History of Economic Thought – 6 of 6 – Hayek and His Lamentable Contemporaries – Murray N Rothbard

Murray Rothbard died before he could write the third volume of his famous History of Economic Thought, which would cover the birth and development of the Austrian School, through the Keynesian Revolution and Chicago School. With this six-lecture course, however, the History of Economic Thought is complete.

6. Hayek and His Lamentable Contemporaries

The Nobel award to F.A. Hayek in 1974 went directly against the tradition of that prize to go only to mathematical forecasters, left-liberals, and government central planners. Not only was Hayek’s work pioneering, but it is also the only correct analysis of business cycles past, present and future since they began in the mid-18th century.

Initially, various economists concluded that the boom-bust cycle must be deeply rooted within the free market industrial capitalist system. The blame must rest with free-market capitalism, said Marx and Keynes. Government spending was to make up for some depression in the private sector. Too little spending created unemployment. Too much spending created inflation. However, this Keynesian concept has failed.

Another group said that it is the government-controlled fractional reserve banking system that is the cause. As far as this goes, it is accurate.

The problem was that when an inflationary credit expansion was pumped into the system, it not only tended to raise prices, it did something worse. It distorted the production system. It caused over-investment in construction and capital goods and under-investment in consumer goods. The recession becomes necessary medicine to the real evil – the boom.

In the normal course of events, prices don’t remain constant, they fall. The Austrian theory was the only one that predicted and could explain the Great Depression. But the fashion changed. Austrians were dropped. Keynesians thrived. Keynesians wanted government spending and deficit spending. In the 1920s there was no theory going on. There were simply institutions.

The only explanation Rothbard has for the number of Misesians who shifted over to Keynes was sellout. Looking at the money factor or the economic factor explains the shift. Keynesianism is filled with fallacies. Government has to use statistics to plan. Strip government of statistics, they can’t do anything.

Fischer and Mitchell viewed themselves as intellectuals who were above class struggles and divinely appointed to plan everything for society. It was a naked grab for power. The Invisible Hand of Planning is about these social scientists. So, Keynesianism is still around, but they have nothing to say.

The final lecture in a series of six on the History of Economic Thought.

This lecture as a Podcast: http://enemyofthestate.podomatic.com/

Sourced from: https://mises.org/library/history-economic-thought-marx-hayek

Source: History of Economic Thought – 6 of 6 – Hayek and His Lamentable Contemporaries – Murray N Rothbard – YouTube

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TRANSCRIPT

00:00
it’s pretty wildly that we’re now living
00:02
in an economic crisis it’s also pretty
00:04
well agree that most economists
00:05
especially so-called establishment
00:07
economists don’t know what to do about
00:09
it
00:09
this is pretty unusual considering that
00:11
up until about five years ago the ruling
00:15
economic establishment not only believed
00:17
but also trumpeted far and wide that
00:19
they knew exactly what to do about all
00:21
economic problems everything had been
00:23
solved as a matter of fact I think about
00:25
five years ago the distinguished
00:27
Keynesian economist Robert Solow of MIT
00:30
wrote that something to the effect that
00:33
macroeconomic problem is macroeconomic
00:36
meaning things like business cycles
00:37
inflation recession depression so forth
00:40
the whole macroeconomic problems have
00:42
now been solved and everything is or
00:44
economic macroeconomic theory has been
00:46
taken care of now usually when somebody
00:49
says that it’s the sort of beginning of
00:50
the deluge sure enough
00:53
only a few years later the the same
00:55
economists have virtually thrown up
00:57
their hands and say we don’t know what’s
00:58
going on we really don’t know what to do
01:00
this does not mean of course that
01:02
they’ve resigned their jobs and
01:03
Washington by the way which needs me my
01:06
favorite story anybody has heard this I
01:08
apologize for repeating it about I think
01:10
that when the recession miking 58 which
01:13
was the first recession whether for the
01:15
phenomenon of the inflationary recession
01:17
first began to appear this is the first
01:19
time when in prices were still rising
01:21
during during the recession here we had
01:24
an authentic officially authenticated
01:27
and certified recession and yet prices
01:29
instead of falling which is the oath
01:30
which is what price is supposed to be
01:32
doing in a recession set up fairly
01:34
prices were still going up they were
01:36
calling up growing much but they were
01:37
going up author of burns at that time
01:40
I’ve just resigned as head of the
01:42
Council of Economic Advisers in the
01:43
Eisenhower administration I was giving a
01:46
lecture up at Fordham which I have no
01:48
attend giving the usual Keynesian policy
01:51
which I’ll go into a little bit later
01:52
what to do about recessions basically
01:55
when there’s a recession you pump
01:56
spending into the system whatever that
01:58
you meaning the government one one pumps
02:00
so the government pumps spending into
02:02
the system thereby lifting the economy
02:05
upward and when there’s an inflation
02:07
where the government takes money out or
02:08
takes spending out of the system the you
02:10
work several variants or
02:11
changes on this theme and that’s
02:13
essentially the Keynesian or the
02:14
establishment program that said birds
02:16
was going into the splaining this policy
02:18
and during the question period I
02:20
unfortunately was a brash young fellow
02:22
that at that time I said the professor
02:24
burns what do you do if that’s the
02:27
policy but you’re specially the
02:28
government supposed to be doing is
02:29
pumping deficits during a recession and
02:31
take out spending or have higher taxes
02:34
or surplus during a boom what do you do
02:37
for both are having at the same time as
02:38
it seems to be happening right now other
02:40
words what he do it as an inflation in a
02:42
recession at the same time well he said
02:45
let’s push reply was well there’s no
02:46
problem in there because the recession
02:48
that will soon be over and so forth and
02:50
I said okay and that it was soon over in
02:53
58 I said what happens if Edwards if at
02:56
some future date the same phenomena were
02:58
looking to recur and intensify will have
03:01
a severe recession aware of an
03:02
accelerating inflation what then would
03:04
you recommend and he thought for a
03:06
moment he said well in that case we all
03:08
have to resign well they have it was on
03:10
the history over the rest of course is
03:11
history the phenomena has arrived is
03:14
with us right now and nobody’s resigned
03:16
one of what was more of the political
03:18
science that nobody ever resigns from
03:20
government less your hand is caught
03:21
directly in the Ted the Nobel Prize to
03:24
such a high I come to this very
03:26
interesting because it comes in this
03:28
context comes in a context where
03:30
establishment economics doesn’t know
03:32
what’s going on and we can really
03:34
admitted the usually part of with Nobel
03:36
Prizes that all the other Nobel Prizes
03:39
which have been awarded by the Swedish
03:41
Academy and going to people are
03:43
completely economists are completely the
03:44
opposite camp as professor Hayek in
03:47
other words a economist or mathematical
03:50
forecasters and also left liberals can
03:53
use that term for believe in government
03:55
planning of the economy for the first
03:57
time the Hayek award goes directly in
04:01
completely contrary to this tradition of
04:03
the Nobel award which supplied there was
04:06
a enormous enormous light we perhaps a
04:09
clue to rival the Nobel Committee did
04:11
this similar they were hedging their
04:13
their bets was that any award they said
04:16
quote they hailed was a high quotas his
04:19
pioneering work in the theory of money
04:21
and economic
04:23
well they didn’t say that this
04:24
pioneering work was not like to do
04:27
tonight is to go into this and try to
04:30
explain why I think not only that was
04:32
Professor hi-hats work pioneering but as
04:34
I say the only correct analysis of
04:37
what’s business cycles past present and
04:40
future ahead of phenomenon the business
04:42
cycle realist began within the
04:44
approximately mid 18th century for that
04:48
there was no business cycle main
04:50
businesses business would be throwing
04:52
them all in a certain so an even place
04:54
and then something that happened usually
04:55
the government would mess things up
04:57
first they are the custom to do the king
04:59
would confiscate early would decide to
05:01
raise money fast by confiscating only
05:03
goal of the merchants and this of course
05:05
would cause a severe depression there’s
05:07
never a business cycle sort of thing
05:09
wasn’t any kind of mysterious boom-bust
05:11
phenomenon it was simply with a king
05:13
with seventy confiscated everybody’s
05:15
everybody’s money and depressions said
05:17
in clever the sort of thing that would
05:19
happen until about the mid 18th century
05:21
when we began to have a secure
05:23
phenomenon of boom bust cycles which
05:26
appear not periodically but what the
05:29
recurrently in other words the the
05:30
phenomenon of inflation and the
05:32
prosperity and so forth rising prices
05:35
usually followed by bank collapse and
05:38
depression in unemployment and then
05:40
followed again by the supply recovery
05:42
and then a boom and setteth this is how
05:44
a puzzling phenomenon but it couldn’t
05:46
didn’t fit into the general economic
05:47
theory and so shortly after this the
05:51
phenomenon appeared economists began to
05:53
try to explain what was going on here
05:55
why was there this recurring recurring
05:57
phenomena not directly well clearly
05:59
related or the King compass getting some
06:01
of these money and there was something
06:02
else seemed to be going on here
06:03
couldn’t clearly pinpoint the cause well
06:07
as time went on to group two groups of
06:10
theories began to develop because a lot
06:11
of different kinds of theories that
06:13
essentially could be classified into two
06:14
groups one group which has been dominant
06:17
generally and certainly dominant up to
06:19
well right now up until the Austrian
06:21
school revival the generally the
06:24
dominant school of hell
06:25
the real cause must be since around the
06:28
middle of 18th century about the time
06:30
business cycles first of all of the
06:32
boom-bust cycle and about that time also
06:34
came the Industrial Revolution
06:36
industrialization and the modern
06:38
capitalist the economy first comes in
06:40
really at that point so therefore these
06:43
various economists concluded that some
06:45
of the cause of the business cycle must
06:46
somehow live deeply rooted within the
06:48
free market industrial capitalist system
06:51
there was the blame because usually
06:52
considered lane worthy boom-bust cycle
06:56
are the blame rests with it with through
06:59
market capitalism Karl Marx is one of
07:02
the first economists to prepare this
07:04
theory and John Maynard Keynes and
07:07
rightness famous work in 1936 not only
07:10
also have a similar review establishing
07:13
Keynesian orthodoxy but also said right
07:15
explicitly that before him before Keynes
07:18
wrote that classical or free-market he
07:20
cannot economists had no theory of
07:22
business cycle he had no explanation of
07:24
business cycle for unemployment or
07:26
depression if they hadn’t thought about
07:28
it they hadn’t really given their
07:29
attention to it he was the first one to
07:31
really do it and he therefore understood
07:34
the Depression was caused by some virus
07:36
under spending in the in the private
07:39
market economy which was first being
07:41
made up by government spending in other
07:43
words if the cause of depression sizes
07:46
an efficiency of spending obviously the
07:48
government is a deus ex machina that out
07:50
of a machine that the government can
07:52
magically come out of the system and
07:54
spend more you think you can put money
07:56
he didn’t quite say that but that’s
07:58
clearly an implication if you can print
08:00
money you’re a good position engage in
08:02
deficit spending but Carolyn for Lao I
08:05
mean for this way the Keynesian vision
08:07
of the economy was which has been
08:09
dominant up until the present so this is
08:11
not just an antiquarian kind of exercise
08:13
the picture was essentially this while a
08:16
free-market economy can do very well and
08:18
in heaven so Clara my Clara dynamic
08:19
problems it can clear the market it can
08:21
solve the problem how much we can
08:24
produce or how much sugar brandy or
08:25
whatever and it can set the prices and
08:28
production in these various areas and
08:29
the micro economy the free market works
08:32
very well however in the macro land
08:35
so-called macro economy
08:37
the free market doesn’t work the theory
08:39
being the free market doesn’t can
08:41
provide the proper amount of total
08:43
spending and serve a Keynesian picture
08:46
of the economy is essentially one where
08:48
a free market economy is essentially one
08:50
where the economy is like a libido when
08:52
you’re driving down a very narrow sort
08:55
of tight local edge within a two of this
08:57
is on either side one of the abysus well
09:00
unemployment which occurs if there’s too
09:02
little spending the other way the abyss
09:04
of inflation which occurs of this too
09:06
much spending and the task of the
09:08
government the government surveys will
09:09
pop out of a pop a driver of the car
09:12
obviously if you have a the economy is a
09:13
coin I’ve got somebody driving it there
09:16
so the task of it over big whether
09:18
government is the be at the steering
09:19
wheel
09:20
keeping fine-tuning the economy in such
09:23
a way as to keep the key total spending
09:25
perfectly precisely attune to the
09:27
separate unemployment line which is that
09:30
the economy doesn’t pull off on one hand
09:33
or the abyssal depression and the other
09:35
hands of the abyss inflation so the task
09:38
level is to keep the economy out on this
09:40
line the Keynesian is that came to
09:42
conclusion very early they knew they
09:44
have the proper two years of doing this
09:46
they kept up spending in as I said
09:47
before in case there’s too little
09:49
spending you can push the steering wheel
09:52
or the right so to speak they can take
09:54
spending out if there’s an efficient
09:56
this was essentially the what we can
09:59
clearly establish or kingdon orthodoxy I
10:01
thought the government supposed to be
10:03
doing and what causes recession but this
10:06
is clearly not worked as pretty cool is
10:08
pretty evident by this time even the
10:10
camions
10:11
who desperately flailing around and
10:13
trying to find some other explanation of
10:15
why there why the drawing board might
10:17
have to go back Euler you’re growing
10:18
bored okay obviously what’s happening
10:20
now is it is accelerated inflation at
10:22
the same time there’s a recession and
10:23
there’s recurring recession which we’re
10:26
going through right now and this author
10:28
Byrne said we all have to resign except
10:30
nobody does it okay actually that’s one
10:33
school of thought one general area for
10:35
which locates the cause of the business
10:38
cycle on the cause of depression on
10:40
causing inflation
10:41
somewhere within the market economy
10:44
somewhere
10:45
just really a palace system there is not
10:49
what other dribbles economists and other
10:51
traditional economics which has been
10:52
neglected until very recently which has
10:55
something very different actually this
10:57
was the view recorded on the classical
10:59
economist of 19th century and so
11:02
rudimentary form essentially but the
11:05
second group says is that something else
11:06
happened literally 18th century not just
11:09
the Industrial Revolution but another
11:11
institution which is directly the cause
11:13
of a business cycle and that is the
11:14
banking system of a more precisely the
11:16
fractional reserve banking system and
11:18
even more precisely in that was the
11:21
government involvement of the banking
11:23
system suit and central banks the sort
11:26
of the first simpler model of this the
11:27
so called monetary Huey business cycle
11:29
came about with with Ricardo in the
11:32
classical economist essentially we had a
11:34
very simple kind of view Burroughs
11:36
pretty girls pretty good considering
11:38
there was in 19th century economics
11:40
basically what they said was with the
11:42
government and the banking system
11:43
government promotes bank credit
11:45
expansion expansion fractional reserve
11:48
banking money in credit the supply of
11:50
money in credit go up this raises prices
11:53
squeeze of prosperity or phony
11:55
prosperity a real prosperity with where
11:57
valiantly took on that this course is
12:00
the inflation showing being part of a
12:02
cycle and then what happens is that the
12:04
value of banks in the country begin to
12:07
lose go to other countries because as
12:10
domestic prices go up and foreign prices
12:13
still remain the same
12:14
go grains out to other other countries
12:17
and so finally the pressure gets very
12:19
intense on the banks or find the gold
12:21
grains out there bank credit has
12:23
increased and so the reserve ratio keeps
12:26
dwindling and finally they’ve got to
12:27
stop expanding and contract in order to
12:29
save themselves this contraction causes
12:32
the recession in part of the business
12:33
cycle and during the recession prices
12:36
money supply for prices for and gold
12:39
flows back in for the country and get a
12:41
cent recovery and then after this
12:44
happens the banks are ready to start in
12:45
again there are expanding again this is
12:48
very simple magnet of business cycle but
12:51
it’s pretty accurate as far as it goes
12:52
it pinpoints in my view the basic cause
12:56
of business cycle is not embedded deep
12:58
with
12:58
in the industrial capitalist free-market
13:00
economy but within the banking system
13:02
and the government control banking
13:04
system why is the government in the
13:06
banking system is desirous make VC money
13:09
the money supply is fairly simple any
13:12
group which seizes control of the money
13:14
supply none with any group which is the
13:16
only legalized fairly / this way the
13:18
government limit and it’s controlled
13:20
banking system is the only institution
13:21
society which has the right to
13:23
counterfeit no we’d like to increase the
13:25
supply of money the rest of us start
13:28
counterfeiting clicking dollars not only
13:31
would we go to jail we better J a very
13:32
very swiftly and for a very long period
13:35
of time
13:35
counterfeiters always the one of the
13:37
most reviled criminals on the government
13:40
books because a private mugger get off
13:42
with a slap on a suspended sentence
13:44
perhaps but he’s only mugging individual
13:47
citizens of the counterfeiter a strikes
13:50
of the reader the government’s monopoly
13:51
in the creation of money which is much
13:53
more important for the government than
13:54
the mugger telling the first things the
13:57
government does early in the game as the
13:59
C’s been controlling there was acquire
14:01
compulsory monopoly of the of the right
14:03
to print money and my contention is if
14:07
you have the right to print what are you
14:08
going to use it like anything else
14:10
because are you print money to spend it
14:12
or you just print money and you can lend
14:14
it out to favored groups political
14:16
politically favorite groups so the
14:18
natural tendency of government and it’s
14:20
controlled by Jesus knows to inflate no
14:22
there’s no mystery about it this is what
14:24
they’ve always want to do anyway there
14:26
are certain checks on the process such
14:28
as the fact I’m losing gold alarm a gold
14:31
standard losing gold abroad which runs
14:33
on the banks before the FDIC came in to
14:36
33 to stop that but a natural course
14:39
unless their basic market checks on this
14:41
phenomenon which people keep the process
14:43
at least a little bit in hand we’ve
14:46
managed to eliminate most of those
14:48
checks at this point by the way so here
14:50
we have sort of a C model which places I
14:53
say the blame for the business cycle and
14:55
the banking system and the garment I
14:56
think I should say a government
14:57
controlled banking system the
14:59
inflationary process of money creation
15:02
this work however wasn’t really a
15:04
totally satisfactory theory and business
15:06
cycle left out a lot of stuff for one
15:07
thing left that the problem why is it
15:10
there’s always a greater bloom invest
15:12
and the capital goods industries the
15:14
machine tools and that’s very little
15:17
material of construction why is it there
15:19
much much greater business cycle on and
15:21
in that area then there isn’t consumer
15:23
goods why is there a sudden collapse of
15:26
business forecasting businessmen FFL or
15:28
sort of expert forecasts or heat if you
15:30
know what’s going to happen fairly well
15:32
how come they will suddenly collapse the
15:34
crisis appointment of alumina 20
15:36
recession or depression arrives and so
15:39
these these these various deficiencies
15:41
meant there were certain gaps in the
15:42
theory which had to be flushed out well
15:46
what happened was the Liberty von Mises
15:48
the founder of the modern Austrian
15:50
school began the so-called Austrian
15:53
theory of business cycle 1912 when he
15:55
publishes theory of money and credit
15:57
when he did was he completely Bigelow
15:59
Ricardian foundation and the classical
16:02
foundation also add are the insights of
16:03
the Swedish economist Club excel on the
16:07
key difference between the free market
16:09
interest rate of so-called natural
16:10
interest rate and a loan rate of banks
16:12
and what what integrated this whole
16:15
thing live into a theory which is far
16:18
life concern of the only theory which is
16:19
integrated completely with regular
16:22
economics with micro support
16:23
microeconomics these are simply outlined
16:25
that’s very briefly in 1912 it was up
16:28
there was left of Frederick Hayek in the
16:30
late 1920s to spend this the whole thing
16:33
out and two beautiful books I recommend
16:35
still recommends the best books on the
16:37
topic
16:37
their imprint Emily prices and
16:39
production and the monetary theory of a
16:41
trade cycle the Monterey Theory trade
16:44
cycle is sort of introduces this whole
16:45
subject that’s the thing in perspective
16:47
and the prices and production is more
16:48
technical both of these were written in
16:50
late 20s now that Mises and Hayek did in
16:53
the late 20s and the thing which really
16:55
struck the rest of the economic world of
16:57
economists was that they more or less
16:59
predictive the Great Depression over
17:00
here are nineteen twenty seven or twenty
17:02
ways the whole world of establishment
17:04
economics said is going to becoming a
17:06
prosperity and ain’t going to be no
17:08
depressions no more
17:09
more and everybody said this we were
17:11
living in what the Coolidge Hoover
17:13
administration square-root era and the
17:16
reason was we had created a beautiful
17:17
engine called foreign reserve system
17:19
federalism with the keep everything an
17:21
even keel there was sort of like a pre
17:23
Keynesian theory idea was it that if
17:26
prices fell a little pump money in and
17:29
prices rose photos or take money out and
17:31
well it couldn’t be a depression
17:33
meantime while this your Florida was
17:36
being gauged in on establishment
17:38
economist Mises and Hayek in Austria
17:40
we’re saying oh I was going to be
17:42
depression to cause more because what
17:44
well for one thing and they chew along
17:47
of a classical economist said of the
17:49
cause of the business cycle was not an
17:51
industry or the market economy or
17:53
industrialization but the banking system
17:56
and the problem that not so much in the
17:58
price level not so much the fact that
17:59
prices went up and running this pump in
18:01
but that when the inflationary credit
18:04
expansion was pumped into the system and
18:05
not only tended to raise prices then
18:07
something even worse than that in a
18:09
sense a tended to distort the production
18:11
system of the words intended to cause an
18:13
over investment in things like
18:15
construction capital goods industry
18:17
world materials and an under investment
18:19
in consumer goods and that the lawyer
18:22
this happened this part of us was
18:24
wrapped up in the fact that interest
18:26
rates were pushed down artificially by
18:27
the expanded bank credit and the longer
18:30
this process continued whether the
18:32
government keep kept pushing this more
18:34
severe the recession would have to be
18:36
the idea being this this is compare the
18:40
unique in history of economic thought
18:42
I’m going to be in the recession instead
18:45
of being a type of thing coming from
18:47
from sort of a god-given blight or
18:50
something other words and sort of like a
18:51
something like an earthquake or a plague
18:53
which has been support
18:55
recession becomes up there not that but
18:58
the necessary medicine which is the
19:00
consequence of the of the real evil
19:02
which is the inflationary boom which was
19:04
created by government self in other
19:05
words every government penance banking
19:08
system pump some more credit to the
19:10
economy
19:11
it just not only raises prices also the
19:13
storage production equals an
19:15
over-investment in others has it once
19:17
sound investments and unsound machine
19:21
tool and constructions are for it and
19:23
therefore it becomes more necessary to
19:25
have a recession in order to shift
19:27
resources back into the healthy free
19:29
market kind of economic system necessary
19:33
to liquidate the gun sound investments
19:34
as fast as possible and if the
19:36
government tries to eliminate the
19:38
recession by prolonging the agony in
19:40
other words by stopping this process and
19:42
we’ll certainly it will do is prolong
19:45
the agony in the lesson and make them
19:46
depression chronic instead of acute for
19:49
example over the last what Benjamin
19:51
Anderson that wait the economist will
19:53
chase behind a financial market on coral
19:57
really are their last free market
19:58
recession or asking market recovery was
20:01
1921 I was raised severe post-world War
20:04
1 depression prices fell rapidly
20:07
unemployment went up very very shortly
20:10
however the questioning has severe since
20:12
the government didn’t interfere with it
20:14
will try to help out on the unemployment
20:16
unemployment relief didn’t try to show
20:18
up unsound investments through
20:19
government lending operations didn’t try
20:21
to career deficits deficits that secure
20:25
didn’t try to engage in public works
20:27
programs and so forth didn’t do anything
20:30
and the result of the question was ever
20:31
raised very very rapidly by the time a
20:34
government figure they should do
20:35
something about the price it was all
20:37
over in 1929 when the Hoover
20:39
administration came in or are they did
20:41
Hoover acted very very quickly
20:42
unfortunately and engaged in all the
20:46
liberal programs which we associate with
20:48
Franklin Roosevelt which were really
20:49
begun by Herbert Hoover and the hope the
20:54
whole business said government money on
20:56
sound investments he would wage rates
20:58
out keeping prices up deficit spending
21:01
cheap credit pathetically menial
21:03
measures really been done by Hoover is
21:05
certainly recently in a recent interview
21:06
direct star world-famous
21:08
Beckham lose my adviser admitted that
21:10
Hoover started the whole thing that he
21:11
couldn’t say that at a time they could
21:13
admit it was a political fight my level
21:16
is overly Lew
21:17
who were raised about new year rather
21:19
than instead of the recession being over
21:21
and not an opossum like nine or twelve
21:24
months as the 1921 recession was it was
21:27
over weather was Leonard lingering from
21:30
after eleven or twelve years at the
21:33
world war two that is out of it so there
21:37
the meat mrs. Hayek approach then is
21:41
though the sort of public policy that
21:43
emerges from the Mises Hayek position is
21:46
virtually the direct opposite of the
21:47
Keynesian policy or the Keynesian policy
21:49
is if there’s a recession you pump
21:51
spending in or you pump money in if
21:54
there’s an inflation you take money out
21:55
the Austrian view is that there’s an
21:58
inflation first first I stopped
22:00
inflating means stop creating new money
22:02
and credit through the government’s
22:03
controlled banking system and if there’s
22:06
a recession don’t do anything about it
22:08
and let it work itself out as quickly as
22:09
possible now obviously this is the
22:11
direct opposite of the king gene
22:13
prescription this besser pretty clearest
22:16
in which seems thing which policy
22:17
everyone’s going to adopt for any kind
22:19
of any kind of crisis emerges you see
22:23
for example every time a new slight
22:24
probably liquidity the government leaves
22:28
every why goes up among businessmen
22:30
among bankers except allah quiddity
22:32
crunch and therefore government has to
22:34
step in and create my name to the side
22:36
with a clearly crunch problem well refer
22:38
the liquidity crunch is precisely the
22:40
austrian retribution
22:42
catching up with inflation boom the
22:45
government always exceeds the short-run
22:47
pressure to ease the problem there by
22:49
pumping more inflation one of the
22:51
differences about the 20s was one of the
22:53
reasons why the economist most of the
22:54
economist in the 1920s did not forecast
22:57
a depression is because those eight
22:58
prices do not go up the general price
23:01
level will remain about constant the
23:03
official theory was where the price that
23:05
the price level remains constant it
23:06
can’t be any problem of inflation we
23:08
reveal however was it in a normal course
23:11
of events
23:11
prices don’t remain constant a fool and
23:13
we can see this in other words you allow
23:16
so if the economy to proceed unhampered
23:18
productivity goes off as nil inventions
23:20
as mass production comes in its effort
23:22
vices will attend deferral
23:23
we see that for example of TV sets which
23:26
began which cost about two thousand
23:27
dollars 1948 but really crummy set we
23:30
could hardly see anything for this
23:32
present situation with TV says 100
23:35
dollars or something for a great or much
23:36
better set because when if we divide
23:39
that by the price level in the other in
23:40
real terms of course the price of TV
23:42
sets is fallen fantastically well this
23:45
the sort of thing happens all over late
23:47
on Lena unhampered system during the
23:50
nineteen twenties we have had an
23:51
increase in productivity a tendency
23:53
would have been for falling prices the
23:55
government of the banking system kept
23:57
pumping new money into the system
23:58
thereby creating the whole boom-bust
24:01
cycle even though prices do not go up
24:02
the Austrian goes as I say foresaw that
24:05
but what happened was and Mises and
24:07
Hayek had as I had predictably 29
24:10
depression so one of 29 depression came
24:12
that prestige went up
24:14
I’m not know any economic circles less
24:17
unfortunately for an American economics
24:21
the Hayek at that point what the
24:23
university of vienna i came to london
24:25
school of economics
24:26
he started gathering around him the best
24:28
minds among younger English English
24:30
economist and so from 1931 approximately
24:34
until 35 36 most English economist
24:37
adopted this Austrian position adopting
24:39
the view that the thing the the cause of
24:41
the business cycle was my credit
24:43
expansion that created this distortion
24:46
production of the government you leave
24:48
things along stopping a fighting Li
24:49
think along the Sun so forth so John
24:52
Dickson won a Nobel Prize last year with
24:54
Muriel Hayek student and almond Hanson
24:56
illegal and so for and so no hungry
24:58
would people who later shifted the
25:01
Austrian theory was adopted precisely
25:02
because it was the only one that a
25:04
predicted and also could explain the
25:06
Great Depression and began to be adopted
25:08
also the United States just at that
25:10
point comes the system Keynesian
25:13
revolution Lord Keynes wrote a book of
25:15
1936 and the whole gang foot flop what
25:18
happened this is very often true in the
25:20
history of thought by the way not just
25:22
me
25:22
expert social sciences generally there
25:26
wasn’t the Keynesian is refuted the
25:27
Austrian theory the Austrian theory is
25:29
just forgotten
25:30
nobody ever refuted it they didn’t talk
25:32
about it just the fashion changes it
25:34
something like ladies hemlines like
25:36
fashion changes and just the other then
25:38
they just stop talking about the
25:39
Austrian definitely deal with completely
25:41
different centered items and that was it
25:44
the Keynesian revolution was facilitated
25:46
by the fact that world Keynes was
25:47
extremely popular in English in neat
25:49
circle so to speak the English
25:51
professors will know each other in those
25:53
days very tightly knit group he’s very
25:56
charismatic personality and so he swept
25:58
the whole whole group with him also
26:01
Keynes even one of the significant
26:02
things about the Keynesian theory was
26:04
for the first time in history of
26:06
economic for other than many differences
26:08
among economists before that this is the
26:10
first time that the economists sort of
26:12
official economist professors and
26:14
writers etc actually advocated an
26:17
inflation deficit spending before lab
26:19
now you can AMA economist has almost
26:22
unanimously advocate a balanced budget
26:24
sound money the gold standard and so
26:26
forth and so in other words here we have
26:28
a Keynesian advocating what governments
26:30
would love to do anyway because before
26:32
that economists were sort of likely
26:34
quite the Peck’s bad boy of a sort of a
26:37
the the the real pessimist in the group
26:39
you know the government’s would try
26:40
advocate also serve wild blue dog wasn’t
26:44
fancy schemes he comes over saying are
26:46
not gonna work the economist a sort of a
26:49
web bluntly said the official web
26:50
blanket among intellectuals and
26:53
statesmen and said but here we have
26:54
candies will not let blanket they were
26:56
exuberant about the idea of government
26:58
inflation deficit spending and so forth
27:01
and so they’re no ideas were adopted
27:02
with great enthusiasm by the official
27:04
political establishment more Keynes said
27:08
when he was in his birthplace when he
27:12
was answering criticisms that murmur in
27:14
Iran his theories won’t work and one of
27:17
the very famous statements was while the
27:18
cares but as
27:20
them well the problem is 1/4 of right
27:24
now the Kanes is that we’re still alive
27:26
in other words we’re living in the
27:28
Keynesian long run we’re suffering from
27:30
it if we’re interested in solving the
27:33
problems created by the kings Ian long
27:35
run which we’re now living in we have to
27:38
return seems to me to the so called
27:39
walking approach and what’s happening is
27:41
that as the as the Keynesian theory is
27:44
becoming more and more discredited
27:46
younger professors and graduate students
27:49
are more adopting the rediscovering the
27:51
Austrian approach which to those of us
27:54
were sort of veteran Austrians is really
27:55
often a real phenomenon right the what
28:01
happens in 1920 little bog settled on
28:04
American from you cannot economics
28:05
namely institutionalism I have
28:07
apologized to repeat that key
28:11
institutional I consider institutional
28:13
frankly is value German historical
28:15
school types with lemon of struggle
28:17
school people without any family
28:18
scholarship or background or anything so
28:20
a moronic version of the German
28:23
essentially per say there is no economic
28:25
laws no economic theories only
28:27
institutions we should study
28:28
institutions
28:29
I brought my Dortmund with
28:31
institutionalist try to claim a certain
28:33
subtle differences in them and German
28:34
historical school I can never really
28:36
figure them out like there are
28:37
distinctions without a difference so
28:39
what you have that in nineteen twenties
28:40
almost no theory going on
28:41
institutionalized like Ely John our
28:43
Commons was ELISA system at Wisconsin
28:47
was founded Wisconsin idea and evenings
28:50
interpreter an assistant and
28:51
post-millennial PI at this head of the
28:54
spice chair Institute for Christian
28:55
sociology and suffered cetera when the
28:57
only I actually study institution Merson
28:59
fuels gas around a lot talk of attack
29:01
everybody else there really do anything
29:04
hum has actually did a lot to study
29:05
legal property legal property rights and
29:08
an American labor history in which he
29:09
was excellent labor is storing those he
29:11
did something so your honor and for that
29:13
so and of course Doris fine loved one
29:15
famous institutionalist and general pain
29:17
in the neck all I can say about I have
29:19
no respect for them whatsoever I must
29:21
say all Ike I said buys you kept pushing
29:23
the distinction between production for
29:24
profit and production for use which
29:26
you’ve already talked about but the
29:28
terrible thing about capitalism the
29:29
producers for profit I should be
29:30
producing for use in favor of the
29:31
engineers taking over and running a
29:33
siding boosting
29:34
for use in other words you know he
29:36
cannot make whatsoever you can say about
29:38
it and but then making Coleman marks us
29:40
with dishwater
29:41
low water and where the diluted Marxist
29:43
I guess marches to systematic form so
29:45
another thing about Bentley sort of a
29:47
Galbraith couldn’t like very well
29:48
another are gambling is really totally
29:52
taken out of my accept gamma he’s a good
29:54
writer and then one wasn’t and GABA is
29:56
cause never acknowledges that bonis but
29:58
i waking about conspicuous consumption
30:00
in the appellants assign you all to a
30:01
flow live and all the rest of it I don’t
30:03
think it’s really worth discussing more
30:05
than that when did you say say always
30:07
interesting about Vemma Lee didn’t get
30:08
along with the left liberal being
30:10
extreme leftist the only got along with
30:11
right-wingers coming hot dog I’ve seen
30:15
that happen in other places to pass on
30:17
phenomenon Eugene D Genovese you a
30:20
brilliant Marxist historian probably
30:22
only scholarly marches the story around
30:24
has booked on everybody on the left’s
30:26
they only talk to the right
30:27
wingers so in the 1930s and in my United
30:30
States as a vacuum in American economic
30:31
most theoretical no theory at all
30:33
realize there’s something you’re not
30:34
talking about institution there’s
30:36
somebody else you’re talking about
30:36
institution and that’s a bingo when
30:38
Keynes comes and it sweeps the board
30:39
over the the path was open for a
30:42
Keynesian revolution where there was no
30:43
real competing theory here this brings
30:46
me to the Keynes stuff that Hayek well
30:48
you all know this
30:49
hi echoes Mises most famous and best
30:52
student got an appointment the Austrian
30:55
academia by the way is a great article
30:56
out just came out hope history political
30:58
economy more an article by you mean
31:00
Carver’s the wife of axel Lane hubbub
31:01
about Austrian emigration states
31:04
Austrian economist
31:05
Posner all these people Mises and always
31:07
only feeling great great in Latin or
31:09
they limp Austrian genomics was
31:11
tightening up I mean academic posts
31:13
warrants still are and Europe very
31:14
scarce and so they started emigrating to
31:17
the United States and Hayek emigrated to
31:19
got an offer of a post in London London
31:21
School of Economics
31:22
why not Robbins was a musician and
31:24
brought the knowledge he was a professor
31:27
in women’s school young professor Lanham
31:28
brought I brought Hayek over I got a
31:30
chair and high exams hits the ones in
31:32
English system like refundable never
31:34
heard of ocean economics being more
31:36
shaolin’s
31:36
they had no capital theory number apply
31:38
anything the money and all the rest of
31:40
us those whole thing hit Hayek lectures
31:42
prices in production was originally a
31:44
series of lectures rates book my high
31:46
originally lectures on London school
31:50
monetary theory in the trade cycle
31:52
originally in German and then translated
31:54
quickly so Robin started sponsoring the
31:56
translation of whole bunch of stuff
31:57
several books by Hayek and Hayek
32:00
converts all the london school people
32:01
like that almost everybody knew we now
32:03
think of as Keynesian to originally
32:04
Hayek Ian’s there’s money in business
32:06
cycles take your have a learner John
32:09
Hicks Cal lure that goes callow love top
32:13
English economist originally how young
32:15
Hayek Ian’s and Keynes now change
32:17
request was a big shot intellectually
32:19
Rory English intellectuals knew each
32:20
other the United States nobody knows
32:23
anybody else you know particularly this
32:25
all very diffuse there Sarah London
32:27
Oxford and Cambridge a small restricted
32:29
area and cases of littering big shot
32:31
from long time there’s always a big she
32:32
started as a big-shot mathematician
32:34
writing a unfortunately bad button bad
32:37
bugger theory of probability book
32:39
hermanas time and also big as lecture
32:42
land and remember the Blues very set
32:45
test to get feet artistic side looms
32:47
burry front of Virginia Woolf and all
32:50
these people and and then became an
32:52
adviser of the Treasury in World War one
32:53
amendment reporting us the Versailles
32:55
Treaty so he’s very well known one of
32:57
Marshalls top students at Cambridge
32:59
Marshall V in Cambridge the heart of
33:02
English the English economic
33:03
establishment to guru and Keynes was to
33:05
top students course Kate had a destroyed
33:08
figure in order establishes dominance
33:09
which he did by public john roberts and
33:12
other intellectual thugs of the time
33:14
we’re around and upset Penghu and
33:16
robertson with old people yeah
33:18
disrupting classes and attacking on the
33:20
door and so on Keynes wrote the fetus on
33:23
money case sort of waffle but I think
33:26
the best bug was the tract on monetary
33:27
reform and in which he analyzed I think
33:31
rate rate inside analyzes hyperinflation
33:33
runaway inflation as the people taking
33:35
back of resources from the government on
33:37
the words governments printing money all
33:38
the time and grabbing resources from the
33:40
public and high-profile is a method by
33:42
which the public speeds up prices ahead
33:44
on the increasing encounter thanks thing
33:46
at least keep some resource the
33:47
interesting insight
33:49
yeah treatise on money supposed to be is
33:50
big book on money and Hayek destroyed it
33:53
when a great demolition jobs and
33:55
economic on London School genomic by
33:57
economic does a marvelous publication
33:59
was a and the early in the mid-30s was
34:02
published in London school had a lot of
34:03
Austrian stuff in it while Ben Tzion
34:04
stuff Robbins by the way yes and
34:07
significant nature significance to
34:08
economic science which was the big
34:10
methodology book in English until
34:12
Freeman’s evil article on positive
34:14
listen and Robbins suckers I’ve
34:17
disagreeing with her on this ‘krsna
34:18
thinks it was a Rama’s really modern
34:21
positivism not me I think it’s stemming
34:23
me zestiness Mises diluted the first
34:25
edition of Robbins but was even more
34:27
means SC in the second edition which is
34:28
the one we know about
34:29
she’s in the libraries he cuts out
34:31
reference to Me’s includes stuff about
34:33
indifference curves I got eating a
34:35
waffle but basically to me Jesse in
34:37
support of damage this Ian book i
34:38
roberts has a very good article critique
34:40
of martial one so far they’re doing a
34:42
very good job on this whole thing it
34:43
translates very money in credit that
34:45
more on last 1935 and the first time
34:49
first English translation gets it
34:51
translated by the way this interesting
34:53
footnote on Cannes Cannes review the
34:56
period money in credit in German when it
34:57
came out pains of the editor pop out of
34:59
the economic journal which is a big
35:00
Cambridge publication and says wow I
35:03
said this interesting book but there’s
35:05
nothing new in it
35:06
anything you can say about your money
35:07
credit that isn’t it he then writes in
35:09
his memoirs later while he said he
35:12
didn’t really know German very well he
35:13
knew enough German to read stuff he
35:14
already knew but now you couldn’t absorb
35:16
new ideas in German that’s ok but how
35:19
did they have a goal of the review books
35:21
in German
35:22
Hayek demolished Peters own money into
35:25
wrong rate articles and economica much
35:27
of which applies to the general theory
35:28
by the way to tack on capital theory and
35:30
so forth his alleged capital fearing or
35:32
estimate K that goes back to the drawing
35:34
board such acknowledges that he’s been
35:36
smashed and weiss’s knew more general
35:40
theory but Keynes’s general fury came
35:42
out okay to be a big shot was reviewed
35:45
by my book shot every journal review go
35:47
back and read a scholarly reviews
35:48
they’re all totally negative
35:49
a good attack a minor attacks that night
35:52
attack they all attack old Big Sean
35:53
Clooney Alvin handsome the cake – Velma
35:55
Hansen’s at your site
35:56
Howard Henry Hanson was a free-market
35:58
type pursuit trustee in Richie Minnesota
36:01
wrote a semi Austrian book called
36:03
business
36:03
cycle theory about 2033 not really
36:05
Austrian really understand it was pretty
36:07
favorable well sort of look at Co
36:08
economic he cannot make something an
36:11
unbalanced world something I like these
36:12
here do you want a packing idea Public
36:14
Works to cure depression rate
36:16
free-market right-wing work general
36:18
theory came and he attacked it
36:20
the Nelson in reviews well he said well
36:22
I don’t think of any favorable review of
36:23
it two years later that’s swept
36:24
everybody everybody is converted the
36:26
Keynesianism
36:27
and Cooney Hanson became the country’s
36:29
outstanding Keynesian but so what’s the
36:31
relative reasons for the fantastic for
36:33
the sweeping of the board
36:34
Samuelson’s I forget now what is the
36:36
semblance foundations rewrites this
36:38
introduction he said when a wonderful
36:39
world was the VL world be young enough
36:42
to read Keynes and John fearing when I
36:44
came out and to be under thirty because
36:46
a mine was open those great new
36:48
revelation so so why was a super
36:50
successful I was lined with the school I
36:52
went to college and graduate school at a
36:54
time just a month
36:55
Keynes’s general period just come we
36:57
were reading Keynes’s general theory the
36:59
nobody reads general theory and after he
37:00
retains interpretations of it this is
37:03
before the changing of the came out came
37:05
out with the equations so we actually
37:06
had to read this stuff in the real thing
37:09
general fury totally incomprehensible
37:10
work I McCain’s was a good writer when
37:13
he one of the day when he was
37:13
clear-headed like in the book of
37:16
reparation Versailles Treaty
37:18
economic consequences of the peace and
37:19
very clearly written book now his mother
37:22
singer became a mother a writer so
37:24
nobody could really understand also he
37:25
contradicted himself and every page for
37:27
example he’d say the key to my thought
37:30
is that saving always equal to
37:31
investment always always always equal
37:32
investment I pay you later who say the
37:34
key my thought of saving always differs
37:35
for the investment okay
37:37
kind of muggy out here sort of an
37:39
average rational person faces garbage
37:40
crossing the wastebasket which one the
37:44
older economists did so Rizzoli how the
37:46
younger people saying oh we were the
37:47
only ones gonna understand the master
37:49
it’s of a coke to Jewish over all those
37:52
over thirty a lot then in their own
37:53
paranoia now we can understand that
37:54
matter we got this in and the fact
37:55
that’s not to be very obscure makes it
37:57
even more challenging you’re like two
37:58
billion journal articles on separating
38:00
what they really thought so this is one
38:02
the intellectual reason plus the fact
38:03
that Keynes was important an English –
38:06
hang on the old new one but the
38:08
interstates they write a Hayek ian’s
38:09
shift over on me lessons in other words
38:11
every amis FC in every Hayekian in
38:13
England except Hayek and Locke
38:15
on partially I mean Locke was really
38:16
came Xin everybody except I became by
38:18
the endless numbers by the early
38:19
thirties everybody in London school
38:21
younger people in England were
38:22
economists were Hayekian he’s Sen hiya
38:25
kids by the end of the thirties are all
38:26
Keynesian oak coal shifted over
38:28
including almost an old me’s Sen shifted
38:31
over partially shifted over so if you
38:33
read these people ma Club for example
38:35
one of my hoes low point a mock-ups
38:37
intellectual careers his book on the
38:39
multiplier foreign trade multiplier came
38:40
out of the 40s straight Keynesian
38:42
analysis but the thing about these
38:45
people mock lava harbor and all these
38:46
people so route Keynesianism are shifted
38:48
over there is amis se and strain there
38:50
with a good stuff agrees se and
38:51
everything else is keen but was there
38:53
never quite pure changes always had a
38:54
slight drawback holding back Geron tech
38:58
nerves of big econ attrition
38:59
we’re slightly apologetic about what’s
39:01
true that we have assumptions here
39:03
aren’t really true with suffering he was
39:04
the meanest student so I’m same way with
39:06
Morgenstern whose critiques of GNP
39:08
statistical are fantastic women within
39:11
the framework trailing clouds amis Sen
39:13
glory so to speak profession so why they
39:15
all shift over are now the case of
39:17
Hanson is really I think fairly clear
39:19
released according Wilfred King is no
39:21
old duffer my met the forty so with them
39:24
the originator of income statistics
39:26
unfortunately not national income
39:27
statistic or price stabilization
39:29
I think port for the Fisher of younger
39:31
thing okay
39:33
the Wilford King is a free-market person
39:35
lazy except less except for us money
39:37
innovation so yes yes we had a lot of
39:40
meeting he taught I think in Minnesota
39:41
will happiness it has some very good
39:43
young lad when he was in Minnesota
39:44
wingsuit he went to Harvard
39:45
he changed that’s certainly part of a
39:48
picture according to Schumpeter has a
39:51
very good assiduous critique of Keynes
39:53
and general theory the reason for the
39:55
big shift in addition of the
39:56
obscurantism and so forth the fact that
39:58
that’s what the government wanted know
40:00
the whole intellectual for all
40:01
governments always want to encourage
40:02
Ephesus spend more spend more at the
40:03
essence of government always straining
40:05
at the leash and the only people are
40:07
their finger in the dike so to see
40:08
holding us back in attacking of been
40:09
economist there’s always economists of
40:11
saying no no you should intervene you
40:12
should increase the budget to not have
40:13
deficits of cause bad consequences later
40:16
and so will the son have comments to say
40:18
no no the great thing is to have deficit
40:20
the more deficit the better the more
40:21
spending the better it’s good and the
40:23
guys who say it’s bad a really
40:24
reactionary old fuddy-duddies are not
40:25
into the nudist suspense
40:27
and so of course the government love
40:29
Keynesianism the Keynesian love our
40:30
government we have the marriage of
40:32
intellectuals and government and the
40:33
state changes then picked their place in
40:35
the planning structure through all of me
40:37
for example I don’t know if you know
40:38
this but there was a world I remember a
40:39
world where no counselor becoming
40:41
advisors magnificent world you have no
40:43
planning of budgetary therefore channel
40:46
rotten forecast in next five years or
40:48
which are dead wrong no positions for
40:51
economists and that source that was
40:52
great
40:52
and then everybody became more or less
40:56
Keynesian even off the burns with my
40:58
professor claimed he wasn’t in kg but
41:01
what really was and so we’re going in
41:02
trois and fighting and living the
41:04
Keynesian framework I wasn’t by the way
41:06
like I was around when the Keynesian
41:07
equations for start coming out malayani
41:09
and all these people my own view is that
41:12
there the current revisionist viewers of
41:14
Keynesian is distorted King James is
41:15
really great guy and Keynesian is really
41:16
the bad guys I don’t believe it I think
41:18
came to the Keynesian insofar as
41:20
anything at all other words the equation
41:22
of the only thing makes sense out of the
41:23
master make sense out of these
41:25
contradictions and they when they made a
41:27
certain sense it all wrong at least
41:29
they’re coherent structure
41:31
Kasich immediately died early nothing if
41:33
he’s not can’t be challenged whether he
41:34
reasons the Keynesian equations or not
41:36
then there’s also stories on Hayek said
41:39
that just before Keynes died he wrote
41:40
that Hayek and said these guys were he
41:43
came to either going too far or I’ll
41:45
really credit that too much I’m a credit
41:46
letters like that may be sort of a
41:48
pleasant trade run anything else so far
41:51
as I’m concerned Keynes is a Keynesian
41:52
and computing otherwise and as I say
41:54
justified deficits that’s correct
41:56
the the best reputation of K this is
41:58
kind of a sad story as by Henry Hazlitt
42:00
we’re a magnificent book which nobody
42:02
has ever read is foreign line now called
42:04
a failure a failure of the new economics
42:06
but what has the page-by-page choice for
42:09
the entire general theory a mighty
42:11
effort and doing as se and critique a
42:13
hard core as I seen critique over way
42:14
every step by step nobody paid nobody
42:16
about it nobody paid attention to it
42:17
much less refuted
42:18
there was that something without a trace
42:20
I guess for two reasons one is hazard
42:22
then I have a faculty position didn’t
42:23
have a PhD
42:24
therefore if not an economist
42:25
quote-unquote it was rule out as a
42:28
paradigm by the establishment secondly
42:30
of course these anti change enemies Sen
42:31
which is bad also bad that’s a great
42:33
buckets March very clearly your written
42:35
which of course black mark against the
42:36
to notice he doesn’t deal with a
42:38
Keynesian neo-keynesian equations he did
42:40
with the actual general theory and so I
42:42
guess that’s another blame or my I don’t
42:43
see why I see do the equations got the
42:45
whole thing there they also then follow
42:47
up with a collection of criticisms of
42:49
canes and of negative reviews from
42:51
critics cover newly genomics so in any
42:53
way not having a scholarly
42:55
Union collar and all that he was the
42:57
book was totally ignored
42:59
how does another great great case HUD
43:00
was also not King G I was a edwin canon
43:02
student on the school that’s very close
43:04
to Austrian ISM a cannon hug position
43:07
the London position and Robbins was a
43:10
student of cannon a very easy pendulum
43:11
coming on Austrian all these guys they
43:13
don’t shift it over Robin Hicks of
43:15
course the whole gang to an amazing
43:17
extent they we can’t it I mean very few
43:19
people actually publicly we can’t that’s
43:22
right I know the only people really did
43:23
her ex communist is what publicly reap
43:24
and and Hicks and Robins Robins wrote an
43:29
excellent book called a Great Depression
43:30
and he’s I see an analysis of the 1929
43:32
depression in 1934 and later on light
43:34
his life he attack my brother’s being a
43:36
bad book a terrible book that we should
43:38
read it
43:38
this of course was an exhausting in the
43:39
book after he became a Keynesian and he
43:42
milord
43:43
my government planner picks theory of
43:45
wages was essentially Austrian first
43:48
edition he later repeated as being a
43:51
terrible book and evil in an Austrian
43:52
and somewhere and so on in later life
43:54
and hexes interesting guy later in later
43:56
life of course he’s now became a sort of
43:58
semi Austrian again
43:59
he appeared Austrian conferences look
44:01
benignly of our situation wrote a
44:03
friendly story about Hayek as autism
44:05
became really revived weak recruit
44:08
lesson with wiving level six especially
44:11
the person whose finger always to the
44:12
wind trying to figure out the next trend
44:13
is and hopping it wasn’t but then though
44:17
he was an Austrian McCain hero he’s a
44:19
Keynesian and well she was coming back
44:20
again it comes an Austrian again and
44:21
very cautious way of course it so I
44:24
think the reason for the shift over
44:26
these people knew better I mean actual
44:28
least people means let’s see in hiking
44:30
is
44:30
know about Keynes knew the fallacies and
44:32
weren’t couldn’t have been swept away in
44:33
a young ecstasy like Samuelson the only
44:36
exception I can tell us sellout the only
44:38
extension I’ve got that lesson usually
44:39
it’s a fairly pretty fairly good
44:41
explanation one of my favorite phrases
44:44
from that is the famous phrase in the
44:45
world and Woodward Bernstein book and
44:47
movie on Watergate if you remember when
44:49
Woodward
44:50
can’t figure out what’s going on Oh luli
44:52
laurel leaves are gone he goes to the
44:54
big throat and he says he croaked
44:57
I’m more think I have to roughing
44:58
investigation coming what to do these
45:00
phonies those follow the money and the
45:04
person this revised the thing hasn’t
45:05
said so I think looking at the money
45:07
factor or the economic factor I think so
45:10
important here stuff interest so in
45:12
other words the the guys are became less
45:14
Tamizh Sen Hayekian camp and became semi
45:16
Keynesian jerk engines got posted
45:18
Harvard Princeton etc and the others
45:21
didn’t I’m not gonna go to critique of
45:24
Keynesianism I even got the time no it’s
45:25
not really that’s a pretty that a theory
45:28
filled with fallacies and riddled with
45:30
it and support so on my favorite cookie
45:33
gives love multiplier and maybe a reddit
45:35
cook myself here I get data straight by
45:37
K on Keynesian grounds and if you give
45:38
me a thousand dollars they would be huge
45:41
like a two million multiplied the whole
45:43
national income will go up by about two
45:44
trillion dollars and of a magical
45:48
magical what we have as I said has
45:52
been Austrian revival since that’s the
45:54
meat for I think the actually 73 we have
45:57
the first Austrian conference ever since
45:59
old Austria the first United States
46:01
Austrian conference with young Austrian
46:02
Zinn it 74 hi I got Hayek as a Nobel
46:05
Prize and I was amazed with legislators
46:07
when you got the Nobel Prize all the
46:08
economist said who the hell is Hayek
46:10
who’s this guy got the Nobel Prize which
46:12
is a the name of every economist right
46:13
objective and who is he so they had to
46:16
go back and find out what he was what he
46:17
was at least even for sociological
46:19
purposes and this created a Hayek bloom
46:21
which is stolen which still on one of my
46:24
pet peeves I wrote this in a journal an
46:25
article on Corley Jeremy Ganahl makes
46:27
years many years ago is that government
46:30
has two right halves of government
46:31
functions by Statistics because this
46:33
exact government can’t function at all I
46:35
mean it can’t Nunnally can’t plank a
46:36
with pretend the plan it won’t know
46:38
what’s going on there was the market
46:40
provides information to intrapreneurs
46:42
businessmen or whatever the price system
46:44
etc so business I don’t really need much
46:46
statistics but they needed sissies they
46:48
themselves generate and knowledge about
46:50
qualitative knowledge of the market the
46:52
whole overall statistics all the stuff
46:54
is marginally Department Commerce
46:56
Department of Labor subject as well is
46:58
all for government information basically
47:00
none of the governments of Europe
47:01
crafted politician
47:02
do anything that that statistics is then
47:03
they don’t have any real real life real
47:05
world knowledge except in statistics
47:07
therefore we cut the statistics off
47:09
they’re helpless they can’t do anything
47:11
so as a lazy a fair person I’ve been
47:13
advocating for many years eliminating
47:15
all appropriation for government
47:16
statistics and statistics in general has
47:18
been in service of the state and we were
47:19
suspicious first statisticians in
47:22
economics with German historical school
47:23
people who realize you had to use it the
47:25
plan governor sees a good plan and 19th
47:29
century statisticians that was their aim
47:30
we have to gather statistics so the
47:31
government can plan things they have to
47:32
know how much unemployment there is the
47:34
government can cure it and separate
47:35
separate richer te lay my old buddy you
47:39
already mentioned the government of the
47:41
gods major instrument of redemption of
47:43
course is the big empiricist
47:44
statistician pipe I mean he himself did
47:46
not gather success he’s a favor of it he
47:48
said we need empirical data the cold
47:51
molar forces at work in society to
47:52
improve existing conditions Samuel
47:55
Ruggles was the American delegate an
47:56
international statistical Congress in
47:58
Berlin in 1863 said that cold statistics
48:02
is the very eyes of the Statesman and
48:04
they became the survey and scan with
48:05
clear and calm positive vision the whole
48:07
structure and Connolly the body politic
48:09
it’s true a question the of the Congress
48:12
of it of you strip the governments of
48:13
the states they can’t do anything can’t
48:14
even pretend to know anything great they
48:17
hit Carroll right over the first one of
48:19
the first commissioners of Labor United
48:20
States who the big statistician
48:22
with influenced them with a student of
48:24
Emily German historical school member
48:26
the head of a royal statistical bureau
48:28
Russia and the founder of angle of law
48:30
and whatever that is of the consumption
48:33
okay Richard II with a former student of
48:35
Engel Carter Henry Carter Adams was
48:38
there also progressive economist along
48:40
with Ely and established its statistical
48:42
brewery Interstate Commerce Commission
48:43
the carrion angle was great work
48:45
believing quote that ever-increasing
48:47
statistical activity whether government
48:48
was essential for the sake of
48:49
controlling nationally monopolistic
48:51
industries in Irving Fisher Vedic life
48:54
is dedicating a fairly free market in
48:56
most many areas life has dedicated of
48:58
stabilizing the price level from
48:59
manipulation of money and fertile
49:01
reserve that is what kind of making of
49:03
index numbers to try to show there was a
49:04
scientific index number the solution in
49:07
next number prom which of course there
49:08
isn’t
49:09
ain’t no scientific name the index
49:10
number there’s no such thing as assigned
49:12
to having index number of course of
49:13
living for example is everybody’s got a
49:15
different
49:16
crying pattern in other words I bought a
49:18
lot of books of course the living in the
49:20
next which pinpoints of the famous the
49:21
classic Dayton Ohio housewife with two
49:24
kids and life of a steel worker they
49:26
don’t buy any books – maybe the Reader’s
49:28
Digest the summary or something so the
49:30
book prices which have been skyrocketing
49:31
as you all know they’re never guessing
49:33
the inflation index my affection that
49:35
can very different from the late no I’ll
49:36
house that’s why Vin’s X right and
49:38
that’s not of course that stamped out at
49:41
Fisher said in the book making in the
49:43
next numbers until this difficultly
49:45
could be met stabilization to scarcely
49:47
be expected become reality you can’t
49:48
stabilize the price level you don’t know
49:49
what the price level is the private of
49:53
that boy we have we have them now all
49:55
these people Carol right was a historian
49:57
a progressive reformer Henry Carter
49:59
Adams in the southern New England
50:00
pyatters Congregational preacher on
50:03
missionary doing a duty in Iowa we
50:05
started out to study for the ministry
50:07
that’s followed alma mater Andover
50:08
Theological Seminary Irving Fisher ok we
50:11
have to ring Tricia one of my pet peeves
50:12
here the alleged greatest economist in
50:14
20th century was the son of a Rhode
50:16
Island congregational spy this preacher
50:18
watch out for some of the preachers
50:20
again this powers of both of all Yankees
50:23
spotted mother strict sabbatarian he was
50:25
in the better a reformer of a crusading
50:27
spirit II with unbelievable
50:29
prohibitionist man he wrote three books
50:30
during the 1920s plane thing of
50:32
prohibition works
50:33
proving my statistic the prohibition was
50:34
good he also believed you also believed
50:37
in the outlawry you know get this he’s
50:39
he was particularly enthusiastic about
50:40
pushing the world quote of such
50:42
iniquities of civilization as alcohol
50:44
tea coffee tobacco refined sugar and
50:46
bleached white flour or which he was
50:48
with one of our law I was an early has
50:51
not but those the rest me and I hope not
50:54
movement hey we love Benjamin
50:58
strongly stabilized in price level then
51:01
we have rusty Claire Mitchell
51:02
institutional found of the National
51:04
Bureau of Economic Research and beloved
51:06
figure student first time Veblen and who
51:08
also dedicating itself II wanted a lot
51:10
of government statistics such as in
51:12
World War one the plan the system lilies
51:15
rise by the way level World War one they
51:16
all took their spots in the collectivist
51:17
planning system as Dorfman it was a
51:20
friend and student of Mitchell predator
51:22
bat Mitchell that he was clearly the
51:24
type of social scientists as
51:26
paraphrasing summing up Mitchell’s and
51:28
the clearly type of type of social
51:29
invention most needed today is one that
51:31
offers definite techniques to nourish
51:33
the social system can be controlled and
51:34
operated the optimum advantage of its
51:36
members of Mitchell and girlfriend says
51:38
to this end Mitchell constantly sought
51:40
to extend and prove and refine the
51:41
gathering and compilation of beta but
51:43
should believe it business cycle
51:45
analysis might indicate the means to the
51:47
achievement orderly social control
51:48
business activity let me see now Lewis
51:50
time Mitchell was claiming to be
51:51
value-free scientist which is value P
51:53
sign is a gathering statistics in order
51:55
to write in order to be able to plan the
51:56
system that’s allegedly value-free
51:59
Mitchell’s wife and collaborated Lucia
52:01
Mitchell on her memoirs talking about
52:03
herself and her husband said that
52:05
Mitchell and visitors the great
52:06
contribution the government can make
52:07
early understanding of economic and
52:08
social problems if the statistical data
52:10
gathered in the Pendley independently by
52:12
various federal agencies or a system at
52:14
probably planned for the
52:15
interrelationships among them could be
52:16
studied the idea of developing social
52:19
statistics not merely as a record but as
52:20
a basis for planning emerged early in
52:22
his own work so he joined were
52:25
collectivism World War one at the end of
52:27
World War one an interesting is then
52:30
happen namely the economy America common
52:33
just this is December 1918 one month
52:35
after the Armistice the American
52:36
Economic Association in any mark
52:37
statistical associated had a joint
52:39
meeting I don’t think they’ve ever done
52:41
that before sent a joint Conclave in
52:43
Richmond Virginia
52:44
fairly close to Washington where they
52:45
have all been percolating during war and
52:47
they have a joint meeting with
52:49
presidential consent presidential
52:51
speeches but
52:52
Fisher to the American Economic
52:53
Association and Mitchell the American
52:55
Statistical Association if we’re very
52:57
optimistic that border love the one I
52:58
love the work push whirl whirl which
53:00
that figure would be an extension of the
53:01
war which of course in a sense it was
53:02
Fisher’s looks forward to an economic
53:04
Royal reconstruction that would provide
53:06
great opportunities for economists the
53:07
satellite that constructive impulses let
53:11
me plan the world right a class struggle
53:14
Fisher murder would surely be continuing
53:15
over distribution of the nation’s wealth
53:16
but by devising a mechanism of what he
53:18
called readjustment the nation’s
53:20
economics could occupy an enviable role
53:22
the independent and impartial arbiters
53:24
of a class struggle these disinterested
53:26
social client is making the crucial
53:27
decisions for the public glib other
53:29
words this is the role of the
53:31
intellectuals and Fisher and Mitchell
53:32
saw themselves and all the other guys it
53:34
to everybody else is involvement
53:37
middle-class family their own class
53:38
centers all selfish and narrower
53:40
or so on businessman unions separate
53:41
separate we the intellectuals the
53:43
planners levitate above us the class
53:45
struggle where we believe only in the
53:47
truth and therefore we are the ones who
53:48
are finally appointed or whatever the
53:50
plan everything of every diocese
53:51
idolmaker already decision based as a
53:53
national interest a common good so
53:55
notice they they always said that openly
53:57
see nowadays it’s much more this is
53:59
before the science of public relations
54:00
of an advanced to a high art everybody
54:04
is pre out front with it with their
54:06
position
54:06
that’s why is interesting study this
54:07
whole period oatmeal now the engineers
54:09
would say we are engineers like society
54:11
is complex and thus therefore we should
54:12
plan the whole world engineers a
54:14
economist should plan a little for
54:16
school squabble there but which would be
54:17
the top planners most interesting guys
54:19
Charles Steinmetz great inventor so
54:22
General Electric’s main inventor turn
54:24
electric being Morgan firm by the way
54:26
the Steinmetz call himself a socialist
54:27
he wanted rule socialism and his view
54:31
was that the world should be running to
54:32
be planned and run by the corporation is
54:34
obviously made mostly General Electric
54:36
and that the top inspiration and guide
54:38
for the gentle for the world cover I
54:40
should be the world rate rate world
54:41
inventors obviously namely himself in
54:43
other words it is he was over General
54:45
Electric whirl with him running it xiety
54:48
of socialism my guess it was socially
54:50
different form and Mitchell proclaim
54:53
that the rule I led to the use of
54:55
statistics as a president American
54:56
Statistical Association no way the
54:58
record of what happened that it also the
54:59
vital factor on planning what should be
55:01
done
55:01
same thing as Lucy Mitchell said I also
55:04
said that war had shown that when the
55:05
community desires to obtain a great goal
55:07
within a short period far-reaching
55:09
social changes can be achieved the need
55:12
for scientific planning of social change
55:13
yet has never been greater a chance of
55:15
making those changes in an intelligent
55:16
fashion has ever been so good the PC
55:19
said will be bring new problems but it
55:21
seems impossible the various countries
55:22
work over a tenth of song run without
55:24
using the same sort of centralized
55:25
directing now employed to kill our
55:27
enemies abroad for the new purpose of
55:29
reconstructing our own life at home this
55:31
is a constant theme from then on the
55:32
rest of the century the New Deal period
55:34
and World War two we did such a
55:36
wonderful job in World War one planning
55:38
everything running everything and card
55:39
wads everything why can’t we do that for
55:41
peace as well of war why can we either
55:44
great means of collectivism for peaceful
55:46
purposes then he says them
55:49
in contrast with quantitative physical
55:51
sciences he posed the statisticians
55:52
submission but the social sciences are
55:54
still immature speculative hula
55:56
controversy and class struggle a
55:58
quantitative knowledge nor statistics
56:00
could replace such struggle and conflict
56:02
by commonly accepted precise knowledge
56:04
objective knowledge and maneuver the
56:06
mathematical formulation and capable
56:08
forecasting group phenomenon a
56:09
statistician Mitchell opined occurs
56:11
either right or wrong as easy to
56:13
demonstrate which as a result of precise
56:15
knowledge of facts Mitchell envisioned
56:16
we can achieve quote intelligent
56:18
experimenting and detailed planning
56:19
rather than agitation and class struggle
56:21
unquote and then he says to achieve
56:24
these vital goals the Economist a
56:26
statistician would write of course the
56:27
crucial element for we would have to be
56:29
quote relying more and more on trained
56:31
people to plan changes for us to follow
56:33
them up to suggest alterations on
56:36
quantumly force himself and his buddies
56:37
so janitor naked grab for power by the
56:40
way the Marxist Marcus called Mannheim
56:42
German Marxist was presented with a
56:45
problem if everybody is determined by
56:46
the class center is what about
56:47
intellectual what I’m a Marxist
56:49
obviously a bourgeois type but so forth
56:50
what about the whether they fit in and
56:52
the answer was the intellectual is a
56:54
free float they levitate a bubbler class
56:56
struggle so everybody else is determined
57:00
that we’re free this is by the way the
57:02
typical determinant argument or you guys
57:03
are tell me run I’ve somehow broken
57:05
through this I had free will there’s a
57:09
good good material on all this there’s a
57:11
two left-wing books when my guy Alcon
57:14
puts the University Press I think
57:16
schooling invisible hand up planning
57:17
it’s about the nineteen twenty he’s an
57:19
only social side of having a grab for
57:21
power and he quotes Mitchell and Fisher
57:23
and so forth Krista what he’s saying
57:26
he’s attacking the centrist for selling
57:28
out Washington London or whatever it
57:29
really doesn’t matter what position of
57:30
the author is only to get the light like
57:32
stuff James Gilbert has a book called
57:34
the designing the industrial state came
57:37
out about twenty years ago about the and
57:38
he called collectivist intellectuals of
57:39
the Progressive Era and World War one he
57:41
wanted talks about Steinmetz and General
57:43
Electric social david noble ones
57:45
bookmark about his launch is a paperback
57:47
about scientists in the nationalization
57:49
of science World War one on the
57:50
scientist all grab for power and
57:51
Industry it’s a boy World War One is
57:54
later if you have government government
57:55
direction of science again channel
57:57
scientists research in the different
57:58
areas which record would put more funds
58:01
then you get outsider knotting an
58:03
industrial state I wanted that stuff on
58:04
this which is coarse neglected by
58:06
mainstream historians at least yeah
58:08
there’s a lot of stuff to be done our
58:09
research this is really sort of tapping
58:10
linked to me having like surface of it
58:13
here’s um you’re pretty but I think many
58:16
want me to mention some overall
58:18
reference to the history of economic
58:20
thought there’s no really good book
58:22
astronomic on an expanse which is why
58:24
I’m writing one most inclusive book is
58:28
by Henry W Spiegel called a group whose
58:31
league anomic sports with my van and so
58:33
us the title that will race tomorrow
58:34
that’s a huge isn’t available on paper
58:36
bag that’s huge like nine hundred pages
58:38
and it’s got everything in it because
58:40
he’s wrong about almost everything but I
58:41
mean that’s it this is godless you got
58:43
the facts development began I thought it
58:46
was doing I thought something like that
58:47
it’s published by prentice hall offers
58:49
widely available these are very good
58:51
annotated bibliography about hundred
58:52
fifty pages
58:53
I was very comprehensive and quite best
58:55
part of a book and I say he’s got me
58:57
going people in there got all the groups
58:59
but the really best book book is
59:01
Alexander gray that’s very sure came out
59:03
of nineteen thirty one coulomb of
59:05
economic so all the closest the same
59:06
similar time and what he does he only
59:08
covers a few groups he covers Smith
59:10
Ricardo Marx separating winds up with
59:12
the Austrians interesting have you know
59:14
where the Nike surely went ignores
59:15
everybody more than Marshall and wholly
59:16
other stuff could write to the heart
59:18
there’s a great writer among the great
59:19
writers in economics thought when he
59:21
sardonic and or less the perceptive the
59:24
Marches people with two sentences things
59:26
like that also he also wrote a book
59:28
called a socialist tradition on
59:29
socialism great on that he said one
59:32
month quip about one of these crazy
59:34
socialist books on these ten volume
59:35
books or something arab impossibly
59:37
written he says the sort of book he said
59:38
you give is one of the six books that
59:40
hitler’s you cannot take the desert
59:41
island unfortunately not gray is a
59:45
second edition but some guy named
59:46
thompson writing stuff for my cane which
59:48
is worthless so that’s supposed to be in
59:50
print the grey-thompson book but I
59:51
understand now it’s not imprints out of
59:53
stock for three months so this is where
59:55
we stand you can you can get the older
59:57
edition or you can get the newer Edition
59:58
where they both out of stock and but
60:00
there’s sometimes in stock after that’s
60:02
sort of a swamp and the shrimp a the
60:03
book is a great book but it’s very
60:04
obscure and it’s also
60:06
eccentric since the ship Raiders great
60:07
on some things and bad on other stuff
60:09
and you can’t predict which is going to
60:10
be at any moment
60:11
I would I Triple E right interesting
60:12
economist I don’t have a time to go into
60:14
his doctrine it’s the only business
60:16
cycle theory worth talking back so I can
60:17
Mises Hayek because I can I think it’s
60:19
wrong but it’s very interesting if the
60:21
rising of ball raising in fact he was a
60:22
ball raising I was fortunately was a bum
60:23
but very keen and shifted of all Ross
60:25
although he has a great one probably the
60:28
best tribute to another economist in the
60:29
world ever written with Schumpeter’s
60:31
obituary Memorial article to bombard the
60:34
Magnificent part of the ten great
60:35
economists I think so I said I think
60:39
it’s very interesting endeavor an
60:40
interesting writer but basically
60:41
basically wrong and stuff his original
60:44
business cycle theory was so obviously
60:46
wrong they had to create new epicycle
60:48
says to Runyan working business cycles
60:50
he he said there were several several
60:53
business like a little going on at once
60:54
and I’m cumulating he unfortunately
60:56
responsible for bringing a congrat ship
60:58
wave into American thought Richard
61:00
witnessed all not yet been purged
61:02
but he’s interesting right and as he
61:05
didn’t finish this book he’s are unfair
61:08
to some people you know all sorts I
61:10
can’t really recommend it as a key book
61:12
as an overview not too much else Scott
61:14
had a pretty good but a very old there
61:16
are certain specific things have
61:17
specific writers of course but as an
61:18
overall situation that’s about it
61:21
unfortunately : than a bear textbook is
61:24
extremely quick ish in other words the
61:26
sort of thing everybody is great
61:27
what strain is a great Canyon is a great
61:29
they’re all contributed a world outlook
61:31
you know so for an Austrian is course
61:33
kind of a lovable voges here i’m cited
61:36
in and i come on a bear favorably but
61:38
everybody else entire favorably and
61:42
against the the thing is I think that uh
61:44
also he got makes is true there’s a
61:46
certainly liar for truth and a part of
61:47
people the truth value people the
61:50
scholars are supposed to be more the
61:52
truth value of truth that we always work
61:54
but in some cases it does if you have
61:56
this shining truth coming up as being
62:00
combatted by other influence I think the
62:01
truth the shining truths were spoke also
62:03
then begins to happen is eventually
62:05
forty theories begin the collapse so
62:08
what happens is the various reasons
62:10
interfere easily in the collapse take
62:12
Keynesianism for example which was
62:13
dominant for many years and the
62:15
government loves it and they love the
62:16
nor everything’s great case isn’t began
62:18
a decline of the theoretical level when
62:19
the equations were worked out and
62:21
Modigliani the equation just worked out
62:22
making a metric I think at 4850 they
62:25
found out the whole thing rests on the
62:27
assumption of wage rates being rigid
62:29
downward otherwise nothing works but
62:32
that’s supposed to be that’s perfectly
62:33
all blamed on capitalism now we find the
62:35
rigid wage raised our has to be playing
62:36
either government unions okay so this
62:38
the whole political focus begins to
62:40
shift then other things are going to pop
62:43
up the Multipla magic multiplier gets
62:44
reduced to about one of the public
62:46
engine status fissures but a magic
62:48
critic evaporates and gradually in a
62:50
theoretical level came to me it’s the
62:52
flu zap not replaced by anything
62:54
particularly good at least the Keynesian
62:56
paradigm losing at and then when a
62:58
Keynesian political predictions flop
63:00
kind of the words and the cagey is
63:02
unless basically on the idea that you
63:04
have either you have a recession or you
63:06
have an inflation the recession you pump
63:07
money in your pumps spending in or
63:09
whatever proportion you do it we have an
63:10
inflation you take money out of Pig
63:12
spending out what do you do however we
63:14
have inflation and recession at the same
63:16
time as ran would say blank out there’s
63:18
no answer and this of course began to
63:20
appear after World War two especially in
63:21
1973 recession we have a galloping
63:24
inflation along with recession then they
63:25
have the bugger out and they had it I
63:28
was Keynesianism as a little lecture
63:29
will force stop doesn’t mean a Keynesian
63:31
stop or the marketers say the ruling
63:33
class in this case has lost I rolled up
63:35
the rule there’s no we didn’t know what
63:36
the hell are do you want to fight the
63:38
abhi flight what do you what do you do
63:39
you know and so they sort of hung in
63:41
there trying everything and putting your
63:43
foot literally on ultimately on the
63:44
accelerator and the brake trying to hope
63:46
that something works and basically
63:48
that’s what the Keynesian have been in
63:49
ever sensing and that’s why the Freeman
63:50
Heights one out if he might not one
63:52
applicable hi Thea they went out because
63:53
Keynesianism was dead basically and some
63:56
people said hey maybe the my supply is
63:57
important maybe jerks out there in
63:59
Chicago
63:59
a right Friedman ISM was tried guys so
64:03
let’s is a reality check
64:04
I’m filthy theory eventually begin to
64:06
come a cropper but my theoretical rather
64:08
than practical policy grounds and abuse
64:10
collapse so there’s still kgs around it
64:12
but really have nothing to say
64:13
particularly so you know spinning wheels
64:14
and what interesting enough I’ll have
64:16
our monetarist politically in the
64:18
regular ministration the regulation
64:20
first came in there were four contending
64:21
economic groups there were the
64:22
old-fashioned conservatives of which
64:24
libertarians are so like extreme variant
64:26
both lost out within a year old kicked
64:28
out or left I’m Martin Anderson people
64:31
like that they’re out those are those in
64:33
favor of a low budget
64:34
big budget cuts big tax cuts
64:36
not inflating they were very fast then
64:39
see have them the modulus of the supply
64:40
siders and white-winged Keynesian
64:42
contending for powers the monetarist was
64:44
bigger the beginning sprinkle becomes
64:46
shooting his mouth off another secretary
64:48
of the Treasury they were in charge of
64:49
the money supply it was what they were
64:51
the regular a demonstration where they
64:52
did was they put the Keynesian to charge
64:54
of the budget their interest of the
64:56
budget for the modulus in charge of my
64:57
supply each one gets his own turf so the
65:00
monitors were running the shed for a
65:02
couple of years even though Friedman
65:04
kept saying is not really monitor s the
65:05
table below name and the other 2% or for
65:08
one pepper one is really with a moderate
65:09
policy for several years total flaw Peru
65:12
and monitor his own terms
65:13
since Friedman says the sciences
65:14
prediction whole point science
65:16
prediction kept making prediction they
65:17
kept flopping me out ranges flops so if
65:19
you live mice or unit by the predictions
65:21
or you know die by prediction sword and
65:23
when the prediction comes a cropper you
65:25
had it the monitors were thus credited
65:27
for a whole bunch of faulty predictions
65:29
including a prediction your temper
65:30
inflation slowly turn down inflation
65:32
without having a recession which of
65:34
course anymore string for the phone with
65:35
implement possible and that was that
65:37
these few prediction as well monitors
65:40
now politically discredited not so much
65:41
in the economics profession and politics
65:43
as a result speckle has been relegated
65:45
the Council of Economic Advisers which
65:46
is now Siberia
65:47
no no reforms no power I’m not a skeptic
65:49
mouth shut so now it’s happening the
65:51
supply siders oh really Keynesian anyway
65:53
anyway become Keynesian to all that sort
65:55
of lovely
65:56
stewpot coalition of the price either
65:58
changing isn’t conservative came by the
66:00
weights and others they supply siders
66:01
are people who now take up a torch of
66:04
ammo Lerner saying little problem with
66:05
public debt who cares about a deficit
66:07
they don’t quite say we owe it to
66:08
ourselves that’s really the next step by
66:12
the way and supply-side that I would
66:13
recommend everybody read to understand
66:15
supply-side doctrine that you
66:17
Brunelleschi’s famous book the way the
66:18
world works which came out just before
66:20
the Reagan an election nineteen
66:22
eighty-something are telling about the
66:24
winter ski book which was a best-seller
66:26
I can’t find anybody’s ever read it what
66:27
is heave it was very interesting it’s
66:28
fascinating it has that he has a whole
66:29
philosophy or history at work
66:31
for history basically this is why we
66:33
incorporate kindly a right-wing hang a
66:35
lien he says
66:36
history is there working out of meant of
66:38
the will of the masses the well of the
66:39
mass is correct is always correct the
66:41
masses know the truth so the function of
66:44
means our lecture on the politician is
66:45
not gonna enlighten the masses because
66:47
masses nowhere anyway less
66:48
always right it’s to embody the correct
66:50
world masses into institutions in the
66:52
history history the providential onward
66:54
and upward march by which the masses
66:56
collect will is involved in violent
66:58
history so he has cut the two ends in
67:01
light for Winooski two goals of history
67:03
of one world government and two world
67:05
pure democracy because democracy is the
67:07
more democratic the better because the
67:08
mass is gonna express their world faster
67:10
I swear it’s in there as a matter of
67:11
fact he’s the only person who’s written
67:12
in last 50 years who loves World War one
67:15
usually you know the famous story of the
67:17
right-wingers love the Cold War liberals
67:19
love World War two he loves World War
67:20
one my world war one of the most
67:22
destructive war but pointless war
67:24
because Emma got rid of the king he
67:26
kisses the kings absolutely because
67:27
they’re not democratic he says a Hitler
67:30
and Stalin
67:30
despite their various defects what
67:32
better than like Kings are there were at
67:33
least democratic that came in will I
67:34
swear it’s in there
67:35
can I have to review the book for
67:37
someone I have to read the damn thing
67:39
I’m not a scholarly contribution East
67:44
thank you very

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