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Nov. 8, 2006 - Freedomain Radio - Stefan Molyneux
43:22
497 Intermittent Slavery
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Good afternoon, everybody.
Hope you're doing well. It's Steph.
I thought it might be interesting, lo, this afternoon.
To talk a little bit, just a little bit, about some of the challenges that I faced, sort of Sunday through Tuesday, in a state situation or a state society.
I have a general theory, which I've never seen validated anywhere, that the amount of actual value that is being transferred in any given economic transaction under the aegis of the power of the state or within the power of the state That the actual value that is changing hands is pretty minimal.
And again, I don't have any sort of particular statistics, but just off the top of my head, I'll run through a few of those, and then I'll talk about how I think that they affected me when I was traveling to New York and back.
So the first thing, of course, is I go to buy a car, right?
I go to buy a car and say the car is $20,000.
Well, of course... In order to, we'll just use simple Canadian-style tax situations here.
It's around 50% that I'm being taxed.
A little bit less, but then lots of goods and services taxes as well.
So, in order to buy a $20,000 car, I have to earn $40,000 of salary, of course, right?
So, immediately I have to pay off the government at the rate of twice the purchase price just to have the right to be able to buy...
The car, right? So that's sort of the numero uno of situations in which the government is subtracting an enormous amount of value, in this case, 50% from the actual transaction.
Now, I'm aware, you know, that I drive to the road to get to the car dealership, and there's some in that as well, but we're just talking in sort of general terms.
Now, the price of the car is...
$20,000. And what that means is that if everyone's getting taxed at 50%, then, you know, more or less, give or take, in rough approximation, the car is worth...
I have to pay twice for the car what it is worth.
Because I have to pay, of course, $20,000 to the government to buy a $20,000 car, and the car's price is also composed of the amount of money that has to be put into the...
The salaries of the people who are employed at the plant so that they can pay their taxes.
Some guy makes $40,000 a year, then $20,000 of that has to be paid to the government so that he can work.
He's only adding $20,000 a year worth of value to the cars that he produces, but he's adding $40,000 of costs to the price that he produces.
So basically, I'm paying the government $20,000, and I'm paying roughly 50% of the price of the car to the manufacturer so that the manufacturer can keep $10,000, right?
So just at a very sort of approximate level, I pay half of the price of the car to the government in order to have the right to not get buggered up the ass by my cellmate.
And then what happens is half of the value of the car is also taken from me by the manufacturer of the car.
So the manufacturer will be able to pay the income tax of the employees that he or she is hiring.
So, you know, right away, I'm basically paying $30,000 of government overhead to buy a $10,000 car.
So we have an immediately 75% of the price.
This is overly simplified, I understand that, but just go with me for the sake of illustration.
75% of the cost is total bullshit, right?
It's just a rip-off, right?
So, what would it mean to me to be able to buy a car for $10,000 rather than $40,000?
Well, sorry, I think I started with the $20,000.
I think you get the general idea.
So, from that standpoint, is it unreasonable to sort of think that there's an enormous amount of lag In the realm of economic growth,
based on the fact that three-quarters of the price of any sort of significant consumer good is being swallowed up by this sort of statist overhead, so to speak.
Well, I think that that's a pretty significant drag on the economy, and of course it is a massive overhead.
Now, we're just talking about the overhead in terms of the income tax.
Three quarters of the price of a car, 20 grand straight to the government, and double the price of the car so that the employer can pay the income taxes of the employees.
That's just sort of one of the situations that's occurring as far as predation goes from the consumer in the realm of purchasing.
Of course, when I go to buy a car, I pay an extra sort of 8%, I think, or 7%, some damn figure now, to the government for the pleasure of being able to buy the car.
And that's off the total, right?
That's off the total.
So we've gone from sort of 75% and there's another sort of increase, right, in terms of the overhead, right, that has to be charged.
I would just say in Canada it's combined sort of 14% or 15%.
It's sort of fluctuated a little lately.
Let's just make it 10% for the sake of sort of ease, right?
So we've gone from 75% bullshit state violent overhead to 85%.
And why?
Well, because I have to pay 10% of tax, value-added tax, or we call it the goods and services tax and provincial sales tax on the car.
So now 75% of the car, which is extorted blood money, has now gone to 85%, right, which makes it even worse.
Now, we can also assume that the $20,000 that I have to pay, that the manufacturer actually gets a hold of, sorry, the $40,000 that I have to earn, $20,000 I have to pay, That half of the money that the guy who's selling me the car has to disperse to his employees and so on,
that those employees also are demanding higher salaries in order to offset the 10% value-added tax that they have to spend on everything that they buy, which means that their salary demands are higher.
So 10% will knock it in half and we'll just say that that's another 5%.
So right now we've gone from 75% to 85% because of my sales tax.
And then we're going to put another 5% on because I have to pay the sales tax plus salary demands for all of the employees of the manufacturer.
So right now we're at 90% bullshit price based on the fact that I have to pay all these overheads.
Now, you're going to tell me, and I think it's a perfectly reasonable thing to say, that I'm paying 50% in my set tax bracket, but the percentage that is being paid for by people in lower tax brackets, blah, blah, blah, blah, blah.
Well, that's all well and good. I understand that.
And that's fine.
We can sort of knock that down a little bit.
If you want to knock it down from 90% to 80%, that's fine.
That's fine by me.
Because then we have old age pensions, unemployment insurance, and so on, which again are all subtracted from the employees' wages and mean that, of course, they wish to gain more salary in order to cover up the holes that the government stuffs into their paychecks, which means that, again, the price of the car has to rise.
Not only am I getting that pay Deducted over and above the income tax, but all the other deductions that occur.
But so is the employees. Everyone that I'm hiring also has that same issue.
Now, let's look at another issue, that we have taxes on corporations, right?
Because the government loves a hidden tax and hates an open tax.
That's why deduction at source and taxes built into the price and so on are all such a juicy and lovely thing.
They just don't like them when there's exporting to be done, right?
They want a tax at destination rather than at source.
When there's exporting, it'll be done to keep the prices low for going overseas.
So that they can then tax the money going overseas, right?
That's why these things come into being.
But if we then sort of look at the corporate tax that the employer has to pay before he gets around to paying all of his employees, and corporate taxes generally paid upon gross profits, net expenses minus gross revenue, And so, that's another.
And it ranges 20%, 30%, and so on.
But again, that's all money that the manufacturer has to get out of my hide as the consumer, right?
Which is, and this, the math gets complex.
I'm not even going to bother. But, you know, it's going to add another couple of points, I would say, between 5 and 10.
But who knows, right? It would add a large number of points.
To the price of the car and to sort of subtract from the actual, tangible, real, honest-to-goodness value that is being handed back and forth between myself and whoever is actually making and selling this car.
So, that's sort of another aspect that's occurring.
You could get into some pretty excruciating minutiae in this kind of analysis, and perhaps there's someone out there who's done it.
I've never heard of it, though I sure would be very interested to have a look at it.
But I think we'd actually be shocked and horrified when we consider ourselves even remotely free, or we consider the system under which we work a sort of free market system.
I think we'd be actually pretty shocked at how much, when we actually go and buy something, how much value It's actually just passing between us and the people who create it, right, without this massive nine-tenths state-sucking leech violent overhead that occurs in this kind of environment.
So I just sort of wanted to mention that there's about a bazillion things that you could put in.
Otherwise, you could put in the accumulated cost of national debts.
You could put in the expense of interest rates that are either artificially low due to state sanction or are high because the government is hoovering up all of the excess capital and thus raising the price of capital for everyone else in the form of interest rates and so on.
But basically, I think that if you really sort of did a drill down, you would find that you think you're peeling a banana, but actually your banana is like the size of a toothpick inside all of this skin.
The actual value that is being transferred among people or between people in this kind of environment is pretty significant.
Sorry, the amount of value is pretty insignificant.
The amount of overhead is enormous.
It is by far the majority of economic transactions that occur for us are being stolen from us in one form or another.
And I know you can deduct things like the roads and the water and other sort of the social services, the utility services and so on that the government provides, and that's all fine.
And that's going to subtract a certain amount from the income.
But of course, we have no idea what the world looks like in these realms in the absence of So you don't say, well, the government pays whatever amount of money per kilowatt hour and that's what we would pay.
No, of course, that wouldn't be the case at all.
There would be significant alternatives to that in a free market situation.
So it's really impossible to know how much we can actually count on the value of what the government provides to subtract it from the whole.
But I'll tell you this, you know, the reason that this is important to understand is that A lot of us are broke.
A lot of us are going in the hock.
The savings rate in America is down below 1%.
It sort of crashed dramatically over the past 20 or so years.
The savings rates for the Chinese economy, they're saving between 10 and 20%, right?
So it's a pretty significant divergence in savings rates.
And why is that important? Well, of course, savings is the magic garden from whence groweth capital loans to businesses, right?
So you basically make money from a capital investment in your business, in some sort of process or productivity improvement.
In order to make that investment, you have to have excess capital in the form of savings that is distributed by banks or venture capitalists or whatever to sort of pinpoint and rifle shoot the highest profit opportunities.
So when people stop at the saving, then what happens is people stop at the investing.
And what that means, of course, is that the rate of capital investment goes down considerably.
Capital becomes more expensive.
It's one of the reasons why the Fed has kept the rate so low.
But, of course, the Fed has kept the rate so low, and capital investment is low enough in industry and so on, that what's happened is that People have simply started speculating in real estate rather than investing in actual productivity improvements.
Again, total bullshit, bad for the economy, ridiculous waste of resources, all this capital's tied up in these crappy loans with no down payment that people can't afford the moment the interest rates change.
Which, you know, they're going to do, and I would say in a relatively short order, again, going way out on the economic prediction limb, which has fallen under many a better mind than I. I would say that the early indications that the Chinese are no longer interested in buying U.S. dollars, buying U.S. futures in the form of treasury bonds, is sort of significant, right?
The black market and the gray market has already switched to euros and other currencies than the U.S. dollar.
Because, I mean, this was inevitable.
The moment that the Fed stopped printing the money supply rates, everybody knew that financial shenanigans were about to ensue with nary a giggle in sight at the end of it.
So, what's happening, of course, is people are stopping buying the US dollars, which lowers the demand for the US dollar, which means that you have to provide higher interest rates in order to get people to buy the US dollar in the form of treasury bonds, which means that you siphon more money out of the capital market.
It also means that people on variable rate mortgages end up having to pay more for their houses.
Which means that there's a crush in housing, which means that the expensive houses go down in price, but the houses are a layer or two down, which people are selling out of the expensive houses to get into the medium-priced houses.
Those housing prices go up, which means people, they fall down the ladder, right?
It's like the top ladder breaks, and then the weight of your demand breaks the next ladder and the next rung and the next rung and the next rung.
And you fall all the way down to who knows where, but it's a pretty significant crash.
What it will do, of course, is it will release a lot of pent up capital currently stored up in bullshit mortgages and release some of that for more investment from a wider context.
But, yeah, so I just sort of wanted to talk about, just before I got into the lengthier topic.
Oh, oh, I can feel your excitement already.
Oh, more talk about capital markets.
Well, the lengthier topic is a little bit, it's sort of more personal detail about the experiences that I had and talked about in New York with regards to state interference.
But, you know, we're all getting poorer.
We're all running heavily into debt.
I'm a stingy bastard, so I'm not so bad that way.
I hate spending money. It's the legacy of growing up rogue, right?
So Christina's loosened my sphincter a little bit on that, but it's still not the easiest thing in the world for me to do.
But most people are getting poorer because, of course, either through hidden or either through sort of...
Hidden or overt means, explicit or implicit means, more and more of your money is being stolen from you, right?
And of course, the only reason we're not totally broke is because there's been a large amount of industrialization in other parts of the world.
So we're not broke as a culture, as a country, because of China and India and sort of...
Vietnam and other places like that where industrialization is occurring and in the sort of Asian continent like 150,000 people a day are moving from the lower class to the middle class.
A day! Of course you don't hear anything about that in the socialist worker and you certainly don't hear anything about that when people are interested in reducing poverty.
You know, the economic power of a decadent, late, over-regulated, hyper-atrophied kind of economy that we have here is, in sort of the West, is, I mean, the power sort of shifts away, right?
The Visigoths of the East, so to speak, are starting to get control of more of the world's capital because, you know, we're just, you know, we're vampires running out of victims over here, and they're vampires and victims.
The ratio is a lot better than ours.
So... So I just sort of wanted to talk about, you know, the reason it's important to understand why you're sort of slowly getting poorer.
It's just, you know, there's less and less of your money going into the pockets of the people who produce stuff that you want and vice versa.
There's this, you know, the amount of overhead is absolutely staggering.
When you sit down and calculate it, I mean, you know, we think, oh, I'm being taxed at 50%, but...
You know, the sort of implicit tax, which is you having to pay the tax of everyone along the whole value chain, the supply chain of sort of raw material to finished good that you're consuming.
You have to pay the taxes and corporate profits, sorry, the corporate taxation and overheads and all, and unemployment and security and health benefits and so on.
You have to pay all of that, and all of that is enormously more expensive because everyone has to continually pay everyone else's taxes.
So I would strongly suspect that, and this is not even counting things like the hyper-priced union supports that go in because governments have taken money from unions and in return given them immunity from prosecution, the right to run closed shops.
And forced union dues at whatever rate they want.
So even if you don't, we can bypass all of that stuff which could go on and on.
The massive amounts of time that people spend stuck in traffic jams and waiting in government waiting rooms like hospitals and doctors and so on, which of course at some point has productivity hits.
A lot of that stuff is done during the workday, interferes with people's productivity.
So we're not even going to count all of that softer stuff which has a very real impact.
But the amount of money that's actually going on between you, like, we're not even remotely a free economy anymore.
That's why I find these statements by people like Mark Stein to be just so amazing that we're a free market and other people aren't.
It's just astounding. Because, you know, we're 90% communists, right?
I mean, we're 80-90% communists.
And again, if I've done something wrong in the math, let me know.
This is sort of what makes sense to me.
And I wish some economists would actually talk about the amount of money that's ending up going from the consumer to the producer's hands without state interference, but I bet you it's in the pennies per dollar.
And really quite fascinating when you think about, you know, even if we take it at 80%, even if we just took it at 80%, then that's a $40,000 car that should only be $8,000, right?
It means people would be five times richer.
Boom! Five-fold increase in people's income.
You don't think that would solve the problem of poverty?
Of course it would. Of course it would.
It's just that we're not allowed to talk like that, right?
Because we're supposed to sit down and shut up and keep paying off the people with the guns.
But anyway, so I hope you get the idea behind that.
I think it's a very interesting thing to mull over.
And if there's people out there who know of studies about this kind of stuff, I certainly would be fascinated to hear about it.
But, you know, this is why we're all getting poorer, right?
I mean, this is why we're no longer a free market system.
There's just some vestigial free market mechanisms left, right?
Or rather, everybody's, you know, we've all got anvils on our backs, but at least the race is even to some degree because everyone has anvils on our back.
Oh, wait, except the people who have friends in the politicians.
But I'm going to sort of run through a quick inventory of the kind of things that I noticed in New York.
So, of course, I mentioned in two podcasts ago that I was hoping to blame the state for my flight delay.
Turns out it was, and I thought I couldn't, but it turns out that it was perfectly just to blame the state for what happened to me leaving Toronto.
The reason that my flight was like 45 minutes late, as I found out later from a colleague who left earlier, was that there were a grand total of four, count them four, Immigration and customs officials working the floor.
And so a couple of hundred people lined up.
Four people, you know, five, ten minutes a person.
You get the math. So what happened was my outbound plane was heavily delayed because they had to basically hold back all the planes because nobody was through customs.
And therefore, when it came, it was flying back much later as well.
So that's one of the reasons why I was late getting to New York.
And then, when I got to New York, and of course, let's not even talk about the airfare, where 50% or more was a load of bullshit state charges and 9-11 security fees and airport improvement fees and all this bullshit, like people don't pay taxes already.
But we won't even talk about that, right?
Because that's over and above, right?
So right there, I've got to pay 50% to have the money for a $500 ticket to New York.
I've got to make $1,000 in my pay, or the company does.
And then half of that then goes into all these other fees.
So basically, I'm paying the airline 25%, right?
So the actual transaction that's occurring between us, even at that level, is 25%, not counting all the other bullshit they have to go through.
But, so then I get on the plane, and what happens?
Well, because, you know, gasoline prices due to inane state policies have gotten so bad, basically airlines can't afford to give you anything.
Like in Europe, it's not so bad, right?
And so in Europe, you can actually, like, you know, in an hour flight, you'll get a full meal, right?
I got a, you know, half a glass of pop on this flight.
I land in New York, and of course, everything's slow.
The government's running the air traffic control system.
Everything's slow. We're sitting on the runway for a while.
Again, this is all time that I have to spend getting, you know, we're not even counting, like, the stuff of traffic jams on the way to the airport, customs nonsense going through the airport, all of this other state apparatus.
We just don't talk about this. I could go on and on, right?
But I'll try and keep this relatively succinct.
I'll talk about the stuff that may not be immediately obvious.
So then I get to New York, and I get a cab relatively quickly, and the cab fare is $45, and I have to pay another $12 in tolls, right?
So why is the cab fare so expensive?
Well, obviously, there's this bullshit price of gas from the state, but of course, the major reason, as I was talking about when I was chatting with the cab driver, Is that the license plate for a taxi cab in New York City runs about US $220,000.
So basically the price of a decent house in a small town, people don't shoot you then if you drive a cab.
That's what you pay off to the people so they won't shoot you when you drive a cab.
And so, of course, that has to be paid off somehow.
People take out mortgages, this guy said.
I was talking with the cab driver. These people take out mortgages like they're buying a house.
And, of course, they have to pay that off every month.
They have to extract that from the height of their customers.
And so that's why it's $45 and then another $12 that has to pay for the road.
And why, as non-New York residents, I should have to pay for New York roads?
Why? Well, it's because I don't vote.
So that's why they put a lot of tolls out by the airport, and that's why they like to put hotel taxes in towns, because it's mostly foreigners, like non-town residents, who pay for that stuff.
So it's a perfect shakedown, and everyone thinks they're getting a great deal.
But of course it's nonsense, because everything that we incur as a travel expense in business, we just have to pass along in higher prices of products.
There is no free lunch, and of course every time other people then go to other towns, everyone's got the same asshole idea that we charge all these people out of town to keep our tax rates low.
It's nonsense. It doesn't work at all.
But, so then I get to my hotel, and my hotel is very expensive, but that's fine.
It's New York. I'm not even going to talk about that.
But the cab driver was also telling me, this is an interesting story just about how people's lives get screwed up by state actions.
So he's from Haiti, right?
So, of course, Haiti is a nightmare voodoo death squad country where Addis Deed and all these other dictators have sort of Daisy chain through stomping on the population's kidneys for the past, I don't know, a couple of thousand years, and where every U.S. intervention that you can imagine has been staged in one form or another.
So this guy, of course, fled Haiti, right?
So he's already running from one government, comes to another government, and he works very hard, saves up $60,000, which is a pretty significant amount for a cab driver, as you can imagine.
He had to pay tax and all of that to get that money into the bank.
And then what does he do? Well, he decides to buy a cab license.
So he goes out and drops his money as a down payment on the cab license.
And he ends up, you know, he's going to work for the next 10 or 20 years or however long it was going to be to pay off this cab license.
Unfortunately, he does this in July of 2001.
You know, a couple of months before the September 11th attacks.
Nobody comes to New York.
His business drops off.
He ends up being unable to pay the mortgage on his cab license, which is a bullshit statist invention to begin with.
And then he loses his cab license and he loses his life savings.
So he had to pay for all of this because of state activities, and then people attacked New York because of state activities.
This is kind of the jerk-around scenario that people get stuck in their lives.
They're just stuck running around chasing their own tails because the regulations keep changing, state actions producing unpredictable results.
And so people end up, I mean, this is purely money that's siphoned out, given to some jerk.
And, of course, the government takes its piece of flesh for every single transaction, right?
This is the cancer that we have overwhelming our bloodstream at the moment.
So then, sort of long story semi-short, I go to my meetings in the morning, and I'm going to see other people's presentations and so on.
And so there's a sort of theme that emerges from this conference, which is sort of twofold.
One is that, for instance, in 2000, what happened, the year 2000, I think it was, the price of natural gas was deregulated, right?
And deregulation in the North American market means something quite different from deregulation It would mean in any kind of sane definition, right?
Deregulation simply means a transfer of public assets to private hands while retaining a monopoly and thus being able to basically fix prices without political control and therefore the politicians who are on the take don't get hit with the voter dissatisfaction.
And this is a sad thing, of course, that has occurred, and I'll talk about this some other time.
But this is a sad, sad effect that has come out of the sort of Hayekian movement, the Friedman movement, to talk about the efficiencies of the private system.
All that's happened is politicians have taken this idea over, and, you know, this sort of fascistic...
State slut corporations have taken it over, and they use these key buzzwords as an excuse to go and privatize public assets for their own profit, and everybody gets screwed, right?
So, again, I'm all for privatization, but, you know, it's never going to happen when the state's in control.
It's never going to happen in a productive way.
It's just going to turn into the kind of mafia-slash-kleptocracy that Russia has turned into.
So... So the natural gas prices were deregulated, which meant they were handed into a private monopoly outside of even remote political repercussions.
And naturally, of course, the prices jumped enormously, right?
So what happened? Well, the prices went up, you know, savagely.
Natural gas, of course, a pretty high expensive utility overhead for a lot of chemical manufacturing and other manufacturing companies.
So what did they have to do? Well, they had to go and rip out all of their plants and move them overseas, because they simply couldn't compete in the U.S. market.
So, you know, the people who did the privatization, sort of quote privatization thing, they ended up making a good deal of money.
The workers got completely screwed.
The plants moved overseas, and of course, once they're overseas, you know, they ain't moving back, right?
And they got all the tax incentives and so on that they could imagine overseas.
And so basically the overseas vampires lured those with some blood still left in their veins overseas to be feasted on a little bit less catastrophically.
And they left all these people behind with no jobs and no future.
This is how this kind of stuff works, right?
So massive contractions within the chemical manufacturing industry.
Others, I'm sure, too, but this is the one I was hearing about.
With the result, of course, that the business has been heavily regulated, heavily controlled through sort of, quote, environmental, quote, health and safety legislation, and lots of price fixing and skullduggery on the political side.
And so these guys are just like punch-drunk boxers reeling around, hoping just to get through another quarter.
Their profits have been slashed.
You know, this one guy is a pretty small company who's losing like a million dollars a day after the natural gas prices went up.
And you can imagine what happened to those, any of the poor bastards who still had any kind of manufacturing capacity in California during the, you know, electricity insanity at sort of 300 or 400 percent during the sort of, quote, deregulation that occurred in the Enron scenario.
But what happens as well is they move plants overseas, they go international, they get all that skill in place, and then, of course, they import mostly the finished goods back, right?
Because when you're producing a lot of raw materials overseas, it makes a whole lot more sense to value-add the labor to the raw materials overseas and then ship the finished products back, right?
You don't want to ship the raw materials over.
It's too expensive. You haven't refined them.
And then in other countries, you can have more sensible disposal strategies and cheaper garbage strategies than you would have in North America.
So when you move your plants overseas and you move your production of raw material overseas, naturally you're going to move all of your, you know, they go along with that decision like the tail of a kite follows the kite.
They go along and they say, okay, well we'll move all of our finished goods production overseas as well.
And, of course, there's another effect that occurs when a business goes through those kinds of wrenching changes, which is that a lot of chemical engineers get laid off, right?
Because people say to them, hey, do you feel like going to Shanghai and learning Cantonese to start working for a greatly reduced salary in a culture that you've never heard of?
You want to move your kids?
And they're like, oh, not so much.
And so when the jobs go overseas, it's not like the trained professionals go with them.
And so what happens is the word spreads in the industry that if you're a chemical engineer, you have very little future.
And there was quite a bit of conversation about this.
At the conference, which was that finding and attracting the top talent is very tough in North America because people don't want to go into chemical engineering because they know it's too volatile and jobs keep going overseas and they don't have much of a future.
And, of course, when you're an engineer, you get kind of specialized.
It's like being a lawyer. You're a little bit tied to your field.
So, of course, what's happening is there's a large number of highly skilled and highly qualified Overseas engineers, particularly the Asian markets, they're producing very good engineers, which again is sort of a problem in the state educational system here.
And so on. So there was that conversation that now they're having trouble with the North American talent for the few plants that are left because nobody wants to go into the field.
Again, all of this. And of course, this has effects in the long term, right?
Because the best managers work their way up through the ranks, right?
I guess I'm sort of a manager now, and I worked my way up through from the COBOL programming ranks.
I kind of know the sort of shop floor, so to speak, in a way that I wouldn't know if I just got an MBA and said I knew something about software.
There's something about knowing the thing itself that is very important and helpful.
So the best managers come from the ranks, right?
So if the ranks thin out, well, you still have your existing managers who are good, and they will be, you know, around for another 10 or 20 years.
But after that, where are all the new good managers going to come from, right?
They've not risen through the ranks, they're not groomed, and that's sort of a significant problem.
But again, it's one of these things, instant profit, long-term harm, who cares?
You know, 20 years down the future, if manufacturing productivity in the chemical market goes down, who cares, right?
And there are other sort of two, there were other two, two other factors that were talked about at the, two of the other factors related to this that were talked about with regards to state power, though not explicitly with regards to state power, which was that, of course, European plants are much more productive than North American plants.
And there's a couple of reasons for that.
But, of course, the primary one is that the North American health care costs, sorry, the American health care costs are kind of lunatic, right?
So even with all of the stodgy, backward, heavily unionized, hyper-socialized European markets, They're still getting some pretty good traction out of their European plants because basically what's happened is the manufacturers have shifted the cost of health care to the tax base as a whole.
Of course, the manufacturers in either the America or the Europe shouldn't be paying health care costs.
That was something that was just put in place because you weren't allowed to raise...
Wages during the Second World War and so people offered healthcare as a benefit and then because the state is a non-taxable benefit people kind of liked it.
That's how it got embedded into our current environment.
The infrastructure in Europe is much better.
You can take a plane from sort of like the top of Norway down to the bottom of Italy, and it's all sort of very smooth and productive and positive.
And the healthcare costs, so infrastructure and healthcare costs in Europe are a whole lot better.
But most importantly, I sort of put this into the mix, although it didn't get me a lot of friends at the conference.
I sort of said, well... That's all very true, but you're kind of missing out on a big one as well, which is whether or not you believe that the United States defense budget is actually to do with defense, which is certainly debatable, but the drag on the economy of the U.S. defense monster is pretty considerable, right? It's like you've got two employees.
One's got a heroin habit and another one doesn't.
Well, you don't have to be a great employee to be a better employee than the one who's got the heroin habit.
So the fact that the European countries don't have this horrendous military-industrial complex overhead is pretty significant.
And again, this just causes lots of screw-ups in the American economy.
And of course then people end up poor and people blame capitalism, right?
That's sort of inevitable, right?
So... There were lots of conversations about that.
Actually, while in the washroom, I heard two gentlemen, two CEOs from companies discussing hiring-firing practices, and one of them was saying, well, you know, one of the things that was a real drag was it took us two years to close our plant in France when we wanted to move it.
It took us two years of negotiating to close our plant.
And why? Because French jobs are heavily protected by law.
There is lots of stories of French entrepreneurs who simply have to flee France to get anything done because they simply don't have the flexibility they need in order to be able to get things done in France.
So, you know, one sort of example of this that this guy was saying took two years to close the plant and they had to provide all these assurances, they had to give these massive layoffs, and all of these costs, of course, directly passed along to the consumer and formed no part of the calculations that I was talking about earlier.
But the guy was also saying, he said, you know, every time I was opening up a plant in Beijing or whatever, I can't remember where it was, and so we had to have extensive conversations with every French employee at our plant saying, would you like to go to Beijing?
I'm talking to this guy, you know, living in the south of France, do you want to go to, like, Beijing, where it's minus 9 million in the winter, and polluted, and not French, right?
And, of course, nobody wanted to go, but you had to go through this whole process of putting the jobs out and offering them and waiting for responses and so on.
And this kind of nonsense goes on in the States as well.
If you want to get a job, they have to keep putting up these ads and so on.
Again, just a waste of resources and time.
So, that's sort of another example of what happens with just this sort of massive waste of resources that occur.
And there were lots of counterexamples from this conference wherein the capitalists or evil capitalist guys were all talking about the ways in which they've tried to fight all of these drags on their productivity by coming up with incredibly innovative uses for waste materials and so on.
All the kind of stuff that would be occurring in a free market anyway, and of course which speaks to these quote environmental issues quite a bit as well.
But that's sort of another examples of how state power is sort of crippling people and destroying their income and undermining productivity and just wrecking people's lives.
And again, a lot of this stuff is kind of hidden, right?
I see it sort of very clearly, for better or for worse, within my mind's eye.
But a lot of this stuff is just kind of hidden.
We don't see it, right?
It's that sort of basic issue that is talked about in many economics books.
Hazlitt's Economics in One Lesson goes over this point a few million times, and not wrongly so, but...
Where he talks about it's the hidden liabilities, it's the hidden costs that you want to see in order to be considered a decent economist.
And so, anyway, I'll sort of fast-forward through some of this stuff, and we'll just sort of get to the end of the sort of whole journey that I did my presentation, and then I finished, and I headed to the airport, and I managed to get an earlier flight, right?
So my flight was originally supposed to leave at 5.15, but I managed to get a 2.45 flight.
Great, right? Yay! Get to get home earlier.
Fantastic. But sadly, when I landed in Toronto, it was quarter to five, and I get out of the airport, and there's a lineup of like 100 people to get a cab, and there are no cabs.
Right? So...
I actually got into an argument with the guy because some guy was coming by saying, you know, can I help you with the cab?
Can I help you with the cab? And this guy who was, I guess, running the official cab thing with this lineup was saying, hey, that's illegal.
And he turned to me and he said, you know, you're thinking of taking a legal cab.
And I said, well, there aren't any legal cabs.
Who the hell are you to tell me that I can't take another cab?
And he's like, well, it's illegal.
And I said, yeah, you know, a lot of things in the Soviet Union were illegal too, but that didn't make them wrong.
And of course, you know, what the hell did he care, right?
I was just kind of pissed off at this point because I realized that I was just doomed, right?
And why were there no cabs?
Well, of course, cab use has been restricted in Toronto because the people who have the cabs want to keep the cabs to a minimum.
So they license and they pay people off.
And of course, then I have to...
The cab price is $120,000 for a license or something in Toronto, which means I have to pay that much more for that.
And... Last but not least, of course, there was some rain, and so the public roads were all screwed up.
I don't know what the hell happens. There's construction and all this kind of crap.
So I had to end up sitting at the airport for two hours.
I didn't wait in the lineup. I just went and read The Best Democracy Money Can Buy, which is a pretty good book.
But... So, you know, then I'm stuck at the airport for two hours, and then I end up taking a cab, and again, I have to pay my sort of pint of blood to the state for the privilege of getting into somebody else's car so that we don't get shot.
And so that's, you know, that's the story of the trip.
I mean, there's lots more details I could get into that I won't.
I went to see the Barenaked Ladies.
There was this annoying service charges.
I also had to get searched to go into Radio City Music Hall.
And so all of these kinds of things, they sort of all come together in a way, if that sort of makes any sense.
And there's just massive amounts of time and overhead, right?
And wasted time and wasted resources and stolen money and all of this, right?
This is all late, decadent, corrupt, destructive, violent, undermining, unprofitable, anti-business, anti-freedom.
Decaying civilizations. All of these things contribute to this decay and poverty that is so endemic within our culture and civilization.
And I just sort of wanted to point that out, right?
I mean, it's partly, you know, it's maybe a grindingly dull tale of what was occurring for me on my trip.
But I think what is helpful is just to kind of understand what occurs within your trips and your life and how all of these costs, whether you travel or not, it doesn't matter.
It doesn't matter whether you travel or not.
All of these costs are going to get allocated anyway.
You have to pay for my trip anyway.
Because I sell my software, which I have to charge more for to pay for all of this nonsense.
And I sell it to manufacturing plants who then have to pass the cost along to you.
And we hope that they save money and they will and all that.
But fundamentally, they're then spending money on my software to make money, which then is half stolen by the government rather than coming up with other stuff.
So overall, you end up having to pay for this, right?
Everything that I'm talking about, you as the end consumer have to pay for.
So, you know, if you're wondering why you're just sort of not able to get ahead in life, it's because 90% of your goddamn money is being taken by thugs with guns.
It shouldn't be that hard to figure out.
If you cut your calories down by 90%, obviously you're going to get a little pinched.
Obviously you're going to get a little hungry.
I just wanted to point these things out.
That, you know, the 90% is increasing.
It doesn't even count things like the national debt and the dilution of money through inflation and so on.
I'm just sort of talking about the basics, but I think it's just important to understand, you know, how little the economy is actually working and how easily things like, if people wanted to solve problems like poverty and so on, and people not being able to afford, you know, medical procedures, easy peasy, right?
Just stop people taking 90% of the money in the economy and, you know, everything would be perfectly fine.
No poverty. People will be able to afford everything.
People will be able to afford their education for their kids and medical procedures and all this kind of crap.
But nobody ever wants to do that because there's too much money in taking it all rather than in letting people be free.
So thank you so much for listening.
I want your money too.
Thank you so much for donations that I'm sure will be coming my way any day now.
And welcome, welcome, welcome to all the new listeners.
It's very exciting how we're growing.
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