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Oct. 6, 2011 - Freedomain Radio - Stefan Molyneux
12:46
2007 Wall Street Protests and the Economics of Ignorance - Part 2
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Yo, everybody.
It's Stefan Molyneux from Freedom Aid Radio.
So, people have been writing to me after I did a silent video talking about a proposed set of statements or principles of demands for the Wall Street protesters.
They said, Steph, you snarky bastard.
Which is kind of a weird coincidence.
That was actually my rap name.
No, wait. No, Fruity English Bastard was my rap name.
But they said, well, why is it so obvious what this dude is saying?
Why is it so obviously ridiculous?
Well, demand one.
Let's go through this real quick. Ending free trade and reimposing trade barriers, tariffs and barriers on imported goods and so on.
Well, free trade, look, just like it or not, free trade is one of these things that you need if you want to be wealthy.
If you want to have a wealthy society, if you want the poor to have access to more and more money over time, you simply have to have free trade.
You have to. And what's the point about countries?
I mean if it's bad for Canada to trade with America Right?
Why is it okay for New Jersey to trade with Arizona?
I mean, Canada and New Jersey are closer.
Why can't they trade? Is it some distance?
No, no, no. It's just some arbitrary geographical line called a country, which is just, you know, bullshit made-up imaginary, paint-by-numbers, maps invisible from space.
It's just your tax farm, right?
I mean, why is it bad for countries to trade, but it's okay for states to trade?
Or counties? Can I trade with my neighbor next door?
I have to produce absolutely everything myself.
No. It's completely arbitrary to say that we should stop trade among countries, but keep it within countries.
If trade is bad, then it's outlawed everywhere, which means everybody starves to death and dies of the first toothache they get.
Free trade, you just have to have it.
I mean, what about the stuff you can't get?
I mean, I'm in Canada. Am I not allowed to buy bananas, for Christ's sake?
I mean, it's ridiculous. Look, let's just give you one quick metaphor.
You could say, well, what if other people don't let our goods into their country?
Well, screw them. I mean, other people make stupid decisions.
Doesn't mean you have to, right?
I mean, you don't have to go through a car wash in a motorcycle just because some idiot did it on YouTube.
Good thing I had that helmet on, by the way.
Anyway, let's say that Japan comes up with a cure for AIDS and America comes up with a cure for cancer.
And then Japan says, you can't ship your cure for cancer over here.
We're going to put up a trade barrier. Does that mean that it's good then to put a trade barrier up about the cure for AIDS that Japan has created and won't let it be sold in America?
Of course not. Just Japan does stupid shit and won't let goods in.
You still want all their goods as cheap as possible.
So no. I mean, all that putting tariffs in is it raises the price of everything, which harms the poor.
I mean, you care about the poor, then have open trade as much as possible, let lowest competition find lowest price.
Lowest price doesn't mean lowest wages, you understand?
Lowest price does not mean lowest wages.
Because lowest price is made up in volume, it's made up in efficiency, and people end up making more.
Which is why so many people got out of poverty in the post-war period, because there was so much free trade and government was so small.
It wasn't out of redistribution, I'll tell you that.
I got the stats for that if you want to look on my channel.
Oh yeah, and so they talk about the minimum wage of $20 an hour.
All that means is anyone whose economic value is less than $20 an hour doesn't get a job.
I mean, that's terrible.
Minimum wage hurts the poor the most of all.
Look, there's three things that you need to do to stop being poor.
You need to finish high school. You need to not get pregnant.
And you need to get and keep your first job for a year.
I finished high school.
I got my first job when I was seven.
Painting... I was painting plaques for the jubilee, for the 25th anniversary, I think, for the marriage of our local tax king and queen in England.
All you have to do is finish high school, don't get pregnant, keep your first job for a year.
That first job is essential for getting out of poverty.
And if you raise the minimum wage, all you do is eliminate people whose economic value is less than that.
It's terrible. And look, I mean, if you can make people wealthy by raising the minimum wage, why stop at $20?
Why not make it $200? Why not make it $2 million an hour?
Because if you make the minimum wage $2 million an hour...
Then, you know, Bill Gates will get a job and that's about it, right?
So, no, I mean, you can't.
This is an old argument.
Just need to do some research on it.
Economics in One Lesson by Hazlitt is really good.
Universal single-payer healthcare system.
Well, it's so funny, you know, because a lot of the protesters are against monopolies.
But all you're doing is giving a violent monopoly called the government control over everyone's health care.
How's that been working out for the world as a whole?
Well, sure, prices go down, of course.
Of course. But waiting lists go up and debt goes up, which means that we're stealing bad health care from future generations' income.
It's not fair. Demand three, guaranteed living wage income regardless of employment.
Well, come on. Incentives matter.
I mean, it's the basis of economics, right?
Two basics of economics.
One, all human desires are infinite and all resources are finite.
I mean, if you could snap and had the genie, could get anything you wanted whenever you wanted, then you wouldn't need economics.
Like, if everything you ate tasted great and was the best for you, you wouldn't need nutrition.
So, yeah, everybody wants everything, and all resources are finite.
That's what economics is all about.
And people respond to incentives.
Of course people respond to incentives.
So, if you pay people regardless of whether they work or not, then more people will stop working.
With more people not working, there's less money to pay the people who are not working.
Because people who are working are diminishing, people who are not working are increasing, and the system can't work.
Free college education.
Come on. All these college students demanding free college education because it's their right.
Nonsense. It's a terrible subsidy from the poor to the rich to the relatively well-off, right?
I mean, the ideal behind education is you invest in your education and you get an increase in your income throughout your life.
Generally, that's the idea, right?
Which means that those who figure that out tend to be smarter than your average bear, and those who can attend tend to have more resources, tend to be middle-class or upper-class.
Because they can defer income for four years and pay all of those expenses, or at least they have the credit worthiness to go into debt, which you don't get if you're in the inner city.
So it's a direct transfer of money from the poor to the middle class and the wealthy.
I mean, it's horrendous. Don't people ever think these things through?
And bring fossil fuel economy to an end, while at the same time bringing the alternative energy economy up to energy demand?
Well, so the government has massive control over the energy.
I mean, it's the whole Department of Energy, for Christ's sake.
I mean, the government has huge control over the energy economy.
So why hasn't this already happened?
Well, because the technology just isn't there yet.
We'd love it to be there. It'd be great.
I'd love to have, you know, solar-powered everything.
It would be wonderful. But, um...
Technology is not there yet, and subsidizing it isn't going to help.
I mean, subsidies gave us ethanol.
Government control gave us Solyndra.
Look it up if you dare.
I mean, it's nonsense. It's just waste resources.
Waste resources, right? So the more government takes from the private sector and subsidizes its friends and gives exactly the same kind of corporate perks and preferential treatment that everybody's so against, the less money there is available in the private sector for actual research into sustainable and useful things that can be done.
I mean, the government is, well, let's just subsidize solar.
And the private sector is, hey, you know, it'd be great if we got little electronic devices that replaced books.
That's pretty cool, right? It means you don't have to cut down trees, expend all the energy processing into paper, create all that waste.
That's pretty cool, right?
So that's what you get out of the free market of the government.
You just get, I mean, just crap investments in politically connected companies that produce nothing but unemployment in the long run.
One demand was to spend a trillion dollars in infrastructure, like water, sewer, rail, blah, blah, blah.
Well, that's nonsense. The government spends 2.5% of GDP on infrastructure now.
It's massive. It's huge.
Way more than a trillion dollars.
The guys, you know, they were spending many trillions of dollars.
I mean, 2.5% of GDP now is like 17% of the GDP in the 1950s when they were building all the roads, right?
I mean, people say the government can solve the infrastructure problem and the government can help us not be dependent on fossil fuels.
Well, we are dependent on fossil fuels because the government built all these, quote, free roads, right?
If you build it, they will come.
If you build all these free roads everywhere, you get a car-dependent society.
If you prop up dictatorships overseas and shield consumers from the political and price volatility of dictatorships in the oil-rich countries, well, yeah, you're going to get an oil-dependent, car-based society.
This is a result of government.
Government can solve it. People.
See, a trillion dollars in ecological restoration planting forests.
This is a weird thing that people think that...
The forests are being denuded or whatever.
I mean, it's nonsense.
I mean, forest acreage in the U.S. is about the same as it was 100 years ago, despite a four-fold increase in population.
And let's say you get rid of dams And nuclear power just means you've got to use more coal and natural gas because the other technologies aren't there yet.
I mean, it's just people don't think things through.
He wants to spend a trillion dollars, so the EPA currently spends about 10 billion a year.
So he wants a century's worth of EPA funding in a year or two.
I mean, I assume it's a human position.
I think women are smarter anyway.
Demand 8, Racial and Gender Equal Rights Amendment.
Dude, dude, dude, we don't need it.
We don't need it in the States. July 19th, 1868, 14th Amendment.
Quote, nor shall any state deprive any person of life, liberty, or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws.
I've been around for like almost 150 years.
The fact that the government hasn't enforced it very well doesn't mean that you need some new law.
I mean, new laws won't matter.
You know, it's like... The guy doesn't take care of his car.
Giving him a new car just means he won't take care of the new car.
Anyway. And then just getting rid of all debt.
All debt. All debt is stricken from the books.
Everything is stricken. Well, you can do that, of course, right?
But all that means is that nobody will ever lend to anyone ever again.
Which means no deferral of gratification.
Sorry, it means endless deferral of gratification because you can't buy anything on loan and credit.
Crushes the economy. And he wants to spend a trillion dollars here and a billion dollars there and a hundred trillion dollars there and blah, blah, blah, blah, blah.
But if there's no debt, then the government can't borrow to do any of that.
And the government doesn't have the revenue to do any of that.
So again, it's just thinking things through.
Demand... Oh, yes, also, workers will starve to death if there's no credit, if nobody will lend, because you need to borrow in order to start a factory, which helps workers become more productive by lending them, you know, all of these great tools and machines and so on, which they don't have the money to buy individually.
So it just means everyone ends up going back to making everything themselves.
We've got tree bark on our feet for Nikes, and we're starving to death.
Demand 12, outlaw all credit reporting agencies.
The government has almost complete control over credit reporting agencies.
They regulate everything that they do.
And so, of course, they're not going to work.
More government power.
You know, governments only had 90% control over credit agencies, but we give them that extra 10% or outlaw them, then that solves the whole problem.
I mean, it's madness. It's like the 12th donut in the box is not going to fix your diet.
Allow all workers to sign a ballot at any time during a union organizing campaign.
Yeah, fine. Oh, look, I mean, governments and unions should have nothing to do with each other.
I mean, forced association is a violation of freedom of association.
People want to organize themselves into a union?
Fantastic. Go for it. Enjoy.
Knock yourselves out. Fantastic.
But a government should not be protecting all of these people to do that.
A government should not be enforcing all of this stuff.
Government should not be giving artificial protections.
You can't have monopolies through government collectives any more than you should have monopolies through corporate collectives or any kind of corporatism.
So, yeah, it's just universal moral rules.
I hope this helps clear some of my thoughts up on it.
Feel free to ask questions and comments and criticisms below.
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