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Jan. 1, 2006 - Freedomain Radio - Stefan Molyneux
57:43
35 Race and the State (Part 1)

The role of race in state power (Part 1) - Feeding on artificial divisions

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Hello, this is Stefan Molyneux from Freedomain Radio.
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Good morning everybody.
It's Steph.
It's New Year's Day.
Actually, I'm just kidding.
I really don't drink, so I've got nothing to be hung over with on New Year's Day.
But I am very happy to be in 2006 for a variety of reasons.
Probably the most important one Is that that old U2 song can finally be scrubbed from my brain, you know, nothing changes on New Year's Day.
And that's always a good thing.
Never particularly liked that song, although I do like U2.
That's one I never particularly liked and always throughout New Year's that sticks in my brain.
There's actually a very funny... The Daily Show is pretty funny in my view and He has a, I think it was the opening of the Clinton Presidential Library, and you two were there and they were singing, you know, how long, how long must we sing this song?
And, of course, You know, Jon Stewart had this rather pained look on his face like, you know, it's like, yeah, that's a good question, dudes.
It's been like 25 years.
So I thought that was actually pretty funny.
So today I'd like to start off the new year with a bang and talk about a nice and juicy and explosive topic, especially for my American friends, which is the issue of race.
A very interesting and exciting topic to chat about and one that has no small share of social excitement associated with it.
But before talking about race, I would like to sort of outline a framework for looking at this issue, and perhaps to help people to at least understand sort of where I'm coming on when we talk about issues of race.
So, to start off, there are three groups, in my view, in any political system, three sort of major groups.
And a political system, by that what I mean is any environment where you have a forced transfer of wealth that is cloaked in moral absolutes, right?
So there is a forcible transfer of wealth from the Mafia to whoever they're preying on, but at least it's not cloaked in a sort of moral absolute of beneficial, it's good for you and you should do it, and altruism and so on.
But in a political system, I mean, not only is there sort of the universality of the criminal gang, but what particularly divides them from real criminals is the fact that they tell you that it's good for you and, you know, they attempt to minimize the amount of energy they have to spend collecting from you by, you know, filling your head with propaganda about how you should hand over all your goods to these people because they're trying to do good things and nice things and only evil people wouldn't and all that kind of stuff.
So to look at it in that context there are sort of three major areas of activity.
There's those who provide the resources and of course these are the taxpayers and so on.
There are those who consume the resources And those are the needy, let's say, you know, which would be the poor or the old or the sick.
And then of course there are those who distribute.
Now those who distribute are a subset of those who consume, but they take the lion's share for themselves.
Now that doesn't mean that the majority of the welfare budget goes to bureaucrats, but it does mean that each individual bureaucrat is going to be taking a lot more money for themselves than they are redistributing to the poor.
So you give, let's say, fifty thousand dollars a year to the welfare system Then $10,000 of that will go to a poor person, and $40,000 of that will go to a bureaucrat.
Now, the poor outnumber the bureaucrats, so I'm not sure what the balance is in aggregate, but for sure, each individual bureaucrat is getting paid a lot more than the money that is going to the needy.
So, you know, it's very important to sort of understand the economics behind this transaction, because it does apply to the state as a whole, not just to what our topic may be today, which is race.
But if you just look at it from an economic standpoint, the bureaucrat cannot get the money from the taxpayer without the poor.
So the bureaucrat is sort of a parasite on the existence of the poor.
And so what the economic transaction is, is that the bureaucrat is selling the alleviation of poverty to the taxpayer and collecting a fat paycheck for themselves on the basis of doing that.
So, the bureaucrat needs the poor in order to get money out of the taxpayer.
I mean, I'm sure that's all fairly clear.
But it's a little bit more complicated than that, because if it were that simple, then poverty programs would never last as long as they do, because obviously poverty programs don't help the poor.
So, what I'd like to sort of introduce is a topic that I call negative economics.
And I mean, there may be about a thousand better phrases for it.
If you have better phrases, be sure to let me know.
But in the world of negative economics, what happens is that... Okay, well let's start with the world of positive economics.
So positive economics are, you know, I'm Steve Jobs and I make an iPod.
And you want an iPod, so you give me money for it and it's a win-win situation.
And that's sort of one aspect of the market economy.
However, another aspect of the market economy, which I don't think is often talked about, We'll just talk about the free market part of it for the moment, and then we'll get to the state-sanctioned part of it in a little while.
But negative economics is basically something like a priest will tell you that you're a bad person because you have original sin, or you haven't accepted Christ, or whatever you're breathing.
And so they will tell you that you're a bad person which provokes, and they'll do this when you're very young, and that provokes, you know, bad feelings.
I feel guilty, I feel inadequate, I feel, you know, small and helpless next to the awesome majesty of God's power and benevolence and so on.
So what happens is you provoke negative feelings and then you charge people to alleviate those negative feelings.
So a way that this has been described for me once many years ago, I can't remember where, was that, you know, in order to save you, A priest has to damn you first, and that's quite important.
You know, if a Christian comes to me and says, you need to be saved, you know, my sort of response has always been, from what?
I mean, I have a wonderful life and I'm very happy.
What on earth would I need to be saved from?
So if you're not damned, then you can't be saved.
So the first thing that priests need to invest in is to create a need within the marketplace of one's emotional existence.
And the way that you do that is to create negative feelings and then pay to alleviate them.
Um, parents do this, of course, quite a bit.
Perhaps this could be talked about as having something to do with my wife's parents, but we're not entirely going to stand behind that.
But because she's in the room as I'm doing the podcast, but I think she would also say she says hello to everybody as well.
She's doing a Sudoku and has kindly allowed me not to participate in this activity because it smacks too much like math and an actually objective test of intelligence and I much prefer to work in the world of metaphors and philosophy.
Parents, you know, the way that it generally works, of course, is that they, you know, let's talk about my wife's parents in particular, because, you know, we might as well start with something that's concrete and absolute.
So, you know, let's just say that theoretically my wife doesn't have a great deal, doesn't take a great deal of pleasure out of seeing her parents for a variety of reasons, but, you know, for quite some time after we got married, before and after we got married, we would sort of go over there every four to six weeks, because You know, my wife would feel guilty about not seeing her parents.
And so it was sort of like, like this elastic band that could stretch only a certain amount.
So we didn't actually take active pleasure in going over to see her parents.
But after a certain amount of time, it would be like, Oh, I feel too guilty.
I feel too exposed.
Let's go and see them.
And that's how we would alleviate the guilt of not seeing them.
So, you know, as I sort of, as we talked about, you know, I've always had the opinion that The withdrawal of a negative is not a positive, right?
I mean, like, if I, you know, threaten to cut your toe off and then say, I'll take 50 bucks not to, and you give me the 50 bucks, you're not better off, right?
I mean, all you've done is avoid a negative, which is not the same thing as having a positive.
And that is a pretty important distinction.
However, in the world of negative economics, provoking bad feelings in others and then having them pay you to alleviate those bad feelings is a perfectly viable economic strategy.
I mean, if we take away the morality of it, then it's a perfectly valid strategy for, you know, gaining economic values.
Just as in biology, being a parasite is not a bad thing.
I mean, it's a perfectly viable strategy for a cellular organism to hang out in somebody's intestines and eat what comes by.
Or for a remora to hang off the jaw of a shark.
Or for the birds that hang out on the backs of hippos to eat the ticks.
I mean, it's a perfectly valid strategy from a biological standpoint.
And from an amoral standpoint, it's a perfectly viable economic strategy to provoke negative feelings in others and then charge them to alleviate those feelings.
Of course, the reason that we know that it's immoral is that it's not universal.
You know, I mean, if you try to... if my wife were to try and guilt her parents, they would get very angry.
So, you know, it's sort of a one-sided transaction, right?
I mean, they'll be happy to create guilt in others, but they won't allow others to create guilt in themselves.
And so, you know, we know that it's not moral because it's not universal.
Like, it's just a sort of manipulative one-sided thing.
So in the world of negative economics, I think it's important to understand this whole transaction.
And of course, there's lots of lots of examples of this.
I mean, we look at a bully in the schoolyard, right?
If you were a kid and you had that sort of that one mutant kid who was like three times the size of everybody else and sort of had to shave by the time he was nine and You know, had a surly disposition and so on.
So, you know, when someone's twice your size and you're in that sort of Lord of the Flies world of the schoolyard, that bully then comes up to you, perhaps, and says, you know, give me your lunch money or I'm going to punch you.
Right?
It's the old lunch for punch routine.
And you then give that person your lunch money because you don't want to be punched.
You know, it's a perfectly valid strategy for both people.
Right?
I mean, but, you know, no value has been created.
It's simply a transfer of value.
You have bought Um, the continuance of your neutral or positive state, uh, in exchange for your lunch or you've exchanged hunger, which you know, can be alleviated within a couple of hours to the pain of a broken tooth or a broken jaw, which can take weeks or months to heal.
So, you know, in a sense, I mean, you've certainly maximized your return and the other person has maximized his return, but you know, we wouldn't say that something really great and beneficial has occurred.
And of course, as I sort of found with my own mother, who was more than happy to use violence against me when I was younger, when...
You know, she started yelling up at me rather than down at me because I grew into a fairly husky lad.
And I was able to, you know, sort of tower over her.
You know, she quickly changed her tune and had no particular interest in aggressing against me violently anymore.
So we know that it's not mutual, right?
I mean, if my mother's moral principle was whoever's bigger can beat up on whoever's smaller, then, you know, she should have had no problem with me beating up on her.
I mean, of course I never did.
But if I had, she would have been shocked and appalled and called the police, right?
So that's how we know it's not particularly moral, but it's just sort of based on bullying.
So let's have a look at some other examples of how the world of negative economics works.
And, you know, in my view, it vastly overshadows the world of positive economics, you know, which is free exchange of value for value.
So, of course, there's parents, there's priests, there's the government, of course, one of the largest purveyors in the world of negative economics.
And so the government does it sort of on two levels.
One is that it will teach you all about the noble poor and the heroic sufferers and those who have little opportunity and those who are subject to sexism and racism.
You know, those who've just had a bad lot in life, and those who weren't born with a silver spoon in their mouth, and you know, all about the environment, and you know, all of this.
So it'll teach you all of these terrible, horrible falsehoods.
And then, you know, as you become an adult, it will take your money and say that, don't worry, it will deal with all of these problems.
And so, you know, you feel bad about these illusory problems existing, and then the government will sell you peace of mind, or to some degree, peace of mind in return for your tax money.
That's sort of at the one level that it operates and the other more practical level that it operates is that the government will sell you your freedom for fifty percent of your income.
So I mean it is it's worse than much much worse than the bully.
The bully will only crack you on the jaw and of course you can theoretically call a teacher and have the bully disciplined but the government in a sense is the teacher and so the transaction that the government has with me for instance is I go to work for four hours a day to pay the government not to arrest me.
I mean, that's...
The simple reality of the transaction and of course I'm perfectly happy to do that given the situation because I certainly didn't invent or caught this problem and you know that is the reality of the situation.
I'm willing to buy my freedom for 50% of my income because I enjoy the remaining time.
So if you know four hours out of 24 I work to buy freedom for the remaining 20 hours and you know it's not a great deal but it's certainly better than the alternative which is to have no freedom for 24 hours a day.
A drug dealers, of course, are another group of people who create a negative and then sell alleviation of it.
And so, you know, a drug dealer will give you free drugs to get you hooked and then basically, you know, you're getting some positive benefits early on but then eventually you're just racing around trying to stave off the pain of withdrawal.
So a drug dealer is somebody who starts off in the world of positive economics, like value for value, but it very quickly moves into the world of negative economics, i.e.
you are then sort of running around just to avoid the pain of withdrawal rather than having a great time on the drugs.
So some examples of what is used to provoke these negative feelings in the world of negative economics is something like original sin, of course.
A good daughter calls her parents.
A good daughter is loyal.
A good daughter takes care of her parents.
A good daughter doesn't argue back.
A good daughter respects her parents.
All of the arguments for morality, of course, that exist.
In many communities, right?
I mean, that's another sort of standard, right, that is held up that you can never achieve, of course.
And which, you know, purely invites bad behavior on the part of the parents, right?
If I have to respect my parents just because they're parents, like that they inhabit this category of automatic virtue just by virtue of just by virtue of sort of having had sex and squeezed out an infant, Then, you know, it really invites bad behavior on their part because they really can't do any wrong because they have done the enormous moral good of, you know, getting pregnant.
So that's sort of another example of the sort of good daughter or good son thing.
And I myself was prior to this for a number of years, as I've mentioned in a previous podcast, I had lunch with my mother every week and gave her money and, you know, tried to take care of her and tried to support her because I thought that was what was meant by a good son, you know, back when I was enslaved by illusions.
Wealth is another one.
If you're doing well economically, then the implication that we're taught is that we have taken from the poor.
All economic activity is a zero-sum game.
If I'm $20,000 above the median income for my country, then it's because other people are lower and so on.
And also people talk about, you know, giving back, you know, which I just I think I've marked in a previous podcast.
I just find that so such full of sanctimonious crap that it just sort of makes me laugh, you know, the idea that you want to give back to the community.
You know, first, from my personal experience, I'm never really sure exactly what the community has given me except for, you know, grief, illusions, bullying, taxation and hostility.
So the idea of giving back to the community would be, you know, probably something fairly unpleasant if it was going to be just.
And intelligence is interestingly something which is often used or often cited as something wherein you should not use your intelligence to, you know, oppose those who are less intelligent or to sort of, as I've been accused of at times in my life, lord it over those who are less intelligent.
So intelligence is something else that you have to sort of watch out for, that it's an unjust benefit that you kind of have to pay back.
It's a wealth, intelligence, opportunity, you know, and so on.
Like if you've inherited a lot of money, that's considered to be unfair.
And so you sort of owe inheritance taxes or, you know, higher taxes, or at least you should give back to the community because you inherited so much that you didn't have to work for and so on.
And, you know, I just find that kind of silly.
I mean, I used to, many years ago, have sort of a resentment for the rich kids because I felt that I deserved more than I actually had in life.
But I never once thought that the rich kids had anything at my expense.
So I wanted to go on the ski trips.
I wanted to go to Florida for March break.
I wanted to have clothes without holes in them.
I wanted all these things.
But I never thought that other people had those things because I didn't.
I just sort of wanted them.
So, I've never had any hostility towards people who inherit money.
In fact, I think that it's probably not a great thing for you to inherit money.
I don't think it gives you happiness because you don't actually have to earn things that much.
So, in the world of the negative economics, it's sort of very important to understand this whole parasitical situation where you are made to feel bad and then people will take your money
in response for either like not throwing you in jail or you know letting you feel better or forgiving you or whatever so let's have a look at that and then so let's have a look at how that sort of operates in in state programs because this is sort of the the basis of of a lot of state programs
So another thing that's very important, and why state programs come along at a certain time, is that those bureaucrats who distribute little bits of the money to those who are needy and keep the majority on a sort of individualistic basis for themselves, You know, they are parasites on the poor and their own wealth rises and falls with the numbers of the poor, right?
So let's just say that I was paid a penny for every poor person in Canada every year.
And, you know, I was supposed to use that money to, you know, alleviate poverty in Canada.
I don't know how many poor people there are in Canada, because the definition of poverty is just so ridiculous, right?
Like, you can own your own home, own your own car, have a color TV, a cable, a microwave, a fridge, and access to free health care, and still be called poor, you know, which to me is just hilarious.
I mean, it's like these people have never flipped on the TV and seen sort of African kids dying in a desert, which to me is sort of poverty.
So, but let's just say that this money gives me $400,000 a year as a penny for every poor person.
Well, the economic incentive there is fairly clear for me that I want to increase the number of poor people, or if I'm not able to increase the number of poor people, I definitely want to ensure that the numbers of poor people do not go down.
I mean, again, we're just talking about sort of an amoral maximization of economic return situation.
So it would be clear to me that my income would be entirely dependent upon retaining the poor people who are already there and hopefully expanding the numbers of poor people.
And for sure, my economic incentive is not to eliminate poverty.
I mean, there's absolutely no doubt about that.
If I eliminate poverty, I get zero income whatsoever.
And let's just say, furthermore, to bring it closer to the situation of bureaucracy, that I can't get another job.
I mean, that's another important consideration.
So, I'm some, you know, do-gooder, social worker type, and I've gone through my entire educational system to get a master's degree in social work, and then I've, you know, I worked in a hospital, I worked in a community center, I worked in an outreach program, you know, whatever.
My entire experience is entirely based upon the existence of the poor.
Now let's say that the poor tomorrow are completely eliminated.
I have no income.
Like I am then going from, you know, $60,000, $70,000, $75,000 a year, lots of benefits and insurance, sorry, and retirement benefits and all of these maternity benefits and so on.
You know, all of these things which total $100,000 a year or more, those are all taken away from me and my entire set of job skills completely vanishes.
And, you know, I am then reduced to getting a job at a donut shop or something, or, you know, going back to school for six years to retrain and stag at the bottom of some other field.
So in the one situation where I'm getting $400,000 a year for every poor person, if that money were to dry up tomorrow, at least I could have used that money to get retrained or I'd have it in the bank.
If I've just sort of been having a paycheck-to-paycheck living wage based on having a number of non-directly cash-based benefits and I have not had any time to retrain and I've had kids and I've got all of this stuff, the idea that I'm going to work myself into a situation where There is no economic benefit to me whatsoever and a huge economic catastrophe.
I mean, the loss of one's entire career is an economic catastrophe of the first order which costs people, you know, a quarter million to a half million dollars at the minimum and probably closer to three quarters of a million dollars.
Because even if they go back to school, it's going to cost them, you know, two, three hundred K in terms of lost wages, plus tuition costs.
And then they have to start at the bottom of some other career, which is going to be like 40 K, 35 K. And then they have to start working their way back up at the same time as they're competing with people who are younger.
Who probably don't have children, so they're going to be bypassed for promotion.
So it is an economic catastrophe of the first order to face the loss of one's career.
One of the reasons that I have moved out of direct programming, software programming, and more into management and sales is because it's fairly clear that meter coding is an outsourceable commodity which is going to be, you know, priced down in the market.
And, you know, it's tough to compete with the $10 an hour guys from Bangladesh, right?
So, you know, there's just no... it's an economic catastrophe of the first order if the bureaucrats get rid of the poor.
Now, let's sort of move up in the sort of parasitical chain and have a look at the politicians.
The politicians face an economic catastrophe of an even higher order if they get rid of the poor.
A bureaucrat is getting paid 60, 70, 80k a year.
They're consuming, right?
They're not redistributing any wealth from that situation.
They're not getting like 50 million dollars, which they can then redistribute and which gives them a lot of political and social and economic power.
You know, they're just consuming their own paycheck.
And of course, it's many times higher than the 10k that actually gets into the hands of the poor.
But it is still not orders of magnitude more than they need to live on.
And this doesn't give them the power of redistribution.
But if you start moving up the chain and you start to look at, you know, department heads and ministers and politicians, then the poor are the reason that they take, you know, tens or hundreds of billions of dollars out of the hands of taxpayers.
And they then get to redistribute that.
Which means that they are sitting on, you know, a stunning and staggering amount of wealth.
I mean the kind of wealth that makes Bill Gates' fortune look puny in comparison.
and they get to redistribute they don't get to consume it all but they do in a sense get to consume it in terms of political power and influence which the power to bestow money on others is pretty powerful because they in turn will bestow money on you for your election campaigns and so on so at the very highest level of those who decide policy and those who are actually in front of the electorate in terms of speeches and and all that they are the ones who gain the most
from the redistribution of income.
And, of course, they are the ones who gain the most from the redistribution of wealth.
That is the basis of state power.
Stealing from A, taking a good chunk for yourself, and then giving the drabs over to the needy is the basis of political power.
And if you eliminate the state, or at least eliminate those who need the state's power, like the poor and so on, Then the politicians are the ones who face a complete, not only economic, but identity catastrophe.
Because, of course, they're complete second-handers who've based their entire social identities on power, manipulation, greed, and the ability to redistribute the wealth of others.
So, I mean, they're not going to give up without the most intense and destructive fight that you can imagine.
So, that's sort of a very important thing to understand about negative economics.
You know, as you get more powerful and more visible in this realm, your economic incentives are the exact opposite of what they should be, right?
I mean, people should get paid for the reductions in poverty.
They should not get paid for the existence of poverty.
And, you know, if you are someone who really loves the idea of redistributing other people's money and you love the sort of power and giddy rush of, you know, primordial pecking order power that it gives you, Then you are for sure never going to put things in place which get rid of the poor.
In fact, you are absolutely going to want to create a situation where the poor either increase in numbers or, if they stay the same, become more and more dependent upon you and hopefully start acting badly so that you can begin to spend money on other areas as well.
So, of course, since I like to work from empiricism, and we will get to race in a moment, but talking about the poor is less emotionally explosive than talking about the race, right?
And I don't want to sort of confuse and make you nervous by talking about race up front, but rather to establish the principle and then see how well it applies to race.
You know, how is this theory testable?
Well, if this theory were to be true about negative economics, then we would expect That while poverty was relatively large, you would not have state programs.
That state programs would only come in when poverty began to reduce itself, of its own accord.
So if there were fewer and fewer poor people, then you would expect, if this theory were true, for the state to begin taking control of the poor people and then ceasing this reduction in the number of poor in order to maintain its own power.
So when there are lots of poor people the government takes money and charities have power and churches have power because they can point to all these poor people and say you see you need to give us money and we will then alleviate your guilt about the existence of poor people which we've made you guilty about to begin with even though the existence of the poor is certainly not your fault and it's not my fault.
I mean generally it's their fault but that's sort of a whole other issue.
So, while the poor exist, we are exploited because the poor exist.
And then, if the poor begin to get themselves out of poverty and begin to solve their own problems, you would expect that the state and charities and so on would make a concerted effort to sort of stop the outflux of the source of their income, that they would then work very hard to arrest the minimization of the poor and to entrench those who remained in poverty and make sure that they stayed dependent so that they could continue to use this as an excuse that they would then work very hard to arrest the minimization of the poor and to
And of course, if you look at the history of poverty, this is exactly what happens.
From 1945 to 1960, incredible gains were made in the alleviation of poverty, which had nothing to do with government programs.
The number of poor, even those poor as defined by the government itself, declined about 1% every single year.
So the number of poor people in the West, and let's just talk about America because I don't want to do statistics for like 50 countries.
The number of poor people in America declined 1% every single year, which is remarkable when you think about it.
The entire history of the human race.
I mean, of course, you've got these major, major systems which deal with poverty, major sort of social circumstances which deal with poverty, right?
The Industrial Revolution and so on.
And then you have, you know, once the state get controls of the money supply, you have all of the mess of the 1920s and the Great Depression, the 1930s, the wholesale destruction of the Second World War, you know, which of course achieved nothing in terms of freedom other than, you know, making it go away for huge sections of the planet.
But after the Second World War, you have this remarkable situation where The poor are evaporating.
The poor are rising like bubbles to the surface of the economic life and getting out of the depths and becoming much much better off.
And so what you would anticipate is that The parasitical charities and state agencies which require the poor in order to exist would take strong steps to reverse this trend.
Now, again, I'm not saying that there's any sort of backroom where people are charting this out.
But you know, if the parasites in my intestines can figure out how to survive, then I'm sure that state agencies can as well.
And I'm not saying it's a conscious process, because now we're talking in the realm of biological flourishing, and we all have very strong instincts on how to survive, even if we don't know much about them consciously, they still operate as powerfully as if we did.
So again, I'm not saying there's any sort of backroom deals where, you know, LBJ is sort of twirling his invisible evil mustache and saying, ah, how can we enslave the poor to our bosom again?
You know, it's just something that happens because, you know, parasites are good at survival and they don't just sort of give up without a fight.
So, you know, as we're sort of probably aware, You know, the Great Society programs were put in place in the sort of mid-60s and, you know, immediately, like immediately, within a year, the decline in the number of poor stops.
So the poor declining 1% a year, fantastic.
And then it stops the moment they put these programs in.
And of course, if they really were interested in getting rid of the poor, then they would simply look at these statistics, which weren't exactly impossible to find, and they would say, huh, okay, so if we wanted to get rid of poverty, poverty was being gotten rid of until we put these programs in, we put these programs in, and it stopped.
So let's get rid of these programs because we obviously made a mistake and we are no longer helping the poor.
But in fact, we are now trapping people in poverty through a variety of reasons.
And if you want to sort of figure out these reasons or learn about them, I mean, there's a classic work by Charles Taylor on this very topic called losing ground.
Where, you know, sort of a great analysis of the economic decisions that you could make in 1960 versus the economic decisions that you could make in 1970.
And how, you know, they had been exactly reversed.
Like in 1960, you wanted to get married.
And in 1970, it was cheaper not to get married.
In 1960, you never wanted to have a child out of wedlock.
In 1970, you made a good chunk of money by having a child out of wedlock.
In 1960, you wanted to get into the workforce and stay there.
And there were, you know, for instance, among blacks and whites, there was no differentiation among the unemployment rate.
So you wanted to get into the workforce and stay there.
Whereas in 1970, you were paid much better money for intermittently dipping into the workforce and then leaving the workforce and, you know, having children out of wedlock and not getting married and so on.
And, you know, it's a simple fact that, like, 1% of people who are defined as living under the poverty line, only 1% of those people have not performed the following actions, right?
So only 1% of poor people have completed high school, have gotten or stayed married, gotten and stayed married, and have worked in the same job or in the job force uninterruptedly for a year or more, right?
So three simple criteria.
Finish high school, get married and stay married, or at least don't have children, and stay in the job force for a year or more.
If you can do those three relatively simple things, you have a less than 1% chance of being poor.
I mean, so it's not a lot of brain surgery to figure this out.
And of course, in 1960, those were the decisions that were economically rewarded, right?
You finish high school, you get a better job.
If you don't, if you get married and stay married, and if you don't have children out of wedlock, then you do a lot better financially.
And if you get and stay in the workforce, then you know, you begin to build your resume and you know, you go, you can sort of plow your way through the five to ten years of having crap jobs before you get good jobs.
So you sort of prove your reliability and get your work ethic up and start to deal with people and work a political hierarchy and all that.
All the skills that you need.
I mean, I certainly had ten years of terrible jobs before I started getting good jobs.
You know, starting, well actually probably more.
I got my first job when I was 11.
I worked in a bookstore putting together the New York Times on a Sunday.
And, you know, from there I did the usual route.
I got paper routes and I was a waiter and all that kind of stuff.
And then I was a temp and You know, I sort of slowly moved my way up.
My computer skills became very good, and then I started working at a bank as a computer programmer, and then I started my own company.
So I sort of had that natural progression, and I was 27 when I started, or 28 when I started my own company.
And, you know, so that's 17 years after I got my first job.
So there is a long sort of, I guess there's a long channel to swim over before you get to the magic land of good jobs.
And there's no, I mean, there's not a lot of shortcuts, right?
Unless, you know, daddy owns the company or something.
So, you know, in 1960 people were making choices that were getting them out of poverty.
In 1970 people were making choices that kept them in poverty, right?
And because people tend to maximize their resources rather than work on abstract ideals.
And of course, if you were really interested in reducing poverty, then you would simply get rid of these programs and let the natural freeing up or minimizing of the poor continue to occur.
Because if that process had been allowed to continue, the process that was going on from the post-war period up until the early to mid-60s, then, you know, by 1980 or 1985, there would have been no poor people left, you know, except for the real hardcore cases who can't be helped by anyone.
There would be effectively zero poverty, right, instead of the extraordinary mess that we have now.
So, without a doubt, we can see that there's tons of empirical evidence throughout the entire Western world that, you know, there are parasites who require the existence of poor people and And when their source of income, i.e.
the number of poor people, was drying up, they put policies and procedures in place to make sure that their sort of crop didn't wither away and die.
So they maximized their economic resources by ensuring that the poor continued to exist within poverty.
And as a side benefit, you know, and again, this isn't too uncommon, as a side benefit, the same policies and procedures that they put in place to keep the poor poor had the, you know, additional juicy bonus of ensuring that the problems of poverty were going to increase. additional juicy bonus of ensuring that the problems of poverty
So, you know, all of the stuff that you would expect, like they put in policies wherein, you know, if you had children out of wedlock and did not live with the dad or the father of your children, that you were better paid for that.
Well, then you get all of the juicy benefits down the road of, you know, youth violence and gangs and drugs and all this kind of stuff.
Not only are you ensuring that your current crop of poor people is well-maintained, but they get to flower into this wonderful bouquet of social problems down the road that you get to further take people's money from and make them feel guilty for, and this, that, and the other.
So, you know, from that standpoint, I think the theory is pretty well validated and, you know, to get back to race, not just in the realm of poverty.
All right, so to get to the main topic at 38 minutes, which, you know, is pretty good for me.
To get to the main topic, my wife is laughing, and she's shaking her head like it's not actually pretty good for me.
No, I'm going to live longer.
But to get back to the main topic, let's have a look at race, and let's take this idea of negative economics, which I think we feel a little bit more comfortable with talking about in the realm of poverty than we do in the realm of race, because poverty is sort of less politically explosive at the moment than race.
Let's have a look and just sort of this is the two-second history of, you know, race relations.
Let's just talk about it in the United States.
Although, of course, well, we have to go back a little bit further because it was sort of the at the end of the 17th century.
And so at the end of the 18th century, I think it was 12, you know, sort of deeply devout British people got together in a pub and said, you know, we're going to end Slavery, and so they petitioned and the sort of anti-slavery movement grew throughout the hundred years that followed, about 80 years that followed.
And they made the case, and frankly a lot of it was religious in nature, that God doesn't give one soul dominion over another.
They exposed the abuses, they exposed the destruction, they exposed the horrors of the slave trade, and so on.
And so England was the first country, and this is in the history of the world, right?
This is not like there was some, you know, slave-free Mecca in the past that we sort of lost, fell from grace out of, you know, if slavery was an absolute and completely accepted part of a human society since the dawn of time.
I mean, this is not like whites were owning blacks.
I mean, of course, the whites bought slaves from the blacks who traded slaves among themselves, and the Arabs had slaves, and the Jews had slaves, and it was sort of mixed and matched all over.
Of course, in the Bible, slavery is both described and approved of.
Not just economically, but sexual slavery is described and approved of as well, as I've mentioned in a previous podcast.
You know, we start in a world where slavery is as accepted, you know, owning a human being is as accepted as owning a car is in the modern world.
The idea that cars have rights and you shouldn't be allowed to own them would be as foreign to us as the idea that you should not own human beings is to people in the past.
And by the way, this is one of the things that you can talk about when people say, well, it's ridiculous that taxation is violence and taxation is morally wrong.
You can say, well, of course, people felt that way about slavery as well, but it turns out that it was.
So you have a situation where slavery is completely common to all aspects of human society, not even given a second thought as to its moral value.
Because, of course, it's approved of in the Bible.
It's approved of in the Old Testament, which is the foundation for the three major systems of thought within the Eastern and Western world.
So it's sort of hard to say that there's anything wrong with it, because God seems, you know, like he would show up at a slave auction and have no problem raising his little quote block.
So, you know, in the 18th century, England, first of all, what it does is England passes a law which prohibits slave trafficking.
And then, of course, it ends up abolishing slavery.
And this becomes such a keen cause for England, or for the British government, let's say, that it also expends a small fortune preventing the slave trafficking from other countries as well, right?
So it has the biggest navy in the world.
at this point I think it's yeah it's already defeated the Spanish so it has the biggest Navy in the world and it what it does is it intercepts slave ships from other countries and it sets those slaves free and punishes the owners and so on so England becomes a sort of anti-slavery force in the world and you know it's economically sort of negative in some way.
I mean slavery is no economic positive except for very localized situations and in the relatively short run But, you know, to expend an enormous amount of time and money and energy fighting slavery was, you know, something that is to the credit of the sort of England as a country.
I mean, to the degree with which I'm willing to recognize the existence of countries and give them moral credit, I would do so in this situation.
And sort of, by the by, another example of the argument for morality and its power.
That, you know, a government, once it's convinced that something is moral, or people, they will even suffer economic losses themselves to to pursue it.
And of course, in America, the original idea behind the Declaration of Independence and the Constitution was that it wasn't going to be life, liberty, and the pursuit of happiness.
It was going to be life, liberty, and property, which of course is much more valid in terms of rights that can be enforced.
I mean, the pursuit of happiness, who knows, right?
But, life, liberty, and property was the original wording of the text.
But, of course, the southern states, which owned slaves, rejected the inclusion of property, because, of course, property can't own property.
And so, if you said everybody has a right to property, then slaves would have a right to property, which meant they couldn't be property.
And, I mean, this was a hot debate that was very commonly understood back then, which isn't so much thought of now.
But, you know, the phrase life, liberty, and property was struck down.
And the sort of anemic substitution of the pursuit of happiness was substituted in its place in order to lure the southern states into the Union.
Which was all well and good until Lincoln began imposing heavy tariffs and duties on the southern states.
I mean, of course, the history of the Civil War is quite complex, but one of the basic histories of the Union in the 19th century is that The northern states were very big on protection, right?
On making sure that foreign goods were heavily taxed on coming in because it was, you know, a mercantilist sort of society wherein manufacturing wanted to flourish behind these protectionist walls so that it could use the government's power to exploit the consumers.
And the South, as an agricultural community, and again, these are very broad generalizations, so forgive me for racing through this, but the South, of course, hated protectionism because it was an agricultural community, so import and export was essential.
And of course it wanted to be able to trade its agricultural products overseas in return for being able to import the more sort of manufacturing-based goods that could be made overseas.
And the reason that it didn't want to buy them from the north was that the northern goods were very expensive because they had set up this huge protectionist tariff wall to keep foreign goods out.
So, you know, the basis of the conflict between the South and the North was largely that the North wanted protectionism and the South wanted no protectionism.
It had very little to do with slavery.
And so, you know, the South eventually wants the protectionistic Tariff walls became just too destructive and it was interfering with their ability to trade and, you know, negatively impacting their standard of living.
The South said, basically, you know, we don't like this whole union thing anymore.
It isn't working for us anymore.
So we're going to hit the road because, you know, we're allowed.
It's a voluntary union.
We're going to secede.
And Lincoln, not so keen on that, right?
Because he really enjoyed pillaging the South for all of the taxes and tariffs that he was able to get out of it.
And so he whipped up this sort of whole slavery frenzy and went and invaded the South.
But, of course, it had nothing to do with slavery.
Slavery was not the issue.
I mean, if slavery was the issue, then they would have included it in the Constitution.
Slavery was not the issue.
And so Lincoln whipped up this frenzy, and he invaded the South, and there was this war.
You know, they still call it in the South, I believe, certain areas within the South.
They call it the War of Northern Aggression.
Because, you know, the South did not declare war on the North.
The South just said, you know, we're gone.
We're out of here, because the power of the federal government is growing to the point where it's really impacting our standard of living.
Now, don't get me wrong, I don't have a lot of sympathy for the South, because You know, they still were slave owners.
So, you know, I'm not sort of saying that the North was right and the South was wrong and the South was right.
You know, but all I'm pointing out is that it's important not to look at this situation where, you know, it's all about slavery and the North of these, you know, heroes and Lincoln was this great guy.
crazy loon, mental breakdowns.
And, you know, I mean, he was real big on central banking, he, he was real big on printing money.
And, you know, he caused a war, which killed 600,000 people, you know, basically, for the sake of money.
And Lincoln, of course, was not anti slavery, I mean, at least according to his own speeches and writings.
So when he was invading the South, he put this great thing together where, you know, he declared that slavery was null and void in all of the lands that the northern did not command, and that slavery was perfectly legal in all of the lands that the North did, as they invaded the lands that the North did sort of control, that slavery was legal.
And so he sort of banned slavery where he had no effect, and allowed slavery where he actually had some power.
So, I mean, this is not the actions of somebody who is against slavery.
And, you know, so after the Civil War, there was, I think it was three-fifths, like a black vote was worth three-fifths of a white vote.
And, you know, many people feel that this is evidence of further racism.
And, I mean, I don't think so, because my understanding is that the problem with the South was that if you allowed the South to have one vote per black person, then they would simply coerce those black people into voting for the continuation of slavery.
So you kind of had to minimize it in order to keep that possibility from occurring.
And of course, I'm not saying that this isn't a racist thing to do, right?
To say the blacks only have three-fifths the votes of the white.
But it wasn't because the northerners felt that the blacks were inferior.
I mean, maybe they did, I don't know.
But the political matter was that if the blacks only had three-fifths of the vote, then the northerners could outvote the southerners.
If blacks had a full vote, the southerners would outvote the northerners.
So the northerners wanted to make sure that they didn't win a war against the South and then be outvoted in the legislature by the South, which would have made the whole war sort of pointless.
So that was sort of the impetus behind giving the black vote sort of three-fifths of the white vote.
Again, I'm not saying it wasn't racist, but there was political considerations behind it which I think were more important than people's feelings about race.
So then, I mean, I'm going to be jumping quite a bit here, right?
So you have the sort of jump forward to the post-war period where blacks are beginning to sort of pull themselves out of poverty, right?
I mean, you have The rise of the black professionals, you have the unemployment rate of blacks is sort of equal to whites.
But, of course, one of the things that happens is that blacks were entering the workforce willing to accept a lower wage than whites.
And again, there's lots of causes and reasons for this, you know, some of which I'm sure can be explained by racism, and some of which I'm sure can be explained by economics.
Blacks had a lower requirement for capital because they had lower standards of living, they lived in poorer sections of town, You know, they didn't have expensive automobiles and they didn't put their children through Harvard so they needed less money so they were able to work for lower wages.
Now, like any group of people who sort of are more than able to use the political process for their own gain, you begin to get, and this I think started in the construction industry, You begin to get groups of whites banding together to try and exclude blacks from the workforce because they are being outbid by the black workers.
Now, of course, if this had never been allowed to pass, i.e.
if there'd been no government or if the government had not gotten involved in this, then the blacks would have done that much better economically because they would have taken jobs from the whites.
It would have been better for the economy as a whole because, you know, the The houses or the structures that the black construction workers built would be cheaper, which would lower rents, which would induce more people to start businesses and hire others and so on.
But of course, that's pretty economically diffuse and unimportant to somebody who's looking at losing their job to some black guy who's willing to take, you know, three quarters his wage or half his wage or whatever.
So the white construction workers and the white construction unions got together to pass minimum wage laws, which meant that they would eliminate large numbers of people from trying to get jobs at less wages than they themselves wanted to charge, which was essentially a racist measure because it eliminated lots of blacks from the workforce.
But even with all of this, The blacks were doing better, getting richer, and so on.
And so if my theory about negative economics is correct, then as the blacks began to do better, you would expect that the government and the charities and the churches and the black political leaders and the white political leaders who relied on the continued bad state of the black population, you would expect them to start passing legislation that would prevent
The continued rise out of poverty of the black population and caused them to become further dependent upon the largesse of the government and caused them to become further dependent on the largesse of state agencies and charities and churches.
And the reason that they would do that is because their income, as we talked about with the poor, was dependent upon the existence and continued poor state of the communities that they used in order to be able to extract their paychecks from the taxpayers so that they could help them.
And this is exactly what you do see.
In 1964 you get civil rights legislation passed, you get busing, you get the introduction of the Great Society, which You know, LBJ was a southerner.
There's no way that he wouldn't have any idea that if you put in a program targeting poor people that you're going to target more blacks than whites.
Why?
Because blacks are poorer than whites at this time.
So it is a completely predictable outcome.
That if you put in the welfare state and all the other programs to help, you know, quote, the poor, and it's actually going to arrest the progress of the poor and start to get them mired within poverty to get them to create, because you're destroying the family and social institutions and the value of education and, you know, similarly as you lower the penalties for crime, you are, you know, increasing drug use and so on.
and of course making drugs illegal happen in the sixties as well for most of the drugs that we now consider illegal so you're creating situations where the poor are going to stay poor and in fact that the conditions for the poor are going to get worse you know which is why uh... which is which is the goal right i mean anytime you want to figure out why someone's doing something you look at how it maximizes their economic advantage and combine active is sort of two combined with uh... what it is that they're actually doing
So, given that the blacks were getting richer and the poor were getting richer, and the moment that these programs went in, that completely stagnated and the problems within those poor communities became sort of exponentially worse, then it's pretty clear that we're in the realm of negative economics, where causing problems and cementing those problems in perpetuity become the purpose of social agencies.
So that's sort of the first part of how it is that I would like to talk about race.
Because it really is impossible to look at the issue of race without looking at the realm of institutionalized coercion because it's very hard to judge any sort of natural human capacity or ability when people are being forced to do things.
You can't study free will in prison.
I mean it really doesn't.
You can sort of study economic calculation in prison but you can't study free will because their lives are coerced.
And so the first thing that we need to do when we talk about race is to take away the issue or the the factors of state violence right so lots of of of state programs and state coercions and bureaucracies have an effect on race right so a welfare money to families with children public education social security right which is generally well known as a
A social mechanism which transfers money from poor black men to rich white women, because it's based on your longevity.
Community activism, all of the money that is paid by the state for advocacy groups around black communities.
Minimum wages, you have housing prices, you have ghettoization, you have public housing, you have subsidies to the churches, you have drug laws, you have leniency on youth crime, which Decreases the value of an education and so on and so you you really have to look at all of those incentives first Before you start looking at things like race Because otherwise you all you're doing is studying the effects of coercion and calling it race and that's not valid, right?
So the first thing we need to do is start to work at unraveling all of these social coercive mechanisms which you know strongly affect race relations and strongly affect The blacks in particular, right?
I mean, it's not because there's anything wrong with the black community.
It's just that they happened to be the poorest community when these social programs went in.
So they just happened to get cemented in that position.
It could have been any community that was part of that mechanism.
So that's as far as we'll go today, but what we'll do tomorrow is we'll start to have a look at, you know, the issue of racism and try and sort of tease out how it can be looked at without reference to state coercion, because we want to make sure that we're studying human nature and not human choice under aggression.
Well, thanks very much for listening.
I hope that you had a wonderful New Year's and have yourselves a great day.
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