American Economy and the End of Laissez-Faire – 6 of 13 – Tariffs, Inflation, Anti Trust and Cartels

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

6. Tariffs, Inflation, Anti-Trust and Cartels
Lecture by Murray N. Rothbard

The Sherman Act outlawed restraint of trade. The Clayton Act added to that. Anti-Trust hysteria came in the 1940-50s. Whatever you did would be considered monopolistic. The charges didn’t come from consumers, they came from whining competitors. It was government-enforced blackmail. The US leather industry was put out of business. The corn starch industry was put out of business. Retail cartels, enforced by the government, imposed artificially higher prices on products. It was the welfare state in action. Claims of economic privilege were whipped up by racial and ethnic claims.

Teddy Roosevelt is my least favorite person. He liked killing.

Lecture 6 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 – 6 of 13 – Tariffs, Inflation, Anti Trust and Cartels – YouTube

http://www.readrothbard.com/american-economy-and-the-end-of-laissez-faire-6-of-13-tariffs-inflation-anti-trust-and-cartels

TRANSCRIPT

00:00
Sherman tank outlaws
00:03
conspiracy in restraint of trade and
00:07
I’ve got the second clause basically
00:10
Billy what said it’s very vague then how
00:13
does it mention two mean price-fixing of
00:15
some sort like a card account does not
00:18
doesn’t mention anything it’s very vague
00:20
it’s like a two sentence and then the
00:22
clayton act 1914 fourteen add some stuff
00:26
increase the Federal Trade Commission so
00:28
most of the antitrust law simply
00:30
accretions of decisions and I trust
00:33
court the courts farm and justice and
00:36
the Federal Trade Commission they could
00:37
do whatever they want you basically
00:39
declare anything monopolistic them or
00:40
anything marjoram it’s truly a truly
00:43
administrative Fayette so as a peek at
00:48
the antitrust Perth area which really
00:50
came in nineteen thirty forty or fifty
00:53
anything gonna be considered and what’s
00:54
considered an OP allistic if you charge
00:58
a price the same as your competitors its
00:59
Coke or collusion lets me know the most
01:02
prices tend to be the same Hershey bars
01:07
enough leave ours will be the same I’m P
01:09
about the same otherwise one of them is
01:10
gonna be in truffle and if you charge a
01:14
price lower than competitors considered
01:16
predatory price cutting and unfair
01:18
competition the charge a price higher
01:20
than competitors instead of monopolistic
01:22
so whatever you did it can be consider
01:25
monopolistic so purely arbitrary in the
01:28
part of the government was no rule of
01:29
law there’s no statute you can interpret
01:31
any rational extent and in those days of
01:34
course so I can’t get into it in this
01:35
course particularly but they actually
01:39
took seriously the economic model of
01:41
perfect competition the competition in
01:43
the market wasn’t quote perfectly
01:44
unquote which meant it wasn’t meant that
01:47
if any firm could affect that to market
01:48
anyway I’d advise making a better
01:51
product by competing more actively
01:53
something that somehow meant it was
01:54
monopolistic so that base you can outlaw
01:58
everything so they could selectively
02:00
then move in and right now most but most
02:02
antitrust are right now almost all
02:05
antitrust is a private I might need the
02:07
sentiment I trust
02:08
charges are made not by the government
02:10
by other
02:11
the industry and even the government
02:13
ones are at the behest of other firm
02:16
they usually whether there is almost
02:17
exclusively inefficient firms that kind
02:19
of screw their competitors like getting
02:21
the government a hobble a competition of
02:23
IBM does better than control Data
02:25
Corporation or something though that
02:26
ever final antitrust is unfair blah blah
02:29
blah and get away with it either they
02:31
get away with which they stick cripple
02:32
or competition or else they make the
02:33
like a blackmail thing and make the
02:35
other guys settle out of court for a
02:37
handsome fee most private antitrust is
02:40
to settle out of court or the korvac
02:41
them as to pay up there’s only like
02:43
black male with a government beanie
02:44
enforcer we might good yeah oh yeah if
02:57
you raise the nose if the merger I mean
02:59
a merger could be just for efficiency
03:00
purposes I mean usually yeah oh yeah
03:11
sure
03:16
now one of the Pens Ella I’m the well I
03:20
think I think Texas erred is busted the
03:22
stuff they just don’t hire they just you
03:24
know when the contract runs out of them
03:25
and just don’t hire me and workers in
03:27
hire non-union machinists or pilots over
03:32
[Music]
03:35
its no no you can’t Wow up here if you
03:40
have you can’t the night I’m a voter or
03:42
something in other words the bake if
03:43
they can call for an election a
03:44
bargaining collective bargaining
03:46
election but if they don’t have a
03:48
collective bargain election in many of
03:50
these cases leave the union wouldn’t the
03:52
workers wouldn’t vote for Union anyway
03:53
and so the in many cases the non-union
03:59
workers or people can’t get union jobs
04:02
anyway because they’ve been squeezed out
04:03
a union has pushed us um the supply
04:07
curve of workers to the left so as a
04:10
rule they actually a whole bunch of
04:12
people so this is a machinist you know
04:14
exciting achievement
04:15
Union machine is getting up a lot higher
04:17
paid a non-union machinist for the clink
04:18
the Nanyan machines can’t get in the
04:20
jobs are frozen Apple control with entry
04:22
so you can turn to a pool in many cases
04:25
of non union machinist pilots still with
04:27
us there’s no laughs and just maybe you
04:30
much you hire them they’d be favorite
04:31
keeping union act I realized that jobs
04:33
are at stake
04:33
especially in Airlines industry with all
04:35
going bankrupt anyway if expand how
04:37
excessive union wages see what happened
04:39
in the in the airline industry was all
04:41
monopolistic ca ca be is similar an
04:44
audix board from very beginning in 1930s
04:51
monopolized the airline industry and
04:53
assign routes where were the only
04:55
Eastern Airlines that fought in Boston
04:56
of New York or something that’s it
04:58
anybody else flies it’s outlawed until
05:01
they restricted graphically sending a
05:03
sign room fantastically expected
05:05
competition they only let a few airlines
05:07
and on the industry for a long time for
05:08
example only Pan Am could pan out to
05:10
find specific nobody else to do it
05:11
illegal so by doing that they first
05:15
raised cut production and raised prices
05:17
but after a long after thirty years of
05:20
this stuff of the airline gets
05:21
monopolistic things the course gets bit
05:23
up it takes uh some wage rates that you
05:25
can pilots the stewardesses nor last and
05:27
become the course go away up it goes
05:29
lazy and so they won’t not like not
05:32
making money anyway even with the
05:33
regulation even monopolies they lost
05:34
money over the long run and many she’s
05:36
like well the railroads monopolies but
05:39
it puts the boots of the whole industry
05:40
so in the case of the airline
05:41
only United Airlines thanks floating us
05:43
deregulation finally late seventies all
05:45
the other airline’s really looked great
05:47
only now it’s tubes anyway and there’s a
05:48
little prize try the market and so forth
05:51
near I get I’m interesting about
05:52
deregulation motoi shows that you cannot
05:53
make fearing inaction nobody no airline
05:56
economic expert or online expert
05:58
predicted what would happen in other
06:00
words
06:00
deregulation came around 1978-79 nobody
06:04
realized what the change of pattern
06:05
would be nobody realized to be spoken to
06:07
the spoke hub stuff the way it worked in
06:10
other word the old age of you flew from
06:12
New York attempt to still young with
06:13
always flew non-stop
06:15
night that’s it now very few people find
06:18
on some that’s almost always a hub
06:20
situation you go to Denver or something
06:22
everybody flies in and everything spy
06:24
app work that way from house more
06:26
efficiently
06:27
other cities coming in so that’s the way
06:30
we’re nobody
06:31
what would happen have any right that’s
06:36
some some mergers in this case figures
06:40
he’s gonna try to operate that the not
06:42
the Machinists union and and what
06:47
happened with these non-union airlines
06:48
like Texas air is that they pay much
06:50
lower salary for stewardesses pilots
06:52
such as I’ve been getting normal salary
06:54
these people are enormous and so now
06:57
they’ve been brought down to earth so to
06:59
speak and one of my colleagues is remain
07:01
nameless the Marxist who’s married who a
07:05
stewardess a Pan Am and he was very much
07:08
against deregulation not only because
07:09
he’s a Marxist world because he realized
07:11
this would lead to lower prices for
07:13
passengers at the end of the monopoly
07:16
rent sort of speeding up wage rates
07:17
enjoyed by stewardesses Pan Am flight
07:22
attendants I supposed to say now let me
07:24
write to get back to the sugar things in
07:26
the middle of the sugar trust and it’s
07:27
saga I’m gonna do a few more examples
07:30
then point out the significance of a
07:32
lesson and elation other historians
07:34
various historians you remember the
07:37
sugar when I left off on Tuesday the
07:38
sugar trust had again merged with our
07:41
buckle our buckle had moved in a compete
07:43
with a sugar America Sugar Refining
07:44
Company which is attempted monopoly and
07:48
they finally and the prices went down
07:49
again and so forth so they finally
07:51
absorbed they had an agreement between
07:52
have a buyer who was the head of
07:54
American sure of finding trust and
07:56
Arbuckle and he wound up on another big
07:58
cartel 1901 so by 1902 they form the new
08:02
Americans all the cartels would call
08:04
Americans all emerges we call American
08:06
Sugar Refining Company right here till
08:08
they went up with a larger one with
08:09
ninety percent of the output that
08:11
refined sugar you think that’d be enough
08:14
the only three independent luck be small
08:17
independent sugar producers and and they
08:21
Jack the price up of course soffits go
08:23
upping they jack it up from four point
08:25
six cents per hundred waiting in West at
08:30
five point three and they think are
08:33
doing great and then exam the same damn
08:35
thing happens they start again with new
08:37
competitors in other words they cut
08:40
production i through the end
08:43
the price and raise profits who they do
08:44
that new new competitors come and
08:47
increase their production and so and the
08:49
price has to fall again and once again
08:51
at four by 1905 to about four four and a
08:54
half cents back down and what I wasn’t
08:55
before and now you have new competitors
08:58
and now the sugar trust by 1904
09:00
there’s only 70% of the total output and
09:05
no better and the whole cartel the whole
09:07
merger system collapses at that point
09:09
and doesn’t come back again it’s a world
09:11
war one once again this isn’t a steel
09:12
industry which well the government beat
09:15
cartelized in the industry on behalf of
09:17
alleged war you know war effort the
09:19
whole merger system once again collapses
09:21
and the sugar refining and it repeats an
09:25
industry after industry israel i just
09:26
give a few more examples of this it’s
09:28
fascinating how kind of time again they
09:30
try a cart they’ve merged i have a big
09:33
new merger in links they try having an
09:34
operating lee and whole point of then
09:36
i’ll play for a cut production raise
09:37
prices and raise profits ooh they do
09:38
that new competitors come in and back
09:40
down again new competitors and it can
09:43
never it’s like it’s like pushing back
09:45
the waves or something never works
09:47
by 1914 the sugar cross is now 54
09:51
percent whole share a total output
09:57
[Applause]
09:59
so prices are back down the whole thing
10:01
is lower etcetera etc have a Meyer who
10:05
made of statements remember the power of
10:07
as a mother trusts repeated a statement
10:10
and even made a you know repeated at
10:12
length for Congress what he said was
10:15
that we we never would have tried even
10:18
have a merger and monopolies that at
10:19
high tariffs wall keep our foreign
10:22
competition he said I was build up the
10:25
cartel on the merger with build up and
10:27
said under quote enormous protection
10:29
without the tariff I doubt if we should
10:31
have dared to take the risk of forming
10:33
the trust I certainly should not have
10:35
risked all I had and a trust unless the
10:37
business had been protected as it was by
10:39
the parrot there was very clear
10:41
statement by one of the top monopolist o
10:43
speaker trust persons but the powers of
10:46
the mother of truck name course made of
10:47
statement is quote any right the there’s
10:56
also the leather trust which is kind of
10:58
interest like the because the the
11:00
leather accompanied us leather company
11:02
when was forum 1893 as I had more higher
11:06
capitalizations a bigger company even
11:08
than Standard Oil Trust was a huge
11:10
company we don’t think much about
11:12
leather but the and the leather of
11:16
business there’s the the sole leather
11:19
industry which was highly competitive
11:21
what we’re talking about so 11 or
11:23
whatever and get sold of shoes and a lot
11:28
of small firms of very little capital
11:31
quite enters there’s a lot of easy entry
11:33
into the into the industry and five of
11:36
the largest leather firms are tenor than
11:38
if they’re called firms and make leather
11:42
my painters the five largest one and
11:44
mostly concentrated in New York and
11:46
Pennsylvania in that period that have
11:47
fairly close together like the brewery
11:50
industry was frustrating and frustrating
11:52
in Brooklyn New York
11:53
cetera they’ve all got together to form
11:56
the u.s. leather accompany and 1993
12:02
and had a capitalization of total assets
12:04
conversation 130 million dollars were
12:07
largest capitalized largest firm in the
12:08
country at that point largest
12:10
corporation the country I standard oil
12:12
at that point was only hotter than 2
12:15
million it hosted a lot of trust so it
12:20
doesn’t get the play in the oil industry
12:22
but is the largest corporation in the
12:24
country at that point it controlled at
12:27
that point 58% of the sole leather with
12:33
that merger 58 percent of the hand of
12:37
sole love it I guess is another correct
12:39
term for it
12:42
72 percent of Hemlock leather 30% of
12:45
Okla there but the overall at the a
12:47
percent and the detail so what happens
12:51
with this thing here’s the biggest
12:52
company in the country
12:54
proposed 58 percent of the output what
12:55
happens to it total flop a room makes
12:58
losses it starts off immediately the
13:00
loss of 1.3 million dollars the first
13:01
year the thought Acadiana could cut
13:06
production raise prices Toto have
13:09
economy large-scale didn’t work property
13:11
make losses the profits will roll the
13:13
stocks collapse I know dividends stock
13:15
prices collapse cetera prices Kathina be
13:20
competitive it’s too much competition
13:21
new competition coming in and a small
13:25
tenet again out-compete the large tenors
13:27
when they try to raise the price and
13:30
finally 1904 thing whence back problems
13:33
after 11 years of loss of the US the
13:35
mighty us weather weather company went
13:37
bankrupt
13:38
I put finish again another merger going
13:43
down the drain
13:45
same way of the cornstarch industry
13:47
coincidence he had a big merger try to
13:49
create a trust
13:51
and they had 70% of the cornstarch in
13:54
the stream again another very large
13:57
factory again there’s a severe
13:59
competition comes up and the whole thing
14:01
collapses once more again there’s
14:04
another merger 1900 is a further merger
14:06
this is 1893 a bigger merger in that 90
14:10
percent of the starch in the in the
14:12
industry I’m some the cornstarch what
14:14
then happens is cornstarch have to be so
14:19
expensive in other words they picked
14:21
they have 90 percent this is the
14:22
quotient so for United story the
14:24
national starch company merger company
14:30
so then actually in order the whole
14:32
point of the merges they have a cut
14:33
production rates prices as soon as they
14:34
do that cornstarch gets so expensive
14:36
that industries using starch start using
14:39
other kinds of starch remember corn
14:41
starch becomes uncompetitive compared to
14:44
the other starches think think potato
14:56
starch so people start using mills and
15:00
factories which used starch as raw
15:02
material start shipping from court
15:03
starts at potato starch and whole thing
15:05
again collapses independent knows spring
15:10
up either with potato starch or a new
15:13
court start you know using a new process
15:15
hydraulic process which is brand new
15:17
lowering the cost of manufacture or the
15:20
profits of the National Car Company
15:21
begin to collapse and a few years
15:24
they’re down a forty percent 90 percent
15:27
of the total out for the 40 but then
15:29
when once again this thing is heart
15:31
warming what’s gonna have a very fast
15:32
mergers monopolies collapsed climate
15:35
Hama gamma industry after industry in
15:37
the same that’s just a process of
15:38
illustrating
15:39
you cannot make a boil at work same
15:42
thing happens on the glucose the glucose
15:43
industry which is similar start to the
15:45
famed Anthony monopolies after monopoly
15:48
merger monopoly have for merger knobbly
15:50
doesn’t work in 1897 they form the big
15:53
merger of the glucose sugar refining
15:55
company forty million dollar company
15:56
with 85 percent of the loop closed loop
16:04
97 and in at first they had high profits
16:12
they raised the price that cut
16:13
production everything’s hunky-dory and
16:14
very soon new people come into it with a
16:16
stem hey I got high profitability will
16:19
coach factory’s new glucose firms come
16:22
in the Illinois Sugar Refining Company
16:23
the New York glucose company in separate
16:25
cetera which by the way put in by
16:27
Rockefeller them as an investment and
16:30
and so with new machinery by 1901 the
16:35
glucose companies back down at 45% of
16:38
the output and they have to cut prices
16:40
and make a lot of water than a stock
16:42
collapsed roof and bingo the and the
16:51
1902 they find out the consolidation new
16:53
mighty merger of the various the big
16:56
glucose company the mighty corn product
16:58
company now the compact finding company
17:00
which now I have 80% of the boot code
17:03
know who and corn product and again the
17:12
same thing happens the same sort of
17:14
story expect they had high property
17:15
scrap a lot of that plant hey we got a
17:17
paper cut a lot of take a lot of pants
17:19
out planets out of production cut
17:20
production raise prices and again new
17:23
starch factories come in Kukoc factory
17:25
better one newer one peel brothers
17:27
Warner Warner company like the mighty
17:30
corn products company we have to
17:31
collapse profit decline my course for
17:34
corn will miss the market heavy losses
17:36
to stock collapses in the whole company
17:38
well that’s goes under my knife you know
17:40
three they’re only producing one year
17:42
later they’re producing only 45 percent
17:43
of the blue post market eighty percent
17:46
the 45 percent in one year
17:49
1906 they try another mighty new merger
17:52
that seventy call the corn products
17:53
refining company than 91 million dollar
17:55
company seventy four percent of the
17:58
product and raised shortly that
18:01
whether it happens to them is they
18:03
realize they couldn’t raise the price
18:04
that kept low prices so a company kept
18:06
on but they didn’t they didn’t achieve
18:07
any kind monopoly price it’s fine little
18:09
mamaia now they just stick to local
18:11
production and distribution so any
18:13
company to succeed have to not be a
18:15
monopolist and we’ve had to act as if
18:17
they’re competitors and we’re
18:18
competitive same thing happens with a
18:21
gun powder and trust another than not
18:23
too well studied trust the DuPont
18:26
company which is always been the major
18:27
gun powder company before they were
18:29
producing nylons and everything they
18:31
started arms and gunpowder manufacturers
18:33
and DuPont led the way in 1872 to form a
18:39
mighty 43 corporation merger our mighty
18:42
gunpowder trust and they built they
18:46
formed it by not by predatory price
18:50
cutting once again and they never try to
18:51
undercut that competition with it is
18:53
they should we bought them out and
18:54
they’re very high fee and leaving only a
19:02
couple of companies and what’s again the
19:03
whole thing begins to their share the
19:06
market begins to collapse and finally
19:10
they just have to go I just went I just
19:12
hung it was all by 1911 after many years
19:14
struggling to maintain get some kind of
19:16
an awfully price out of it which they
19:19
never succeeded in it by the way in the
19:23
in the case of a gunpowder trust they
19:26
had 230 they had done I think any firm
19:31
they had many firms yeah had about forty
19:34
three firms merger they couldn’t prevent
19:36
their own part of their own plants their
19:39
own different subsections of a companies
19:41
from from cheating cheating unquote the
19:43
salesmen like once again of the sales
19:45
vice presidents and sales managers are
19:47
constantly offering rebates and
19:49
discounts to get more people for
19:51
themselves and for their department even
19:52
though it’s one merged company they
19:54
didn’t act as if they were their records
19:55
it was salesmen there they wanted to
19:57
make more sales and competed against
19:59
each other they couldn’t even stop that
20:01
I’m much less external competition it
20:04
couldn’t stop internal competition from
20:05
the sales managers
20:08
and then in court new entrants come in
20:11
and have compete the non-pilot trucks
20:15
holding had a collapse in a general
20:20
study of these trusts of nearly 100
20:23
trusts or mergers form in 1899 1900 for
20:27
example they have 100 100 merged
20:31
so-called trust will define and Trust is
20:34
being emerged a type of Monopoly 1899
20:38
1900 in one year 3/4 of these terms are
20:44
not paying dividends in other words they
20:47
were losing money basically they were in
20:49
bad financial shape and only one year
20:52
after they were formed there many other
20:54
thoughts of other statistics I’ll
20:55
mention in this thing but the promoters
20:57
hopes were not realized in most cases
20:59
new competition comes in etc etc Coco
21:03
points out of the 50 largest
21:05
corporations in 1909 for example by 20
21:09
years 20 have dropped out of the 15
21:11
largest and was a very high turnover in
21:13
large companies a Cobra has a lot of
21:17
regulars stuffins first two chapters on
21:19
mergers failure mergers are very good
21:21
the other very good person even better
21:26
Coco was a book by I came as a
21:28
thunderclap and I came out in 1960 I was
21:30
I’ll point out in a minute before Coco I
21:33
think Coco was what 1950 something like
21:36
that before that the the best study of
21:40
mergers maybe a guy named Arthur doing
21:43
nobody pay attention to authoress doing
21:46
BEW ing he had hid there made a study of
21:50
them you know written a book called
21:51
corporate promotions and reorganizations
21:53
I think 1906 something like that
21:59
and Lenny written in a journal or a
22:04
scholarly Journal article 19 I think 11
22:06
studying what happened to these mergers
22:08
a random sample and then he wrote an
22:11
excellent textbook on corporate finance
22:13
called financial policy and corporations
22:15
which want to go about 20 editions I
22:17
think the first positions like 1920 and
22:19
it’s me of about 30 years and might
22:21
still be in print going on it marvelous
22:23
but it’s not really a textbook that’s
22:24
chock full of footnote no there’s a lot
22:26
of great stuff but nobody ever read that
22:29
except corporate finance people an
22:30
economist didn’t read it or even reading
22:32
so isolated in an extremely mainstream
22:35
anyway doing you know that’s probably
22:37
the best study Koko’s was at second in
22:40
second so what doing showed you had two
22:44
tough wave two more july first a small
22:47
ones late 1880 or 1890 there was the
22:49
first one and i guess one of my point of
22:53
that one’s long late 1889 you know the
23:01
largest one was 1898 1901 it was much my
23:11
father biggest when most of the murders
23:12
took place I think what he did was he
23:15
took a presently said 130 in the second
23:20
way well how did the 30 murders one
23:22
night 930 trust 930 different industries
23:25
climax support by US Steel Corporation
23:27
which is 1901 a capitalization 1.3
23:30
billion dollars and I’ve already
23:32
mentioned I could steal on you the
23:35
Morgan and what he did was he took a
23:42
random sample of 35 industry and one of
23:47
the detail what happened to them how do
23:49
they what happened on a fillet what was
23:50
the expectation of the promoters before
23:53
they were merged what happened afterward
23:55
a year after five-year tenure exactly
23:56
his generally Ninian principle he also
23:59
asked the question why did it stop in
24:00
1901 why was there a sudden sensation
24:02
sudden stopping a merger like you know
24:05
why wasn’t any kind of antitrust
24:08
and he said well they turn out badly
24:09
just didn’t work they didn’t suppress
24:10
competition they didn’t they didn’t
24:13
realize the economies of scale did they
24:16
thought one of their theory was if a
24:18
large company is more efficient than a
24:20
small company and I’m very very large
24:22
company therefore even more efficient
24:23
what course didn’t work that way there
24:24
are limits to economies of scale me a
24:26
captive especially this kind of
24:28
artificial merger their stocks declined
24:31
steadily their main losses they had new
24:33
competitors coming in and what’s that
24:35
I’ve talked about if you haven’t paid
24:36
any different dividends at all most of
24:38
the more money shares of stock the
24:41
shares of the out without putting the
24:42
industry decline steadily men even
24:44
actually went bankrupt collapsed totally
24:45
those didn’t collapse had a cutback I
24:47
you keep declining steadily like US
24:49
Steel which have been miserable shape
24:51
oil ever since so you just see studies
24:55
that say random sample are 35 of these
24:57
trusts and a fan after example that the
25:01
average on the average average is a 35
25:13
25 percent of these of these mergers
25:16
earn more than the first year before the
25:21
trust
25:24
you mean you know just earn more just
25:27
before the trust then another year
25:29
afterward so then on and one year after
25:34
that would you could take a hundred
25:36
companies for me a trust website with
25:37
some industry you take our average rate
25:40
of return emigrate a profit just before
25:42
they form the trust your peril of a
25:43
trust after let’s form 20 drops 25%
25:48
robbing profits after 10 years total
25:54
more than the average earnings of 10
25:55
years later but have 10 years of the
25:57
trust for learning less than the
25:58
individual companies in before the trust
26:00
the estimates of the promoters and
26:02
bankers reform of the trusts were 50%
26:07
higher than the actual earnings in the
26:09
first year much higher over 10 years in
26:11
other word inflated estimate you asked
26:14
about water at stock in other words they
26:15
say when ten million dollars actually
26:17
and only here in five million it’s a 50%
26:19
drop over the expectation of the
26:21
promoters of the 35 or input looking on
26:25
another way of the 35 trustees doing
26:29
studied
26:39
13 had positive earnings in the first
26:43
year
26:51
and we’re 13 a prettier name equal or
26:58
greater than the pre touch pre trust
27:00
earning higher first year earning or the
27:04
same 22 ruff ruffman earning lower
27:09
earning the same for the whole first 10
27:14
year period most of the Trust had much
27:16
lower earnings after these forming than
27:17
before only for Ernies equal low
27:21
anticipation only for ne veut
27:29
anticipated equal 1 the patient
27:41
[Music]
27:42
the or looking another way earning that
27:47
for the trust were expected to be 40
27:48
percent higher and the average the
27:50
earnings after the Trust’s were
27:51
expectedly 40% higher than before the
27:53
trust actually a 20% less the first year
27:56
and 10% less over the first couple
27:58
several years so that gives you another
28:00
way of looking at it they’re expected to
28:01
be 40 percent higher you form a trust
28:06
expectantly or the promoters are second
28:08
high forty percent how it actually drops
28:09
from ten to twenty percent so some of
28:16
the reasons he goes into is the sake
28:18
just because a larger firm is more
28:21
economical on a toilet firm doesn’t mean
28:22
a very large room be more economical
28:24
depends of especially if it doesn’t grow
28:25
organically for who these are officially
28:27
imposes for promotion it turns out for
28:31
example the management or
28:32
entrepreneurship is very scarce the
28:36
range of judgment is very scared limited
28:39
one guy over a huge number sorry for the
28:42
fact that a new competitor is popping up
28:43
you know the range of the individual
28:46
initiative is limited
28:47
managerial bility is very scarce etc etc
28:50
also many cases a loyalty of ego the
28:52
manager to a weekend there will usually
28:54
happen as a emerged that 21st version of
28:57
one a guy used to be the owner of the
28:59
president of one firm becomes now the
29:01
manager that’s about division
29:03
well he’s not now he doesn’t care that
29:04
much anymore as a management he did it
29:06
as an owner also the salesmen are
29:10
demoralizing up they put them out with
29:12
strict therefore their sale if you don’t
29:13
like that everyone mention that and the
29:18
larger side often make them worse
29:20
competitors to compare this more more
29:24
mobile owners and much more innovative
29:26
one example of that and if I mentioned
29:28
already but the current recent years
29:31
some great examples of very large firms
29:34
and so-called monopolies of virtue and
29:36
all these there come on creative
29:38
bureaucratic etc etc as I mentioned
29:41
Xerox and pull rolling yet that’s a
29:43
classic example after World War two the
29:46
United States relief there’s a virtual
29:47
monopoly of photography by Eastman Kodak
29:51
and dr. al and when the discoverer of
29:56
Polaroid camera comes to the great new
29:59
discovery companies from Kodak so look I
30:01
was great thing and he offered of course
30:03
of solid Eastman Kodak many of their
30:05
experts went over they said won’t work
30:06
I’ll be can I make one work no that
30:10
doesn’t sit he had to go and get you
30:12
know good friends together and get a
30:13
small bank loan or whatever and start
30:14
this thing up on his own company I wish
30:17
I of course I had had can you share the
30:20
original Polaroid corporation same thing
30:23
happened a guy who invented Xerox forget
30:24
his name anyway same damn thing happen
30:26
goes through the well the great
30:28
revolutions in photography right he go
30:29
so the Eastman Kodak won’t work Donnie
30:32
economic blah blah blah I have to start
30:33
his own Xerox Corporation the rest of
30:35
the history actually originally a Moyer
30:37
oxen he need company and of course the
30:40
which I have 10 shares of that another
30:43
fantastic success story
30:45
so what’s together the monopolist the
30:47
big business doesn’t see the situation
30:48
start with teeny firm you out-compete
30:50
means I for the wall there’s an
30:53
excellent book there’s several books on
30:55
it they’re interested an excellent book
30:57
by John Dukes and others you can other
31:00
people called sources of invention the
31:03
marvelous book I’m not sure it’s in
31:05
print anymore but it’s dead but it did
31:08
wasn’t it took at all the top inventions
31:11
of the 20th centuries about 80 of them
31:12
are selling fan app where they were
31:15
invented with you know what sort of
31:17
conditions in the fan almost every case
31:19
it was done on us by either an
31:21
individual inventor or a small firm but
31:23
not done by the big big research
31:25
laboratory big research laboratory I
31:28
seem to be much better for development
31:29
after somebody else’s invented that they
31:31
can then process it and apply it for
31:34
actual inventions they were there were
31:35
pack of losers whole collection of all
31:38
the pop inventions of 20th century
31:40
including Xerox and Polaroid and kind of
31:43
sell them and God knows what else
31:44
there’s a whole bunch of stuff basic
31:46
oxygen oxygen process and steel these
31:48
things on a very small laboratory
31:51
whether people are flexible and they’re
31:52
not bureaucratic
31:54
etc etc another thing it happens is the
32:02
is the peddler and we’ll see in a minute
32:05
and the retail industry get into that in
32:07
that too where where most many cases the
32:11
retail firms smaller businesses gonna
32:13
compete larger ones very easily you see
32:15
the peddlers for example a flora a local
32:17
forests are hunted down like like rats
32:19
by the police they can very beautifully
32:23
out-compete the official florists the
32:26
official Orthodox flora – they charge 10
32:28
bucks for a bunch of flowers you get it
32:29
for two bucks better ones on the corner
32:32
of Flores and he’s mobile I can get
32:35
stuff easily you can get in out of the
32:36
rain it doesn’t have to be you know I
32:38
can take the like corners and right
32:39
spots he’s not fixed in you know that
32:42
pay fixed rent it’s not affecting one
32:43
particular if it’s raining that day
32:44
doesn’t he doesn’t have to show up all
32:47
these things makes the peddler wears
32:48
almost no capital notice the pellet only
32:50
one day’s worth of equipment makes him
32:53
very able out-compete larger stores as a
32:56
result of that in history to be found
32:58
industry I just thought that today but
33:00
the history of retailers three knives
33:01
there’s a whole history of consulate
33:03
pets father mother established firms
33:05
that surrender illegal the crippled
33:07
intend and out-compete by law there are
33:10
more smaller mobile mobile competitors
33:12
in almost every city and town in the
33:14
country even a peddlers early legal it’s
33:17
still illegal here they are there are
33:18
severe licensing requirements every once
33:21
in a while the mayor has to crack down
33:24
on them if out a lot of evil peddlers
33:26
because they compete we tale store
33:28
little pups and I was racing why should
33:29
they mad compete them
33:30
why shouldn’t consumers be able to get
33:32
scarves and pocketbooks and laughter
33:33
much cheaper watches are keeping the
33:36
establish official fun so the fact you
33:40
have more capital is enough selling even
33:42
better the competitively in many cases
33:45
you’re worse off they’re stuck in the
33:46
fix fix the location for example and
33:50
many of the immigrant groups the guys
33:52
they came in they rose up in regress in
33:56
late 19th century early 20th century
33:57
that came into New York for no money at
33:59
all nothing in them
34:01
and I get one day’s worth of stuff from
34:04
Capitol City when they’s worth of pedal
34:06
pedaling equipment flowers or cool or
34:08
whatever does and he start with that and
34:10
they rise up very quickly profits plowed
34:12
back of profits finally get a push cart
34:14
push cart working with massive amount of
34:15
catalog they’re just carrying a thing a
34:17
suitcase or whatever and they wind up a
34:21
quite wealthy in it and that way and so
34:23
but now you can be current low-income
34:26
groups to have a bit difficult to do
34:28
that because you need heavy slices
34:30
requirement they’re hunted down by the
34:31
police etcetera driven out in New York
34:34
and the New York mayor of New York
34:35
usually says it’s unaesthetic
34:37
major argument against feathers of the
34:39
street to normal a beautiful New York
34:41
they say a lot about New York Street
34:43
beauty is not one of them
34:45
that’s that actually not one of our
34:46
major major attributes the idea of
34:50
somehow the streets have to be cleansed
34:51
by getting rid of peddlers pretty
34:53
extremely phony and we doing rinds up I
34:56
think marvelous quote from doing after
34:58
he’s summing up his study of the
35:01
thirty-five mergers what happened to
35:03
them etcetera he says this quote I’ve
35:06
been impressed throughout by the
35:08
powerlessness how this is a mere
35:10
aggregates of capital to hold monopoly
35:12
powerlessness of the Fiskars they’re in
35:14
a lot of capital equipment I’ve been
35:16
impressed to by the tremendous
35:17
importance of individual innate ability
35:19
or its lack in determining the success
35:22
or failure of any enterprise but these
35:25
observations in my one may has er the
35:27
belief of whatever a quote tough problem
35:28
on quoting this will work out its own
35:31
solution the doom of the inefficient we
35:33
found no legislative regulation is
35:35
rather delayed thereby
35:38
restrictive regulation will perpetuate
35:40
the inefficient corporation by
35:42
furnishing an artificial prop to support
35:44
natural weakness
35:45
it will hamper the efficient by impeding
35:48
the free play of personal ambition the
35:50
beautiful statement that without
35:51
government intervention just letting a
35:54
rip but I think any kind of regulation
35:55
control you wind up but enterprise being
35:58
successful in other words relic of how
35:59
much capital a person’s got its got
36:01
ability to foresee what’s going on to
36:03
step into the market to compete
36:05
he or she will do so rather than just
36:08
aggregates of capital and I want to turn
36:14
neckla just start doing start this today
36:16
about the history the retail industry
36:18
United States event one customer attempt
36:20
of new innovative innovation new
36:21
innovations repeating itself with the
36:25
Orthodox current established retailers
36:27
trying desperately to crush the
36:29
competition by law
36:30
turning the government that one of them
36:33
right now as I say peddlers own with the
36:35
illegal with everywhere except the veer
36:36
license requirements I’ve started me
36:40
with in the early 19th century you have
36:41
to go back of that remember the early
36:44
19th century with no roads so the very
36:47
little there’s no Traveling Salesman
36:48
there’s nothing in no way you can’t
36:50
travel so but you had with merchants in
36:54
central markets we’re offering good and
36:57
once a year the out-of-town buyers would
36:59
come in and actually get make their way
37:00
to New York or whatever to they still do
37:02
in many cases in the garment industry
37:06
look at the samples of equipment and buy
37:08
them and carry them home yeah that was
37:10
the sort of pre Civil War Between 1850s
37:14
situation so with very little
37:16
standardization it was a very haphazard
37:18
kind of setup in 1850s and 1860s with
37:23
the railroad coming in a new new kind of
37:26
marketing technology enters the feel of
37:29
retail namely the Traveling Salesman
37:32
would you know take a sample case and
37:35
travel around and go to different
37:36
merchants and retail Merchants and sell
37:41
have where’s the Traveling Salesman with
37:44
met by the wholesale merchants in the
37:47
towns in other words in Detroit or
37:48
Peoria would I be how old a wholesale
37:50
merchant how many salesmen come from New
37:52
York and you know go to the hook the
37:54
retailers go save the retailers and
37:56
compete with a local hotel merchants
37:58
local hotel merchants Metropole Obama
38:01
has stereo with hatred the Traveling
38:04
Salesman of course has no capital except
38:05
this suitcase so the whole series of
38:09
speed and city licensing laws that
38:10
crushed the crush the Traveling Salesman
38:13
making it for example very high license
38:15
fees very high anti I mean severe anti
38:17
peddler laws and every ten every little
38:22
panas own license packs in other words
38:24
they say some analysts anybody who sells
38:26
anything in our town doesn’t live in our
38:28
town
38:28
that’s the pay a license fee if I don’t
38:29
know 20 bucks a year which is enormous
38:32
leave the poor traveling salesmen have
38:33
to pay 20 bucks a year every County
38:35
visits which makes it totally prohibited
38:38
matter of fact the average traveling
38:40
salesman was making twenty five hundred
38:42
dollars a year
38:43
Dave you had to pay a license fee out of
38:46
that of over a thousand that means like
38:48
almost 40 percent of the income at the
38:50
door the license fee obviously this is
38:53
not gonna work so what you had then was
38:57
a series of evasions in other words the
39:00
the the peddlers would probably get vada
39:04
pav like salesmen try to evade a license
39:06
to be one way they sneaked into the pan
39:08
sell their stuff that we found and get
39:10
out before they go to court or else they
39:13
have have phony employees nobody they
39:16
get some resident merchants some retail
39:18
Merchants that quote hire them on clover
39:20
two weeks they wouldn’t be illegal they
39:22
won’t have to pay a license fee
39:23
you have phony employee rice
39:25
relationship or they just say skip Pam
39:30
dodging the tax collector well they
39:31
bribed the local tax collector of course
39:34
they have a black market travelling
39:36
salesman the result of all this is the
39:39
Traveling Salesman is always in a state
39:40
of semi legality sometimes he was jailed
39:42
says what did you have for not
39:44
non-payment in the license day so he
39:47
became a disreputable figure as a result
39:49
of that of the famous traveling salesman
39:51
farmer’s daughter jokes came in up
39:52
enough to school going around but and I
39:54
was going up so a standard dirty joke of
39:57
a yep lock on the Traveling Salesman job
39:59
apparently reason whether the traveling
40:00
sales on the state of semi legality
40:02
they’re always disreputable they’re half
40:03
jail half a sign of skipping the law I
40:05
mean right this goes on for about 20 or
40:08
30 years it’s kind of knock that trying
40:11
to use the law to oppress repress the
40:13
Traveling Salesman concept finally after
40:15
about 30 years of sorry about eighteen
40:17
eighties the pressure comes through it
40:20
and is finally repealed actually Supreme
40:22
Court found declare them
40:23
unconstitutional but the pressure comes
40:25
from several sources kind of interesting
40:28
first the first place the retail
40:31
Merchants one what that they they they
40:33
you know they get any cheaper wholesale
40:34
products also another thing that happens
40:37
is the wholesalers in South Island point
40:39
traveling salesmen in other words a
40:41
wholesale in Detroit was thought
40:43
studying traveling salesman out to their
40:44
region so they don’t want to have their
40:46
people outlawed and paint heavy slicing
40:47
speed so in other words Traveling
40:49
Salesman advocated they used by the
40:51
wholesale merchants themselves and they
40:52
start shifting the support repeal and
40:56
this happens in Baltimore Hampton
40:58
Philadelphia in Louisville and land all
40:59
these so a medium-sized city starts
41:01
shipping and the salesman perform a
41:03
their own association the pressure hook
41:05
lobby for repeal so you have the ship of
41:08
the bait by the local merchants and the
41:11
regional merchants and the sales and
41:12
association finally
41:15
Supreme Court takes notice of this the
41:17
whole thing goes down the chute after 30
41:18
years of repression the poor traveling
41:20
salesmen the friendly thing is finally
41:22
over
41:24
and a decision in eighteen seventies and
41:31
eighties anyway finally the family feels
41:33
more accepted they’re no longer
41:34
disreputable there’s no more high
41:36
license fees are part of the industry
41:37
but again it’s Terry a hit doesn’t take
41:39
much longer for new it for a new
41:41
innovation of Compal two big things
41:43
happen one of them about 1895 come to
41:47
the department store you can’t imagine
41:49
hysteria which department order we’re
41:52
men the promise ORS are unfair dime evil
41:56
there they’re out competing poor
41:57
mom-and-pop stores stores only sell one
42:01
or two things apartment stores they have
42:02
many floors make them unfair they have
42:04
10th floor the other stores I’m only one
42:06
floor and so the per minute attacks on
42:08
them gimble and Gimbels and Macy’s and
42:10
other department stores and the
42:12
retailer’s with the convened condemned
42:14
department store the vendor they said
42:17
quote the Port Authority would quote
42:18
result no oppression of the public can I
42:20
get this the claiming it’s for the
42:22
public interest with suppressed the
42:23
outlaw department stores it would result
42:26
an oppression of the public by
42:27
suppressing competition and causing the
42:30
consumer in the end to pay higher prices
42:32
and ultimately create a monopoly with
42:34
ease the argument here is apartment
42:35
store Macy’s imlah separate which are
42:37
now fiction out competing retail stores
42:39
if you allow them to do that they will
42:42
eventually push all the retail stores
42:43
out of business and they will then cut
42:45
prices and production race bike so the
42:48
interest rate consumers we should outlaw
42:49
the department stores now notice the
42:51
logic of this because you they might be
42:54
eventually a monopoly by the poor an
42:56
efficient monopoly by department stores
42:58
they fortunately couldn’t feed and an
42:59
inefficient monopoly right now through
43:00
the consumers now by outlawing apartment
43:03
stores that’s the logic of it in Germany
43:06
there were compulsory cartel system from
43:09
about 1880 to about nineteen the end of
43:12
World War two
43:13
more or less
43:14
and after World War two is over the
43:16
German the only normal round of Capri
43:18
cartel system there’s more less free
43:20
market more or less relatively free
43:21
market so they form a cartel us and an
43:25
argument to the German parliament they
43:27
said as follows about 1950 I remember
43:29
reading it somewhere and equipping they
43:31
say petition to reimpose at a pro 3
43:33
cartel because they said if you don’t
43:34
have a pro suite card Powell and there
43:37
you have fishing business without
43:38
compete other business you wind up with
43:39
a monopoly and consumers suffer the same
43:41
argument in order in order to eliminate
43:43
a possible future monopoly where the
43:45
consumers would suffer we should make
43:46
the consumers suffer right now with an
43:48
inefficient uh novelty again fortunately
43:51
doesn’t work I can’t imagine anybody
43:53
really believe I can’t my problems I
43:55
can’t imagine people making these
43:56
arguments with a straight face or
43:57
anybody believing them anybody bother to
43:59
report them without laughing in our
44:00
faces in any rate that’s the these are
44:03
common arguments that they were
44:04
compulsory cartel work if they were
44:06
outlawing efficient businesses coming up
44:09
so they’re special taxes on department
44:11
stores there were special licensing
44:18
requirements or whatever and finally
44:20
they made it another thing which
44:21
happened about the same time and they’re
44:23
brown around 1900 so it also has met
44:25
with tremendous Astari you can’t believe
44:27
it with a mail order concept you don’t
44:31
have to go to the store you just send
44:33
the way you have a catalog Sears Roebuck
44:35
of course the famous one a Montgomery
44:36
Ward you haven’t had samples you sent
44:40
orders by mail
44:41
met with fantastic Astari all that we
44:43
filled forth oh my god monopoly has
44:45
drivers a lot of business is unfair
44:46
competition out more than tax them and
44:50
they organize for example special they
44:53
said this is a terrible thing insisted
44:55
does they don’t employ salesmen I get
44:56
that
44:57
one of the big arguments was the Sears
44:59
Roebuck and Montgomery Ward unfair but
45:03
they don’t employ salesmen but means
45:05
they have a smaller cool
45:06
lower courts know that’s thirty years
45:09
before that they were attacking any firm
45:10
which employed a salesman of being
45:12
somehow evil now if you didn’t employ
45:14
sales in superb or unfair thing and so
45:17
they organized retail is organized they
45:20
or can log burning parties bonfires
45:22
where they they have trade at home clubs
45:25
because this way first of your in New
45:26
York or Philadelphia you buying from
45:29
Sears catalog at Illinois and these
45:31
you’re about trading from the local
45:32
store somehow injuring a local economy
45:34
and trade at home closet organized
45:37
burning up Sears Roebuck talent bonfire
45:39
they taught them in Sears and monkey war
45:41
ten log totally crazed they set up
45:44
special taxes against the mail-order
45:46
honey right after the mail-order
45:47
business final grudging and took a long
45:50
time to accepted the mail of Sears
45:52
Roebuck and Montgomery Ward Oh
45:53
considered monopolist unfair competitors
45:55
they don’t have any salesman just like
45:57
peddlers are unfair they don’t have a on
45:58
paying rent what’s so why he can get
46:00
away without paying rent great willing
46:02
to walk around the streets and brave the
46:04
rain and snow and go forth super you
46:07
know there anything which is best for
46:09
the consumers of extra life of the
46:10
economy and another big threat which
46:13
came in around the same time as as the
46:16
meal or been with a partner store yes I
46:19
mentioned at the very end apartments or
46:20
terrible thing they’ve a floor the son
46:22
of one god proclaimed that only one
46:23
floor every store to be on one floor if
46:26
eight floors and everything is anyway
46:27
for the purple thing and a group of
46:30
retailers convened in 1895 and condemned
46:33
department stores they said it would
46:34
result in oppression of the public by
46:37
suppressing competition and causing the
46:38
consumer in the end to pay higher prices
46:41
and ultimately create a monopoly I
46:42
mentioned last time this is typical
46:44
argument monopolist they’re trying to
46:45
get a government to give you a cartel
46:47
the argument against efficient
46:48
competitors is eventually don’t have a
46:50
monopoly well then the answer is first
46:52
of all wait don’t don’t impose an afib
46:54
and inefficient cartel now because you
46:57
might have in effect and a fishermen are
46:58
play twenty years from that I mean
47:00
waiting for the efficient monopoly see
47:02
if they raise prices they almost never
47:03
do because then they’ll worry about new
47:04
competitors coming in so it’s a couple
47:07
of nonsense to me right after that
47:11
as I promised or was accepted and mail
47:13
order accepted around 1920 he’s came a
47:15
new dread innovation change storage
47:18
changed with my god chain thrown op
47:20
elite terriblest we’ve got all these
47:21
lovable mom-and-pop stores and be no
47:24
single stores left every vulnerable wall
47:26
when I was growing up in the 1930s there
47:28
was a big big crime I lived with and
47:30
left us break up and pee pee pee of them
47:33
was a big quote monopolist on quote
47:35
changed or they had the biggest chain of
47:37
groceries and they could charge lower
47:39
prices because they were buying in
47:41
quantity they buying a 10,000 units of
47:43
something sort of 12 and so the result
47:46
they’ve got this this counts quantity
47:47
just can’t it be cheaper etcetera
47:50
etcetera now of course there were also
47:51
some problems with ANP namely they
47:53
didn’t give credit they didn’t deliver
47:55
as much a small story though you have
47:57
you have a trade off a smaller mama
48:00
typical mom-and-pop store they know you
48:03
they give you a credit and they’ll be
48:06
looser about that about charging in fact
48:10
they’re forcing it out of the liver or
48:12
later and so for and so on so at any
48:14
rate break up at the A&P; is so bigger
48:17
than a driver lowest Oregon a business
48:18
or if nonsense what actually happened
48:20
even in practice it was it and the
48:22
supermarket boom came in first world war
48:24
2 the big change with frozen food the
48:26
big invention of frozen food and second
48:28
of all the supermarket concept where you
48:30
have before that NP which they’re all
48:34
they like mom-and-pop stores in the
48:35
sense that you in a counter what the ask
48:39
the guy want yeah five cans and so on so
48:42
the whole idea of a self-serve a
48:45
supermarket comes in after World War two
48:47
an EMP not being used to this for the
48:50
last guy for convert the last people
48:53
that really understand the supermarket
48:54
concept as a result the average ampie
48:57
New Yorker clampy it sort of almost went
49:00
bankrupt on quasi bankrupt down the
49:02
tubes
49:04
it didn’t have to be broken up by
49:05
government coercion I broke up
49:06
themselves by an efficiency and even now
49:09
you have an EMP supermarket those who
49:10
few to the left are criminally
49:12
criminally organizes dirty to have had
49:15
boxes pile off in the oven but they have
49:17
drawn only implores instead of them what
49:19
they do
49:20
it wouldn’t Ford excuse me said of the
49:21
tiles they’re just coming in they’re
49:24
old-fashioned they just didn’t they
49:26
weren’t up with a current but innovation
49:29
so the Chen’s wrapping many shmoney
49:32
states and cities have changed your
49:34
taxes deliberately to inflict factors
49:36
that kind of cripples change doors and
49:38
there are my professor of economics
49:41
professor told me about Switzer one of
49:42
them have to clean land the rest of the
49:44
continent it’s with Iran where people
49:46
are and view the ideology a changed or
49:48
for evil and actually walk ten miles to
49:50
go to a mom-and-pop store Robbins and
49:52
patronize a changed or they think it’s
49:54
somehow evil so in any rate all that
49:56
stuff is the stuff that was swept away
49:58
nordley and then came in supermarkets
50:02
and nobody could break up a MP anymore
50:04
but you couldn’t believe how many
50:05
left-wing liberal writers in the
50:07
nineteen thirties and forties emerging
50:09
them for the breakup of and the terrible
50:10
thing monopoly person was selling cheap
50:13
stuff and selling good stuff the
50:15
consumer a cheap prices after World War
50:18
two the latest thing in retailing which
50:20
also got big hysteria was a discount
50:23
house which came in in the nineteen
50:24
fifties epilady
50:26
heroic discount hath which broke the law
50:28
the because of the Clayton Act which
50:33
came in 1913 we’ll see later and
50:36
Robinson Patman Act which came in the
50:38
1930s imposes so-called
50:44
fair trade
50:47
great great work our town fair trail or
50:52
let me hear the words found fairness by
50:54
the land and economics guard your
50:56
pocketbook
50:57
we should guard your wallet so fair
51:00
trade meant it shouldn’t compete in
51:02
other words this is a so-called resale
51:04
price maintenance once again the poor
51:08
beloved mom-and-pop stores have to be
51:10
saved this was not my trade association
51:14
the mom-and-pop retail stores you don’t
51:17
have to be a big business to be
51:18
politically powerful you have a lot of
51:20
retail store the little band together
51:21
and a trade association they have a big
51:23
cloud they have a lot of votes the
51:25
resale price maintenance means that thee
51:29
thou shalt not sell the certain product
51:32
below a certain amount you know where
51:34
you keep the pushes the price above the
51:36
free market level by a cartel
51:38
arrangement you push the supply to the
51:40
left keep out competition and raise the
51:43
price several cartel situation a cartel
51:46
enforced by the government federal
51:48
government and nobody else can do it
51:49
state government federal government you
51:51
have to have a hundred thousand
51:52
retailers I can’t help they can’t form a
51:54
successful cartel without well how the
51:56
government imposing it so retail price
51:59
maintenance officially the manufacturer
52:03
imposed it actually of course was a
52:05
retailer the retailer would want to keep
52:06
the electric shaver classic case was
52:10
Sunbeam which was slave for the retail
52:13
cartel we have an electric shaver in
52:16
those day I don’t know what I like I
52:17
don’t use an electric shaver those days
52:18
a typical price would be about $30 $25
52:21
watt going out anyway so let’s say the
52:24
reason so the retailers will go to
52:27
Sunbeam okay look mr. Sunbeam we will
52:29
not buy your products either the blah
52:30
blah blah unless you impose a resale
52:31
price maintenance say $30 now almost
52:36
always the manufacturer doesn’t care
52:37
long chief sells a product of the
52:39
wholesaler in the job air he doesn’t
52:40
care what the retailers charge by his
52:42
concern
52:44
but the war the retail points mainly
52:47
will set us follow the manufacturer can
52:49
make a contract if I’m mr. Sunbeam I can
52:52
make a contract a retailer thing is how
52:53
shalt not selling with shaver and less
52:56
than $30 but that would mean like
52:58
100,000 contract nobody wants to go to
53:00
an on-set so the resale price
53:02
maintenance law said mr. Sun Li makes a
53:05
contract with one retailer who impose a
53:08
minimum price of $30 and every other
53:10
retailer is bound by it
53:11
in other words an extending contract
53:13
statue it’s saying only introduce
53:16
assigned one contract would go Jones
53:18
somewhere and supply the course the
53:20
boards or the whole country but nobody
53:22
can tell us thanks for 11 13 bucks and
53:24
this of course was imposed upon Sunbeam
53:27
by by the retailer cut cartels we caught
53:29
recreation this is true for most product
53:31
appliances household appliances vitamins
53:34
draaga the 14 and more sell liquor with
53:37
liquor which is we see a price
53:38
maintenance on the state governments so
53:41
what happened this meant that prices
53:42
were much higher than they should have
53:43
been it the whole cartel screwing the
53:45
consumers is in the name of course of
53:46
the welfare state this by the way is the
53:48
welfare saying in action
53:49
the whole bunch of special special
53:51
interest groups throwing in humorous and
53:53
taxpayers and making them think they
53:55
really benefiting so it finally happens
53:57
arrival of this can happen or a group of
53:59
illegal like market sellers in
54:03
particular the New York that the classic
54:05
ones of masters masters masters masters
54:09
house and Corvettes was just recently
54:11
like bankrupt for other reasons
54:13
Corvettes and masters the whole thing
54:16
was geared as we now to put matter this
54:17
count has all over the place
54:19
but this can house was able to sell away
54:21
below the market the fixed market price
54:23
because they had great they have very
54:25
low cost the things and most in the old
54:28
days not so much anymore I mean nowadays
54:31
you can’t get a Salesman in New York if
54:33
the weight on it but there are salesmen
54:35
at all as you well know the customer is
54:39
considered to be an intrusion
54:41
and the valuable leisure time of the
54:43
clerk’s you know cartridge uh cannot be
54:45
there’s no parts at all they’ll stay on
54:46
the house looking it up over coffee and
54:49
then he customers an unwelcome intrusion
54:51
any right on the old days used to be
54:54
like God service
54:56
okay going in the department store or
54:57
whatever appliance store rugs or diving
55:00
got a lot of a lot of personal servant
55:02
the master is important out excuse me
55:05
cut out personal service at all you just
55:07
have price tags and just get the product
55:09
then you take it on weight online and
55:11
buy it as you do now 47 3 total another
55:14
place in other words the idea of no
55:16
frills no service retailing so if you
55:19
know what you want it’s a great thing to
55:21
do if you know you want some being shave
55:23
matter like they shave you just going
55:24
stand Alliant payload this camp site
55:26
this is illegal because they were
55:28
violating a consciously violating at
55:31
least the price minimum the retail price
55:33
maintenance law excellent huh I just did
55:37
it and heroic is everybody started
55:39
buying it there’s twenty itself a twenty
55:42
dollar something like that yeah this is
55:45
making no see they didn’t make a
55:46
contract contract only was one one some
55:49
somebody else right one store it isn’t
55:52
violate a contract with violence retail
55:54
resale price maintenance world which
55:55
said that one contract price everybody
55:58
know they’re breaking the law now they
56:03
weren’t breaking any contract they they
56:04
made no contract no means they just
56:06
bought us some baby that’s right they’ve
56:08
dropped a lot yeah no well they took
56:10
them to court
56:11
obviously the son being people and then
56:12
particularly a retail trade association
56:15
system the court they sorta they took it
56:18
all the way to Supreme Court Supreme
56:19
Court on their side of the law was
56:21
unconstitutional magnificent decision
56:23
somewhere I guess late fifties and
56:25
sixties another the constitutional test
56:27
and finally broke the resale price
56:31
maintenance week day for the consumer
56:33
and after that the whole thing collapsed
56:35
the whole price structure collapsed and
56:37
then we started getting discounts all
56:38
over the place from then yeah now you
56:40
have
56:40
and now everything is this town mean you
56:42
have 47 streets photo mean list pricing
56:44
sort of a joke one great thing about New
56:46
York even though the consumer
56:47
sovereignty is not driving the order you
56:50
can get yourself much cheap much cheaper
56:51
he only can defy self this 47th Street
56:54
photo an electronic stuff much much
56:56
cheaper than let’s fight the sort of a
56:58
joke here you go to other places in the
57:00
country with a tailless price they don’t
57:02
know any better though though this can
57:04
has unless they get a catalog yeah first
57:08
so the whole concept of the discount no
57:10
thrill discount store was a magnificent
57:12
magnificent one and now just list price
57:14
adjust the color they a vague reference
57:16
point nobody really takes it seriously
57:19
so any right quick recently Corvette
57:23
went out of business but they had no
57:24
more function in the words one after 20
57:26
years of bonanza they finally line up of
57:29
the you know they’ve ever since
57:30
everybody else is discounting there’s no
57:32
reason got a Corvette
57:33
more than any other place it still had
57:36
vitamins and drugs I think for the long
57:38
time ago discount although that happened
57:39
to health food stores wasn’t too long
57:42
ago about 20 years ago I wanted to get
57:45
some vitamins of this drugstore on my
57:47
neighborhood and the guy asked me it was
57:49
the list prices aspera grand was
57:50
priceless 950 insane price and very high
57:55
part of us we say Oh Piper maintenance
57:58
because drugs was especially regulated I
58:01
said nein let’s find a 950 I said I get
58:04
some by our granny said looked at me
58:05
said you live in a neighborhood a
58:07
strange question you might think that
58:08
ask why should they care that was a
58:10
neighborhood and the reason is before
58:12
they were afraid I was the equivalent
58:13
Ark and I was afraid I’m afraid I was
58:15
like a stop bowl an SPI it’s been ijg
58:17
for the city regulatory whatever heck it
58:20
is it goes around police’s price that
58:22
you can believe prices make sure you
58:24
don’t sell it below 950
58:26
I said yes yes I’ve seen your neighbor
58:28
honey getting poor sold me for 550 which
58:30
is the true market price the contract
58:33
early and crazy 950 so now of course
58:36
it’ll go over PI you don’t have to be
58:38
afraid I know the neighborhood the bike
58:40
she’s biting them cuz now that this
58:42
counter everywhere it’s magnificent like
58:43
great victory for consumer we should
58:45
hail mr. Corvette mr. master whatever
58:47
names are I think it wasn’t there was a
58:49
premise record that EJ Corvette hailed
58:52
on for being pioneers at a tumor freedom
58:54
and so but again of course these were
58:59
the tank literally by the retailers
59:01
they’re destroying the fair prices it’s
59:04
unfair competition
59:05
whatever hit weird unfair competition
59:06
again watch out yeah like a liquor to
59:12
think yeah well I think liquor is C
59:15
liquors monopolize this cuz you can’t
59:17
you can’t open a liquor store yeah I
59:20
couldn’t open a liquor store you have to
59:21
get a liquor license they’re not issuing
59:22
any new liquor licenses you have to buy
59:24
like a license some guys willing to sell
59:26
like a pack the industry very tightly
59:29
control so you can’t you can’t have a
59:32
liquor store more than less than I don’t
59:35
know 150 feet you’re hunting 50 yard
59:37
whatever the Lego store this it’s
59:39
compulsory spacing everybody has a
59:40
little monopoly turf it’s a little it’s
59:43
less regulate on the used to bake I’m
59:44
not really sure what the latest thing is
59:46
it’s still heavily regular a very high
59:48
taxing of course it keeps on competition
59:50
raises with cooperation of the price I’m
59:55
not sure I don’t know where the European
59:57
situation she usually liquor is regular
59:59
everywhere but I’m then that she won’t
60:00
happen
60:02
yeah yeah hmm I think so it’s not as bad
60:06
Lichter work so lightly in for example
60:09
on Californians making definitely to buy
60:10
liquor on the ground a grocery store it
60:13
doesn’t have to be a special liquor
60:14
store kiss me
60:15
yeah the license muckety-muck license
60:17
those liquor is much cheaper for them
60:19
much more competitive also in Las Vegas
60:25
for example liquor stores open coming I
60:26
mean grocery stores over 24 hours a day
60:28
supermarkets you can buy liquor
60:29
Magnificence me in the morning when I
60:31
get they closed the liquor aisle better
60:32
than one o’clock shut down a liquor
60:35
section anyway much easier to buy it how
60:42
do they be stealing all of the
60:46
deregulation that was the late seventies
60:50
early eighties from the deregulation hit
60:52
you start having because before they see
60:55
the Rachel regulated by the Civil
60:58
Aeronautics Board and so the airlines
61:00
put in the big airlines put in the
61:01
programmers board and so it kept a price
61:05
for rates way up and he kept the
61:07
competition way down they signed routes
61:09
like Austin New York Blue has only be
61:12
Easter things like that now of course
61:14
the skies are women anybody can dip in
61:16
any any area so of course those the
61:18
inefficient in Illinois it’s not going
61:19
in Boston Lulu Airlines came in with
61:21
more competitive rates and then no
61:24
frills and all the rest of it like
61:27
partly you know non rail has gone up and
61:31
it would be regulars matter of fact
61:33
there’s a there’s a woman now as head of
61:34
the Interstate Commerce Commission is a
61:36
favor eliminating the Interstate
61:37
Commerce Commission and deregulating all
61:39
trucking and all the others who run
61:42
buses it’s like that’s not railroad you
61:44
want to keep where road race so that’s
61:47
the force of things been killing the
61:48
railroad or regulations of the film yeah
61:52
[Music]
61:57
no beginner yeah
62:02
well it’s interesting questions no it’s
62:05
as rare as of the purely subsidized
62:06
means right now it’s all the taxpayer
62:08
paid for this stuff and I think if one
62:10
of the trend of minors in the
62:11
transportation you know economist I
62:13
answer them the question if they’re all
62:15
subsidies and all controls are
62:16
eliminated we’re an entirely free
62:18
markets in translation what would what
62:20
do you think would be the you know what
62:22
would be used in different areas the
62:24
person can’t predict it but his hunch
62:25
was that basically you have from
62:28
prolonged long island long haul Freight
62:32
have railroad at best for the long haul
62:34
right like crazy more than house for you
62:36
and suddenly it’s a long hold passengers
62:39
of course Airlines all right an entry
62:42
short hole all of us the commuting stuff
62:44
buses for buses for passengers and
62:49
trucks for right that would be about it
62:53
me so I think that’s that makes a lot of
62:55
sense that wasn’t so the whole railroad
62:57
we’re shouldn’t be any short-term rail
62:59
role kept up taxpayer for the benefit of
63:02
a few
63:02
wealthy people who Rhenish Connecticut
63:04
subsidize why should they be something
63:06
that nobody’s nuts anyway that’s the
63:10
they’re trying to sell Amtrak now the
63:13
regular least one wing of the Reagan
63:15
administration is trying to privatize
63:16
get rid of all those stuff I don’t think
63:18
it’d be very successful at least they’re
63:19
talking about it for any unusual selling
63:22
I’m trying anytime saw a couple of dams
63:24
and it’s amazing thing that governor
63:26
trying to sell from them have been a dam
63:29
dam topping and on that from about a
63:32
century-old dams a good per se some
63:35
reason even because they’re there and
63:36
they have water flowing on purpose or
63:38
they courtiers are several rolled back
63:40
now and we evaluation the damn question
63:42
both buy them for my economists on one
63:44
kind of environmentalists on the other
63:46
for month we’re trying to say you look
63:47
vicious of stuff like that I think like
63:49
it’s sort of a coal anti dam coalition
63:51
between free-market economist now in the
63:53
morning level was that’s kind of
63:55
interesting
63:57
like pardon violate security oh yeah
64:10
[Music]
64:12
don’t worry about that because they keep
64:14
the producers a liability if you don’t
64:16
have if we have construction up over
64:19
their houses a long time and they’re not
64:21
not government private housing though
64:23
private office building don’t collapse
64:24
they did collapse of these guys the guys
64:27
would be liable not to use unsafe
64:29
equipment could go to jail for 20 years
64:31
or something plus you know pay through
64:34
the nose so they have an economic
64:36
incentive and that’s not the bill
64:37
unflavored stuff much more than when the
64:40
government the government’s never liable
64:42
there’s no government wastes a lot to do
64:43
to somebody somebody else’s school so I
64:47
know a thing on a safety question of the
64:49
five of people much more responsible
64:51
than they gonna get big hit get hit in
64:53
the pocketbook shoddy equipment the so
65:00
anyway that’s the anyways that’s so when
65:04
on the whole retail question we now we
65:07
have a whole history ago and each time
65:09
the finally innovation triumph
65:11
efficiency finally trillion several long
65:13
stella call attack and and now they I
65:17
don’t know of any recent big Duvall is a
65:19
peddlers employer puts on get rid of
65:21
peddlers I guess is forever
65:23
mmm-hmm any right will you buy even you
65:26
can bet your bottom dollar whatever a
65:28
new big thing comes in and retail in the
65:29
field we can come batted by whole bunch
65:31
of people who are now competing against
65:33
it
65:34
one interesting thing are beginning to
65:36
labor them is that a second is it one of
65:39
the big charges have left us of always
65:41
mating us capitalism as the capitalism
65:42
took the people cook the masses out of
65:44
there but love at home used to work at
65:46
home another word the old days if you’re
65:48
a weaver let’s say hey your equipment
65:50
and home your loom in the basement you
65:52
live by x money leaving one hut you your
65:55
family and a loom and a couple of pigs
65:57
or all in one room as a traditional
66:00
but anyway so a yeah can’t believe the
66:03
me Yankee see well out of that my lover
66:04
the Hudson took them in the bottom end
66:06
of the factory but it had to stay there
66:08
eight hours of ten hours a day or
66:09
something with work they got a lot more
66:10
money but somehow their soul was robbed
66:14
and they’ve been there are alien data
66:15
from their from their labor but
66:17
capitalism brings about alienation and
66:19
for and so on
66:19
here we have now we have a situation
66:21
where the counter drive know what the
66:25
computer stuff like that as a lot of
66:26
people now it can work at home and are
66:28
working at home and so the left that’s
66:30
not belly aching about that terrible
66:32
thing they can undercut Union waste
66:33
scales and they don’t join unions
66:35
obviously if you’re working at home and
66:36
I gotta join a union
66:37
so trying to outlaw that so the same
66:39
people who are attacking capitalism hurt
66:41
alienating people from their home and
66:44
that’s kind of forced them to work
66:45
somewhere up prevents them from working
66:48
at home one more contradiction in the
66:50
eternal struggle
66:52
anyway now get to labor in the labor
66:54
situation in late nineteenth century
66:58
there’s been a lot in the his most
67:00
historian not true of human and general
67:02
most historians traditionally
67:03
overweighted the whole labor a whole
67:05
Union problem the numbers we’ll see in a
67:08
minute the number of people joining
67:09
unions are very small throughout and
67:12
really it’s of course dramatic if news
67:15
were they have a strike but it really
67:16
didn’t mean that much anything in that
67:18
when the overall picture again on the
67:21
overall picture what happens the wage
67:22
rates real wage rates in other word wage
67:25
rates corrected for changes in price
67:27
went way up all during the late
67:29
nineteenth century there’s one the one
67:33
way of looking at it
67:39
this is the average wage rate average
67:41
daily wages in the industry all in this
67:43
drink
67:44
what’s a rough figure but it gives you a
67:46
good idea what daily wages Google
67:51
industry because one of the stories the
67:56
claim of workers or somehow oppressed
67:57
during the lake during the Russian
67:59
Revolution the United States see what
68:02
kind of oppression and what an 1864 I we
68:05
set wages equal 100 in other words
68:08
there’s an index where the average wage
68:10
and making 55 an equivalent 100 in 1891
68:15
and money terms is the money wage rate
68:20
they’re going up by 13% in other words
68:23
if now 13% increase in money terms in
68:28
1855 1891 plus 13% the course of living
68:36
in the same time don’t forget a
68:39
deflation this whole period spices kept
68:41
falling throughout because because they
68:44
basically because the increase in
68:46
production of goods and services with
68:47
much greater every year than they
68:49
increase the money supply yes increasing
68:51
money fire was fairly small increasing
68:53
production was tremendous and so you had
68:54
a a big robbing of the word to have this
68:57
sort of thing this is a price on the y
69:00
axis and quantity x axis the supply this
69:03
is a man supply kept increasing a lot
69:06
overcoming any increases the money
69:07
supply so prices kept falling home
69:10
period so the cost of living went from
69:12
169 other words as a 31 percent drop in
69:19
prices dementia 31 percent drop in
69:21
prices over a 26-year period
69:24
Roberts fight anymore than 1 percent a
69:26
year so in overall in real terms the
69:31
average daily real wage correcting for
69:36
deflation this time went up by 64%
69:39
hundred fifty-four
69:42
so we had another were they something
69:46
like 2% a year at 3% a year increase in
69:48
real wages steadily for the 26 year
69:51
period I mean it goes on from 1900 in
69:54
addition of that a number of hours that
69:56
they work the average hour that but
69:58
again those days people work a lot we
70:00
work very hard they work 64 hours a week
70:03
or something and um the hours drops in
70:06
this period from 11 hours a day and the
70:08
average of 10 so you had another words
70:11
in addition to a 64% increase in real
70:13
wages you have what is it something like
70:15
another extra amount to jury an
70:21
additional 10% per hour wage rate so
70:25
it’s like 74 percent in this whole
70:29
period take the Union Union membership
70:34
right you take the labor for it to mean
70:36
a number of people working or seeking
70:38
work total labor force in 1897 was 26
70:49
minion and a number of the total union
70:53
membership in 18 1970 was 440 thousand
71:00
which is 1.7 percent that’s the batch
71:03
that was about the norm that’s unusual
71:06
the cold period me from 1880s and for
71:08
1914 proximally union membership was
71:12
about 2% range I will see the fluctuate
71:15
a little some extent but basically it
71:17
was a very small proportion of labor
71:18
force it wasn’t really worth talking it
71:21
back very much huh
71:24
total union membership so this is a
71:29
total labor force number of people who
71:31
are working twenty-six million of that
71:33
Ford and forty thousand were union
71:35
members
71:36
which makes it one about 1.7 percent of
71:40
a total the no there’s no deflation
71:53
they’re talking about deflation but
71:54
spices price is still going up about 3%
71:56
a year yeah the price of oil fell the
72:01
other hand see look at the overall
72:02
picture price is still going quarter let
72:04
me flick only out by three percent a
72:05
year
72:08
no one even one important price it’s not
72:11
the whole story
72:13
oh there’s lots of prices going on one
72:17
aspect of it and the fact that the
72:19
material prices keeps falling on the
72:21
other hand general prices the overall
72:24
Fleming rose up of the sign I don’t
72:27
forget they’re in 1950s the government
72:30
tried to keep their target was the
72:32
prices should go up no more than 2% a
72:34
year they figure that was a limit of
72:35
inflation and anything above 2% a
72:37
terrible thing now it’s 3.5% since it’ll
72:41
be no inflation at all which shows we
72:42
we’ve been desensitized from the place
72:45
it’s nothing inflation is eliminated
72:46
just you don’t think there is any better
72:48
being happy sounds better than 13% those
72:50
it is but it’s not it’s not the whole
72:52
picture I can watch that the problem
72:54
desensitization there was an equation
72:58
these weakens people over we’ll do
73:00
something about it can unions come in
73:05
first well first of all before that
73:07
civil war would know there’s no real
73:08
room for you if it mostly will not
73:10
employ most people were self-employed
73:11
the expander situation with the be self
73:14
employer if Europe manufacturing was
73:16
very small like a small barrel maker or
73:18
a bicycle not got enough for myself bow
73:20
maker or for sure something like that
73:22
usually have a master craftsman
73:24
employees owns own shop and a journeyman
73:27
is employee and maybe an apprentice
73:29
that’s it so even though there are
73:32
outfit to cool themselves labor groups
73:35
they were not really laboring our ascent
73:36
and we’re really particularly employed
73:40
it’s only after the Civil War with
73:42
factories you have a large number of
73:43
employed people and so what first
73:48
happens is that the first organization
73:55
is trying to do organize unity Labor’s
73:57
with the Knights of Labor found in 1869
74:00
which is essentially a social social
74:03
announcement and since the lights of
74:06
Labor believe in labor solidarity above
74:08
all things they didn’t see the need for
74:10
any kind of separate unions in the word
74:11
what they did is they the everybody you
74:16
just join up geographically know that
74:18
everybody’s a member of Knights of Labor
74:19
if you show up doesn’t matter what
74:20
you’re working at you simply become a
74:23
geographical member I’ll say if downtown
74:25
Brooklyn here with a with the local 786
74:29
or something like that you just join up
74:30
with a matter what your occupation and
74:31
you become a member of Knights of Labor
74:33
local 786 obviously since there was no
74:36
as everybody was amalgamated the one
74:38
that was called one big Union the
74:40
concept of one of the Union because
74:41
everybody was amalgam in and one of the
74:43
Union there’s no collective bargaining
74:44
going on because there’s nothing
74:45
there’ll be the bargain with a zone
74:47
there’s no committee of Steel Workers
74:50
something like that
74:51
to this this will only really went
74:54
national by 1878 though it existed in a
75:00
very small Matt and at least the PCAT
75:02
8086 and by 1892 totally collapsed and
75:05
was a big sort of them so the flurry and
75:09
thing the whole thing was over and with
75:12
the collapse of the Knights of Labor
75:15
some true smart true Union people ganna
75:18
come occlusions there’s must be another
75:20
way of something wrong with isolator
75:21
then it didn’t work and one of the
75:23
reasons didn’t work is because one big
75:25
Union nothing to do except preach
75:27
socialism though there’s no direct
75:28
activity and so as a result what found
75:31
that another group based on a right in a
75:34
whole different concept and this is the
75:37
concept of a cracked Union the idea of a
75:43
craft Union into control labor supply in
75:47
other words to trying to take a
75:49
situation an occupation usually is still
75:52
cracked
75:52
we’re ago was the natural limitation on
75:55
entry in other words everybody can be a
75:59
ditch-digger anybody’s got shoulders
76:01
mister guy says you can’t organize this
76:03
digger this is the concept you only
76:06
organize people through skill traits
76:08
multiplied skilled craftsmen why not one
76:12
ideal in our example would be stonemason
76:14
there almost no stone masons left and
76:17
eight or nine on the country and usually
76:19
elderly Italian that’s it if you have
76:21
eight or nine people in stone maybe you
76:22
can easily organize easy to organize
76:24
them because for various reasons one of
76:27
the still kind of small limited entry
76:34
one in one reason you take a still craft
76:38
which is living area and also requires a
76:40
lot of skill of a comic stonemason can’t
76:43
just walk in become a stone nation to be
76:44
a prejudice of ten years or something so
76:47
you have things like stonemason you have
76:49
things like cigar band workers usually
76:52
not mechanized in other words most cases
76:55
these are skilled craftsmen like
76:57
mechanics and the old old-fashioned
76:59
sense it but stuff together if it parts
77:02
together
77:02
yeah mechanics have cigar works of our
77:07
workers hand cigar workers
77:09
glass blowers and other occupations
77:12
women trade going forever with
77:15
mechanization it’s things like that no
77:17
it’s still skill craft we have a limited
77:19
that only a few people can join it to be
77:21
in it and to another very important
77:23
thing is the the main curve for the
77:25
labor is inelastic in other words you
77:31
have this sort of situation if the
77:37
demand curve of elastic okay man for
77:40
let’s say ditch-digger you’ll ask them
77:41
if you form a ditch diggers Union and
77:44
it’s just I’m raising the wage rate you
77:46
will just employ a whole bunch of them
77:47
in other words this is a how many people
77:49
will be hired and they incur this I
77:51
don’t why axes you now have wage right
77:54
so if you push the wage rate up from
77:56
here to here you this employer you know
77:58
halfway half the number of this diggers
77:59
or more than half you have a heavy
78:02
unemployment they don’t break the Union
78:03
your reunion with guys without just go
78:05
out there and under compete the union
78:07
and the union will be smashed you have
78:10
to have another for the unions be
78:11
successful in pushing out wage rates to
78:14
the lasting demand curve where you push
78:15
out the wage rate to say stonemasons you
78:17
might disappoint one person you have 10
78:19
people in point you might disappoint one
78:21
guy in other words you’re trying to have
78:23
a situation you always will have
78:24
unemployment as a result of you use
78:26
pushing out wage right for at least if a
78:28
small amount of unemployment Union get
78:30
away with it
78:31
and best for the union of course if you
78:33
don’t disappoint anybody simply don’t
78:34
employ a new person coming in like
78:36
somebody would have been throw away to
78:37
the age of 21 he’s no longer employed so
78:40
the unemployment is not visible okay
78:42
even better for the point of view of the
78:44
Union if you can do that you can have
78:46
that in the lastic demand curve and
78:48
unlimited entry then you have the
78:50
conditions ready to form a successful
78:52
crack union and one of the reasons that
78:58
gives you an inelastic demand curve is a
79:00
small proportion of the labor force oh
79:02
it’s a small number of people small
79:05
portion so these are the assets that
79:08
have an economic power let’s and push
79:16
out wage rates of the expense of
79:18
unemployment at small proportion because
79:24
then it’s not it’s not a significant
79:26
part of the payroll you’ll raise costly
79:27
employer very much we give you an
79:29
example I think a classic example is I
79:31
using woman on my micro classes that
79:32
Union and Polly here least have two big
79:35
unions we have the staff workers you
79:37
know these big using relative equality
79:38
if 200 members of something of staff
79:41
Union long for that we kill first and
79:45
the faculty we used to belong to au p
79:47
which is a mass union or 250 whatever
79:50
faculty members they had no power a lot
79:52
of they made a lot of noise or the moles
79:54
more people they yell a lot
79:56
but had no power I can could kind of you
79:58
could get a dam spent content because if
80:01
a faculty got a 50 percent wage
80:02
increasing with Bank robbed Polly no I
80:04
mean a huge increasing cause the other
80:06
hand you had two or three boiler tenders
80:09
won’t even leave very teeny of an
80:12
important boiler tenders Union and so I
80:15
remember years ago my 18 years ago a
80:17
company boil kind of you went out on
80:18
strike and then we have big news a
80:20
faculty with a big Union than its
80:21
currently what does the boiler say one
80:23
picket somewhere around the corner but
80:24
nobody sees them and I don’t tell they
80:27
said you want solidarity wants to pick
80:29
it with you they said don’t leave it
80:30
alone leave buzz off we’re not
80:33
interested in you worker solidarity
80:35
and so sure enough of a foremost strike
80:39
two weeks three weeks by these three
80:41
guys of work I mean it sure and finally
80:43
probably settles after about three weeks
80:44
give them a 50 percent wage increase
80:47
they’re probably gonna 40 or 50 don’t we
80:49
agree so three people not the four
80:51
hundred people that’s the difference so
80:53
you have that in other words it
80:55
inelastic demand curve small proportion
80:58
of a payroll and small entry goes up to
81:00
me I probably will of tenors are
81:02
probably fairly skilled occupation
81:03
changers walk in walk in a become a
81:04
boiler tender so with these conditions
81:08
set even have a situation successful
81:12
craft union so the unions that have the
81:14
economic power in other words the power
81:15
to raise wage rates above the market
81:18
level or not the large unions would want
81:21
the members make lots of noise we’ve got
81:22
a lot of publicity in the paper these
81:23
are small little unions of the interest
81:25
of the seeds of the market where they
81:26
can get in cut cut employment and raise
81:30
wage rates without too much evident
81:32
disruption
81:33
now what happens of course the people
81:35
means like people can’t get into the
81:36
occupation you can’t become a boiler
81:37
tender very easily right I control over
81:40
the craft these unions usually a very
81:43
tight control they’re usually considered
81:45
racist because they don’t and that
81:46
really racist and the correct sense they
81:48
really what happens is in the standard
81:50
situation is you can’t become a union
81:51
member like Christian and Hobart Hoboken
81:53
attrition is doing a very powerful Union
81:55
you can’t become an electrician unless
81:57
you have a son or a son or nephew an
82:00
existing union member of course nowadays
82:02
I suppose with whether the permit of
82:05
action or another they probably broken
82:06
that a little bit but this was a classic
82:07
situation you can’t become a member of
82:11
the Union less you’re the son or nephew
82:12
of an existing union member well I mean
82:13
it’s cuts out for other races it also
82:15
cuts out non-relative all non fellows
82:18
need not apply
82:19
but and of course you can’t become an
82:21
electrician in Hoboken less you remember
82:24
the Union virtually closed shop
82:26
situation your your houses bomb or
82:28
whatever it’s
82:30
I control the full area of the labor
82:32
fort so this means wage rates of
82:35
electricians have pushed up at the
82:36
expense of whom that’s not so much the
82:37
employer at some extent but largely to
82:40
the extent of other workers who would
82:41
like to be electrician they can’t do it
82:42
they become supermarket clerks or
82:44
whatever and that’s another word out of
82:46
Hoboken and so result is an increase in
82:49
the supply curve for other occupations
82:51
which I don’t have a pike in so this
82:54
means a full-on wage rates for
82:56
supermarket carts feel like station of
82:59
Penance or whatever so it’s your hands
83:00
then the weight unions get their power
83:02
is that by exploiting employers
83:04
particularly by exploiting other workers
83:07
and exploiting non-union workers or
83:09
workers with less you know less powerful
83:11
unions that can’t you can’t maneuver
83:12
this way they’ve got a lot more people
83:14
that can’t control the supply at work I
83:16
just overworked so on so what’s your
83:18
hand on this whole period 1880s 1914 in
83:22
the situation where unions a very small
83:23
proportion like 2% or so and the only
83:26
flourishing skilled craft situations and
83:29
they in a theoretician this are the
83:32
active practitioner with Samuel Gompers
83:34
head of the cigar Workers Union who was
83:41
a became head of the American Federation
83:43
of Labor form in 1886 as the exemplar of
83:48
this kind of the craft concept has an
83:51
American Federation of Labor
83:55
[Music]
83:58
the American Federation labor of AF of L
84:00
had no power itself was really simple
84:02
pump began that but the real power of
84:04
the laws of school belongs are ways of
84:06
the National Union the National cigar
84:07
workers you know whatever it is and
84:10
there are national unions a literal
84:12
loophole usually a National Union of
84:15
cooking power will look each local and
84:21
then they’re part of the Federation of
84:23
the Federation itself only endorse
84:25
candidates and they make the speeches
84:26
they don’t really do anything they don’t
84:28
have any concrete powers and actually
84:30
you can leave the effort all any time
84:31
once they open has no I’m lots of guilt
84:39
yeah so that’s technically called you
84:41
need to go self-employed usually but
84:42
they’re certainly they act as it doesn’t
84:44
innopolis like yellow trim very similar
84:48
like hardened yeah yeah yeah sure thing
84:52
but I get this government introduces
84:53
parts to fight for them we’ll see how
84:55
that happened linking 10 Woodley Flexner
84:58
report how’s a doctor they were able got
85:01
control of medicine especially licensing
85:03
in medical schools and hospitals and
85:04
thereby kicking out all reducing to
85:07
supply tremendously they had to use the
85:09
government to do it we’re not talking
85:11
about unions who do this without the
85:12
government say in other words we’re able
85:14
to have a successful
85:15
kind of Union without government support
85:20
or right it’s very limited as I say it’s
85:24
limited go some limit at the craft
85:25
unions and most of the unions were I
85:28
will have a break in a minute but mostly
85:30
unions were concentrated in certain
85:33
industries or occupations yeah there
85:35
were the building trades that’s known as
85:37
the building construction unions
85:42
carpenters joiners Masons and machinists
85:48
of wearing only things with construction
85:50
of course the holes been the most
85:51
reactionary part of the economy least
85:53
most backward weeks innovative and in
85:55
voyage these because construction is not
85:57
a very competitive industry between
86:00
between Reno clean city locale in other
86:04
words if you’re a garment firm if New
86:07
York City is unionized and pushes the
86:09
force of garment production way up just
86:13
yeah the government plant closes them
86:15
and goes into West Virginia or something
86:16
starts there I cap each with a really
86:18
clothing this New York but in
86:21
construction you don’t really have that
86:23
kind of competition if New York City is
86:25
unionized in your city construction you
86:26
know you don’t just move the Chicago
86:27
structures firm and where construction
86:29
doesn’t repeat that Eve closely but
86:32
other cities but since construction is
86:34
sort of geographically not the lipstick
86:36
in a sense it leaves room for this kind
86:38
of skill crap unionism so building
86:42
trades were heavily unionized throughout
86:44
the in the railroad industry the
86:50
Brotherhood of locomotive engineers
86:52
which was the known of the aristocracy
86:54
of a railroad industry the guys have you
86:57
know blowing the whistle in a cab but
87:02
they were the only ones that were
87:03
unionized before the ICC came in and I
87:05
think he came in 1886
87:07
this is expanded to the loss of the
87:11
skilled craft and railroads so for big
87:13
for Brotherhood even though the
87:14
Brotherhood and these what the engineers
87:21
the firemen together the other to drive
87:23
work too big for skilled crap they’ve
87:27
been not the non skilled railroad people
87:31
like the you know guys have sort of
87:33
janitorial pipes of the porters were not
87:35
we’re not we’re not unionized these are
87:38
the skilled craft in the rail industry
87:40
and all these only really came in with
87:42
the ICC with the ICC by the way since
87:45
the ICC essentially court Eliza Veron on
87:47
the street permitted
87:48
broad and racial discrimination in the
87:50
railroad before 1886 blacks were they
87:54
were storm why contingent and rail and
87:56
railroad engineers firemen all the rest
87:58
of it in the south and another placement
88:00
by chemically in the south bank as soon
88:03
as the ICC came in the railroads were
88:05
quite a lot you have to worry about
88:06
being profitable and so forth well
88:08
actually systematically kicked out on
88:10
the top job the railroad industry
88:11
engineers for Northland push down with
88:14
the porters and janitors and then that’s
88:20
really mostly a nun of various skill
88:23
cramps agar conference comes out of the
88:26
cigar workers flash blowers etc really
88:30
yesterday I’m the only other ones really
88:32
with anthracite coal anthracite coal
88:36
contrast is my two minutes of coal which
88:38
is they get most of the publicity but my
88:41
two minutes folks found everywhere I
88:42
mean Pennsylvania West Virginia all over
88:44
the place and recycle is limited a very
88:46
small section in around Scranton and
88:47
eastern Pennsylvania so therefore it’s
88:49
fairly easy to monopolize it to unionize
88:51
it because with very small geographical
88:53
monopolies and so you get one Union that
88:56
little area and then fit so they were
88:58
successfully unionized and that’s really
89:00
about it not too much else they tried it
89:03
all the time with garment firms the
89:06
unions van especially be ideologically
89:09
will go to their immigrants from Eastern
89:10
Europe the vote of the unionism per se
89:12
and socialism they couldn’t succeed very
89:14
well even with that ideological devotion
89:17
within that framework but also what
89:19
happened if you take a a graph and a
89:26
y-axis percentage of union membership
89:28
depends on labor force and union
89:30
membership and this is time say 1880s
89:34
the 1914 in this whole period which will
89:38
go from about 1% of 6% something like
89:40
that the 6% would be in the business
89:43
cycle room period we had a boom
89:45
boom situation it means the mantle labor
89:49
would go up so wage rates would tend to
89:51
go up in that situation people were
89:54
going unions or they thought the unions
89:55
would claim responsible hey we got your
89:57
higher wage rate even though the court
89:58
was not your music cause of the boom so
90:00
you need membership of go up stay from
90:02
1% of 6% in boom period as soon as the
90:04
recession came and the man for labor
90:07
fella usually smash because they try to
90:10
keep the wage rates up and of course
90:11
massive unemployment and you easily
90:13
broken because they little workers that
90:15
simply compete undercut Union wage rates
90:17
to get two jobs well right back down at
90:19
1% this is a classic situation during
90:21
the pre 1940 1980 1917 period an 1886
90:28
with 1917 the traditional situation a
90:31
very small proportion unionized most and
90:35
mostly during boom periods which then
90:37
recede in recessions and limited to race
90:40
war skill craft easily concentrated and
90:43
things like building trade there Road
90:45
brother-husband that’s just like coal
90:48
the only other Union before 1930s for
90:52
New Deal came a which was successfully
90:54
unionized it doesn’t meet these
90:55
conditions of Musicians Union and the
90:59
apparently my professor taught me labor
91:02
economics from her I’m Bible and great
91:04
truth cousin understand I said welcome
91:06
musicians are crazy anyway I was the
91:08
only explanation I think probably a
91:11
better explanation of the new musicians
91:12
are willing to be ninety percent
91:14
unemployed Muslim or other words it’s
91:16
they love music so much it’s something
91:18
like acting to acting as first not
91:20
heavily lazy and won’t even be on point
91:22
most of the time to be waiters and so if
91:24
we’re waiting for the big chance or
91:25
winning the faint music once and most
91:28
occupations they’re not willing to
91:29
settle for that obviously not only it’s
91:31
it’s both of us and they need someone
91:33
preliminary so generally that was the
91:36
concentration unions are not that
91:37
important and there were craft unions
91:40
there was gave up any kind of idea of
91:43
changing the world but they want to have
91:45
higher wage rates and better working
91:46
additions that was that and it was
91:47
collective bargaining on the local level
91:49
and the Sira ish Samuel Gompers
91:51
right practitioner must appear efficient
91:53
I was feeling calm on wrote I was a
91:57
economist for number who wrote a
92:00
book on a theory of labor unions in
92:01
their eyes they search for panelist
92:03
doctrine the Marxist myth of workers
92:06
solidarity there was no worker
92:07
solidarity on a nonsense in the as you
92:09
see the craft unions succeeded by
92:11
essentially shafting other workers who
92:13
are not skilled craftsmen it looked on
92:17
the national level what happened we were
92:19
the national level the people who call
92:21
for immigration restrictions world forth
92:23
the unions in other words by keeping out
92:26
immigrants you push the supply curve to
92:28
the left you raise the wage rate of
92:30
exhibit workers who was behind this
92:32
barrier and a personal long run means
92:34
the international division of labor is
92:36
heard and what sort of other stuff but
92:37
usually will special interest on care
92:39
about the long run there were just a
92:40
short term exclusion a kind of
92:43
competition America was built on free
92:45
immigration of the great things about
92:47
America there was no restriction on
92:49
immigration and with immigration we had
92:52
the greatest industrial success with
92:53
greatest robust real
92:55
Gradius program the fan of the living
92:57
however the union forces in favor of
93:00
limiting immigration so as to keep out
93:02
competitors worker competitors and would
93:04
work at the feet with each other just as
93:06
employers for people to each other
93:07
workers don’t get people to employers so
93:10
the key thing is that
93:11
restrictions on labor migration or
93:15
advance showing with always lobbied for
93:17
by other labor groups in the case of
93:20
united states the first restriction
93:23
immigration comes in the late nineteenth
93:26
century with a bitter hatred of Chinese
93:28
and and restriction is not Chinese
93:30
immigration the important thing again
93:31
about labor migration is the comedy
93:35
economics and race is a powerful
93:36
combination racism by itself as
93:38
unimportant racism I probably it’s sort
93:40
of like social thing you don’t get in a
93:42
certain Club without cared but you
93:44
combine race with economics
93:47
it comes from somebody economic interest
93:48
to keep out Chinese and onions or
93:50
whatever then you have a powerful
93:52
combination and two things reinforce
93:54
each other which is what happens in
93:55
racial restriction United States so the
93:58
first people who get the force of this
94:00
with Chinese immigrants the Chinese
94:01
again at migrating United States around
94:03
1850 and they did extremely well mostly
94:08
importantly west coast as you might
94:09
expect but extremely well
94:11
they were usually efficient industrious
94:12
all the rest of the virtues of the labor
94:15
force thrifty came in almost no capital
94:18
and immediately of course white workers
94:20
began to agitate to keep them out kick
94:22
them out terrible thing they’re evil
94:23
they’re coolies whatever it is because
94:26
they’re be out competed indeed by better
94:29
workers and they didn’t like it and they
94:30
use the racial weapon that try to
94:34
exclude them
94:35
the first thing the Chinese settled on
94:37
mass and Western mining districts in the
94:39
mountain of states and extremely while
94:41
they take an abandoned mine like a
94:42
crummy mine and do very well with it
94:44
about making it profitable so the white
94:46
miners began agitating very quickly by
94:48
1852 to prevent Chinese immigration to
94:51
kick them out and they used force both
94:53
private and governmental the kicked it
94:56
kicked Chinese out of the mining
94:57
district one should shine anything burn
94:59
their houses down and so for and so on
95:01
and they stayed in local governments
95:04
with passed laws prohibiting Chinese
95:06
mentoring in mining districts working in
95:07
the mine believe all of a think of it
95:09
about 20 or 30 years later Supreme Court
95:11
declares legal of our Constitution
95:13
without talking with too late
95:14
really the effect was immediate
95:17
so the whole heart stories about this
95:19
there’s violence was used and say state
95:24
laws were you that especially tax
95:26
Chinese mind so horned so on then that
95:29
way by violence the chattin both
95:31
governmental and private the Chinese
95:32
were driven out of the mining areas and
95:34
that went into the cities like San
95:35
Francisco and railroad work of course
95:38
once again they the white workers called
95:40
belly aching about Chinese railroad
95:41
workers except when my work came
95:43
dangerous we had to go up mountain and
95:45
gravy separate myself care with allow
95:47
the Chinese to do that so the and the
95:54
people leading the parade and a
95:57
theoretical level so to speak leading a
95:59
parade of anti Chinese Exclusion and the
96:01
agitation where the Knights of Labor and
96:02
those Brooklynites of labor and then the
96:04
American Federation of Labor later on
96:05
Terrence Powderly usually considered
96:08
life liberal s story and luckily mr.
96:10
riderhood heroic left-wing figure I
96:12
guess in a sense he wasn’t like
96:13
certainly a left-wing figures not heroic
96:15
who the head of the Knights of Labor
96:16
Terrence Powderly called the total
96:18
elimination of old Chinese jnanis they
96:19
kick them all out out early and the
96:28
Knights of Labor doctor this is there
96:30
one of that big planks and again the
96:38
that was murders of Chinese driving and
96:40
driving amount of mining areas in 1877 a
96:44
working man’s Party of California which
96:46
is a labor party of workers and unions
96:49
or was a fairly strong employer a big
96:50
third party in California for about
96:52
thirty years
96:53
it’s founded by Denis Kearney with a
96:55
powerful political figure came out for
96:57
the wrestling compact a welfare state
96:58
and kicking all Chinese out of United
97:00
States and he could put a quote we
97:04
proposed to rid the country of cheap
97:06
Chinese labor as soon as possible and by
97:08
all means in our power in any means
97:10
necessary over current phrase they also
97:13
Marcus public enemies and what’s in the
97:15
newspapers or whatever all employers who
97:16
would refuse to fire Chinese workers
97:19
those illegal persecutions of in
97:22
California Chinese workers California
97:26
for example 1870 outlaw the employment
97:28
of all any Chinese and probably works
97:29
project
97:30
two years later the outlawed Chinese
97:33
prevented Chinese from owning any real
97:34
estate or getting business licenses
97:36
I’d say about 20-30 years later the
97:38
Supreme Court declared unconstitutional
97:41
they put special taxes on Chinese but
97:45
they do with things like this example
97:46
Chinese had less capital and other
97:47
workers they started with virtually
97:49
nothing so the San Francisco for example
97:51
charge $8 license fee per year for a
97:54
horse-drawn laundry wagons but $60 foot
97:58
laundry man on the word Chinese and
97:59
weren’t lucky enough yet to have have
98:01
horses and wagon because they carry the
98:04
stuff on foot laundry on foot would be
98:06
especially high taxes on foot laundering
98:09
money
98:09
same thing with vegetable peddlers where
98:11
basket carriers Chinese who have
98:13
bathroom it spent $40 a year it goes 8
98:15
dollars a year for for a license fee for
98:18
those who have wagons
98:19
now this remember $40 meant something
98:20
like $1,000 now so they’re quite quite
98:23
high also in order the crutch Chinese
98:25
businesses they have maximum cubic foot
98:28
laws for say laundries so that a cubic
98:32
air ordinate so you have you couldn’t
98:33
have lettin less than 500 cubic feet of
98:36
air and any laundry so if most of the
98:39
Chinese one of these are small put out
98:40
Latanya going risen and for the benefit
98:43
of white laundries also the key
98:46
ordinance California at San Cisco area
98:50
where our compulsory haircutting Chinese
98:52
used to wear pigtails or queues is cool
98:55
and they possibly cut the hair or you
98:58
know cut the hair off of it again
99:01
eventually of course declared
99:02
unconstitutional
99:04
anyway this goes on to the whole harvest
99:06
of horror story about having this thing
99:08
on and on endless and again the leaders
99:11
in all this for the Crystal working man
99:13
nights away with them the working man’s
99:15
party
99:15
Californian on the craft unions when the
99:17
AF of L gets strong in 1880 they pick up
99:20
the cry example in San Francisco for tea
99:22
labor unions a people 1880
99:24
set up the League of deliverance what
99:26
they meant a league of deliverance from
99:27
Chinese Americans in the head of it with
99:31
a socialist and remember this seaman’s
99:34
protective union with the working man’s
99:36
party
99:37
social group they
99:40
four thousand members in California they
99:42
promoted a giant boycott that ideas the
99:43
boycott all good made by Chinese labor
99:45
and boycott merchants to employ Chinese
99:48
sell Chinese labor products when I fact
99:51
the first example of a boycott united
99:52
faces anti-chinese boycott the and a
99:58
boycott can take begins by the way with
100:00
Samuel Gompers who white white cigar
100:04
workers are being out competed by large
100:06
cigar firm used to employ Chinese labor
100:08
I need cigar what flavor they would
100:10
out-compete the inefficient white
100:13
Chinese like cigar workers so the gone
100:17
Burt comes up with a packing with what
100:18
was called a white label now call the
100:20
union label you know that Union labels
100:22
and clothing separate the originally is
100:24
a white label and instead of cigars
100:29
cigars for example made an efficient
100:31
high-cost white worker plants or had a
100:35
white label on the person the Chinese
100:37
made one didn’t and and by eighteen by
100:43
the mid-1880s 7/8 of the cigars in –
100:46
encounters Gophers have all made by
100:48
Chinese workers and one low-cost plants
100:51
so the white label comes in they form a
100:53
white cigar makers Association believe
100:55
the boycott a normal course with a union
100:57
again an example of union industry
100:58
cooperation in white for the white cigar
101:01
workers but combining with inefficient
101:03
white cigar factories fun mister
101:05
manufacturing firms to try to boycott a
101:07
napkin and crush the lower cost Chinese
101:10
labor people and and course Gompers then
101:15
takes the lead in the next knees
101:17
exclusion to try to keep Chinese from
101:19
coming in and preferably to kick them
101:21
out
101:23
they finally vonlee to 1885 and the
101:25
pressure of a boycott it’s utterly San
101:28
Francisco art cigar firms agreed to fire
101:30
only Chinese workers and replace them
101:32
with white workers
101:33
another thing in 1885 of a giant Council
101:38
of Congress in San Francisco 64 Pacific
101:41
Coast unions including Knights of Labor
101:42
Antico communists anarchist socialist
101:45
Labour Party and other than craft unions
101:47
all unite on the idea of kicking out all
101:50
Chinese for United States so so
101:52
San Francisco area and the only
101:54
disagreement was should they be kicked
101:56
actually give them two months of the
101:57
leave or of today’s the Ranger opinion
102:00
the most extreme of the anechoic
102:02
communist seaman’s Union which court for
102:04
King and Chinese immediately any right
102:08
the as one of the NFL coming ously ders
102:11
said but by force is the only way to
102:13
remove the coolie twenty days is enough
102:15
to do it in people are the big
102:17
concession I give them three weeks the
102:19
state of California goes along with us
102:21
might prefer one preventing Chinese and
102:22
becoming citizens to excluding Chinese
102:25
children from public schools three
102:27
trying to restrict Chinese immigration
102:28
on a state level only right most of the
102:31
agitation has ended in 1882 and the
102:33
Congress gullible as passes the Chinese
102:36
Exclusion Act preventing all Chinese for
102:39
coming in further Chinese from coming in
102:42
mostly under union pressure and and
102:46
Californians and the first the unionists
102:48
were disappointed that they did not kick
102:51
out existing Chinese about a hundred
102:52
thousand Chinese Americans at that point
102:54
you’re not go so far to kick them out
102:57
Samuel Gompers again thankfully just
102:59
want to mention one of them Samuel
103:02
Gompers official the AF of L official
103:05
Herman Gooch Gooch dot or at a pamphlet
103:07
those days of title used to be very long
103:10
you really didn’t have to read the
103:11
pamphlet just read the title and get the
103:13
whole picture the title of this pamphlet
103:15
mighty no to was but this one the
103:17
Chinese Exclusion I was up for renewal
103:18
twenty-year act one of the agitate to
103:21
keep it going
103:22
some reasons for Chinese Exclusion colon
103:25
meat versus rice in other word right to
103:27
somehow evil
103:28
meat meat versus rights American manhood
103:31
against Asiatic coolie ISM which shall
103:34
survive at any rate then comes with
103:39
Japanese begin them emigrate by 1880 or
103:43
so and by 1900 they’re going to come in
103:45
and of course they started staring at
103:47
the Japanese especially in Los Angeles
103:49
area the same stuff goes on the same
103:50
people Denis Kearney comes out of
103:52
retirement in 1890s leave the idea of
103:56
Japanese exclusion
103:57
against quote another breed of Asiatic
103:59
slaves unquote again the labor unions
104:02
lead a parade of Sam Sisko labor unions
104:04
and Los Angeles etc same damn thing
104:06
happens it’s forming Asiatic exclusion
104:09
we exclude Chinese and Japanese
104:11
emergence and I fight AF of L refused
104:15
charter at the Japanese Farm Workers
104:16
Union because they were Japanese
104:18
Japanese Americans and Samuel Gompers we
104:23
refusing a charter to the sugar beet
104:25
Union sugar beet Workers Union said
104:27
quote around 1905 your Union must
104:30
guarantee you they will under no
104:31
circumstances accept membership of any
104:33
Chinese or Japanese the great this is
104:35
great farsighted humanistic labor
104:38
movement any right the same stuff goes
104:42
on it’s finally Japanese exclusion act
104:44
and so I just want emphasize on the
104:50
point of all this is not business the
104:51
repeater Horror Story the point of this
104:53
demonstrate the exclusion racial racism
104:56
economic and political measure come from
104:58
the blend of race race and economic done
105:00
with a blend of economic privilege with
105:03
then using racial whipping up racial
105:05
sentiment as a way of doing it and by
105:07
the way the same thing happened in South
105:08
Africa it’s not realized in South Africa
105:10
the South African apartheid system
105:12
they’re not put in by the Afrikaners of
105:15
board that was much later was put in
105:17
originally by the white work annual
105:18
workers after World War one when African
105:23
workers began to rise up and become
105:24
skilled laborers rise up out of the
105:26
unskilled the calm Foreman of things
105:28
like that and that point a white workers
105:30
got a star up on one side we have to
105:31
exclude Africans
105:33
from being promoted and the Communist
105:36
Party of South Africa by the way which
105:37
led the exclusion principle organize the
105:41
general strike in the early 1920s the
105:43
theme of which was to prevent all
105:45
Africans from being from the Year coming
105:48
to skilled labor of Fullman jobs and the
105:51
fee and the slogan was white workers
105:53
unite and fight for a better world a
105:55
communist party forces not talk about
105:57
the apocalypse history point but anyway
106:01
this was then this one is the general
106:02
strike one and after that the government
106:05
Africa in response to this prevented
106:07
blacks from rising up into the into a
106:09
skilled worker and an informant job
106:11
that’s really begins the holdup part
106:13
eight it began even before that would
106:15
work or those one of the earliest
106:16
examples okay I want to get nap to start
106:21
with Teddy Roosevelt the next time told
106:23
about the Grove are present beginning
106:24
and tell you I was president so I want
106:27
to talk about Teddy Roosevelt early
106:28
career tell you Roosevelt you might
106:31
expect is one of my least favorite
106:32
people in American history I have many
106:34
unfavorite petty you want to write up
106:36
there on the top I can’t have too many
106:40
people in dislike more than Teddy in any
106:42
rate petty for example like killing for
106:45
his own sake love War II love murder
106:48
killing anybody animals people there’s
106:50
me a difference he didn’t carefully
106:54
Chile right he wanted any kind of war
106:55
than that who the war we got Spain
106:57
anyone Fran doesn’t make any difference
106:58
Germany doesn’t matter as long as it was
107:00
a war any right Teddy was as I say grew
107:05
up with a Morgan ambit his relatives
107:06
were more the Oyster Bay Roosevelt’s
107:07
role Morgan he goes to Harvard as a
107:11
young young lad and at Harvard College
107:13
and he marries Alex Lee was a daughter
107:16
of George capitally one of the top
107:18
Boston Brahmins one of the critical
107:20
connected with a Morgan interests and
107:24
related and leaves the Higginson’s in
107:26
the Cabot pop Boston financial
107:28
aristocracy
107:37
you

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