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Dec. 19, 2005 - Freedomain Radio - Stefan Molyneux
33:15
19 Voodoo Economists

The moral challenges of the modern economist

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Well, good morning, good morning.
It is Monday.
I believe it's the 19th of December.
I'm tootling off to work.
It's a beautiful, bright, sunny day.
Lovely weekend with my wife.
And I would like to talk this morning about voodoo economics.
No, no, not exactly the stuff that Reagan was talking about, although I do think it was interesting that that phrase kind of took root in the public imagination.
And I'd like to talk about why I think that might be the case.
And just before we start, a very kind gentleman phoned in and told me that, oh sorry, emailed in, and told me that, sorry if my defroster is interfering with our sound at all, told me that I was getting some sort of plosives or some sort of rumbles because of sound, and I do apologize for that.
I have bought a better Microphone for home, but in the car, you know, we sort of have to make do.
I don't know.
I haven't been able to find a really good headset microphone that would eliminate any kind of exhalations, but I'll do my best to try and stay away from the... to stay away from breathing directly onto the microphone, so I hope that that helps.
So for voodoo economics, I sort of, I mean, okay, first of all, I have enormous respect for the science of economics.
You know, this idea of looking at the non-obvious losers in all economic transactions, in particular, all state-run economic transactions, to me is, you know, it's sheer genius.
I mean, the people who came up with economics to begin with, you know, hats off to them.
It's an amazing mental discipline and they should be I mean, I guess, although fairly long dead, they should all be very proud about what they did, because it really is one of the non-obvious leaps of intuition that can result in the foundation of a new science, and I just think it's a wonderful discipline.
Now, that having been said, I think that it is also a discipline that is not brave enough, not nearly brave enough, and I'll sort of say why.
The rise of science, you know, was a bloody murderous affair.
I mean, the church just... I mean, there were some tolerant and curious scientific church members, but those were only the clergy who did not believe their own books were the ones who were curious in science, or about science, because one of the huge problems with the rise of the scientific method is it denies the power of a divinity to perform miracles.
Which is a fairly significant way that we know a divinity exists, right?
I mean, according to most theologies, if I stand up and say, I am the son of man, well, of course, in these days of genetic tinkering that may be possible, but theologically people would look at me rather askance, let's say.
But if I were able to stand up and say, I am the Son of God, and behold, I can bring the dead back to life with the touch of my hand, and I can walk on water, I can do all of these miracles, and then people might have some more acceptance of my beliefs, right?
So, you know, if just some guy says, I am a deity, Then, you know, we would look at him as somebody who was mentally ill.
However, if some guy says, I am a deity and I can prove it by, you know, going flying off and getting a piece of moon rock and coming back, you know, in a split second or something.
You know, something that would be fairly tricky to rig, then, you know, that's something that we say, okay, well, there's some sort of external corroboration, you can do things that nobody else can do, you obviously can manipulate and change the laws of physics at will, and therefore, you know, you are either a high-ranking government bureaucrat or some sort of deity or have some access to some sort of higher power.
So, the existence of miracles is what separates crazy grandiose lunatics who say that they're a god from people who might have some legitimate claim to such an exalted status.
Status.
Status.
Still working on which side of the pond I'm on.
So this question of miracles was pretty fundamental to the rise of science.
So when scientists said, look, matter has fixed principles which can't be violated and you can't pray for the sun to stop turning in its direction.
You can't pray for a pebble to fall upwards, simply because matter has these properties which are not open to whim.
And, of course, this was a huge battle with the church.
I'm not very conversant with the battle with the Middle Eastern religions, whether science won against those.
I mean, I think it's fairly safe to say, given that the separation of church and state never occurred, that the scientists in those societies did not win the battle.
And it may not be because they weren't brave and fought, but it may just be for a variety of other socioeconomic reasons, right?
So the early scientists in the West had to battle it out with the clergy and it was just a grim, grim one-sided battle.
You know, you didn't read of a lot of priests getting burned at the stake for not accepting certain scientific theories, but of course, you know, many, many, many scientists were slaughtered, tortured and murdered by church members, right?
Because the church, let's just say in the Middle Ages for the sake of argument, You know, operated identically as a street gang would operate in the modern world, right?
I mean, they had a turf and that turf gave them power and it gave them income.
And the last thing that they wanted to do was to waste resources on putting down rebellion after rebellion.
And they also, given that they generally didn't have an army, but instead relied on the power of the state, it would cost them more if people stopped coming to church voluntarily.
I mean, it would cost them more to drag newly converted atheists to church than they would make out of pillaging those people's income.
So, it was a racket that was entirely predicated on people's acceptance of a worldview and a moral belief, which they defended as zealously and as violently as any drug-dealing gang would defend its corner of, you know, a city or its trade in a particular drug.
So, you know, the economic proposition for the church is, I have to get the kids early, and I have to brutalize them, and I have to teach them all this stuff, and so terrify and warp their minds, that they would be unable to ever break free of the sort of mental straitjacket that I placed them in.
I've mentioned in another podcast, but I still think it's worth, it's a metaphor that's worth repeating here, that In the same way that, you know, in sort of late 19th century China there was a practice called foot binding where a girl's foot would be, you know, put in these horrible, you know, bone-crushing restraints and it would be curled into a little ball where her toes would be pointing into her heel and
You know, it wasn't like later she could just go and get it straightened out.
You know, what happens developmentally hardwires the neurology.
You know, that's why the church and that's why the state focus on children.
So, in the same way that you can't straighten out a foot binding after you're an adult, but you just have to hobble around, you can't straighten out your mind after a religious education.
And so you have to just sort of hobble around and continue to worship the church because your brain is, you know, epistemologically just a massive, you know, religion-induced scar tissue that you can't think clearly through anymore.
The church needed to make sure that the worldview and the moral teachings that it was inflicting on the young were stable, because otherwise, you know, it would end up paying a dollar to the local lord to go and drag an atheist to the church to extract ten cents from his hide.
And this, of course, isn't productive at all.
It's why farmers tend to raise cows, not tigers, because it's a little more dangerous to deal with a tiger.
So you want to make sure that all your domestic animals are passive and dumb and not given to questions and so on.
So with the rise of science, you began to have, you know, this incredible violent reaction to what the scientists were saying.
Now the scientists, I mean, of course, the majority of them, you know, I would imagine, just kind of shut their mouths and went back to doing their research in private.
I just didn't talk about it because, you know, there's few of us who have the stomach for, you know, being burned at the stake for the sake of an abstract principle.
I'm not sure that I would, but some of these people certainly did.
Now, I don't know if it's because they believed that their scientific visions were coming from God or If they just had a masochistic streak or if there's some sort of brand or species of noble integrity that prefers death by torture to living publicly with a lie.
I mean you can live privately with the truth, right?
But if you have to live publicly with a lie maybe some people can't.
You can't stand that, right?
I think it's New Hampshire that has the license plates, Live Free or Die, which is kind of funny, of course, because license plates are printed by the government and you have to pay a license to get them.
So, printing on something that you've already subjected your will to the government, printing Live Free or Die on a government license is, I think, pretty funny, but that may just be me.
So, you know, why am I talking about scientists and the Church and the rise of science?
Well, while there were no absolute principles, sorry, the Church required that there be no absolute principles of matter, because any absolute principles of matter limit the power of the God that they believe in.
And, you know, if the God is limited, then You know, it's really hard to say, you know, the God can watch you at all times, the God will punish you with hellfire, the God has no equal.
So, it's a little tough to say that if the God is just sort of limited, you know, that He can, you know, He can lift a thousand pounds while you can only lift a hundred pounds, right?
I mean, then He's just a bigger guy and there's no need to worship Him.
So the church reacted with the kind of ferocity and predictability that you would expect from any sort of criminal organization that wished to retain its source of illegitimate income, and moved to quash the rise of any sort of absolutist scientific methods.
And this, of course, as you know, or probably know, happened again.
When evolution came trotting along and began to, you know, deal with the question of the origin of life.
So, you know, this was all something that you can look up and you can look up the persecution and the sort of mini Spanish Inquisition that occurred with the early scientists and I think it's worth a read because, you know, we get a lot of propaganda about nice old church ladies these days but I tell you it's You know, just because you've taken the claws and fangs off a tiger doesn't mean that its cubs are going to be pleasant as well, right?
So you never know what's around the corner.
Definitely, throughout history, the church has had absolutely no problem, you know, killing, raping, and murdering to retain its privileges.
And, you know, there's absolutely no reason to believe that human nature has changed in the intervening time that the separation of church and state has occurred.
So, you know, keep your eyes peeled, you know, for the rise of more aggressive theology, which, you know, I think you can see pretty much is already occurring.
So, why do I bring this up in the context of economics?
I'm going to create an analogy here that is a big one, so you might want to adjust your reality helmet to an incoming shell.
So I'm going to sort of say that The early scientists were equivalent to moral free market theorists, or free markets like myself, or free market theorists like myself and perhaps yourself, who are willing to use the argument from morality.
And that physical matter is analogous or equivalent to the market, to the economic life of people in a country.
And last but not least, the state is equivalent to the church.
So, in the earlier part of my talk this morning, I was speaking about how scientists had to argue for, you know, inviolate properties of matter in order to develop science.
And it is my belief that economists have to argue for inviolate morality in order to Bring about the rise of a rational science of economics.
Now, scientists were abused because their formulations implicitly denied the possibility of miracles and thus limited the power of God.
Free market theorists who use the argument for morality will be abused because their arguments Demand absolute properties of morality and people, and therefore limit the power of the state.
And to me it's exactly an analogous situation.
And I would say that the free market theorists of the modern world are doing just a wretchedly, unbelievably, abysmally, catastrophically, apocalyptically terrible job of defending freedom.
I won't get into that because that's a whole other podcast, but I think you'll probably see that we're not having any luck maintaining the free market or limiting government power.
We are sliding down a hole pretty quickly.
It's a pretty well-oiled hole that we're going down, and we're not even able to slow down or fall, let alone start climbing back up.
So, it's a pretty bad job that people who've been defending the free market have been doing.
And it's my belief that that is because they're not directly taking on state power.
And the reason that they're not taking on state power is that most of them are academics or people with things to lose.
I'm not sure that I'm, you know, a braver human being than others, but I will certainly say that I have, you know, nothing to lose.
I left the world of academia, you know, because I recognized that I wasn't going to get anywhere You know, with this constant arguing that I was going to battle for another five years to get a PhD and then either get a job on false pretenses or not get a job at all because my path to truth took me a little further than saying, hey, you know, Ireland's doing a lot better since they dropped some of the regulations and lowered their taxes.
Isn't that great?
You know, let's give the slaves a little bit more of a chain so that they can row harder, so that they can get the state where it wants to go.
I don't consider that a very moral argument.
I don't consider that a very decent, honorable, or an argument with any integrity to say, let's give the livestock a little bit more room to wander around so that their milk is better.
You know, that to me is a disgusting and vile subservience to evil state power.
And I would have had no luck convincingly talking about limiting slavery since, you know, it is a simple fact that slavery is evil, violence is evil, state compulsion is evil.
And it's pretty simple to prove it, that it is evil.
And so, you know, the fact that people believe in it is because they get well paid to do so.
I mean, we're all aware of this, and I don't think anyone's particularly surprised.
I'm going to do this on another podcast, but just to mention it here, you know, when was the last time that a great idea came out of academia?
I mean, you have
Hundreds of thousands of people all toiling away supposedly coming up with these great ideas You tell me what was the last great idea to come out of academia that people just went wow You know like like evolution or you know and I'm not talking about science although science is pretty wretched these days as well physics and so on because you know they They're not commercial because if they were commercial they'd be in the private sector and they don't want to oversimplify because if they oversimplify their budgets go down so they you know
Very big on exploring the 12th dimensions of quark activity, because, you know, that'll never be solved, and, you know, it's just another government program to overcomplicate and waste time and money.
So, you know, physical sciences are pretty bad, the humanities are just completely wretched, and philosophy is the worst state of all, right?
I mean, there's nothing, nothing decent coming out of philosophy.
I mean, after 9-11, which was, you know, in essence a moral You know, did anybody call on the chair of philosophy to come and talk about it?
Well, of course not.
Because they had nothing to say.
They couldn't even parrot the sort of party line and say, well, you know, these cowards attacked us because we're free.
You know, this kind of stuff.
Because, you know, we're so free these days.
50% taxation, hundreds of thousands of regulations, the Patriot Act.
and, you know, dependence upon the state in virtually every critical aspect of our lives.
They're so, you know, we're so free, and, you know, don't you know that they also attacked Switzerland because, you know, Switzerland is free as well.
Oh, no, wait, they didn't attack Switzerland.
Maybe that's because Switzerland hasn't stationed troops all over the Middle East.
Anyway, so to return to the question of economics, why do I think that voodoo economics is a powerful term?
Well, if you believe not just in the historical existence of miracles, but that miracles occur all the time, every day, all over the world, then it would be kind of tough to come up with the science of physics, right?
If you accept the fact that, you know, people can walk on water, that you can drink fire, that, you know, water can burst into flames, and that, you know, Uh, you know, tides, uh, can, uh, occur on land, uh, whatever, you know, whatever nonsense you wanna make up about the behavior of matter.
If somebody wills it, then this will happen, and it's a valid phenomenon.
Then, if you accept that, then you really can't be a scientist, because how can you conceivably come up with things like, you know, the iron law of reproducibility or, you know, logical consistency, if you accept the fact and support the fact that miracles exist?
You simply can't be a scientist.
You are an Somebody who apologizes for the priesthood, right?
So you're supporting the evil of organized religion if you accept and work within the confines of, you know, miracles exist.
God is real.
Everything, you know, that you will can happen if you're faithful enough.
Therefore, matter can have no properties.
Therefore, there can be no iron physical laws.
Therefore, reproducibility of experiments is not a criteria for truth.
Therefore, therefore, therefore, I'm sure you get the idea.
You can't create a science based on whim.
That's sort of the essence of what it is that we're chatting about this morning.
I mean, that's really the...
You can't create a science based on whim.
That's sort of the essence of what it is that we're chatting about this morning.
Now, if you look at the economy, you know, it is far more enslaved than it is free.
If you count the enormous amount of capital that's been tied up through, you know, the national debt, even if you just say, well, the state only has a third of workers and taxation is only 48% or 35% for most people, that's fine.
But if you count up the trillions of dollars that are locked up through government debt, then, you know, we are far more enslaved than we are free.
You know, you can't say that somebody with a $50,000 income is middle class if they have a half million dollars in debt.
You know, they're broke.
It's just a matter of time.
So we have, you know, very little freedom left in our market.
And yet, we have a lot of economists.
Now that, to me, seems rather unusual.
You can't study whim no more than a physicist can study miracles, other than to disprove them.
So, an economist who is looking at choices made in the free market and attempting to analyze the free market seems a rather odd occupation to me when the free market is almost non-existent in the modern world.
In a sense, you know, government intervention being equivalent to miracles, to divine intervention in matter, government intervention in the economy is equivalent.
You know, they're like physicists studying a world where more than half the behavior of matter is completely whim-based and political or random or, you know, subject to God's, you know, preferences, which is complete nonsense.
I mean, you can't study that as a science.
So, it doesn't make much sense to me that economists claim that there's such a science or such a discipline as economics, when really all that economics is these days is a description, in one form or another, of the effects of, you know, whim-based political violence.
I mean, it's not a science at all.
It would be a wonderful science in a purely free market, in a purely free world, But it is certainly not a science when the vast majority of capital, time, and labor is all shoveled around at the point of a gun, and all decisions are based on political whim.
And I'll sort of give you some small examples of this, and this is at a really micro level, but, you know, it's important to sort of jump from the stratosphere to the blades of grass from time to time.
This is just sort of people I know.
I've been somewhat free of it.
I guess to some degree.
This sort of whim-based stuff, simply because I was lucky enough to take a couple of years off to write a novel.
Well, actually I wrote about three or four novels, but only one has been published during the great tech boom of the early 21st century.
But, you know, I'll just speak about one or two other people that I know who've dealt with this kind of regulatory mayhem.
And, you know, I would really like to know how an economist would square this with this supposedly rational science of economics.
So a gentleman who is a businessman that I know was involved in environmental assessments Which is you send an engineer on site when somebody wants to buy a piece of land or property they don't want to get hit with a lot of environmental regulatory bills later on.
Like you don't want PCBs or asbestos or you know battery acid leached into the ground or anything.
So you want to do an assessment and make sure that it's not such a bad thing that you're buying.
You're not buying a lot of liability.
So he had that business and ran it for a number of years.
And then, and I'm sorry for not knowing the details, but the regulations changed.
What was formerly required by law was now no longer required by law.
And so, you know, this man's business entirely collapsed.
And I bet you, you ask around anybody who's been at all entrepreneurial, or even people who work for larger organizations, and just ask him about this, I bet you, you know, that you will absolutely find a large number of people who have suffered through this kind of calamity, where they sunk their life savings, their whole professional career, into a particular field.
And then what's happened is some regulation, some law, something has changed, and the whole thing goes down the toilet.
An economist has no right to study this whatsoever, other than to thunder over and over that violence is bad and the state intervention in the economy, let alone the state for sure, state intervention in the economy should be completely eliminated.
In the same way that, you know, the early scientists had to thunder over and over that You know, God may have created the universe, who knows, but he sure as heck isn't coming down and flicking atoms around because he's bored.
You know, that matter has properties and, you know, anybody who doubts it is more than free to submit a reproducible experiment where it doesn't.
Another example is a woman that I know who runs a psychological practice.
had a pretty flourishing practice a couple of years ago.
She had, you know, I think 18 or 20 people working for her and so on.
And a lot of this was due to the fact that lawyers who dealt with people who had gone through motor vehicle accidents could refer those people to this psychological clinics.
So she'd, you know, spend a lot of time developing relationships with lawyers so that she could get fed people who'd gone through motor vehicle accidents both for assessment for insurance purposes and also, you know, just to help them deal with either, you know, chronic pain or limited functionality and so on.
Because, you know, that stuff's pretty jarring to a personality.
And then, lo and behold, you know, one morning she wakes up And the law has changed and now lawyers cannot refer patients to psychological clinics.
You know, I mean, I don't know who came around with that or who came up with that, but I would imagine that it is something to do with the idea that, you know, if you refer a patient to a therapist and that therapist is assessing your patient, And your fees are dependent upon that patient being found incompetent, that you might be able to influence your patient, and so on.
Of course, that's not actually why it happened, right?
I mean, that's just the story.
The why is some political backroom deal that we'll never know about.
But, you know, this woman's livelihood, you know, the business that she'd spent, you know, 14 or 15 years building up, I mean, just absolutely vaporized in the space of one day.
I mean, she, you know, went through a complete financial meltdown because her, you know, her referral sources just dried up.
And, you know, you explain to me, as an economist, I mean, you can say, yes, estate intervention is bad, but if this kind of stuff is occurring all over, The economy?
How on earth can you claim that there's such a thing as the science of economics?
I mean, sure, you can say there's cause and effect.
Right?
But, I mean, we all know that violence is bad.
We all know that, you know, holding a gun to people's heads to get them to do what you want is bad.
What you need to do is to thunder that over and over and actually take a stand for the free market rather than justifying the use of state power by saying, well, you know, it should be used less, or it should be used differently, or, you know, I mean, you don't say to a hold-up artist who's using a gun, you know, it would be much better, you know, if you used a knife.
You know, it would be nicer.
It would be, you know, maybe more efficient.
You know, you wouldn't have to keep oiling your gun.
You certainly wouldn't say to a hold-up artist, You should hold up people less.
You should rob less.
You know, that would be a completely immoral approach to the problem, because you're, you know, while seemingly criticizing, you're absolutely supporting, you know, the base premise behind it, which is that violence is okay, You know, we just kind of need to tweak it or limit it a little bit.
You know, so you can have slaves, just don't beat them more than once a month.
You know, that is to me where the science of economics is these days.
It's attempting to describe a system that is completely manipulated and whim-based and politically based.
So it's not a science at all.
It's like a soap opera.
It's the descriptions of the motivations and actions of mentally ill people.
You really can't call that a science at all.
You can certainly say, here's a prescription for health, and you can spend your entire time documenting The abuses of power and the abuse of violence.
But, you know, it's really not a science if you just say, you know, as I mentioned in my last podcast or two, Bob shouldn't beat his slaves and that would be better.
You know, it's not a... if you say this government program or that government program is bad or this, you know, government program doesn't achieve what it wants, you're still accepting this thing called government, this thing called program, which is a completely inaccurate description of what is occurring.
You know, I mean, it's one of these, I mean, there is a reason that people manipulate language so much.
You know, you wouldn't call, you know, the protection racket of the mafia a government program, you know, a state initiative.
You know, it would be a violent shakedown.
It would be thuggery.
It would be, you know, brutality.
It would be gang warfare.
I I mean, and that's really what economists are trying to cover up, is to say, you know, we think state programs should be optimized, we think the market should be freer, or not, you know, whatever they're saying, but they're still accepting the basis, which is that violence should be used, it should be used differently, perhaps.
That is not a science at all.
Right?
That is just a cover for evil and corruption and violence.
And it is a justification for it.
And these people, who call themselves economists and so on, you know, generally paid or subsidized heavily by the state.
And, you know, if they are think tanks, then they're subsidized by political parties or movements.
You know, so they're very much, you know, fed in the belly of the beast.
You know, they're like those little remora that follow sharks around and pick up the scraps or pilot fish and so on.
So, you know, these people who call themselves economists are absolutely analogous to the theologians of organized religion, you know, who attempt to codify and abstract the violence that is being performed so that people can have a different emotional reaction to it, i.e.
a muted, non-reactive emotional reaction to it.
So, you know, they call it foreign aid.
Well, who's, you know, Who's against aid?
What they don't call it is, you know, giving arms to murderers.
I mean, they don't call it, you know, stealing money from the general population in order to, you know, fund companies with foreign, you know, foreign contracts.
So I have a good deal of problems, a large problem with the people who call themselves economists.
To me, the phrase voodoo economics is very apt because these people are theologians.
They are simply describing the behaviors of politics and of whim in the same way that theologians describe a material reality that is completely subject to the whim of God and that's non-scientific and nonsensical.
Economists are describing an economic reality that is entirely subject to the violent whim of the state, and therefore to call it a science, to me, is, you know, species and nonsensical in the extreme.
Well, thanks very much for listening.
I've actually made it to work.
I gotta tell you, it is so much nicer to come up with audiobooks rather than to listen to them.
It really helps the day fly, and I hope it's interesting to you, too.
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