American Economy and the End of Laissez-Faire – 1 of 13 – The Civil War and Its Legacy

The American Economy and the End of Laissez-Faire: 1870 to World War II

1. The Civil War and Its Legacy
Lecture by Murray N. Rothbard

How does government intervene in the economy? What are the consequences? What are the motivations behind passing these interventions? The lives of the people involved explain why they do these things. Rothbard delves into the religious views of the leaders in American history to understand motivations. Schools, drink, and Sabbath laws were the focus of Yankees in Northern states for ninety years.

Lecture 1 of 13 presented in Fall of 1986 at the New York Polytechnic University.

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

Sourced from: https://mises.org/library/american-economy-and-end-laissez-faire-1870-world-war-ii

Source: American Economy and the End of Laissez-Faire – 1 of 13 – The Civil War and Its Legacy – YouTube

http://www.readrothbard.com/american-economy-and-the-end-of-laissez-faire-1-of-13-the-civil-war-and-its-legacy

TRANSCRIPT

00:00
you can see the the embryo of the
00:02
current institutions you can see how the
00:04
thing had a thing originated and loved
00:07
it causes were on what the consequences
00:09
were so it’s it’s kind of like dealing
00:12
with a but the microcosm of a current
00:15
set up with a current institutions and
00:17
laws and agencies and all the rest of it
00:19
we will focus on that exclusively would
00:21
focus on the relationship of government
00:23
and the economy is with my major
00:25
interest that says we’ll be able other
00:27
aspects to but basically will deal with
00:30
the making will focus on how does
00:32
government intervene and what were the
00:35
consequences and the causes of the
00:36
intervention also the most historians
00:42
when they deal with government
00:44
intervention in the economy so the other
00:47
record of it I mean who who did wat 1886
00:52
the Interstate Commerce Commission with
00:53
path support so on but not dealing with
00:56
a consequence sort of like an almanac
00:58
like looking at the Almanac saying well
01:00
in 1860 1886
01:01
so such law was passed economic
01:06
historians been oh and economics which
01:08
is not always the case the problem
01:10
leaking humming historian of half of
01:12
them no historian they don’t know an
01:13
economic the other half for economic
01:14
don’t know any history that’s one of the
01:16
big problems in the discipline any rate
01:20
if they know anything on makes for some
01:22
of them do then they talk about the
01:23
consequence of what were the
01:24
consequences of these government
01:26
intervention these actions ICC or
01:28
whatever what was what happened after
01:31
that what were what was the result
01:32
oh the consequently the economic
01:34
consequences well going to that will
01:36
also go into a third area which very
01:38
even fewer people deal with
01:40
namely why does it come why does why do
01:42
these interventions where they passed
01:44
why are they come about what were the
01:46
motivations involved one of the problems
01:49
that still goes on by the way is when
01:52
they deal with government they deal with
01:54
the president historians presidents
01:56
secretaries of state secretaries of the
01:58
Treasury
01:58
whatever they talk about these guys as
02:01
if they came up from a matter of space
02:02
in other words someone so became
02:04
president making
02:05
written or somewhat so became head of
02:08
the Interstate Commerce Commission as if
02:10
this person had no past no associations
02:13
no nothing he just becomes their Jojo
02:15
joke becomes president overcomes the
02:17
Secretary of Commerce or whatever he
02:19
does some things for six or eight years
02:21
and he leaves he drops out of existence
02:23
and that’s the implicit assumption most
02:25
historical record of this stuff you know
02:27
they don’t say who these people were why
02:29
who are who were they before what about
02:31
what were they doing before they became
02:32
president but finally became Secretary
02:33
of Commerce what do they do afterward
02:35
they had a life before and after if he
02:38
examined the lives of these people
02:39
before and after you find interesting
02:42
things which hook up explain the
02:43
motivations of many of these
02:46
interventions any of the actions they
02:47
took in office the problem motivation
02:53
for example the to give a very
02:56
non-economic and a very simple simple
02:59
reason here is this most people do not
03:01
they have economic motivations
03:03
I’m not saying can I make motivation the
03:04
only motivations in political action
03:06
what I’m saying is they tend to be
03:08
hidden that can be covered up historians
03:10
have the work of finding out what they
03:12
are for example its to give a very
03:14
simple example from the news last week
03:17
before the Manas case happened which is
03:19
worse in the big case in New York City
03:20
politics just four three three days
03:22
before that the City Council met and is
03:26
supposed to have the guy was supposed to
03:29
be the chairman of City Council which is
03:31
an open spot but Peter of a loan of
03:32
Queens that was sort of the traditional
03:36
thing Manhattan and Brooklyn got
03:37
together unholy alliance with everyone
03:40
call Brooklyn a book on democracy the
03:42
Brooklyn mechanic parties the split wide
03:44
open for many years they got together
03:45
for patronage reason to the side of
03:48
their former lives in Manhattan to the
03:51
potent to depose Maloney or not not
03:53
elect them and I like Sam Horowitz of
03:55
Brooklyn I was a big struggle was
03:59
Manhattan Bronx ok Manhattan Bronx
04:02
versus I’m she’s me Manhattan Brooklyn
04:04
versus Queens in the Bronx was the
04:07
titanic struggle for power
04:09
now if everybody stuck with their
04:11
burrows the Manhattan Brooklyn Alliance
04:14
would have won by one vote a half hour
04:17
before the vote took place they took a
04:22
straw poll in Manhattan delegation and
04:24
the vote was unanimous is unanimous in
04:28
favor of Manhattan Brooklyn guy Horowitz
04:31
a half hour later they take the real
04:34
vote and one guy Robert Reich was in
04:37
Manhattan shifts his position votes for
04:40
abalone Evelyn he wins by one vote so
04:44
then they asked later the press asked
04:46
him well why did you change your vote
04:47
okay what did he say he didn’t say he
04:49
did it for patronage or committee
04:51
chairmanship where she’s gonna get stuff
04:53
like that he said well first of all
04:54
Stanley Friedman was a pretty seasoned
04:56
absolute boss of the Bronx Democratic
04:58
Party was asked how are you reward
05:02
rifles and he said with my love
05:05
rifles himself in the fast why did you
05:08
change your vote and he said he’s
05:10
sweating of course because nobody in the
05:12
Manhattan delegation he said stovic talk
05:13
to one for this day
05:14
he said I did it because my conscience
05:17
and my duty to my god God in my country
05:20
anybody believes that you know there has
05:24
an extraordinarily naive in other words
05:27
his official motive what he’s gonna say
05:29
they did a kazi’s he’s sold out of his
05:31
burrow for a chairman committee
05:33
chairmanship or other patronage he’s not
05:35
gonna say that you’re gonna say he did
05:36
it for my conscience for the public
05:37
interest the general real a common good
05:39
on my crack okay which is what he said
05:41
this is an obvious example it’s not
05:44
always that blatant but in a starring
05:47
and if I were in a story on somebody
05:48
else’s story in writing history New York
05:50
City politics and came to this Dreyfuss
05:52
question he would not simply take
05:53
drivers work for it I said with lifeless
05:55
said he did it for the for gone and
05:57
country obviously gonna investigate a
05:59
little bit deeper okay so this is says
06:01
something historians have to do in
06:02
general when a company economic
06:03
motivation we will be doing that
06:08
okay do me alright the there’s one basic
06:13
text in this course and two paperbacks
06:16
supplementary paperbacks we had a
06:18
problem of the Texas is typical about
06:20
life there’s a text of unusually for
06:22
many years of Bennett is the best
06:23
economic history book even though it’s
06:25
quite old with being kept in print
06:27
because it was such a good book and all
06:29
of a sudden I was told it was in print I
06:32
ordered it in mid-january they call me
06:34
up says chief that a stock go on I had a
06:37
I had a fish around very quickly for a
06:39
new textbook I got one which I didn’t
06:42
but outside on things I know they was a
06:45
friend of mine never seen the book I
06:46
think it’s gonna be very good so we’re
06:47
we lucked out also it’s there I think
06:49
it’s there in the bookstore I think
06:51
Jonathan Hughes from American economic
06:57
history
06:59
[Applause]
07:02
I forget the publisher it’s a red cover
07:05
so a reddish brown from brownish red
07:08
cover that’s the basic text start with
07:14
what you go I’ll explain in a minute
07:17
then there’s two paperbacks Weinstein
07:28
paperbacks the corporate ideal and a
07:31
liberal state
07:35
[Applause]
07:43
[Applause]
07:50
and Coco triumphs of conservatism kid
08:08
Coco and and the Weinstein both deal
08:11
with a very important error which I’ll
08:13
cook a lot about later on called
08:14
progressive air I which essentially
08:17
there’s some dispute about when I’m look
08:20
like what the years were but essentially
08:21
1919 17 1918 that period when most of
08:26
the current government regulation was
08:28
launched and with every feeling and
08:30
think up and so this press of era
08:33
Weinstein a cover both do of that Hughes
08:36
feels that Bob Dole of American history
08:38
we’re gonna start in the middle of the
08:40
Civil War and doesn’t there’s only a
08:46
little bit of the Progressive Era and it
08:47
fits in nicely here Civil War World War
08:50
one and then after that we’ll get to
08:53
where we’ll want to both use and why
08:56
Stein and after they’ll see after you
08:57
know that start with and Hughes so you
09:01
don’t read once not a cocoa and cocoa
09:02
later on the course told my mom about
09:04
half the course of something maybe
09:06
earlier than that okay let the other the
09:09
recipe we’re gonna begin with a civil
09:10
war which is 1861 55 and start with huge
09:16
chapter 13 and 14 13 things in civil war
09:20
for Tina’s railroads there’s the next
09:22
thing after the war some warp basically
09:25
what we’re gonna do is we’re gonna read
09:26
Hugh’s chapters 13 and 22
09:29
that’s the couple hundred pages which
09:33
deal stall at a civil war intended of
09:34
World War just a four world will want to
09:37
just live or when we that’s the first
09:39
block of the course
09:40
Hughes chapters 13 and 20 to stop my 13
09:43
and 14 just keep going
09:45
there’s no specific assignment for
09:47
specific day lectures are very important
09:53
textbook is is good for a background and
09:55
structure elections are important I
09:58
don’t require attendance but a
09:59
dependence is suggested because the like
10:02
I talked about when I think is important
10:04
on making history is a huge area what
10:06
you can do deal with almost ever
10:08
anything the first thing to deal with
10:15
here on the whole 19th century the
10:19
fourth thing I want to talk about the
10:20
political party system is it as a new
10:22
friend something called a new political
10:23
history which has been going on after
10:26
about twenty years it’s very interesting
10:28
it’s not the old on its salt and it’s
10:32
rage thing stuff but it deals with
10:36
something that you know what with other
10:37
historians never dull was mainly how do
10:40
people but why do people vote the way
10:42
they do it analyzing voting it’s known
10:44
as voting behavior I don’t like the term
10:45
I’ve stuck with it why do people vote
10:48
they’re trying to correlate voting with
10:49
other factors religious factors economic
10:53
factors Geographic to try to figure out
10:54
why they vote with different parties in
10:56
the course of doing that they found out
10:58
the from the interests of interesting
10:59
thing first of all there are party
11:00
systems in other words we think of
11:03
political parties Republicans are
11:04
chronic that’s about it it’s not just
11:06
that our systems which last for about
11:08
thirty years or fifty years and the
11:09
change of the labels of the parties are
11:11
the same that nature of the party
11:13
changes fairly suddenly and sharply into
11:16
a new system so for example I’ve been of
11:20
course the problem is you don’t know
11:22
what system you’re in when the system
11:24
changes for quite a while afterward
11:25
because you don’t know whether this is a
11:26
temporary glitch in the system or
11:28
whether it’s it’s an important one so
11:29
you you have to use hindsight but the
11:36
first thirst there are I think maybe
11:39
five party systems in the period we’re
11:41
dealing with here the first party system
11:46
party system usually United States to
11:49
parties probably because the way it’s
11:51
structure the electoral laws the fact we
11:54
have a big country have that our
11:55
coalition’s and whatever we have mostly
11:59
a two-party system although they have
12:00
been third parties who kind of have some
12:02
importance the first party system lasted
12:07
from summit around 1796 to around
12:13
actually though the Federalists we’ll
12:21
see what what what they represented and
12:22
Democrat Republicans then what happened
12:28
was the very strange situation having
12:29
not talking about much from 1815 to
12:32
about 1825 was only one party on States
12:34
pretty dangerous situation have only one
12:36
party it was them another crown Republic
12:39
important Federalists died happens here
12:40
against the war of 1812 they were
12:42
considered traitors and suffer and they
12:44
died out then a new party developed
12:47
narcotic party we have from about 1828
12:50
second party system this is like one and
12:54
a half and between I guess second party
12:56
system from about 1828 to about 1854
13:02
there’s the slice dating Golgotha that’s
13:05
not that’s around that period namely the
13:07
Whigs whi GS who essentially were
13:11
successors of the Federalists and
13:13
endemic rats essentially successors an
13:16
account Republicans with certain
13:17
exceptions we’ll get into what they
13:19
meant with the label mint 1854 the Whig
13:24
party dies now the Republican Party
13:26
comes then we have a third party system
13:28
which one asks from 1854 1896 that was
13:37
the Republicans and Democrats and even
13:41
though the Republicans Democrats : right
13:43
now the party system changed drastically
13:44
in 18 around 1896 1900 it’s something
13:47
very different I think we’re
13:51
about see a fourth party system safe and
13:56
safe in 1919 32 some people say well
14:03
earlier something said later around that
14:05
fifth party system maybe 32 that’s
14:08
something blank 68 80 we most people
14:11
think we’re now in a sixth party system
14:13
I’m very confused situation so this is
14:15
30 to 50 and it’s a 60 son before
14:19
whatever
14:20
so when out something in six places one
14:25
way of looking at the differences here
14:27
the third party system was very closely
14:30
fought most people have thought the
14:32
Republicans were dominant they weren’t
14:33
really dominant very much only for the
14:35
presidency and even they have a very
14:36
close races there was almost no period
14:40
with a Republicans won both houses of
14:41
Congress and the president that usually
14:43
one party or another had each half of
14:45
Congress this period fourth party system
14:48
of the period of Republican dominance
14:50
except for Woodrow Wilson parties listen
14:52
Democratic dominance and right now it’s
14:55
sort of confused with a very high
14:57
floating independent pop vote and
14:58
Republicans winning most of the
15:00
presidency Democrats winning it’s my
15:01
house so that’s something like that one
15:06
of the things that distinguishes ever
15:07
all of this from the 20th century hold
15:10
on all of the 19th century the parties
15:12
were fiercely ideological contrast the
15:16
now is very difficult to figure out any
15:17
ideology all right
15:18
they weren’t the political party who are
15:20
not just ways of getting into office and
15:24
getting patronage of course there were
15:25
that too but they’re all to something
15:26
else they were organized around ideology
15:28
and principle and every fierce about it
15:30
there was no insist analogize of course
15:32
they claim to have principles we get to
15:34
the campaign of trying to attract a big
15:35
floating independent vote everybody
15:37
fuzz’s up so by November first of
15:39
something you can’t tell the difference
15:40
name one they were moving to the center
15:42
to find the floating vote in those days
15:44
there was no floating vote there’s no
15:46
independent vote almost almost none
15:48
everybody leader Democrat or a probably
15:50
everybody hated you the other party of
15:51
guts okay you voted Democrat vote
15:55
overpumping you were staunch and you
15:56
expect that your your nominees to be
15:59
just as storage if they start a waffling
16:00
you just didn’t go out and vote
16:02
Democratic vote Republican or vice-versa
16:04
I’m voting for the enemy when they do it
16:06
they just wouldn’t show up here this
16:07
guy’s waffling and howl of them and so
16:09
in other words the political candidates
16:11
had to be even more militant during a
16:13
campaign they were the other times
16:14
they’ll bring out the vote the most
16:17
votes for most races were close in most
16:18
states the other guys had be fiercely
16:21
Democratic on attack the Republicans
16:22
bitterly in vice versa they get their
16:23
people out there’s always a lot more
16:26
excitement I want more ideological
16:28
differences and a lot more excitement in
16:31
19th century campaigns there are now you
16:33
have to know that’s very difficult to
16:35
figure any differences so when the
16:39
ideological differences were severe and
16:41
tremendous and also the ponies are
16:44
extremely important there a way for the
16:45
average person to have an influence on
16:46
public affairs in other words in most
16:49
cases special interest groups take over
16:51
and legislate you’re the Congress and
16:52
cabinet whatever special interest groups
16:55
looking for their own boodle we tend to
16:56
take over the average person hasn’t got
16:58
the time involved in this stuff if you
17:00
want to get let’s say you’re the sugar
17:03
refining industry you have your
17:05
lobbyists down a working 24 hours are
17:06
they trying to get a subsidy or a tariff
17:08
for sugar right in front of subsidized
17:10
sugar refining the average consumer you
17:11
know the consumer will be screwed by
17:12
those damage we see what does know
17:13
anything about it hasn’t had a time to
17:15
invest in it and so goes by the full so
17:19
in those days what political parties
17:20
were they essentially mobilized the
17:21
average person for an ideology either to
17:23
stop the specialist other confronting
17:25
them either one way or the other
17:25
depending what the ideology was so an
17:28
ideological party meant there’s some way
17:29
to get around the special interest is a
17:30
way for the average person get involved
17:32
in politics in the real life so no keep
17:34
voting for Joe Turkey
17:35
he’s not just turkeys for advancing your
17:36
ideological interests whatever they are
17:39
so what the great was an exciting time
17:41
to be around I must say I think in
17:42
politics the okay basically this group
17:49
here and this had a similar ideology
17:52
economic ideologies especially all the
17:55
way down the 19th century the
17:56
Federalists the Whigs and Republican
17:57
decided basically a similar idea logical
17:59
structure Democrats and similar
18:02
ideological structures throw out with
18:04
certain differences obviously but
18:05
basically very very hardcore considering
18:08
they’re the men you know large party
18:10
trying to get a you know appeal to law
18:12
section stuff like that
18:14
The Federalist Whig Republican group
18:17
their vision of the world
18:19
well Amiga na McCloud started something
18:22
else before we got the economic part one
18:26
of the things that would puzzle after a
18:28
long time before games
18:29
figure fine athlete new plug history
18:31
told us the answer tell me the answer to
18:33
this I couldn’t figure out this the 19th
18:36
century have a huge amount of interest
18:38
money cannot make questions banking
18:40
several banking on tariffs
18:42
everybody knows brother out there
18:44
writing illiterate pamphlets foreign
18:45
against the para for against gold and
18:47
silver reporting central bank I can’t
18:48
get my own students at this good at it
18:50
you’re a captive audience how come I was
18:53
everybody here Cindy can’t nobody that
18:54
history economics now I mean we’re
18:55
almost none that’s their unemployed or
18:58
something big inflation is very
18:59
difficult getting people interested how
19:00
come people are fascinated but
19:01
tremendously interesting economic rush
19:03
and recognize your government question
19:06
and the answer I think was is given to
19:11
us by a new political history of
19:12
so-called FL religious history what they
19:19
found was the voting the mass of a
19:21
population we’re not but they didn’t
19:23
start off interest in the banking of the
19:25
power of things like that they started
19:26
offering interested in religious crushed
19:28
local religious political issues and
19:30
they escalated from that of economic the
19:34
economic question their consciousness
19:35
was broadened so to speak the economic
19:37
here’s the way it worked I mean we have
19:40
to get into religious history all these
19:41
things integrate history fascinating
19:43
thing about history everything meshes
19:44
together the what happens is around 1830
19:51
around that person 18 2013 30 something
19:55
crucial habit of American Protestantism
19:58
the American Protestant religion was
20:00
transformed even though they kept the
20:02
same word Baptist Methodist ever totally
20:05
transformed with something different
20:06
before that was essentially Calvinist
20:09
you’ve eight you’re joining the church
20:11
you obey the Calvinists Creed of law
20:13
Bagon for the one presumably be
20:15
hopefully you’ll be saved
20:16
probably not that was basically very
20:19
simplified version Calvinists credo
20:21
something happens
20:23
the product doesn’t in 1834 the revival
20:26
movement with the revival movement unit
20:29
we’re now pretty familiar with those
20:30
days nobody was familiar but something
20:32
big brand new it was originally in
20:33
Europe and it comes to United States and
20:36
people are rolling on the ground and
20:38
getting born again of things like that
20:39
getting converted and and they get they
20:42
get a new religion and really basically
20:44
new religion new religion basically is
20:46
Crees don’t matter doesn’t matter what
20:48
church you belong that’s the beginning
20:50
of like of like freaking up of American
20:53
products and nobody cared them nowadays
20:54
most products is don’t care if I don’t
20:55
map this method of Presbyterian doesn’t
20:58
a any different than the old days for us
20:59
made a big difference of appearing mint
21:00
your favor leave me up and they get the
21:04
elect general damnation stuff like that
21:06
now a prince in eighteen thirties on
21:09
doesn’t make any difference white shirt
21:10
you join queens were unimportant
21:11
everybody was a Protestant together
21:13
that’s why the YMCA and YWCA were
21:15
founded about that period we’re all
21:17
Christians what the president make were
21:19
treat you’re in or Protestant Christian
21:21
and the basic the basic view is this
21:26
everybody in order to be saved
21:29
joining a church or being baptized isn’t
21:31
enough yep that’s a new thing call the
21:33
baptism of the Holy Spirit you have to
21:35
be born again and what you have to be
21:38
born again through an emotional mystical
21:39
conversion experience that’s why you’re
21:42
rolling on the ground is parlor orphan
21:44
parlor conversion experience so each
21:46
person goes through is revival
21:49
[Music]
21:51
conversion experiences and then and each
21:55
person’s has a free will to be saved
21:57
this is a free will each person is a
22:00
theological free will can easily save or
22:02
not and you have to you have to try to
22:04
achieve this mystical state or emotional
22:06
state of being born again to the baptism
22:08
of Holy Spirit if each individual is
22:11
alone with God there’s no church the
22:13
church doesn’t matter much here so the
22:17
next step was
22:18
now each individual can easily not be
22:23
saved because he’s free well as a week
22:25
you have to have if the church doesn’t
22:28
count much anymore doesn’t matter what
22:29
by creed or anything throw you and God
22:31
therefore the state has to step in very
22:34
early a state the government has to step
22:35
in and stamp out temptation try to get
22:38
you to be saved by eliminating stamping
22:40
out of company there’s lots of
22:41
temptation stamp out sin basically
22:43
occasions worse in these new Protestants
22:46
the new province in was everywhere
22:48
almost everything was simple any any
22:50
kind of enjoyment was sinful Dancing
22:53
with central gambling is central all
22:55
should be asked was the outlawed of each
22:57
individual is weak to end up the
22:59
temptation and and particularly
23:04
especially demon rum liquor the hysteria
23:11
about liquor among so-called
23:13
fundamentalist new products is enormous
23:15
still is it’s kind of all if Jesus
23:18
himself drank wine it’s kind of odd for
23:21
process to drink grape juice a communion
23:23
the the only Waggoner’s rasped this is
23:28
because these people believe that in
23:31
order to be say got that free will and
23:32
your money you know they’re happy free
23:33
well your mind can’t be clouded see if
23:36
you drink liquor in your mind that’s
23:37
clouding your theological free will if
23:38
they get away from you that’s why these
23:40
nine ten of the anti-slavery not because
23:42
they cared about slavery in the sense
23:44
that most of us care about Liberty
23:45
versus favor they care about the slaves
23:47
theological free will to be save and be
23:49
interfered with so so what cloud men’s
23:55
minds
23:56
Beamen run liquor preventing and their
24:01
price to be outlawed and especially in
24:04
particularly the Antichrist literally
24:07
gets over the Antichrist the Catholic
24:08
Church of the Pope in Rome
24:09
so Catholic Church the Pope was
24:13
considered the Antichrist and casteth
24:15
Alden supposed to be stamped out
24:17
as much as possible so we have then the
24:20
the local on state law these things are
24:22
not hit the federal level on local and
24:24
state politics the all of the new
24:27
Protestants their two divisions now
24:28
these new process South southern
24:31
Protestants intended to be salvation
24:34
another they believe that everybody
24:36
should be try to be saved and that’s it
24:38
they didn’t have this fanatical zeal to
24:39
stamp out sent the Yankee promise to the
24:42
northern products is it called
24:44
evangelical Pietism because part of the
24:48
new creed in the north is so you can’t
24:52
be save unless you try your best to
24:53
maximize everybody else’s salvation this
24:56
goes beyond missionary work they use the
24:59
usual idea missionary Marx would go and
25:00
present the truth everybody hope they
25:02
they agree to us survivors are very
25:04
different inside if you don’t try your
25:06
damnedest to stamp out sin and save
25:08
everybody off you yourself won’t be safe
25:10
you have a tremendous zeal to stamp out
25:13
sin so you have this we put a crusading
25:16
spirit the way they put it is we have to
25:23
achieve a king or gone on earth through
25:25
this method we have to stamp out saying
25:27
we have to make the world make America
25:28
holy and make the world holy this is the
25:30
Messianic Creed’s new promise another so
25:37
this was the new product this was the it
25:40
focused on several things they couldn’t
25:43
kick out a Catholic since we had a free
25:45
country we try to keep out immigrants if
25:48
you can’t keep out Catholic immigrants
25:50
they tried to do that they can’t keep
25:51
out Catholic immigrants then Christian I
25:54
they call a Christian I the Catholics we
25:55
have to get the kids because they’re
25:57
Catholic being heathen and follow the
25:59
Antichrist
26:00
therefore there are any Catholics
26:02
unfortunate we have to stamp them out by
26:04
getting the kids and putting them into a
26:06
Protestant eyes public school system the
26:08
public school says the 19th century was
26:09
not secular Protestant they’d rather
26:11
Protestant Bible and most jurisdictions
26:13
you had to be a member of Protestant
26:14
Church in order to be a public school
26:16
teacher the whole idea is to get the
26:19
Catholicism and convert them save them
26:21
well why you yourself won’t be safe
26:24
stamp out liquor outlawed liquor this is
26:27
going on since 1830 and stamp out Sunday
26:32
enjoyment Sabbath laws even in mine in
26:38
my day when my wife was growing up in
26:39
the South you couldn’t play paper play
26:41
baseball on Sunday with the illegal so
26:43
up until the world war two still going
26:45
on in half states Sabbath movies Sam up
26:50
she became holy SH in here and should be
26:51
able to nothin on Sunday except I’ve got
26:53
a church period anything else you
26:56
central and monstrous drinking on Sunday
26:59
of the worst possible Seneca binds to of
27:01
a great sentence right drinking itself
27:03
with central doing anything they’re
27:06
going to church on Sundays I was ringing
27:07
up sounding like the old double with
27:08
said I’d rather fight us wild which is
27:12
calling Priapus the most of the people
27:18
who took to this is sort of fanatical
27:20
with fanatical zeal and so-called
27:22
Yankees who already even before this
27:24
happened with some oriental cultural
27:27
imperialists they try they try to shape
27:29
everybody up there sort of people want
27:30
to shave everybody up by force so the
27:33
Yankees took this like a duck takes the
27:34
water hey this is great now what our
27:35
Yankees Yankees don’t don’t mean just
27:37
northerners and the southerners used to
27:39
say Damn Yankees are much more specific
27:40
than that they meant Yankee ethnic group
27:43
or cultural group essentially who
27:46
started out there for English descent
27:49
they started out in rural New England
27:53
not so much Boston merle massachusetts
27:55
rural Connecticut and then emigrate they
27:57
were big migrants they emigrate are they
27:58
populated most of the north north
28:00
northeast in other words everybody in
28:03
upstate New York one was not an
28:05
exception especially western New York
28:08
Buffalo that whole area to hold the
28:10
whole area Genesee Valley all that so
28:12
this was sort of
28:13
that’s the deserted I carry the whole
28:15
area there plus northern Ohio northern
28:20
Indiana northern Illinois Northern what
28:22
stunts out southern Wisconsin that whole
28:24
area with Yankee whether you say Yankee
28:26
you mean this whole everything from
28:28
world outside of Boston not so much the
28:30
city that I thought was West
28:33
– around Chicago and and so forth okay
28:36
that’s that’s Yankee
28:37
and so Yankees took as I say like I
28:40
think the mortar New England stock the
28:44
same thing is going on as fights are
28:45
going on in California turns out their
28:46
own Yankee older Pro public school
28:48
people are Yankees everyone in New
28:50
England emigrated so the idea to say of
28:54
a public school with a shape-up of
28:55
Catholics get the kids and convert those
28:58
so this is one group they’re the group
29:01
the party almost is almost a one-to-one
29:04
correlation here the from the studies
29:06
have been done the political party these
29:07
people support it almost to a man were
29:11
first the federal as what everything 30
29:13
the Whigs and then the Republicans in
29:15
other words the Whig party and then the
29:16
Republican Party was essentially the
29:18
wasp pie at this party let’s certainly
29:22
obviously a few exceptions hearing there
29:23
but basically with mass voting behavior
29:25
if you worry a pie attest and Yankee pie
29:29
that you were a Republican conversely
29:32
what happens then is originally the
29:34
Democrat Republicans were not the
29:36
Yankees Yankees even Federalist then the
29:38
KY Republicans for the Dutch types the
29:40
scotch-irish whatever later on what
29:45
happens is the other big religious
29:47
groups now coming into the United States
29:50
we’re Roman Catholics and I loosened the
29:54
Lutheran’s have split allo Lutheran’s
29:55
five was going to Scandinavian look
29:57
there’s a very very much like yankee
29:58
appliances and German Lutheran’s a
30:01
mostly high church the high church
30:03
Lutheran’s and Roman Catholics come to
30:06
the United States with a very different
30:09
Creed or not no holy rollers there
30:11
except for nowadays this little shot
30:14
Catholic Church is not what it used to
30:16
be I’m talking about before 1930s anyway
30:20
right Catholic Church and high Lutheran
30:22
Church basically ideas you achieve
30:25
salvation through entering the church
30:27
with baptism and keeping the sacraments
30:28
the church takes care of salvation you
30:31
don’t need the state to stamp out sin
30:33
okay so thats another we have much more
30:36
libertarian bases right right away
30:38
second no more sin is not everything
30:41
enjoyable with the Catholic position
30:43
the high movement position always has
30:44
been obviously if you’re drunk a lot
30:46
this isn’t sensible you don’t have if
30:47
you drink in moderation is nothing wrong
30:49
with it pleasure of bullets
30:50
so what much more inclined consent much
30:53
more rational review okay so the for him
30:57
the Catholics in the high channel
30:58
hydration will come the United States in
31:00
there and they but they don’t worry
31:03
about sin because they think I’m a
31:04
little church takes care of that all of
31:06
a sudden they’d be set by the cream I
31:08
think it’s that are crazies rushing in a
31:10
chap who destroyed bars destroy liquor
31:13
trying to force that kids in public
31:15
schools doesn’t agree they want to have
31:17
parochial schools they can transmit
31:18
their religious values that kids who are
31:20
these fanatics will these crazies washed
31:21
crazy to come in and chopping up a bar
31:23
of these for example early the Germans
31:25
were very lovable group both German
31:27
Catholic and German Lutheran’s and
31:28
German culture you go the whole family
31:31
goes to church and then they prepare to
31:33
a beer garden charming here garden they
31:35
played a brass band plays having long
31:38
I’m quiet fun a little something like
31:40
lost crazy the caring nation types
31:42
coming with hatch doesn’t chop up and
31:43
destroy the beer since in okay you have
31:47
a totally total religious culture clash
31:51
so what we had for a hundred years
31:54
ninety years and the local and state
31:56
level constantly because they didn’t
31:58
they were cut they were pests the losses
32:00
were pests because they believed that in
32:02
order for them to be say that and try to
32:03
save everybody else so they were costly
32:05
trying to outlaw liquor costly trying to
32:07
out Walker okie old schools and costly
32:09
trying to outlaw Sunday activity also
32:13
outlaw teaching in the German language a
32:15
special big say outlaw German school go
32:19
together so the the Roman Catholic in
32:24
the high Lutheran’s one-to-one almost
32:27
man from man voted Democratic so what
32:29
you had then is that the the Whigs of
32:33
the Republicans with a pie at this
32:34
party’s the Democratic Party the
32:37
Catholics the we call the liturgical
32:40
groups these are the prior tests
32:44
and the other groups are called
32:47
liturgical we emphasize liturgy
32:49
liturgical don’t withhold voted
32:51
Democratic it’s a very interesting study
32:52
the nave and the different Lutheran
32:54
Senate Lutheran’s are split and
32:55
different very high church Lutheran’s
32:57
and moderately and very low church very
32:59
pious and the voting record is such the
33:01
the stuff was done on Midwestern voting
33:03
and turns out they the highest church
33:06
the highest senator to the Wisconsin
33:08
Center than the Missouri Senate almost
33:09
all voted doesn’t like ninety percent
33:11
Democratic I need five of them right
33:12
the Scandinavians in a row very low
33:14
church would have like twenty ten
33:16
percent Democrat a ninety percent
33:17
Republican so he get he have in other
33:20
words the pious groups voting on was
33:22
completely Republican leaning Catholics
33:25
and Lutheran’s going was completely
33:26
democratic the Democrats were no except
33:32
for the slavery question is obviously a
33:33
separate situation and then I crash were
33:36
known as the party of personal liberty
33:37
[Music]
33:42
and the Republicans were known as the
33:44
party of great moral ideas great moral
33:48
ideas like stamping out liquor stamping
33:50
outs in outlets in things like that okay
33:53
car do you greet moral ideas which is
33:55
the party personal liberty so this is
33:57
that this is going on on the state and
33:59
local level this is what people get
34:01
their gutted this little interested in
34:02
their gut they’re more just that this is
34:04
Anita and economic questions okay they
34:07
were just they were interested in having
34:07
the church or I’m having this school or
34:09
I or house outline somebody else’s
34:11
school and having an liquor having them
34:12
liquor at lor this is gut stuff he is
34:15
finding only on for a hundred years it’s
34:17
not of the economic picture come an
34:18
economic picture came in this way the
34:22
sorry personal liberty
34:34
[Music]
34:36
the economical you know I started to say
34:39
this I’ll get back to this now
34:40
economically the federal it’s the Whigs
34:44
and Republicans were statist in other
34:46
words they believe in big government I’m
34:48
going to different aspects of this next
34:50
hour and the Democrats were a
34:52
libertarian and they believe in minimum
34:54
government minimal free trade lays a
34:57
fair hard money no government
34:59
intervention etc so the interesting
35:02
thing is how did the the Democratic
35:05
leadership who addressed an economic
35:07
question that money went to their local
35:08
people how do they convert local people
35:10
the interest in economics and similar
35:11
the Republicans are wait they did it by
35:13
taking the religious issues and widening
35:14
of the consciousness of their
35:15
constituents to the economic in other
35:17
words Republicans are the waves we go to
35:20
their people I said look just as we need
35:21
just as we need big we need big
35:23
government local level stamp out sent
35:25
right right
35:25
you need paternalism they go on a local
35:27
level okay just as we need big
35:29
government local level stamp outs and so
35:31
we need big government on the federal
35:32
level to increase everybody’s purchasing
35:34
power to keep out cheap foreign goods
35:37
detective tariffs keep increasing
35:39
purchasing power to inflation’s with
35:41
paper money
35:42
chief credit to big public works we need
35:46
we need a whole big government structure
35:48
so in other words they said I’m gonna
35:50
Republic say yes yes of course
35:52
so in other words they show the
35:54
application of the religious values of
35:56
the public to economic questions then
35:59
our chronic leadership do the same thing
36:01
on the for their poor they said look you
36:03
see the you know these wasps peso bees
36:05
are trying to trying to eliminate our
36:06
let our liquor and eliminate our
36:07
churches our schools is that right yes
36:09
these same guys want to have big
36:11
government on the federal level to keep
36:14
out cheap goods we’re trying to have
36:17
monopoly privileges to their people
36:19
the different corporations or whatever
36:21
and trying to keep out they kind of have
36:23
inflation which will rob the value of
36:24
your of your of your purchasing power
36:26
and government intervention trying to
36:30
have Big Mike taxes and so forth the
36:32
same way they’re trying to have bigger
36:33
than a local level so they widen the
36:35
conscious of their people it will
36:36
integrate it so libertarianism on the
36:39
local level
36:40
of apparent as an economics lay their
36:42
care and economics the same way state
36:44
isn’t on the local level was translated
36:47
into Republicans into state of the money
36:50
economic federal level so that’s what
36:54
your hands nineteenth century had a
36:56
consistent to consistent parties this is
36:58
an ideology both on local religious
37:01
social code now social issues such as
37:05
liquor and school systems and things
37:07
like that and versus a consistent
37:12
libertarian position and so minimal
37:16
government and local social and
37:18
religious questions was translated the
37:19
minimal government on economic questions
37:23
and vice versa for minimal government
37:24
maximal government so to speak on social
37:27
religious questions to the economic
37:28
question that’s why the people got
37:30
interested now that solid like Mike my
37:32
long-term question on this thing how
37:34
they got addressed and money in banking
37:36
all that okay so that was the that was
37:44
the two parties there was the two
37:46
ideologies never the to religious
37:48
ethno-religious basis and the Civil War
37:51
the we have almost at one Party Congress
37:55
in other words this number crap they
37:57
stuck the South was almost a little
37:58
democratic we’re getting almost all
38:00
Democratic and the South we’re not
38:02
Catholic other exception of the
38:03
southerners they were not fanatics okay
38:05
so they were part of the Democratic
38:07
coalition when they left Macy seeded
38:10
from the Union and that we had almost a
38:11
one-party Congress me the total
38:13
Republican Congress at that point the
38:15
Republican Party used the okay the
38:17
opportunity haven’t sent opportunity so
38:19
to speak the put throw their entire
38:20
economic program which they couldn’t put
38:22
through before one of the things
38:24
interesting things happens here is twice
38:27
in the nineteenth century once then
38:28
around 1830 they can4t the next time
38:31
next time ie 1890s the Democratic Party
38:35
was becoming slowly but surely the
38:36
majority party will see in the 1890s in
38:40
the yeah one reason is because maybe
38:44
libertarianism was more attractive in
38:45
the public second reason is that the
38:49
demographics with such the Catholics
38:50
were getting stronger a lot of the
38:52
Protestants
38:52
there were more Catholic immigrants than
38:55
there were positive arresting the
38:56
Catholics have a bigger higher birthrate
38:57
you’re probably all know so the result
39:00
of all this prior immigration and a
39:02
higher birthrate is the Catholic
39:04
Lutheran High Church with them gradually
39:06
becoming majority the first time is half
39:09
of 1840s we almost had we’re getting to
39:13
have a solid Democratic majority and
39:14
then what happened is the first to split
39:15
over slavery I don’t think it was that
39:17
down there up the chute Democratic Party
39:20
split wide open slavery question and
39:22
then we have a civil war that kill laugh
39:24
the next time we’ll see later on and
39:27
happened in an early early middle 1990s
39:29
another chronic party of slowly surely
39:31
become the majority and we’ll see what
39:32
happened with that okay let’s take a
39:35
ten-minute ten minute break here so come
39:37
back to a second hour the Republicans
39:47
did your own civil war started was to
39:49
put through because the Democrats had
39:51
been more or less than majority
39:53
mattifying of Democrats had won every
39:56
presidential election time 1844 about
40:02
twenty twenty year twenty thirty years
40:05
with the civil war with it whether one
40:08
Party Congress the Republicans used the
40:10
opportunity to push through their entire
40:11
the entire national status economic
40:13
program and first of all of course big
40:18
government keep very high spending and
40:21
all that then income tax for the first
40:26
time in American history
40:33
a high protective tariff which is one of
40:36
the big Republican planks Wigan
40:38
Republican yeah civil warm precisely it
40:45
income tax and protective tariffs to the
40:58
on the pay for the war and to build up a
41:01
big big machine also to pay for a little
41:03
war effort and also the part of economic
41:05
program paper irredeemable paper money
41:08
in other words before that we had a gold
41:09
standard gold and silver a really gold
41:11
standard hard money such policy to to
41:17
allow inflationary cheap money paper
41:19
money
41:20
the greenbacks were issued also by the
41:21
south and the South also does the same
41:23
thing to the north did it with
41:25
ideological fervor so called greenbacks
41:28
meaning the green paper of money we’ve
41:30
got right now right the gold coins of
41:33
course were gold color greenbacks are
41:37
green the also an addition for allegedly
41:46
finance for the financing the war effort
41:47
and also for its own sake of a high
41:49
public debt have heavy deficit financed
41:54
the first part of the war it’s financed
41:56
by greenbacks done the greenbacks began
41:58
to depreciate in other words we’re going
41:59
to go oh we got to the point after about
42:02
two three years of war the one paper
42:04
dollars worth about 50 cents and gold
42:07
coins all of the end of the pre-shaped
42:10
of inflationary so in other words if you
42:12
want to buy a loaf of bread if it was a
42:13
dollar in terms of gold coins was two
42:16
bucks in terms of paper so they since
42:20
the greenbacks we got any fairly we’re
42:21
getting to the point of getting
42:22
worthless they had it shipped to a
42:23
public debt also a national banking
42:28
system was going to go into more detail
42:30
little bit later which essentially
42:33
outlawed state banknotes
42:36
part of the Republican creed was a
42:38
centralization put everything in the
42:40
hands of several government much as
42:41
possible whether Democrats the ideas
42:44
have a little as possible and of the
42:45
federal government and then evolved on
42:47
the states and a pretty limited state
42:48
government also mostly stuff done by the
42:50
public by the people themselves if
42:53
anything done by government should be in
42:54
a state and local level with almost
42:55
nothing in the federal government well
42:56
the Republicans just the opposite so we
42:59
have national banks and her banking
43:01
system which means outlying state banks
43:04
and pyramiding on top of them a few wall
43:06
street bank will see that all get to the
43:08
later I’m not gonna spend too much time
43:10
I’m banking is pretty technical but it’s
43:13
important and huge subsidy through
43:18
railroads which we’ll get into next
43:19
after the talk about civil war huge land
43:24
grant subsidies and railroads giving
43:27
away the public domain and railroads to
43:30
privilege very high excise taxes for the
43:39
first time there was some in the war of
43:42
1812 it mostly Iassogna taxes on two
43:46
things in particular which continued on
43:48
forever since then namely notice the
43:50
pietistic now liquor and tobacco to
43:56
enjoyable occupations don’t forget
43:58
nobody knew about one cancer and I guess
44:00
the back of it was enjoyable
44:02
therefore it’s sinful as HL Mencken my
44:05
favorite writer once wrote defining
44:08
Puritanism he said the Puritan the
44:09
person the haunting fearsome somebody
44:12
somewhere might be happy
44:14
the okay so these high exercise font
44:18
excites that could still exist you can’t
44:20
imagine how cheap liquor was before the
44:22
Civil War it was incredible a gallon of
44:24
top Scotch was like you know eighty
44:26
cents or something like that and it
44:28
wasn’t just the prices person twice of
44:30
dollars worth more than it is now but
44:31
most of the due to the goddamn taxes
44:33
huge excise taxes on liquor which
44:35
continue to this continue on this
44:37
contains permanent part of American
44:39
heritage so they couldn’t outlaw liquor
44:43
they at least slap a high tax on it
44:44
that’s the point and for the first time
44:50
really in American history you know
44:51
certainly in the national level
44:53
conscription the draft and cranking down
45:05
of the centers the suspension of habeas
45:07
corpus one of the basic parts of
45:09
anglo-saxon law and also a libertarian
45:11
law nobody has the right nobody could be
45:13
jailed without being charged with
45:15
something with some crime right and then
45:17
be tried for it
45:18
Lincoln suspended habeas corporately
45:20
Atty where does lock people up if they
45:22
do it they’re against the war effort
45:23
they if they were a favor of peace with
45:24
a South negotiate a peace of South he
45:27
locked them up so there’s a count long
45:28
descent which the Supreme Court said
45:31
later on what constitutional I’m not
45:33
that didn’t he go them after the war is
45:34
over they said expect no right to do it
45:40
hockey’s honorable newspaper editors or
45:42
writers or guts favorite piece with a
45:44
south and okay I think it’s that’s more
45:57
or less it that’s the that’s him wealthy
45:58
entire bowl of wax there was a they put
46:01
in nothing to their favor because of
46:02
this to appease the western former types
46:05
a homestead we’ll get through that move
46:07
a little bit later but this is a basic
46:12
state of the economic program is all put
46:14
through a high tariffs or high excise
46:17
taxes inflationary and cheap money
46:18
public debt nationalizing the banking
46:21
system big huge subsidy for railroads
46:25
all these things are the Democrats
46:28
inglese a fair party or against subsidy
46:30
they’re just in favor of minimal no
46:32
government intervention in favor of free
46:33
market free trade the very low budget
46:39
very low taxes those subsidies no
46:41
special privileges etcetera etcetera so
46:42
this was this is more or less a
46:44
situation boiling civil war and I’ve
46:46
lent some exceptions obviously looking
46:48
at broadly
46:51
this is a Republican program most of the
46:53
continued on since Republicans were
46:56
fairly dominant until about 1870 because
46:58
of the civil war for about ten or
46:59
fifteen twenty years after Civil War
47:01
Republicans maintain their dominance my
47:03
what school waving the bloody shirt this
47:05
was done by some guys and Republican
47:07
campaigner he waved a bloody shirt on
47:10
was he say that beside the Democrats my
47:11
party of treason the party of the
47:14
rebellion and treason they leave them
47:16
the shirt of some soldier who died in
47:17
the northern court here’s a this is a
47:19
shirt of Hiram Jones who died from local
47:22
Illinois or somewhere if you vote
47:24
Democrat you betray the Civil War and
47:26
stuff like that this light you know this
47:27
worked for about twenty years by about
47:30
eighteen seven days it didn’t work any
47:32
much anymore but that was the there’s a
47:35
famous phrase by the way in 1884
47:39
campaign the Cleveland one queen was the
47:42
first Democrat that wins after the Civil
47:44
War the Vice President and when he won
47:46
great close campaign as a and the thing
47:48
that probably switched it right week
47:50
before the election or a public and lost
47:53
minister actually being Republican in
47:55
New York Reverend Richard attack a
47:58
Democratic Party so the democratic party
47:59
is the party of rum Romanism in
48:02
rebellion I noticed these three things
48:04
this was essentially the Piatt test
48:06
program Republican program summed up in
48:09
one phrase Democratic Party the party of
48:11
rum over an evil demon rum liquor cloud
48:15
men’s minds they can’t get salvation
48:18
Romanism nor was the Roman Catholic
48:20
Church and rebellion the South southern
48:23
side and Civil War this so angered so
48:28
much anybody who was sort of marginal
48:30
type that had swung the election of
48:32
Cleveland though anger they yet any
48:35
neutral or any moderate success these
48:37
this is monstrosity and they that there
48:39
was enough that turned enough votes
48:40
against them that shift the election a
48:42
clean one and how much this this last of
48:47
the the National Bank and he never got
48:48
out of the national banking system we
48:49
never achieved free banking and we had
48:52
before the Civil War
48:54
Democrats were never able to get rid of
48:56
this so this is a permanent heritage
48:59
until we got the Federal Reserve’s just
49:00
the 1913 I get into that later
49:02
essentially they say an outlaw
49:04
state bank notes and left centralize the
49:07
banking system on a few Wall Street
49:08
banks basing their their issues on
49:13
reserves on government credit on
49:15
government bonds we got into that later
49:17
we never got Jackson Jefferson and
49:19
Jackson Jackson Lee the only president I
49:21
think Jefferson to pay off the federal
49:22
debt paid off a public debt Jackson paid
49:27
it off from inside 1830s the Republicans
49:31
when it was so much debt by the Civil
49:32
War that became impossible course quite
49:34
you know what something now that’s
49:36
protective Cara Lee ever got really rid
49:38
of we Republicans remain in power until
49:41
the Wolf’s administration Cleveland
49:42
Wilson we never really got back down
49:44
they reduced it some extent that took
49:47
many that case you get rid of that he
49:48
kept taxing we only got rid of the
49:49
unconstitutional declare
49:51
unconstitutional greenbacks he only got
49:53
rid of 1879 we finally got back to the
49:56
gold standard top titanic struggle to do
49:59
that we never got rid of the high excise
50:02
taxes on liquor and tobacco so these
50:04
were permanent legacies of the Civil War
50:06
what huge land grants stopped in 1873
50:10
last the start of 1862 lasted maybe 73
50:14
by that time most of the line was given
50:16
away well most of the Transcontinental
50:17
where was a dope also they began to go
50:19
bankrupt so that was there was an orgy
50:23
of ten years at huge subsidies for the
50:25
railroads
50:26
conscription of course is over after the
50:29
war the Senate precedent of World War
50:31
one and two and outlined it sent the
50:34
anger survive during World War one once
50:35
it stopped after the Civil War was over
50:39
so much of this continues on a part of
50:41
the income much of the things off our
50:43
legacy they’re trying to battle back
50:44
from the tremendous increase of state
50:47
power it’s theta is in this government
50:49
dimension it took place during the Civil
50:50
War period what’s happening matter of
50:52
fact during an American history but we
50:53
usually have this course you can’t
50:56
really do this precisely if you could
50:58
chart government intervention degree of
50:59
government eventually the economy and
51:01
the society starting with 1780s it
51:05
starts very low the opinion pegs all
51:07
along more like very loans then we got a
51:08
war you got the war of 1812 we got a
51:10
increase then it took about 20 years to
51:13
wash out the intervention of war of 1812
51:15
excise taxes
51:16
conscription banking mess-up anyway
51:20
huntin public debt about 1840 to get rid
51:23
of that and we get to the Civil War we
51:26
got a huge increase we never really get
51:27
rid of it so swaps off a bit and the
51:30
1900 increase in the night normal I know
51:31
that they increased knife and or war –
51:33
another big one that’s about it most of
51:35
the increase except for 1900 parry which
51:37
is the Progressive Era most of the big
51:40
increase in the government eventually
51:41
come in wartime and usually a big legacy
51:43
continuing afterwards over okay the one
51:52
of the big one of the big as I said
51:58
we’ll get into that more detail later
52:00
one of the big interventions
52:01
chapter 13 my wife use deals what was
52:05
the Civil War to the Civil War promote
52:07
industrialization will redock I’ll get
52:08
to that next Thursday the so one of the
52:13
big programs of the public government
52:16
and Lincoln and grant administration
52:17
there’s huge subsidy for railroads the
52:19
subsidies began really a little bit to
52:21
some extent in 1850s railroads begin in
52:26
the 1850s I want to take a decision idea
52:29
of transfer first of all I have to
52:30
realize its significance of railroads in
52:32
general to realize something key thing
52:33
before say the 1830s 1840s on the
52:36
railroad the first independent before
52:37
that so the beginning of time until 1840
52:40
means from the year you know 5000 BC or
52:43
whatever there was no land
52:44
transportation ever ever you have to
52:46
realize that nobody moved on land
52:49
you couldn’t move on line the movement
52:51
along on water ocean and rivers and
52:54
that’s it okay and only you’d only lived
52:57
nearer near an ocean or near a river and
53:00
so will the trade was going on in
53:02
Washington River there’s no such thing
53:04
an overlay on transportation no roads
53:06
yeah yeah yeah it was covered why but I
53:09
mean basically I’m talking about
53:10
passengers can I go take a couple of
53:13
months but some of my real trade goods
53:14
and service transport it you couldn’t
53:16
have any real transport
53:17
okay sure he didn’t want you to go out
53:19
in the woods whatever the point is and
53:22
any kind of a large-scale yet dirt road
53:25
there’s no of course there’s not a lot
53:26
of Beals
53:27
no trucks and no railroad so he got dirt
53:30
roads with carts and wagons and so forth
53:32
you make it for the nearest river in
53:35
good shape so the advent of the railroad
53:38
was a fantastic thing tremendous favor
53:40
for them for the world with meant cheap
53:43
land transportation for the first time
53:44
cheap efficient land transportation of
53:47
course so everybody want to get a whole
53:48
before that of a canal I mean if you
53:51
couldn’t have a river he’d dig a canal
53:53
from one river to the other and so an
53:55
England in the 18th century things have
53:56
got a big network of canals he can move
53:58
from one place to the other inside the
54:00
country give you an idea of the railroad
54:07
the sort of next to therefore the first
54:10
big business the first large-scale
54:11
capital was railroads ok when most
54:14
manufacturing was never much of anything
54:17
which was not a big business until the
54:18
1890s the first corporations first
54:21
cooperation with banks that doesn’t
54:22
really count something different
54:24
governments for the corporation doesn’t
54:26
care first real corporations were a
54:27
railroad corporation first massing
54:29
amassing of large scale kappa so wait
54:33
before you start with railroad or the
54:34
first big business and let’s give you a
54:39
little schedule assisting here mileage
54:42
total mileage united states canals and
54:47
railroads total mileage over you summed
54:52
up in 1840 over three point three
54:55
thousand miles of canals and there were
54:57
three point three thousand miles of
54:59
railroad in other words canals are just
55:01
as important as railroads in 1840 then
55:04
it changes in 1840 there’s a big change
55:06
by 1850 the three point seven thousand
55:10
miles can I was eight point nine
55:11
thousand euros by 1860 then thirty point
55:17
six thousand mile road that was a big
55:18
railroad boom in the 50s and we’ll see
55:20
you later on bye bye the industry in
55:22
general football from 50 where are they
55:24
gonna take off nineteen fifties canals
55:27
begin the
55:28
I am they stop they think if anything
55:30
the the Kleins after that our railroads
55:33
are basically cheaper except of course
55:35
you know we’re on the right there and
55:38
the Erie Canal or something but
55:39
basically the the railroad is a
55:42
fantastic producer a tremendous producer
55:45
of transportation cost so beginning you
55:48
have railroads in from one teeny rail
55:50
with another like one you know Perth
55:51
Amboy to New York the big railroad 30
55:53
miles or something and as time goes on
55:55
is more and more than they learn more
55:56
than more capital investment they learn
55:58
more technology etc and railroads began
56:00
to merge into a signal to a long line
56:03
survive 1850 that’s certainly about
56:06
civil war the railroad network east of
56:08
this asipi was more or less built and
56:10
was it was lots of lots of mileage and
56:14
and mostly merge into one long line so
56:17
you start off of in New York
56:19
Philadelphia would have originally a
56:20
trail rows when you’re like one New York
56:22
that breath and boy and for them boy and
56:23
then of course they integrate and merge
56:25
into one much more efficient to have one
56:27
line from New York to Philadelphia
56:28
things like that by the way the I forget
56:32
now when this happened I’ll get to it a
56:34
little later but one interesting thing
56:35
is I bet you all of you think and happen
56:38
around the 1870 1984 some adventure mode
56:41
do you think of a better way to really
56:42
an Eastern Standard they are saving rid
56:44
of these standards with me Sceptile
56:46
Stanton come from
56:47
you probably think was imposed by the
56:48
government at one point the government
56:50
that’s wisdom said okay we have Eastern
56:53
Standard Time
56:54
Western and Central Pacific Mountain
56:56
Pacific it was not done by the
56:57
government originally there were about
56:59
80 different time zones every tenant
57:02
every 10 Maha different time zone
57:05
because nobody travels nobody really
57:07
gave a damn you didn’t if you couldn’t
57:08
travel you took it it took in two weeks
57:11
to get from here to Boston doesn’t
57:13
matter you’re gonna just your your watch
57:15
but so there are lots of time every five
57:19
miles 10 miles have a different time
57:20
they’re like another 10 minutes to see
57:21
if you want to do it I guess technically
57:24
there’s no such thing as a time zone you
57:26
don’t have one hour I mean you have to
57:27
Chicago you know and we get the perth
57:29
amboy adjusted by five minutes I mean
57:32
nobody ever knows what the hell
57:33
nobody cares if you never travelled
57:35
everybody in and you know perth amboy
57:37
it’s here it’s it’s 4:30 and for them I
57:39
might be before 25 nobody really cares
57:43
but the railroads and he started
57:46
Transcontinental Railroad
57:48
I started going from one they couldn’t
57:49
mess around they have to have a pine
57:51
table ok they have a schedule they
57:53
couldn’t have a tee time his company so
57:55
the railroads got together in a
57:56
convention and they agreed on time he’s
57:59
only just arbitrarily czar ok we’ll have
58:01
an Eastern Standard Time on them Western
58:03
you know except for one time for some
58:05
Island Pacific the railroad that did it
58:07
the government nothing to do with it
58:08
community here railroads have an
58:11
economic incentive to do something about
58:12
they were they were losing money or upon
58:14
by worrying about when the think um what
58:16
timetable is impossible total chaos
58:18
through the railroads that brought order
58:21
out of chaos on that by the way that
58:26
they liked saving time which I presume
58:27
the railroads are not responsible with a
58:28
later invention of government it’s still
58:31
a little peculiar because some of the
58:34
example Arizona has never going on
58:36
daylight saving time so that Arizona can
58:38
never you have to remember that that
58:40
they stall on standard time things like
58:41
that Benny Wright was much more chaotic
58:43
in the old days before the whenever was
58:46
1880s when the railroad that had the
58:48
agreement
58:49
similarly the railroads got the began to
58:51
get the guns say look we have to have a
58:52
standard gauge we’re gonna go from four
58:54
cars gonna go from one tractor on the
58:55
other and every gauge is different size
58:58
ain’t gonna make it
58:59
the railroads got the other Messiah what
59:01
they’ve got the gauge should be again
59:04
the interest of having an efficient and
59:06
profitable and efficient railroad system
59:12
okay the one of the railroad subsidies
59:16
begin really the mid fifties or so with
59:21
first of all every every one-horse town
59:25
what’s the habits its railroad remember
59:27
there’s no roads so every one horse town
59:29
gee we can’t really prosper unless we
59:31
have a railroads the beginning to have
59:32
subsidy to get the get the rear over
59:33
come through your town beginning of over
59:37
a building there’s one thing to have
59:38
puff again those days are lots of
59:39
railroad only one more time about five
59:41
only through it and so there’s other was
59:44
overbilling of railroads there’s a lot
59:46
of subsidies on local level on the state
59:48
level and finally on a federal level
59:52
that’s right so if you have by about
59:54
1870s or so we begin to have
59:55
bankruptcies and collapses in the
59:57
railroads but anyway the biggest
60:01
railroad before the Civil War the
60:03
Illinois Central which I think went from
60:05
Chicago to New Orleans I believe and
60:10
heavily subsidized and therefore
60:11
politicized in other words you had Lee
60:13
the railroad was sort of a political
60:15
railroad cuz they wanted subsidies most
60:18
of the eastern rural didn’t have
60:19
subsidies they made it without it free
60:21
market and one of subsidies began to buy
60:23
politicians so you’ll be going to have a
60:25
situation where senators selling cell
60:27
with an illinois sub old man was known
60:30
as a little inseparable person this is
60:32
what i meant before a beginning of the
60:33
two hours here I was talking about you
60:36
have to know who these guys are before
60:37
they become senators or whatever Stephen
60:40
Douglas for example the Democratic Party
60:42
was an Illinois central person he was
60:45
have hip-deep in illinois central this
60:48
heavy stock holder he also owned a lot
60:50
of real estate of a terminal in Chicago
60:54
where the even the senator from Illinois
60:56
Democratic senator where the Illinois
60:59
several we’re having a thermal so he was
61:01
selling him so low real estate illinois
61:04
central very heavily personally involved
61:05
an he going on the senate and lobbying
61:07
so that was the that was bubble was so
61:13
I’m not gonna go too much in the him
61:14
since he lost he lost out of the
61:16
president for the presidency any rate
61:18
another person who did did not lose out
61:20
was also an Illinois central person
61:22
basically was Abraham Lincoln Abraham
61:25
like I’ve known the history books as a
61:27
Railsplitter the image of him is his
61:29
addition to being like Raymond Massey
61:31
and speaking rather than Massey I don’t
61:33
know if he spoke like that would he
61:35
spoke I ran mad he certainly looked like
61:36
him anyway you see a picture of him
61:39
splitting he never split rail on
61:40
nonsense is like it’s like Reagan
61:42
whining a horse on the ranch guys that
61:44
sort of thing you never split rail he
61:46
was a railroad attorney a pretty wealthy
61:47
rail we’re turning
61:49
he was a he was a hired a lobbyist by
61:53
Illinois central for example to get them
61:55
their Charter in 1850 so he was a
61:57
popular railroad will aaron is also
61:59
mostly illinois central lawyer his his
62:07
wife’s sister’s father-in-law was a
62:09
big-shot president of Louisville and
62:11
Nashville railroad with another big
62:12
railroad it’s definitely a railroad
62:14
person he Western railroads he was a
62:18
dark horse candidate Republican
62:19
nomination 1860 Seward was supposed to
62:21
get it Seward was a connect with Wall
62:24
Street law practice and New York State
62:28
so nobody nobody heard much about like
62:31
and his campaign manager bringing a
62:33
campaign manager especially one in the
62:34
nomination with Norman Judd was a
62:37
Chicago lawyer chairman of the Illinois
62:38
Republican Party and a railroad official
62:42
particularly Big Shot on the Rock Island
62:44
Chicago Rock Island Railroad that famous
62:46
walk on the line which went from Chicago
62:49
Omaha had popped three important
62:51
terminus from Omaha links of the famous
62:54
on Pacific would start moving pretty
62:57
soon of the Transcontinental for the
63:01
West the other guy I hope gonna
63:04
nomination was Judge David Davis an old
63:06
friend of Lincoln who before he became a
63:11
judge or was he before becoming to have
63:12
judges are not always just sitting on a
63:14
bench are often pretty active
63:15
politically he was a big shot of the
63:20
Illinois Central he was a top person in
63:23
Illinois Central he also sold a lot of a
63:27
creation oiseau it’s not for something
63:28
like Stephen Douglas did so what we have
63:31
then is a as Lincoln himself heavily
63:36
involved with myself on also there’s two
63:38
big campaign managers at the Republican
63:40
convention there’s definitely a Western
63:44
Railroad person the the other
63:49
interesting figure on the cabinet I
63:51
could go through the whole candidate
63:52
yeah the other interesting figure of the
63:53
Secretary of Treasury is involved with
63:55
banking and deficits and so forth the
64:00
guy who was made Secretary of Treasury
64:01
that’s a great a Treasury Lincoln
64:04
administration salmon P chase a former
64:08
Democrat Cincinnati for some reason
64:17
chase was always always heavily in they
64:19
always needed money I guess lots of the
64:21
theme money he needed a lot of money you
64:23
know his wife his wife’s father was one
64:25
of the wealthiest landowners in
64:26
Cincinnati owned owned half of
64:28
Cincinnati but he always needed money so
64:31
Chase was the two guys who got him into
64:37
office a lobby to get him to be
64:38
Secretary of Treasury because he always
64:40
the next Democrats it wasn’t really in
64:41
big favor for the cook brothers J cook
64:45
the first famous banker as brother Henry
64:51
covered the bigshot newspaper editor
64:52
Cincinnati whatever so Henry cook
64:59
Jay Cooke was a banker and full of gob
65:01
went to Philadelphia came a banker I’m
65:04
not to me I’m sort of a moderate-sized
65:05
banker nothing that’s a great shape as
65:07
soon as Lincoln well they poured a lot
65:09
of money to chase his campaign campaign
65:11
his estimated over the years Jake
65:16
fighting 54 in other words by the end of
65:18
the administration Jay Cooke personally
65:20
invested $100,000 chasing his campaigns
65:24
this is a case of political life boodles
65:28
either subsidies bribery or can’t pay no
65:31
hundred thousand dollars 1860s is
65:33
enormous it’s like over a million now
65:34
more than a million now I think maybe
65:36
more than maybe five minutes something
65:38
like that enormous amount of money
65:39
poured in the chases campaign by crooks
65:41
in a very close connection between Jason
65:43
cook so cook gets cook cook poured a lot
65:47
of money into chasing the political
65:49
stuff yes he lobbies to get chasing the
65:51
Secretary of Treasury then what happened
65:52
the quid pro quo
65:56
after the greenbacks begin to fade out
65:58
because they’re appreciating their
65:59
inflated cook this there’s a big they
66:02
put out a gimmick international banking
66:04
act a gimmick is this first of all cook
66:07
gets from the Treasury Department the
66:09
monopoly on the underwriting of all
66:10
government bonds huge amount of
66:12
government bonds now pouring out to pay
66:13
for the war effort
66:14
cook gets the monopoly on the other cook
66:16
was the first investment banker he took
66:19
up of houses gate cook cooking company
66:22
in Philadelphia gate cooking company and
66:26
he gets a contract in the Treasury then
66:27
he the cook has a monopoly an old
66:29
floating and government bond for the
66:30
entire war and that if I happen to get
66:33
teeing off from then on for the 1870s
66:34
except for one year one or two years
66:36
cook out of a novel government bond
66:38
issue incredible so listening to cook
66:43
gets a rake off and every every
66:44
government bond of so that’s the chase
66:46
cook connection the way politics works
66:49
cook for the hundred thousand dollars in
66:51
the chases of Louisville career chase
66:53
become secretary Treasury and grants
66:55
cook monopoly a noble government bond I
66:57
cook and the first con man and financed
67:01
by con man means s he takes you realize
67:05
this is the days before the science of
67:06
public relations have been invented
67:07
no no PR man a professional PR man no
67:11
Madison Avenue cooking the first I said
67:12
I got all these bond how am I gonna sell
67:14
them we’re gonna buy this stuff he hires
67:17
propaganda see how his agents become the
67:19
country saying buy a Buy America and I
67:22
sort of so all the stuff Elise phony
67:24
campaigns the government bond salesman
67:25
begin with cook hiring pamphleteers and
67:29
talk about the glories of government
67:30
bonds how her mother wonderful and now
67:33
telling you gonna be wiped out by
67:34
inflation things like that it almost
67:36
starts with cook so in addition so
67:40
that’s number one and then cook gets
67:43
cooked beside the way to fix up the
67:45
banking system is we have lost eight
67:46
banknotes and we replace and then create
67:51
a national banking system she’s done in
67:53
1863 thank and say that only national
67:59
banks can issue banknotes in other words
68:01
other banks can now can still have the
68:03
positive C go to a checking account you
68:06
have it checking a can you still do that
68:07
but actual notes like paper money the
68:09
old days every bank is issuing paper
68:11
money they were payable and gold you go
68:13
to the bank of Great Neck you have ten
68:16
dollars banker Great Neck which they
68:17
would have to pay go along here the
68:19
mandala and gold coins or Treasury notes
68:21
using gold coin and that’s it this is a
68:24
free banking system free competitive
68:25
banking system which is pretty hard
68:26
money
68:27
there’s no banking expand very much
68:28
couldn’t fight very much because then
68:30
they’d be call upon them to Redemption
68:32
people from outside a great necklace
68:34
start calling upon a Redemption it
68:35
wouldn’t have the money they go bankrupt
68:36
so we very tightly uninflated system
68:39
very hard money system which is for us
68:41
whether democrats were in favor of well
68:44
now we have a republicans come in a
68:45
merely creative system where state
68:47
banknotes are outlawed only a new thing
68:49
called national banks which didn’t exist
68:51
before there were no national bank every
68:52
bank was chartered by the state
68:53
government some state government now we
68:56
have new things well national bank
68:57
charter by the federal government which
69:00
had to be very large have in other words
69:03
very few large back both day on Wall
69:05
Street
69:05
few New York Philadelphia banks half a
69:07
dozen banks they become the basis of
69:10
whole banking system banks the banks
69:11
non-parent on top before that we had
69:13
individual banks you have gold issue
69:17
maybe three times money
69:18
thank notes now if they can’t do that
69:22
but there’s only a National Bank issue
69:24
of banknotes National Bank’s the state
69:27
banks have to have accounts of the
69:28
National Bank they’re trying to get
69:29
banknotes so you have to you have to
69:32
permit on top of the National Bank a few
69:34
Wall Street bank a few Philadelphia
69:36
banks these national banks permanent
69:39
have a why they paralyze have a
69:40
government bonds huh in other words they
69:44
can create credit they can expand credit
69:46
of money of course you have a bond
69:49
government bonds they buy behind hundred
69:51
thousand dollars of government bonds
69:52
again they have $5,000 in the bank
69:54
credit which is state bank then
69:56
paramount tugboat so in other words more
69:58
government bonds they they buy the more
70:01
they can pyramid inflationary credit on
70:03
top of it who did I so the national
70:06
banks like who they get the bonds from
70:07
they get it for only one person Jake
70:08
cookies got a monopoly so Cook lobbies
70:10
for it and then they have to go to cook
70:13
to get their money so they gonna plate
70:15
on top of it expand credit on top of it
70:17
that’s about with a racket the
70:18
magnificent a racket cook himself
70:20
created a couple of national banks he
70:21
owned two so we then have cookie merging
70:26
from the war as the of the
70:28
multimillionaires of top and the top
70:30
investment banker and mostly finaiiy
70:34
didn’t have much money before the war
70:35
started him sort of moderate banker
70:37
begin to get a lot from the Civil War he
70:42
was also a Republican he was a
70:43
Republican banker and tied in with the
70:45
Republican Party public administration
70:49
[Music]
70:50
so we have then Henry cook as an editor
70:53
of a top of Ohio Republican paper if Jay
70:56
Cooke as has underwriter monopoly
71:00
underwriter and the only guy of the
71:02
national banks can go to to get there to
71:04
get their government bonds front so
71:12
anyway that was the that was the chase
71:15
of the case connection the way the
71:18
treasury work some war okay the you know
71:29
just to begin the civil war question it
71:34
used to be thought until about twenty
71:35
years ago until about twenty or thirty
71:37
years ago the textbooks have a view
71:40
which of course he was not half as he’s
71:43
up to date the head of either the Civil
71:44
War launched industrialization around
71:46
States the railroads of manufacturing
71:49
all these things start with a civil war
71:50
and war give a stimulus to industry and
71:54
this was the this is an all and
71:56
therefore that was all a textbook this
71:58
was finally began to do some research
72:00
and I found out it’s just the opposite
72:03
war retarded that’s realization it makes
72:06
more sense for the word siphoning off a
72:08
lot of effort the war effort and the
72:12
armaments and stuff like that I didn’t
72:13
have time for any kind of fundamental
72:15
improvement so matter of fact we’ll take
72:19
off stage need to call it then the
72:22
industrialization really begin the
72:24
United States with 1850 just as
72:25
railroads begun in eighteen fifties so
72:27
the industrialization not as big as
72:29
railroads but everything really begins
72:32
in 1850s iron manufacturing increases by
72:35
two-thirds in that decade
72:36
textile manufacturing goes up by
72:38
two-thirds interchangeable parts begin
72:40
like begin the comment
72:42
whole concept interchangeable parts
72:44
early starts later it begins to come in
72:46
then see before that and this by the way
72:48
goes on from them it’s a new workman
72:49
you’ve done claiming it’s handicraft
72:51
lasts for a long time and the old days
72:54
what you do is you have even when you
72:55
have machines you know craftsmen or
72:57
mechanics to go out there they fit the
72:59
Machine and so there’s a lot of handwork
73:03
going on in each machine the one that
73:06
expensive and obviously and work with it
73:09
with interchangeable part machine made
73:10
interchange them apart reason or
73:12
effective gonna be replace these like
73:13
they fit together
73:14
you don’t need hand fitting and begins
73:16
to come in from the 1850 there really
73:18
only reaches a peak with Henry Ford
73:21
1920s
73:22
I mean mass production are the only be
73:23
no nineteen tens really only begins with
73:26
Henry Ford but uh it begins to it begins
73:29
to come in or Marie’s and stuff like
73:31
that and also and sometime you’re
73:33
factoring in 1850s Arms Factory
73:41
clocks begins and things like that but
73:44
all of my run one of the reason why all
73:45
my company because you want to be able
73:46
to replace the arm for if there’s some
73:48
piece of the rifle it’s broken you want
73:50
to be able to replace it obviously you
73:52
know put it in so it’s a big advantage
73:54
to do that no new contribution begins
73:58
with no new big contribution begins in
74:01
the Civil War precisely the Civil War
74:03
there’s a knife AG award delayed
74:05
technological evolved for example a
74:07
Bessemer steel process which is a big
74:09
thing in England right by the 1850s the
74:15
big advance only really is adopted here
74:17
and they after the Civil War because ya
74:19
got time and I can turn out grind out
74:21
arms
74:22
there’s no time to retool and and invest
74:25
on the Bessemer steel process so that
74:27
only after 1865 we’ve not come in the is
74:36
not like steel and general really just
74:37
comes in there before the house mostly
74:38
just plain iron and who bessemer’s do
74:41
you have the shift to it to a steel
74:44
steel process
74:49
and all the things like mechanization
74:53
beginnings of corporation all these
74:56
things cotton textile manufacturing
74:58
being at the take-off in 1850s so all
75:01
these things you’ll see more of that and
75:02
Hughes and as a matter of fact it tends
75:10
to be a sort of breakdown in production
75:12
because they’re working the equipment
75:14
too hard during the Civil War and begins
75:15
to break down
75:16
productivity mr. fule they can only
75:18
replace it after the war is over okay
75:21
that’s the that’s it time is up so the
75:26
huge book okay so I’m gonna give me some
75:29
statistic this show I’m not gonna give
75:30
you too much that’s listening I hope in
75:31
the course but the show that the Civil
75:34
War was worth had a retarding effect on
75:37
industrialization instead of a
75:38
stimulating effect their various ways to
75:41
do this there’s a there’s a statistic
75:46
called value-added by manufacturing it’s
75:50
a way of trying to find out a dollar
75:51
form how much national income is added
75:55
by manufacturing
75:56
[Applause]
76:04
try to keep them quiet otherwise you
76:05
won’t be able to have any have to shut
76:07
the door you won’t have any air a large
76:29
class of no teacher no explosive
76:30
combination okay from 1849 of 59 in
76:42
other words the decade of the 50s this
76:44
went out by 76% they can’t there’s no
76:48
precise percentages here of course you
76:50
have to realize also that as you get the
76:53
economy grows the percentages will
76:55
probably decline but any rate that’s but
76:58
this is enough of a factor to begin
77:00
court 1859 a 69 cost 25 knots on a big
77:05
slowing down and then 1869 of 79 plus 82
77:10
percent so again you can see right away
77:13
you have a big jump a big big increase
77:15
in manufacturing and the 50s
77:18
slowing down and six even a lot of this
77:20
if you could have figures from 1665
77:22
probably you might be much lower and the
77:25
seventies bouncing up again to a big
77:27
increase okay so this is just one
77:30
indication a lot of things like I’ll
77:31
just give you a few pig iron production
77:36
very important by the way about half a
77:40
pig iron went into railroad billing of
77:42
railroads and those this period your own
77:46
lines and corns or whatever your track
77:59
[Music]
77:59
[Applause]
78:07
18:52 60 increased about 20% from 1860
78:16
to 65 and increased by 1% and virtually
78:21
stay the same and from 1865 and 70
78:25
pagará production went up by 100 percent
78:30
afternoon night 1872 ad not by hotter
78:33
than 30% the big industrial boom I will
78:37
see you later took place after the Civil
78:38
War but also even though the 50s and
78:40
it’s quite substantial and the civil war
78:42
was ahead of everything got retarded
78:43
everything you know everything it’s all
78:45
real capital investment gets slowed down
78:48
[Applause]
78:50
cotton textiles another important
78:53
manufacturing in that period
79:02
this is this is a cotton consumed in
79:06
manufacture which really means raw
79:08
cotton consume the textile manufacturer
79:11
figures we’ve got eighteen fifty to
79:15
sixty I was up by 47 percent eighteen
79:22
sixty to seventy down by six percent
79:24
obviously almost no oil during the Civil
79:26
War period and eighteen seventy to
79:29
eighty up by about forty eight percent
79:31
so once again we have a consistent
79:35
pattern we have a big increase of 50
79:37
it’s slowing down even getting declining
79:40
in the sixties and going up again in the
79:42
seventies and it’s almost all the
79:44
statistics we have have the same kind of
79:46
pattern when a little statistic sort of
79:49
confirm each other it’s pretty it’s
79:51
pretty pretty you know it gets a pretty
79:53
firm conclusion same thing have a farm
79:57
machinery manufacturing and construction
80:03
and all rights index is a business
80:05
activity all these things work in about
80:08
the same way the other interesting thing
80:15
by the way this is something completely
80:16
different about prices which we’ll get
80:18
back to prices this is something which
80:21
almost impossible for us understand
80:23
comprehend because nowadays we think of
80:25
prices going up every year we think
80:27
inflation is liquid and only goes up by
80:29
three percent lot of nonsense because
80:32
what we’re used to in the seventies
80:34
prices are going up by my fifteen
80:35
fourteen fifteen percent and twenty
80:37
percent every year so when it goes down
80:40
and only increases by three four percent
80:42
we think inflation is way not true in
80:43
the old days prices used to go down
80:45
every year I just used to fall off my
80:47
bad three percent a year it was
80:49
magnificent and the reason is because
80:51
supply of goods and services went up as
80:54
you have an industrial revolution of
80:55
supply of goods increases production
80:57
increases prices for here we bring in
80:59
some fundamental economics taking a home
81:03
like micro you should grasp it
81:08
have you good old supply and demand
81:11
curve which the most important single
81:12
thing to take out of Micro have price on
81:17
the y-axis and you have quantity on the
81:21
x-axis and you have the demand curve
81:24
something like that it’s a pike line
81:26
which is vertical any given point as a
81:29
supply of business services increases
81:31
every year prices are supposed to fall
81:33
and since overall and as the progressing
81:37
economy and prosperity economy
81:39
especially in the 19th century prices
81:42
supply even now the private goods and
81:44
services keep going up why aren’t prices
81:46
falling prices are supposed to fall and
81:48
the old days needs to fall all the time
81:50
every year they fell in magnificence the
81:52
average person it meant that usually
81:56
wages remain about the same from the
81:57
average wage and of course the living
81:59
kept going down every year about 3% a
82:01
year or something so everybody knew in
82:03
their heart and soul and gut that
82:05
they’re if they save money the value of
82:07
the savings were all up won’t be wiped
82:09
out by inflation will go up because of
82:11
deflation and so the not it was not did
82:14
not have a depressing effect on business
82:16
many historians think nothing a
82:17
depression wasn’t an oppression because
82:19
course also felt in other words
82:21
productivity went up as capital
82:23
equipment and technology improvement
82:25
capital equipment was invested supply of
82:27
goods and services when I of course went
82:29
down and so prices fell course style and
82:31
profits remain he remained ok profits
82:33
were not wiped out everybody was happy
82:36
average consumer improves etc etc so
82:41
this was a normal condition of the
82:43
American economy from about 1800 to
82:46
about 19 actually go by 1940 from 1800
82:49
1940 prices fell over a year with one
82:52
exception an exception was wartime
82:57
in other words by the way in England the
83:00
great period of revolution England for
83:02
about 1750 to about 90 however prices
83:04
fell every year to looking you and
83:06
except during wartime got wartime okay
83:09
means the government needs money fast
83:12
how they gonna get money that they
83:14
create money by inflation they print
83:15
money one way or the other prints bank
83:17
credit various technical ways the basic
83:19
thing is they print money as they print
83:21
money to finance the war effort the
83:23
supply of money goes up and the man
83:26
turns go up in other words
83:27
everybody’s got more money in their
83:29
pocket they bit up prices and so as the
83:33
man curves goes up if you haven’t been a
83:35
lot of money you can offset the increase
83:37
in productivity that’s what happened but
83:39
cisely what happened when war of 1812
83:42
mexican war was too short this to happen
83:45
the two limited civil war enormous
83:50
increase in money supply both North and
83:52
South World War one and World War two
83:58
and this whole period and every all
84:01
other kind except for 1896 to 1914 was
84:04
special reasons we’ll get to later when
84:07
money prices went up slowly about 2% a
84:10
year aside from that prices fell a con
84:13
during all this period except during
84:14
wartime what the war of course was
84:16
fairly short like for example a lot of
84:18
jerks now who are Reagan administration
84:22
apologists regular stations face the
84:26
economist for Reagan administration or
84:27
apologists are faced with an interesting
84:29
problem namely Reagan promised to
84:31
balance the budget by 1984 it’s now 1986
84:35
deficit of about two hundred billion
84:37
dollars a year and going up I mean they
84:38
keep saying well it’s gonna go down to
84:41
50 million don’t you believe it
84:42
it’s a deficit of enormous every year so
84:45
how do you justify this somebody’s got
84:46
it you got to come up with some kind of
84:48
justification if your Reagan
84:50
administration and apologists either
84:52
actually working for it or spiritually
84:55
working for it so they say as well after
84:57
all it’s not so bad if you paid the
84:59
proportion of the GNP deficits aren’t
85:01
that bad only 5% it was higher in World
85:06
War two
85:06
no more deficits in World War two since
85:08
the GNP was lower national income and
85:10
lower proportion of the deficit – unipi
85:15
was high at 7% or whatever well that’s
85:17
true however it it’s not much of a not
85:20
much of a an argument because
85:22
the world war 2 that was only lasted for
85:24
about two years you know does that mean
85:26
that was the big burst of tremendous war
85:30
financing with 1943 and 4445 that was it
85:33
and was no but everybody knew is only a
85:35
couple years this damn thing is
85:37
permanent it’s a very different
85:38
situation to have a burst of a deficit
85:41
used to happen every war and then you
85:43
try to wash it out afterward very
85:45
different from that they’re having a
85:46
permanent deficit leaning back if I have
85:48
nothing wrong with it was worse in World
85:50
War two that’s the that’s the problem
85:53
with an argument at any rate the
85:57
surprise sees the fall of time as a
86:00
result prices around 1940 or about the
86:03
same and this is very rough about the
86:06
same as they were in 1814 it wasn’t
86:07
really that much difference there was
86:09
fluctuating war and after the you know
86:11
after war was over with fall again more
86:13
or less pick up so prices were fairly
86:16
constant over a long period but if you
86:18
have punch you have war prices falling
86:20
and peacetime punctuated by increases in
86:23
war and some you have one you wind up
86:25
something like that and fully prices are
86:29
good from any point of view before view
86:31
the consumer point of view you cannot
86:32
make helpful or whatever any right to to
86:38
pick up on this prices were about
86:43
constant you give me a wholesale prices
86:46
now if you no idea they fell uh nineteen
86:52
forties they went up old a bit 1850 so
86:56
between 1848 he six they were flat
86:59
constant 18 so eighteen forty to sixty
87:03
hunts them prices this is a rough thing
87:08
but if they don’t need precision for
87:10
this eighteen sixty to sixty five
87:12
because of tremendous inflation airy
87:13
policy so called greenbacks I mentioned
87:15
last time prices went up double went up
87:17
by 99% in greenbacks see one interesting
87:21
thing about that period was but you
87:23
could use gold it didn’t outlaw the use
87:25
of gold in a California and Oregon
87:26
weather the stateís covered go fairly
87:29
recently they were using gold coin
87:31
in trade so if you want to know if the
87:34
average person want to know what the
87:35
cause of inflation you can obviously see
87:37
their prices are doubling they could see
87:40
what it was because they took a paper
87:41
dollar they went to buy a loaf of bread
87:44
or something is of course 2 bucks and
87:45
greenbacks of course only one buck and
87:47
gold
87:47
it was obvious what the reason why they
87:49
couldn’t blame it on speculators or
87:51
capitalist or unions or anything like
87:52
that or aliens or speculators it’s all
87:55
me it’s public or work all through the
87:56
goddamn paper okay there’s something
87:58
wrong with the paper money was wrong
87:59
weather kept increasing wakhan at any
88:02
rate in 1862 70 the increase was 46% but
88:07
with prices the end of fall as soon as
88:09
the Civil War was over if you take just
88:12
this half decade have a doubling of
88:15
prices if you take the whole deck a you
88:17
have only going up a 50% so it goes down
88:20
starts going down since the war is over
88:22
in the eighteen seventies eighteen
88:25
seventy to eighty prices fell by 26%
88:28
like nificent thing two and a half
88:31
percent for per year money supply kept
88:33
going up for very firm action of the
88:35
increase in productivity production was
88:37
so great that well set all the
88:39
manipulations of the banks and so forth
88:41
and you have our foreman prices in 1880s
88:45
1880 in 1890 they had a drop of 18
88:49
percent and many historians looking at
88:52
the safe gene was a big depression from
88:54
a thesis it wasn’t a depression
88:55
everybody loved it it was a there was a
88:58
forum on prices in the fall and course
89:00
everybody was happy yet the myth of the
89:03
secular depression and they see the
89:05
reasons historians and I think of prices
89:07
going up was I think something wrong
89:08
with prices for these are the pressure
89:10
doesn’t mean that war and a little bit
89:12
of stuff has been done on this and
89:13
anyone but so far United States that has
89:15
been much recasting of this in the light
89:18
of the end of the facts any right now
89:20
wasn’t it was just great start a
89:21
magnificent someday am i coming again
89:25
falling prices okay I’m gonna get now to
89:28
the land questions a key question for
89:32
that pot it’s a key question by the way
89:33
for all of the so-called third world
89:35
which we have fortunately escaped for
89:38
various almost accidental reasons
89:41
first you start with us the the third
89:48
world model this is obviously not true
89:49
of every country but basically it’s true
89:51
most countries in South America looked
89:53
up these in Asia the model is that she
89:56
have cousins any peasants are working
89:58
the land happy President’s authority
90:02
they’d have constituents all right and
90:04
they’re there they are making a living
90:05
all at in fairly good shape and all of a
90:09
sudden a foreign government comes in a
90:11
conquer this land and what’s the white
90:13
is fron government conquer anything
90:14
what’s the point well as the usual
90:16
historian the usual historical view that
90:18
they do with a glory for national
90:20
sovereignty I wouldn’t say that’s
90:21
totally unimportant mostly nonsense they
90:23
do it for differing for loot
90:25
okay in other words the in the case of
90:28
South America you have Indians who were
90:31
peasants or tilling the land a Spanish
90:33
cumin conquistador A’s they take over
90:36
they not only establish a government
90:37
there they also parcel out the land the
90:39
key thing which is the story looking
90:41
over look they take you know forty
90:43
warlords or something for you big shots
90:45
with Spanish army in Spanish period we
90:48
regime they parcel out the land between
90:50
forty people alright so they have huge
90:53
landed estates the problem is not the
90:54
size of the land that I think the
90:55
problem is get the peasants there with
90:57
what they own the property all of a
90:59
sudden they find bingo they don’t know
91:01
anymore in fact they have to pay rent to
91:04
lamp people call themselves landlords
91:06
and it’s as if I’ll give you an analogy
91:10
is if the Rockefeller family suddenly
91:12
announced we own all of New York State
91:14
and the land in New York and the
91:16
government passes a law in the old days
91:18
and oxen to the governor they pass a law
91:20
saying from now on the Rockefeller
91:22
family owned the entire territory New
91:24
York State so now on we have to pay not
91:26
only the crummy taxes we pay which are
91:28
enormous force in New York we also have
91:30
to pay rent huge amount of rent to the
91:31
Rockefeller family of equivalent local
91:33
land owners this is basically what
91:35
happens in most countries except it’s
91:37
mostly foreigners of comment
91:40
so yeah it’s a supposed to be probably
91:42
even now it be considered
91:43
unconstitutional and pass such a law but
91:44
most countries they haven’t got a
91:45
constitution and then you don’t you
91:47
don’t worry about that so what you have
91:50
then all of a sudden you turn around by
91:52
God you’ve got you got a pay write land
91:55
rent also and latinum this is this is
91:57
the origin of so-called present problem
92:00
the president’s about peasants finally
92:02
thought they were landing on with all
92:04
the sudden they find have to pay and if
92:05
you if you’re an intelligent landowner
92:07
you what you do is you squeeze the
92:08
peasants to the limit you soar like a
92:10
slave owner you take those the effective
92:12
peasant you figure you can’t can’t pack
92:14
to all of us
92:14
incoming rectly wouldn’t him starve you
92:17
charge him enough fret to permit him to
92:19
continue living in the container of them
92:21
raise a family that’s basically other
92:24
words you tax taxes or rent a rent tanks
92:27
over and above subsistence he has
92:29
siphoned off the landlords and build big
92:31
palaces and also they have to have a
92:32
little army they had to enforce this so
92:35
what you’ve got this is not this is not
92:37
I’m not talking about landlords the
92:38
United States or fortunately but we
92:39
escaped this problems will see them
92:41
lying is the maybe this time which if
92:45
God is a enforce theft of property on a
92:49
massive scale with property stolen by
92:54
the foreign government which then
92:55
parcels that the property to Lopez
92:57
Gonzalez or whatever and it’s certainly
92:59
fine you have to pay rent these people
93:02
plus the fight you have to pay taxes the
93:04
same set the governors they use the
93:05
government is usually a Executive
93:08
Committee of these landlords so what you
93:10
have you pay to the same group of people
93:12
high taxes support this whole thing plus
93:15
high rent that’s the present problem I
93:18
think Christine Marxist Leninist
93:19
movements the Marxist Marxist theory is
93:23
that the revolution would take place in
93:24
the most advanced capitalist countries
93:26
aperi it would rise up take over it has
93:28
been no communist revolutionary thought
93:30
and on any capitalist country okay all
93:32
economy is revolution to take advice in
93:34
peasant countries third-world husband
93:36
countries including Russia 1917 which is
93:38
essentially a peasant country then of
93:40
course China and Cuba and whatever
93:42
yet Nam will he’s at least covered your
93:44
peasant country the problem was a
93:45
peasant prompt I’m nothing to the
93:47
proletariat the peasants were being
93:48
shafted on the case of Vietnam by French
93:51
the French of payment about 1890s 1880
93:54
see the land parcel a various French
93:56
landlords and also Vietnamese allies the
93:58
so-called comfort or Epidaurus and
94:01
Marxist terminology so you’ve got and
94:05
when the peasants were rebelling and
94:07
getting arm and trying to enter Cuba
94:09
they’re rebelling basically against the
94:10
Atlantic they they they figure they own
94:12
their bail and they really own the land
94:13
their private property people hadn’t
94:15
read Das Kapital and know from communism
94:16
or anything they wanted their property
94:18
back that was the whole key these
94:21
communist revolutions they were not
94:22
interested in communism they just want
94:23
to get their properties that’s the
94:24
present problem in interestingly enough
94:30
in Vietnam after the North Vietnamese
94:32
made the Treaty of Geneva 1954 they were
94:36
willing to abandon the South if they all
94:38
right we have our North northern this is
94:40
a theory of peaceful coexistence will
94:41
will hold up on the north and hello the
94:43
south the peasants in the south as soon
94:46
as the American came back there they
94:47
started reinstalling the French and
94:49
other Vietnamese landlords so they send
94:51
around to each village tax collectors
94:52
and rent collectors over whom were hated
94:55
on sit on the site on site because they
94:56
figure they own their own
94:57
nobody likes tax collector in addition
94:59
to that you have the rent collectors for
95:00
property which they felt they owned run
95:03
rightly so so what happened more than
95:05
nothing to do with communism at first
95:06
what happened was the South Vietnamese
95:08
villagers started forming little
95:10
guerrilla bands and popping off the rent
95:11
collective impact collector they come
95:13
around you shoot him yeah it was the
95:15
first response and they started shooting
95:18
more the government would send more and
95:19
finally they told a communist look if
95:21
you don’t join our how many trying to
95:23
shush them up beginning we this is my
95:25
lease the people card this is politics
95:26
it look fellas you claim you’re on our
95:28
side you’re a favor of the peasants
95:29
either sign up or ship out and so when
95:32
the coming is done for sign up and being
95:34
better organized and being aided by the
95:36
north I finally took over but they were
95:37
the initial impetus the Vietnamese
95:40
Revolution was a pure present question
95:42
nothing to do with communism remarks
95:44
isn’t anything like that alright so we
95:47
have the poor peasants being shafted by
95:51
the feudal land system it’s a probably
95:53
bad turn I know what better turn to use
95:55
for it
95:56
state-imposed land ownership in the
96:03
United States we escape fuel and for
96:05
this reason we had a lot of land
96:06
first of all in that States America’s
96:09
discovery of a huge amount of it being
96:10
land enormous hundreds of millions of
96:12
acres of not very productive land nobody
96:14
on it
96:15
nobody except Indians of course of the
96:17
controversy by having the Indians there
96:18
were that many of them got wiped out by
96:21
disease because when they met the whites
96:24
they interchange diseases and most
96:28
things got wiped out and then they write
96:30
the the Indians were unfortunate not
96:34
considered human the general policy of
96:36
the white colonial assembly basically
96:39
exterminated and aside from that was an
96:45
empty land situation they did not have
96:48
that wasn’t very densely populated with
96:50
the Indians any rate so you have on only
96:53
had unused land land which is not
96:55
foreign to you yet who owns it first
96:57
question is who owns this land well the
96:59
peasants we know who owned a peasant
97:00
sounded then the feuless came over and
97:02
took it over but unknown land was vast
97:06
country
97:08
who owns it well you have two series of
97:11
this a little bit Aryan theories
97:12
essentially was adopted by Jefferson and
97:14
Jackson I mentioned the Democratic corny
97:17
position the libertarian theory is
97:22
nobody else own and this is essentially
97:27
a Jefferson position essentially the
97:28
Jackson position okay so who should
97:33
honor the libertarian theories nobody
97:37
else until somebody settles it
97:38
somebody settles it that’s something
97:40
with it bringing it into production and
97:41
what it is
97:42
could be fuzzy but it really isn’t in
97:44
practice you clear the land you grow
97:47
something on it whatever it is chop a
97:49
tree down you build a road whatever the
97:50
heck it is you won’t you then own it you
97:52
become a homestead owners this is cool
97:54
homesteading homesteading Theory
97:56
John Locke of the first era Titian of
97:58
this
98:00
and it’s a sort of theory which is sort
98:02
of cumin Sethi which most people in
98:03
practice will have got interestingly
98:05
enough for example in the California
98:08
Gold Rush 1848 with no government in
98:12
California United States government
98:13
technically owned it but didn’t wasn’t
98:15
interested or the way the hell out there
98:16
is one of Indians in between
98:17
nobody wanted to schlep the California
98:19
don’t forget there’s no interstate
98:21
highway program no airplanes
98:23
there’s no interstate highway program no
98:26
railroads there’s no not and and I
98:29
mentioned something that somebody
98:30
mentioned the covered wagon law yes last
98:31
hour I have great reverence for the
98:34
covered wagon people if anybody’s ever
98:35
driven the calf any of you ever drive to
98:36
California driven to it is a mess that
98:38
is a boring mess from about the edge of
98:42
Iowa from the Iowa Nebraska border until
98:44
the California Board even beyond that
98:46
two thousand miles of nothing they’re
98:48
not no houses no people no trees no not
98:53
a slight exaggeration but not much I
98:55
think these people are doing that with
98:57
no roads no motel okay and how they did
99:02
it lord knows the covered wagon pipes
99:04
for any rate it was a tremendous real
99:07
pioneer spirit what you see in the movie
99:09
there’s nothing compared to what
99:10
actually they went through and then any
99:12
rights and so California had no
99:13
government with energy so miners got out
99:16
there the whole bunch of gold miners
99:17
prospecting they had a they had to make
99:19
decisions on the spot who owns what and
99:21
they made it very things they created
99:22
their own property law there was no
99:24
mining property law they create it they
99:26
were mostly illiterate they did it they
99:28
knew what was going on in the world
99:29
let’s go see jake has this vein and
99:31
therefore Jake owns
99:32
whatever the technological unit is say
99:35
in other words that he owned this vein
99:36
plus X number of feet around it or
99:38
whatever I don’t know I think about gold
99:39
mines but they did if they were able to
99:41
assign without too much trouble
99:44
create a property all for gold mining
99:47
and they had courts they had their own
99:48
private courts the miners set up
99:49
arbitrator listen enforce it plainly
99:53
jumpers is the so proclaimed army the
99:54
terrible crime and oh they did somebody
99:55
jump that claim he was written out of
99:57
town or a shot or something so it worked
100:00
pretty well and they took about ten
100:02
years the US government again interested
100:03
in this
100:04
so these things can be worked out in
100:08
practice the people who are doing it
100:12
morale can allocate allocate property on
100:14
the homesteading basis whoever uses it
100:16
finds it claims that does something
100:18
whether they come to the owner
100:19
that’s the libertarian theory they’ll
100:21
carry theory is you nobody owns did
100:22
until Holmes homestead it the other
100:24
theory which is essentially the finally
100:27
several government owns it
100:32
since the several government was around
100:34
then they of course took over
100:36
immediately when America was discovered
100:37
Spanish government owns half what you
100:39
have to globe the Portuguese government
100:41
they were all personally on land I don’t
100:43
having been there even and so this is
100:46
the basic its distinction here I’m gonna
100:50
put the claims to it now once the
100:51
government claimed they own there’s
100:52
nothing much the batarians we do a bad
100:54
they’re stuck with US government owning
100:57
it example how did the head of the state
101:00
get to be called New York conely UART
101:02
because Charles the second I believe
101:05
King of England
101:06
we were we were owned by England parcel
101:09
athlete the territory now called New
101:11
York with his brother the Duke of York
101:13
okay who’s the became the private owner
101:16
of this whole kind of I mentioned Walker
101:17
for you probably thought was an
101:18
exaggeration
101:19
is now they were having a Duke of York
101:20
privately owned this whole state so the
101:24
and the thing which saved us from fuel
101:25
and rent reason why we don’t have to pay
101:27
half of our income to the Duke of York’s
101:30
the sentence he wanted money I mean it
101:32
was gone for a second area here with no
101:34
people off the trees you want to get
101:36
money out of it okay so in order to get
101:38
money out of it the feudal landlords of
101:39
New York and North Carolina etc parcel
101:42
it out into small plot and soul of the
101:44
sutlers and so there that way even not
101:49
only homesteading came about in the long
101:51
run other words the settlers finally
101:52
wound up even though they had to pay a
101:53
high price for it they finally got out
101:55
from under the feudal ancestors all a
101:57
monopoly system Jimmy William would call
101:59
it so we had a way out which um
102:03
which unfortunately other countries not
102:05
have because there was so such a large
102:07
amount of land so few people and so land
102:10
became a drug on the markets that are
102:12
speaking they were willing to sell it
102:13
off of small parcels we got any money
102:15
out of a page they could I mean if
102:16
you’ll give your was not really
102:17
interested in the fact he wasn’t
102:19
thinking about the fact in nineteen
102:20
eighty here’s the sentence could make a
102:21
lot of money out of New York sixteen
102:23
eighty just a bunch of trees and no
102:25
people you wanted some people here nor
102:26
they get people here haven’t some of the
102:28
by the land of the small plots and sell
102:30
it the settlers okay so we had then as
102:34
the United States acquired the west and
102:36
of the original 13 States in pretty good
102:39
shape except for slavery of course
102:41
whereas plantations became large
102:44
unnaturally large because of cheap labor
102:47
except from that there’s a fairly good
102:50
land system because it’s essentially
102:51
acquired by settlers as the government
102:54
government then owns it in other words
102:56
we United States became a republic US
102:58
government all owned all unused land
103:00
so-called public domain yes just by
103:03
virtue of the fact every government but
103:05
in the east that already Moran had
103:07
already been craley well parcel out the
103:09
problem came in west of the Appalachians
103:11
when we first of all after a revolution
103:13
we got all this onion my own unused land
103:16
then after the Civil War of course we
103:17
got more and more of this you have all
103:18
the flan on the West owned by the
103:20
federal government a siphon pact program
103:24
there’s not a great shrewd or fish and
103:29
land owner to say the least
103:30
as with everything else they a different
103:33
president then becomes a governmental
103:35
question how do we parse live the life
103:37
how much land go to private ownership
103:38
and how should it be done well what
103:40
happens is the temptation and either
103:41
this government a whole lawn to live
103:42
forever which is one which happens sis
103:45
about 1900 so-called conservation
103:47
movement most of the land on the western
103:48
space is still owned by the program and
103:50
held out of use it’s sitting now locking
103:53
up all these resources like that
103:55
minerals trees ranches sometimes the
103:58
lease of that little to the bad effect
104:00
I’ll get a little bit later on but any
104:02
rate several government owns it you can
104:05
either sin on it lock it up
104:08
or you can sell it at auction or
104:12
whatever I’ve granted the various
104:13
favorite people follow political
104:16
favorites or sell it at auction
104:17
political favors in other words sell it
104:19
or keep it some of them granted so that
104:24
was partially that was done with one of
104:26
the civil wars a lot of that selling at
104:28
auction of speculators not the settlers
104:30
that speculators and speculators have
104:32
charged with settlers for it
104:35
the homesteading principle Jackson and
104:37
Jefferson since the government already
104:38
owned the land they said well at least
104:39
allow the set the homestead us to own it
104:41
in other words grant it in the
104:43
homesteaders I’m stairs clear piece of
104:44
land guard men should grant it to them
104:46
and that’s it that’s your humor for it
104:49
that’s the homesteading doctrine it’s
104:52
sort of a later version of a libertarian
104:55
doctrine I mean given that the the South
105:06
was against homesteading and the Easter
105:08
is against homesteading some and the
105:09
Westerners tended to be in favor of it
105:11
but first the Westerners were outvoted
105:12
so the Republicans in 1863 I think
105:15
passed homesteading war not because they
105:17
were in favor of it because they wanted
105:18
to make a deal with the West they want
105:20
to get support on the west and that was
105:22
there that was their concession and
105:29
unfortunately I was fine Iowa was
105:31
settling homesteading manor everything
105:32
everything we’ve done pretty well there
105:34
except the problem was as soon as you
105:36
get west of Iowa this happened around
105:38
1870 did you ever drive a GoSee so you
105:41
something happened something grandpa
105:43
Chemical America you get the rest of
105:45
that Iowa name leaves no water okay what
105:48
online whether they call it ain’t no
105:50
water so this means that it’s very dry
105:55
okay means that you can’t you can have a
105:57
farm in the east east of the Mississippi
106:00
east of Iowa it’s a little bit less than
106:01
Mississippi an average farm could be a
106:04
family farm about hundred sixty acres
106:06
and so the homesteading wall said
106:08
anybody who clears and produces hunted
106:10
60 acres gets it and if it stay there
106:12
for two years whatever they provision
106:13
was
106:14
how did seized a cure is fine fine for
106:15
cattle and you can see camel forms up in
106:18
Virginia or down here together something
106:20
a bunch of cattle twenty cows and it’s
106:23
sitting there in a waterhole whatever
106:24
this it’s great I got a lot of grass
106:25
ain’t no grass out there but I mean
106:28
that’s all scrub you know they have one
106:30
cactus and a little got a grass under it
106:32
and paint you mm-hmm five miles away
106:34
there’s more cactus because 160-acre
106:36
farm or ranch is nothing I can’t do
106:38
anything hunting you need a couple of
106:39
thousand acres to do anything there’s a
106:41
cattle if you drive on the west instead
106:44
of having a bunch of cattle em you do
106:45
here sitting under the shades in the
106:47
shade
106:48
ain’t no shade out there possibility of
106:50
that they do is he has one cow over here
106:53
another five miles another cow because
106:56
there’s no food so they have to spread
106:58
out a lot unfortunately when you after
107:01
the Civil War the jerks who were federal
107:04
land Bureau and farm and period
107:06
understand that they probably never went
107:07
out they want the schlep out there it’s
107:10
sitting in Washington and then what I
107:12
didn’t have air conditioning then but
107:13
they were sitting there in comfort and
107:15
so hundred sixty acres that said they
107:17
refused to expand the size of the home
107:20
study claim refused to allow farms of
107:23
more than hunting fee acres a ranchers
107:25
as a result there was a whole land
107:29
communism for about thirty years making
107:31
sixty eighty ninety all over the West in
107:34
other words from from Iowa West the
107:37
Sierras whatever this whole area and no
107:40
private private ranches and there’s no
107:42
private property there at all in land so
107:45
what they did is the sort of stuff you
107:47
saw you see in western movies in the old
107:48
days you ever see an old western moving
107:50
a television as only their ways shooting
107:52
each other why are they shooting each
107:53
other that’s shooting each other for fun
107:54
of it not really enjoyed it it’s because
107:56
there’s no private property everybody
107:58
was scrambling over the water hole who
108:01
gets this land
108:02
there’s the nesters right the nester the
108:06
wanted I want a fun
108:07
there’s the ranchers who usually picture
108:10
the evil ones I live in the movies for
108:11
some reason there’s the ranchers and the
108:13
sheep man okay no loops of them each one
108:17
want to get the same land they want to
108:18
get there
108:19
I was the pastor on this thing or
108:21
whatever they’re each fighting over the
108:23
same property and shooting each other
108:24
they claim to why they shouldn’t you
108:25
don’t have to shoot each other in the
108:26
east why is that because they’re like
108:27
of their evil Westerners because
108:29
there’s no private property they didn’t
108:31
allow property and he’s like don’t name
108:33
in large acreage as a result you have
108:37
people using the property but not owning
108:39
it they’re leasing it and assess it
108:41
using the fruits of it they can’t only
108:43
actual land so yeah it constantly
108:48
complexes as a result housing war over
108:51
the resources sheep men come the Sheep
108:54
men for example one of the problem well
108:56
one thing is if you have grass I mean
108:58
the reason for the Dust Bowl and so
109:00
forth it’s quite simple you have a bunch
109:03
of grass it’s nice too better to be able
109:04
to renew it from year to year either
109:06
seated again it’s everyone’s don’t wanna
109:08
not eat up the whole thing if you’re on
109:10
the grassland you’re have a you know
109:12
have a capital investment you know it’s
109:14
you to your interest is keep the thing
109:15
knowing keep the thing productive not to
109:18
destroy the grassland your own economic
109:21
interest to keep up a capital value of a
109:22
wrench
109:23
so private ranches are private foresters
109:25
don’t they don’t chop down all the trees
109:27
it might benefit in the short run but
109:29
they got they got a lot of trees it’s
109:31
somebody I’m gonna many pre forest left
109:33
a capital value there far as the stock
109:35
stock buyer disappears so they’re
109:38
interested in renewing it private
109:39
foresters renew the trees they chopped
109:42
down only certain an Avenue where they
109:43
plant more same way with grass they
109:45
don’t destroy the Grand Slam but if you
109:47
can use any trees you want or grand
109:49
flying you want but you can’t own it
109:50
means your there’s no buts end up for
109:52
you to renew it because if you know if
109:54
you try to renew it if you if you plant
109:56
more grass some other guys cattle will
109:57
eat it two weeks that’s the point you’re
109:59
just creating more grass for the other
110:01
Schmo to come in and eat but your grass
110:03
there’s no there’s a negative incentive
110:05
to keep up the value of the property
110:06
just the opposite if you don’t chop down
110:08
the tree some other guy chopped down the
110:10
tree so the incentives to chop down the
110:11
tree as fast as possible and you don’t
110:13
have a private property in the actual
110:14
resource you only have a private
110:16
property what you can chop down today
110:19
so what you have is you have one month
110:21
set of camel you eat it eat as much
110:23
grass as possible down of the nubbin
110:25
because if you don’t do what some other
110:27
somebody somebody else’s cattle will do
110:29
it same way of the sheep man the sheep
110:30
or cattle man always complaining that
110:32
she could eat the grass down on the
110:34
ruger so I don’t want me if you have
110:35
your own sheep ranch you find a way to
110:38
solve our problem you wouldn’t let them
110:41
eat everything yeah whatever
110:43
that’s what happen you have a war of all
110:45
against all created by the fact of land
110:46
communism it was a fact that was no
110:48
private property there’s communal
110:50
property in the ground on the grassland
110:51
and then the ranches no private property
110:54
and action natural resource actually
110:56
left-wing is storing them blame it on
110:58
capitalism just the opposite
111:00
blame for the situation is due to the
111:02
fact the entire grass cover with a story
111:04
that forest destroy the problem is not
111:06
capital the problem was a failure to
111:08
have private property to allow for the
111:10
government to allow private property in
111:11
the international resources and grass
111:13
and forests etc etc the you’ve probably
111:17
seen some movies about the barbed wire
111:21
they started fencing off of them
111:24
they started seizing private property
111:26
and cattle ranches by putting a barbed
111:28
wire around and and then there’s a whole
111:30
bunch of mystique of the open range
111:31
remember Kirk Douglas about 30 years ago
111:33
on a movie which he had a phobia about
111:34
Bob why I guess he was chest with cut up
111:37
on one time he kept kept looking for the
111:39
open range
111:39
Stiga the over range he said this place
111:42
is no good if they’ve closed off a fence
111:44
love everything I’m leaving for Montana
111:45
or something well it’s a charming
111:48
romantic of the point is by fencing off
111:50
they were able to have private property
111:51
and ranches and the solve this problem
111:53
of constant war over the pinna Nestor
111:55
the Scheepers on the and the cattle men
111:57
and they were able to keep start
111:59
renewing the property keeping up the
112:00
capital value maintaining it and it was
112:03
illegal until about 1890 so worthy they
112:06
just illegally shut it off how well this
112:08
is my property I’m fencing it and that’s
112:10
it and when he mentioned a barbed wire
112:13
which is around 1870 was much cheaper
112:14
than wood but also there were no trees
112:16
there
112:17
he can’t have wooden fences in the West
112:19
great no trees
112:21
other so the invention of barbed wire
112:23
and we’ll go in there just dis fence off
112:25
and hike with it and anyway this is the
112:28
reason for the pull of War of the West
112:30
the fact that there were custome worth
112:32
between investors and the ranchers in
112:33
the cheek man and all that it’s more
112:35
about by government intervention by the
112:36
fact the government refused to have to
112:38
allow home studying it larger than
112:40
hundred sixty acres and dry in dry
112:43
climates rather than the hundred sixty
112:44
acres is pointless
112:49
[Music]
112:55
okay that’s um that’s really the land
112:59
question I think there are this has a
113:08
application right now there were things
113:10
of water that one of the problems for
113:13
the great water problems in the West
113:14
it’s not just that it’s dry there that’s
113:16
not the real point a point is they they
113:20
steal water from one area to the other
113:21
they can’t nobody’s allowed to sell
113:24
water nobody has private property what
113:27
are they doing the western states you
113:28
have private property in certain rivers
113:30
and the percentage of flow like the
113:32
first deepest sign on the next second
113:34
eight percent whatever it if you can’t
113:35
sell your right to anybody else
113:37
you keep other were the people in Los
113:38
Angeles won’t water the guys up here
113:40
have it they should be able to sell it
113:42
right – somebody wants Angela they don’t
113:43
they can’t do that by law well the
113:45
government has to do it and so it’s not
113:47
done they have a big political conflict
113:49
in Sacramento but think the southerners
113:50
in the northern they hate each other’s
113:51
got they threatened see seeds of one so
113:53
on and finally what happens is they have
113:55
huge federal project so they waste
113:57
billions of dollars and several Arizona
113:59
project right now they wasted billions
114:01
of dollar yuuji number a huge amount of
114:02
money bring water from the Colorado
114:04
River here to Arizona they take this
114:07
water they sell the government course
114:10
owns the government sells it very
114:11
cheaply to farmers in other words the
114:13
cost of the taxpayer I don’t know X
114:15
amount of dollars per bath or gallon
114:17
it’s all of the form is about 1/10 that
114:19
they’re buying loose and a farmers by
114:21
the way have to buy it they don’t value
114:23
by only you don’t use it they don’t get
114:25
it they have to use all this work water
114:27
and this isn’t even a lot of water they
114:29
take the water they irrigate
114:30
on economically growing crops which the
114:33
government then pays
114:34
not the couple not to produce and we
114:37
were they then pay them the plow under
114:39
the crops the government buys in the
114:41
stores in some way I finally finally you
114:43
know dumps it so they’re totally insane
114:46
policy the plumber gets subsidized the
114:48
water construction people get subsidized
114:49
no the taxpayers pay through the nose
114:50
and water gets wasted in other words
114:53
here you have a very scarce water supply
114:54
on the west of water they deliberately
114:56
induced people if so people farm as
114:58
water at a very low rate and do seem to
115:00
waste it and they and then they buy like
115:01
crops and burn it somewhere so then
115:04
totally insane politician benefits only
115:06
politicians and their constituents and
115:09
in a right let’s say that’s enough for
115:12
today well then next time you’re going
115:13
on the railroad question
115:23
you

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