Sept. 1, 2015 - Freedomain Radio - Stefan Molyneux
02:27:25
3063 Profit Is Evil? - Call In Show - August 29th, 2015
Question 1: From a libertarian perspective, how would a stateless society benefit everyone as long as the profit motive exists? What could be the one unified aim that we could all agree on to move society forward?Question 2: Do the Baby Boomers and Generation X owe it to the young to accept decreases in their government services in order to provide student debt relief for the young? Put more simply, given how much they have screwed us, don't they owe us?
No particular massive amounts of announcements and excitements to inform you of other than to say thank you so much for your continued support at freedomainradio.com slash donate.
And Mike, who do we have on first?
Alright, well up first is Robito.
He wrote in and said, Hi Stefan!
I'm the founder of a new project to inspire positive societal change through education.
I recently released a short documentary which critiques capitalism from the perspective of Karl Marx.
In particular, it critiques the profit motive.
My question is, from a libertarian perspective, how would a stateless society benefit everyone as long as the profit motive exists?
In your opinion, What could be the one unified aim that we could all agree on to move society forward?
That's from Robito.
Right, I'm here.
Hello.
Hello.
Robito, was it?
Yeah, well, Robert is my name.
Robito is my nickname.
It's been my name for quite a few years now.
It was given to me when I was in Spain.
So, yeah.
Does it mean anything in Spanish?
Sorry?
Does it mean anything in Spanish like you who have collectivized my couch or something?
No.
So yeah, Robertito would be the diminutive form of Robert.
So kind of small and cute or something like that.
And it's a long kind of probably not that interesting story.
But when I was learning Spanish in Spain, The teacher was telling us that if you put ito on the end of the word, then it's the diminutive form.
And because everyone was calling me Rob, they then called me Robito.
And the teacher at the time just thought it was hilarious because it doesn't work.
You can't in Spanish make the diminutive form of a shortened version of your name already.
Oh, hang on.
So you couldn't, in Spanish, you couldn't say, it's really cold out, I have a penicito.
Penicito, you could say penicito, yeah.
But you could say, if you wanted to be little Stefan, you could say Stefanito, but you couldn't say Stefito.
Stefito wouldn't work.
Oh, you can't double contract.
Yeah, exactly.
Okay, got it.
So the teacher just thought that that was hilarious at the time, and so all my friends at the time, they just kept calling me Robito, and then it stuck.
So that's the not-so-interesting thing.
So, I have a question for you then, Robito.
Yeah.
Which is, do you expect to gain more out of this conversation than the time you're expending in pursuing it?
I hope so.
Yeah.
But you expect to, right?
That's your goal.
You think that you could?
The conversation, yeah.
I mean, I'm phoning because...
Because, you know, we're going to...
Sorry to interrupt, but we're going to spend like an hour chatting about it or half an hour, however long it's going to be chatting about something.
It's very, very important.
A great question.
Yeah.
you because you could be spending an hour doing just about anything else.
And yeah, you could be spending this hour.
It just feels like an hour reading the first chapter of The Stone Angel by Margaret Lawrence.
But anyway, you so but you expect to gain more out of this conversation than you're investing, right?
I have been looking forward to this conversation.
And I'm genuinely interested in your answer to the to the two questions.
So you will be better off at the end of this conversation, your hope or your goal is you'll be better off at the end of this conversation than at the beginning?
Absolutely, yeah.
So your goal is to profit from this conversation?
Well...
Good.
Very good.
It's not a trick.
I mean, I'm not trying to trick you or anything, but you are hoping to gain more than you're investing.
You're hoping that your return on your investment is going to be more than your investment itself, which is the time.
So you are hoping for a profit because profit is lots of different things, right?
It's not just money.
It's when you hope to gain more.
I mean, if you invest into going to the gym, you hope to gain health, which is your profit.
You know, if you invest in dating, you hope to gain a relationship or sex or whatever it is, which is your return on your investment of dating.
If you spend time with a friend, hopefully for both of you, it's because you gain more than you lose.
by spending time together and so whatever you do where you get more than you invest in and that can be a positive thing like love or sex or friendship or Wisdom or knowledge or something.
Or it can be the avoidance of a negative.
You know, like I'll invest time doing my taxes so that I don't go to jail or something like that.
So you can do that.
You know, I'll invest time going to the dentist even if I feel fine so that I don't end up with a cavity or have my wisdom teeth ripped out with squid tentacles or however they do it these days.
So the profit motive is not relegated only to To money, money is one way of measuring it when there's no personal stake in things, right?
I mean, if a friend cooks you dinner, you like that, of course.
But if your friend then said, okay, dinner will be 40 bucks, you'd find that kind of offensive because there's a personal relationship there.
But profit, from a cash standpoint, is how you measure the value of something where there's not a personal relationship if you're going to a restaurant rather than over to a friend's house.
Yeah, absolutely.
If I could just clarify, though.
I'm a teacher.
I've been teaching for more than 14 years now.
And what I'm doing at the moment is I'm setting up a project to educate People, specifically students, or aiming more, at least in part,
well, part of my idea is that I'm going to create a course and I'm going to deliver to students in schools, informing students of Social change and social transformation and ideas for a better system than we have at the moment.
And things that aren't covered in the mainstream media.
And so my question really about profit is that I don't have a problem at all with profit Per se and the ability to produce something and then trade and get something in return But my question really is more about the profit motive as the main reason for,
and maybe this isn't the libertarian view, but the profit motive is the main reason for, or the main goal in trading with somebody else.
Because it seems to me that when you trade with somebody with the profit motive as the main goal, that that then can lead to a certain group of people deciding to exploit that.
Hang on, hang on, hang on, hang on.
Because you went from profit to exploitation.
And exploitation is not...
It's not one of these words that I really understand very well because it seems to be used in such a broad context.
It's sort of like the word racism and I don't know what it actually means.
Often it just means things I don't like or didn't benefit me or something like that.
So the profit motive is that you hope to gain something more than you lose.
But in a voluntary transaction, the profit motive is pursued by both people, right?
So the old example, I have a dollar and you have a pen.
And you need a dollar because you really want to buy a popsicle and I need a pen because I really need to write something down.
Right?
And so you don't really want your pen, but you want the dollar.
You want my dollar more than your pen, but I want your pen more than my dollar.
So we trade and we have both become better off as a result of the interaction.
We have both got more than we have given up.
And I can't really see how that's exploiting I don't think that particular example is exploiting anyone.
Okay, so then give me an example in a voluntary trade where exploitation has occurred.
Yeah, so I'm not really thinking between two individuals trading.
I'm thinking more about when you are creating a company or a business.
So what I'm talking about more is, for example, in a true free market, when there's no influence from the state at all and I've listened to a few of your videos and you explained quite well in one of them how if there was no state then it wouldn't be possible for these corporations to monopolize One
example is, I watched a fantastic documentary a week ago about the fashion industry.
As far as I know, and I could be wrong, the fashion industry isn't an industry that has a lot of subsidies from the state, from the government, and there's not a lot of influence from the government.
But what the companies are doing, and not just the huge fashion companies, but the companies in general, in order to compete with each other, they are, you know, obviously with globalization, they're having people in India or in China produce these clothes for $2 a day, $2 an hour, $2 a day, yeah.
And then they're selling over to Europe and to the US and Canada for a lot more money.
That's a global situation, but basically what I'm not clear about is if you've got this free market and everybody's trading with each other and there's no inference from the state, what's going to stop some people deciding that Everybody is being very nice to each other.
There's the non-aggression principle.
Everyone's being very nice.
But I want to exploit this.
I want to take advantage of this.
Hang on, hang on.
No, you can't use the word when you're trying to define it.
I'm asking you what the definition is of exploitation and you said, well if I decide to exploit someone but I still don't know what the word is.
Okay, so what I mean is take advantage of this situation that everybody is trading with each other freely and I want to do something to make more money because money is my motive.
I want to make as much money as possible.
So therefore I'm going to lower my costs as much as I possibly can and to do that I found this group of people that I can pay next to nothing and they can make these things for me and then I can sell them to somebody else and I don't care about what happens to those people as long as I can make as much money as possible.
Okay, okay, so let's stop there.
So, okay, let's say that people want to make as much money as possible.
I don't think that's a fundamental human motive because children cost money, they don't make you money, and there'd be no people in the world if people only wanted to maximize the amount of money they had.
But, and also people give, you know, hundreds of billions of dollars to charity around the world and blah, blah, blah, blah, blah.
But anyway, let's just take it from an economic actor standpoint that people want to make as much money as possible.
So the question is then, Robito, why...
Is someone's labor only worth $2 an hour?
Yeah, well, in this case, I think...
I mean, you wouldn't, sorry to interrupt, you wouldn't take a job for $2 an hour, right?
Because you make more money being a teacher.
Yeah, sure.
So why is someone's labor only worth $2 an hour?
Well, I know what the mainstream answer to that would be, which is that without these companies going to these places, they would have no options at all.
So, therefore, you're doing them a favor by paying them $2.
I feel terrible right now.
I can't remember if it's $2 a day or $2 an hour, but whatever it is, it's very, very low.
You know, you're doing them a favor because otherwise you wouldn't have any work at all.
But what I'm saying is that these companies are making millions or billions of dollars.
Okay, so I don't know if you didn't hear the question, but we're not dealing with the question unless you're taking a roundabout way, in which case, please don't.
Just answer it directly.
If you don't know, that's fine.
The question is, like, if you go to Brad Pitt and say, I'll pay you $2 a day to make a movie for me, he'll going to say, well, no thanks, right?
I can make $20 million for, you know, two months' work making a movie.
So...
So you can't, you know, you go to Alan Dushwitz and say, I'll pay you $2 a day to be my lawyer.
He's going to say, well, no, right?
So the question is, why are people only worth $2 a day in India?
Well, I thought I answered that question.
Do you mean to the company or do you mean to the person that's working for that money?
If they were worth more than $2 an hour, people would be paying them more than $2 an hour because just as the capitalist wants to make as much money as possible, so do the employees.
And so if somebody offers the employees $3 an hour rather than $2 an hour for the same work, then they will go and get that.
And then if somebody offers them $4 or $5 or $10 or $20 or $50 or $500 an hour, they will do that, right?
And so the question is, why...
Are they only worth $2 a day?
It could be any number of reasons, just so we can toss them out.
Number one, they are illiterate.
I'm not saying they are.
I'm just saying that if they're illiterate, well, not being literate limits your work capacity to a significant degree.
Number two, there are huge tariffs, monopolies, taxes and so on that prevent competition for the workers, right?
This is called mercantilism, wherein you get a license with the Indian government and only if you have a license can you go and hire workers.
You pay a lot of money to the government for the license.
But it means that no one else can compete for the workers, in which case you are going to keep the workers' wages low because nobody else is going to come along enough.
Maybe they're worth $5 an hour or $5 a day.
But you're able to pay them $2 a day because the government will arrest anyone who tries to offer them more because you've bribed the government for that exclusive monopolistic access to those workers.
So it also could be because they have a superstitious-based culture Which means that they're not really taught how to think critically.
And in particular, there are lots of cultures where any challenging of authority is considered very taboo.
That makes workers less valuable because they're basically just drones.
They'll just do what you tell them to and they won't say anything back.
Like I remember when I was in the business world, I went on tours of lots of factories.
And...
The workers were really scared of management.
Management comes around and they're like, oh God, the gods of the earth, of doom and danger, are walking the earth.
Now, not everyone was, and it wasn't like the managers wanted to inculcate this sense of terror in their employees.
They didn't.
But for whatever reason, they'd have the kind of childhood, or they had the kind of upbringing, or they had the kind of culture that made them very deferential to people in supposed authority, which means, again, that they're going to be worth less.
And these are just off the top of my head.
There could be any number of reasons, but if it's free market, then that's all they're worth.
And that's tragic, but that's all they're worth.
If it's not free market, then we need more free market.
I mean, the best way to raise the wages of people who are employees is to have as much competition as humanly possible and all that.
They also could be dumb.
These could be people who, and I use that, it sounds harsh and all that, but short people don't usually get to play basketball and less intelligent people aren't worth that much money.
Intelligence is a bell curve.
And there are people who are super smart who make a lot of money.
And there are people who are, you know, have an IQ of 80 or 85 or 75 or whatever.
And they're just not worth that much because they can't contribute much.
And they can basically mostly kind of do what they're told and follow simple instructions and so on.
So they're not just going to be worth very much from an economic standpoint.
And we may supplement that with charity and a lot of places do.
But you can't, there's no magic wand to wave to make someone's services available.
More valuable in the open market.
I don't agree there.
It sounds like you're blaming the employees rather than the employer in this scenario.
Where on earth did I blame the employees?
Just when you were saying that they might be dumb or they might be illiterate.
That's not a blame.
That's just a fact.
I didn't blame them for anything.
Because they're bad people or they've done dumb things or they've made stupid decisions.
I don't know where the word blame comes from.
Well, not for illiterate.
Perhaps for dumb.
I mean, dumb sounds like they're stupid, you know, and that's...
But they might be!
Yeah, but every single person in India that's working in a sweatshop can't be stupid.
That's the probability of that.
Do you know the economic reasons or the political reasons why they're only getting $2 an hour?
Because that's important, right?
Mike, if you have a second, you can look up and see if there's any...
Government licensing or payoffs or monopolies or exclusion or lack of union.
Maybe the government, like in China, you can be sent to jail for 10 years for trying to unionize.
Well, that's a violation of freedom of association.
And so maybe there are laws banning unionization of, but that's not, I mean, unions are perfectly free market.
As long as they don't gain extra special privileges for being unions, they should neither be banned nor Given any legal monopolies on privileges and so that's another reason why the workers may be underpaid because the government throws union organizers in jail.
That's not a free market situation.
No.
Well, if I can make two points.
Well, the first one is that the documentary that I watched, there was actually a girl in this documentary who was working in a sweatshop and she tried to form a union.
This was in Bangladesh in India.
And she formed this union and demanded that she wanted better working conditions.
And the employers of the factory locked the doors and beat up all of the women that were working in the factory.
Because they try to challenge their authority.
So I would say that there, that's not really the...
You know, you mentioned that the employees are afraid of the employers.
Well, I think in that particular situation, obviously, there aren't any rights for the employees to be able to do anything against the employer if the employer decides to treat them that way.
Well, no.
Of course, what they should do is they should call the police...
Given that it's a status society, they should call the police, and there are laws against physical assault in India, and they should report those employers to the police.
And then those employers should be tried, and if found guilty of the assaults or ordering the assaults, they should go to jail.
But I'm guessing that doesn't happen because there's fairly notorious corruption in India among the police.
I was going to say, yeah, I would imagine that if this is a common scenario, that if you phone the police in India, then nothing's going to happen.
Right.
So here we have a problem that a government institution is failing people, which is why private police and voluntary police would be—free market police would be much better.
Because nothing bad—the police aren't competing with anyone, so if they don't do anything about it, nothing happens.
There's no—right?
They don't lose business if the government-mandated monopoly police force does a bad job.
They don't go out of business.
They don't lose their pensions.
They don't lose their jobs.
Right.
And so the fact that the government has a legal monopoly on, quote, justice is a terrible situation and also not a free market environment at all.
Yeah, I agree with you completely.
I think that that's...
Yeah, that is...
But going back to the...
The point of why are they worth the $2?
You've got this country where people are extremely poor and then you've got these companies that want to make as much profit as possible.
The reason that they're worth $2 to the company is because if they can pay $15 to somebody in the US or $2 to somebody in India, then they would rather pay the $2 to somebody in India.
But when they're making a profit of billions, then it seems that they could sacrifice some of their profit so that the people that they're paying can have living standards that actually enable them to, for example, spend time with their children or not live in slums.
Because my question really is, what's going to stop Certain people in a true free market system from taking advantage, I would say exploit, but taking advantage of other people that they know their situation is so dire that they can pay them as little as possible in order to make more profit for themselves.
Well, of course, competition is what does that, right?
Because if workers can produce more money for the employer, then employers will bid them up until they're close to the amount of money that they can profit from them, right?
So if a worker can produce, like Brad Pitt produces at least $25 million worth of value to a movie maker because of all the free publicity and all that, And so they'll pay him $20 and they're still making $5 million, right?
And if somebody says, oh, I want to only pay Brad Pitt $10 million and someone else is saying, well, I want to pay him $20 million, then he'll take the $20 million, assuming that he likes the project and other things being equal and so on.
And so the competition...
For Brad Pitt's services is what drives his wages to the maximum.
Now if Brad Pitt says I want a billion dollars to star in a movie, well the likelihood of that movie making the money back will be so low that they wouldn't be worth it, right?
That would be overcharging.
But if there was only one movie making industry allowed in the entire world and Brad Pitt was forbidden from working outside of that movie industry, then they could pay him whatever they wanted and he wouldn't have any recourse called competition.
So the best way to To make sure that the workers aren't exploited is to have as many people competing for their services as possible.
Now, I'm no expert on Indian history, but to my knowledge, certainly from...
The liberalization of India from British rule in the late 1940s and the partition with Pakistan, they had a bunch of wacky socialists come into power.
It's not the fault of the average person, of course, right?
But the reality is that for 40 or 45 years, they pursued a very heavy socialist and nationalizing this and government control of that policies.
And what that did, of course, was it destroyed the wealth of the country, as these kinds of socialist clap draps always do.
And so this was a big problem.
The socialism resulted in massive misallocations of capital.
It resulted in general impoverishment of the population as a whole.
Which again then means that there's not money enough to educate.
Kids got to go to school rather than go into, sorry, they got to go into work rather than being able to go into school.
And so more recently they've started to liberalize the economy to some degree.
But there are of course lots of religious divides within, religious and ethnic and racial divides within India.
Of course one of the world's most populous countries, I think second after China.
And they have, like, dozens and dozens of religions and sort of former nation groups.
The history of India was a history of warring principalities, where there's still a lot of residual, localized state-slash-nationalism that occurs.
And so there are lots of impediments to people becoming more worthwhile and more valuable.
And again, to take this info with a grain of salt, this is the generalization of But the average IQ of the Indian population is 82.
Now, I don't know if you know much about IQ. For those who don't know, the average IQ across Western nations is about 100.
Across Oriental nations or Asiatic nations is a little higher, 103 to 106.
And in India, it's at the moment 82.
And again, of course, this could have a lot to do with education, it could have a lot to do with parasites, with malnutrition, with any number of things.
But the reality is that at the moment, you can't pay and remain profitable somebody who has an IQ of 82.
And if that is the average, and of course, the average means that half of the population in India has an IQ lower than 82.
That means that it's going to be harder to find workers who are going to be able to make a lot more money.
And again, the goal is try and raise that to get that back into the norms of humanity.
But that's not the job of the capitalists, right?
That would be the job of the philosopher.
Talk about better parenting and all that kind of stuff.
So these would be some of the challenges.
Now, as with regards to the specific incidents, you know, the important thing is to look into Why these people are being paid so little.
And if there's open competition, in other words, if no one can find a way to profitably hire these workers by paying them $2.50 an hour, in other words, anybody who comes along and And pay them $2.50 an hour, we'll lose money on every transaction, then that can't be sustained.
I mean, that's just the way you might as well just set fire to money and everyone goes hungry, right?
Because you have to, capital is incredibly scarce and incredibly rare.
Sorry, that repeats myself.
It's incredibly valuable and it's incredibly scarce.
And you don't want to squander it on things that can't make money.
Because the capitalist is not paying the workers.
This is really important to understand.
I know you get this, but it's important for the average listener who's not, you know, boned up on this stuff, so to speak.
The employer is not paying the employee.
The employer is selling the employee's services to the customer.
That is the really important thing.
There's not just the capitalist sitting on a bunch of money which he chooses to dole out or he doesn't.
The capitalist or the employer is the conduit by which the customer money exchanges with the laborer's employees.
Now, if the, you know, Brad Pitt, sorry, I keep using the example, but it's familiar to people.
Brad Pitt is very popular with the movie audiences, despite his excess of hair.
And so they're not paying Brad Pitt $20 million out of their own pockets, these movie makers, the studios.
What they're doing is they're selling Brad Pitt services to moviegoers.
And it's the moviegoers who are paying Brad Pitt's salary.
That's really, really important to understand.
If you've not run a business, if you've not studied the stuff, it wouldn't be immediately intuitive or obvious to you.
So when you say, well, the workers are only being paid $2 an hour, assuming a free market environment or a semi-free market environment, what that means is that no one in the world knows how to sell those workers' labor and time to customers.
For more than $2 an hour.
Or another way of saying it is that customers refuse to pay more than $2 an hour for that person's labor.
Now, you could force people to pay more, but that just means they're going to pay other workers less.
You can't magic it into.
It's like forcing people to get married and thinking that you're increasing the love in the world.
It doesn't.
What you have to do is find ways to make the workers' productivity such that...
The customers want to pay more for them in the way that they do with Brad Pitt.
Does that make any sense?
Yeah, I just need to stop you because I've got a few, as you're talking, I've got a few points.
So with the competition, And you were saying that with increased competition that people can earn more money because they can go somewhere else and that they can get more money from it.
No, no.
Sorry.
Just to be precise, with increased competition, I said it's the best way to ensure that the workers are paid as much as possible.
There's no guarantee that the workers are paid as much as possible.
Let me give you a tiny example, right?
If I'm really good at digging ditches and filling them in again because that's been my government job, How much is a private company going to pay me to dig a ditch and fill it in again?
Well, I get paid a lot more with the government, but then when the private sector takes over, they're not going to pay me anything.
They pay me to not do it, so to speak, right?
But it's the best way to ensure they get paid the most.
Or another way of putting it, it's the best way to ensure that their pay accurately reflects their value to their customers.
Sorry, go ahead.
The thing with the competition with India as a specific example is that what's actually happening there is that the companies are competing with each other, but the fashion companies, they're going over to these sweatshops, they're contacting the employers of the sweatshops And they are saying that this other sweatshop over there can do this shirt for 50 cents less.
And if you don't do the shirt for 50 cents less, then we're going to go over to that one.
So the companies are competing and it's reducing the cost.
It's reducing the price that they're making because they're actually competing with each other because they know that these employers over in India need the money so much because there isn't any other There isn't any other business for them.
So they can actually compete with each other to reduce the cost is one point.
Another point that I want to...
I'm sorry.
I'm sorry.
I don't quite follow that point.
And I'm sorry if I missed what you were saying.
So can we just...
Yeah, sure.
Okay, so I'm, you know, evil, monocled, corporate capitalist guy over in India.
And I want a bunch of shirts made.
Yes, so what the companies are doing, they're phoning up the sweatshop, they're speaking to the employer and saying, the manager, And they're saying that I've just spoken to this other sweatshop somewhere else, in another area of the same town, and they've just told me that they can do this shirt for 50 cents less.
So unless you do this shirt for 50 cents less than per shirt, then you're not going to have any business from us at all.
And because they need the business, the factories, they have to take whatever the fashion company is offering them and they can't negotiate because they need the money so badly because over there there's not really much else on offer other than these companies that are down pricing all the time.
I understand that.
But we're right back to where we started.
I get that if you have some sort of stranglehold on someone, if they have no other options but to take the price that you're offering, sure, if my choice is to make two dollars an hour or zero and starve to death, I'll make two dollars an hour.
But my question is, why aren't there lots of people out there bidding up these workers' wages?
Well my question is slightly different.
My question is why isn't there a moral or ethical, shouldn't there be a moral or ethical business incentive or business model that goes before profit?
So instead of these companies that are making all of these millions of dollars by paying these workers two dollars An hour a day.
Why don't they take less profit?
Because there's a certain amount of millions that you need to live off.
If you're making 200 million a year, you can live off 100 million a year.
So why don't you give more to the workers to increase their living standards and To bring up your point, you said that if your IQ is 82, then you don't really have any other options.
Somebody...
No, no, no.
I didn't say you don't have any other options.
I said that your economic value is going to be...
If someone has an IQ of, say, 130, they can do just about any job.
They can be a lawyer, they can be a professor, but the average is 100.
At least in Western countries, and a standard deviation below that is 85, and this is even below that.
And people who have 82, they can't really do much work, right?
Because they can't really think for themselves very well.
Yeah, but there are a lot of people in the Western world that don't have any options for various reasons other than working in factories.
I'm sorry, hang on.
What do you mean?
There are various people in the Western world, in America, in Europe, and I'm sure in Canada.
Because of your personal circumstances, if you've grown up in an area where, in England we'd say a working class area, but an area where everyone around you is You know, messing around and you've grown up with bad parents, you know, parents that...
No, but this is true for me and this is not what happened to me.
So you may be talking to the wrong person about this.
Yeah, but it didn't happen to me either.
And I woke up...
And I didn't.
I grew up in a working class area.
But...
And the funny thing is that in England, very few of the people in the working class area are actually still working.
At least that was the case when I was a kid.
Yeah, well, this is one of the reasons why, particularly with the elections that have just happened, one of the reasons why I'm particularly interested in Getting involved in social change.
Okay, so you and I are both arguments against this economic determinism, which is, well, you're just born into these neighborhoods and you have no choices and no options.
The reality is that people who are born into poor neighborhoods, who are ambitious and willing to work hard, have an economic advantage.
Over people who are born into rich neighborhoods with exactly the same configuration, which is that their cost of living is much lower, so they can actually accept it.
They can outcompete.
They can accept a lower salary, get their rungs in, add to their economic value, and end up making more.
Because what happens, of course...
I've heard some of your talks when you've spoken to people and they've talked about their issues and you've asked them about their family life and their background.
And you know the influence that your background has on your personality and on your way of thinking.
So if you're born in an area or with a family where you are disadvantaged in the sense that this family or this area, your peer group, are going to negatively influence you, then it doesn't necessarily mean that you don't have a good IQ. It might just mean that because of problems that you had at home or out and about in your neighborhood that you haven't tried in school,
you didn't make it, And then later in life, you regret it.
Sorry to interrupt you, Robert.
But I understand all of that.
But that's not the job of the employer.
No, no, no.
Let me just make this very, very brief case.
So let's say that we say...
I'm not saying it's the employer's fault.
Sorry, let me finish my sentence.
Let's say that some kids grew up disadvantaged.
They didn't get enough food.
And so they're only five foot five instead of seven feet tall.
Like they were going to go to be seven feet tall.
Their twin that was raised in a better environment grew to be seven feet tall.
But this kid suffered from malnutrition.
And now it's only five foot five.
Hang on, is it the job of the basketball team to put that kid on the court, the 5'5 kid?
Because he was disadvantaged and he grew up and he didn't get enough food and he didn't get to be tall enough.
They've got the choice between the 7' twin who grew up with enough food and the 5'5 twin who didn't.
Is it their job to give the place on the team to the 5'5 kid out of sympathy?
No, but that's not what I was saying.
Okay, so it's not the job of the employer to make up for the deficiencies in the childhood.
No, but that isn't what I was saying.
It's exactly the same.
Yeah, I know, but that's not what I was saying.
The whole point about...
I said that somebody who's got a higher IQ might not have any other option than working in a factory in the Western world, and that's how we ended up talking about this.
Well, hang on, hang on.
Somebody who's got a higher IQ may not have any other option than working in a factory?
I'm not sure what that means.
Can they not move?
Can they not study things online?
Can they not teach themselves stuff?
Can they not start their own business?
I don't understand what you mean to say no other options.
I know people that have left school at 16 years of age and don't have any qualifications because of trouble and things that were going on in their lives at the time.
Wait, wait, wait.
Hang on, hang on, hang on, hang on.
Are you telling me that they have zero responsibility for their lives?
They have absolutely no chance or could never have made any other choices?
Everybody can make different choices, but it seems that, I mean, what I'm talking about here is I'm talking about how your environment affects you.
So if somebody...
No, no, no, no.
You're talking about how your environment determines you.
And I sure as hell hope you're not teaching that to your kids.
Because talk about a self-affirmation.
You're never going to get out, kids, because you were born into a poor neighborhood.
You've got no chance.
You can never get out.
You had bad parents.
You've got to resign yourself to this for the rest of your life.
You've got no chance to get out from where you started.
Zero!
I hope you're not teaching that.
No, I'm not.
I'm not.
And you seem to be twisting a little bit what I'm saying.
You said no chance.
to get out of where they started.
Or no chance to do anything other than work in a factory.
That's not twisting your words.
Okay, it's not true that you've got no chance, but for example...
Okay, then don't say that you don't have a chance if you do.
That's important.
Alright then, I'll reword it.
If you have grown up in an area where you were beaten by your parents, or if you have grown up in an area where you have developed depression because of your circumstances, and then you leave school at 16, but you are not an unintelligent person, Then it's going to be extremely difficult, extremely difficult for you to get an extremely high, well-paid job.
And there are a lot of people in...
Well, hang on, hang on, hang on, hang on.
You're changing things now completely.
No, I'm not.
Because you said originally you had no chance to do anything other than work in a factory.
And now you're saying it's going to be extremely difficult for you to get a job without qualifications in the UK that is not a manual job.
And is that what you're telling your kids?
That this is going to be extremely difficult for them to do anything other than manually?
No, of course.
If I'm teaching my kids, then I'm encouraging them as much as possible.
Then you're lying to them because you're telling me one thing and you're telling the kids something else.
No, I can tell them that it's going to be extremely difficult, but I can still tell them that it's possible.
But it doesn't change the fact that it's extremely difficult.
And how would you measure that extreme difficulty?
Or let me put this another way.
You work in a public school or a private school?
At the moment, I'm working at a university.
But I've worked in secondary and primary.
At the moment, I'm working at a university in the UK. But that's a government.
The universities are public, right?
The government, right?
They're half and half.
They get funding from the government, but they run pretty much like a business as well.
Well, no, they get a lot of subsidies, right?
They do get subsidies.
And they also have to conform to government regulations in order to be degree-granting institutions, right?
So it's not a free market environment.
No, it's not a free market environment.
Okay.
Now, how difficult was it for you to get out of what you said was a pretty hardscrabble working class beginning?
How difficult was it for you to get to where you are based upon where you started?
Well, the thing is with me...
Okay, so with me, as I was growing up, I mean, I grew up in Nottingham.
You lived in England once, didn't you, a while ago?
Right.
So, yeah, Nottingham's in the Midlands, and it's an old ex-industrial mining area, so if anyone's ever seen Billy Elliot, it's a bit like that, kind of in the 80s.
Where I grew up, it was very common for girls to get pregnant at 15.
You could hear stolen cars driving around outside.
There were people walking around with baseball bats on a Friday night looking for The local wine bar got smashed up every week.
And this is a heavy welfare state problem too, right?
This was the welfare state problem.
It was just...
Okay, let's start this again.
You're a fairly young man, right?
You're in your 20s, right?
Me?
I'm 37 now.
37.
Okay, so you're 37...
So, you were born in the late 70s, early 80s?
Yeah.
Late 78?
Yeah.
Okay, so you were born a little bit more than 10 years old.
Younger than me and the welfare state was a big problem even when I was in England at the age I left at the age of 11 yeah, but then 15 year old kids girls getting pregnant is Certainly exploded since the welfare state came along as has the capacity to have severely dysfunctional Family and personal habits because you don't have to get up to get through a job So it's easier to drink and sleep in and do all this kind of crap Yeah,
I mean, I don't mind talking about this, but we're moving further and further and further away from what really wants us.
No, we're not.
We are right at the heart of it.
Which was the profit then.
No, we're not.
We're right at the heart of it, because economic mobility is really right at the core of this.
Because if people don't have economic mobility, in other words, if they can't choose anything different, then...
Exploitation becomes much more possible, right?
As I said, where there's a lack of competition, where there's a lack of opportunity, there's going to be lower wages.
The exploitation is much more possible.
So if people are fixed into their classes, if people are born into these classes, have virtually no chance to escape them, then you have a fixed pool of workers that If you pay them too little, it's not going to motivate them to jump into something else.
Yeah, you've got a fixed group of workers in India, you've got a fixed group of workers in China.
But my question is, If profit, I don't know, as I said, from the libertarian perspective, if the profit motive is the underlying motive for free market exchange.
But if the profit motive is the underlying motive, then what stops then certain people, and not everyone, but certain people from taking advantage of the fact that they can exploit or they can take advantage of these people that Don't have the mobility, they don't have the options, and they can therefore pay them as little as they want.
Hang on, hang on.
So now we're back to they don't have options.
Or few options.
I doubt very much.
You keep sliding back into this Marxist economic determinism.
And then when I catch you on it, you say, okay, well, they have some options and so on.
And I got out, Steph, and you got out, Steph, but, you know, there's all these other people and so on, right?
When I say no options or when I say few options, it's very, very difficult to say specifically what percentage of options they have.
But obviously, if you are in India, in an impoverished area of India, you have very few options.
I'm not saying that they can't do anything about it, but the options must be...
I haven't actually been to India, so I don't know the extent to how poor it is, but I'm presuming that the options are very, very limited for those people.
And I think that's terrible, but I'm not sure what that has to do with the free market, because India is not a free market environment.
Because I'm talking about...
There's massive amounts of corruption I'm talking about the state in this particular context.
I'm talking about the companies that are deliberately paying these people as little as possible because they don't want to pay $15 to somebody back home because they can make more profit if they...
No, I wish you'd run a business.
God, I mean, because you've not run a business, you're talking out of your ass.
I keep telling you the same thing, and I'm sorry to be so blunt, but it's not that they don't want to pay the workers.
$15 an hour, but they want to pay them $2 an hour.
That is not the reality of running a business, and you'd know that if you'd ever run a damn business.
Are you telling me that it's somebody else?
All these people, you learn all this stuff in books, but you've not actually lived it.
And you've also not talked to any capitalists, I bet.
Because I was a capitalist, I was an entrepreneur, I was a business owner, I am still a business owner.
I have people who work with me, and I pay them, right?
So the idea that you're telling me, you're lecturing me all about the business world...
When I've spent 20 years being an entrepreneur while you've hid out in academia and you're lecturing about all these things that you've read about in books but never actually listened.
Look, the reality is, let me finish and then I'll shut up.
The reality is that if their customers wanted them to pay $15 an hour rather than $2 an hour, that's what they would do.
Businesses are in the business of pleasing customers.
Let me finish.
If you cut me off again, I'm just going to hang up.
Let me finish.
Businesses are in the business of paying workers to serve customers.
So it's what the customers want that determines the business decisions.
If the customers want the employers to pay $15 an hour, then that's what the business people will do.
And the reality is that it's not a matter of dollars and cents as to why jobs are going to China and to India.
In China and India and Vietnam and all these other places, they've always been a lot cheaper to get labor from those places than in America.
America workers have always been paid many times what workers in China or workers in Cambodia or wherever.
They've always been much more expensive and it's not like these guys are getting shipped over on helicopter.
You don't need new technology.
Ships have been around for a long time.
The question is why over the last 30 years or so have jobs left America and gone to these other countries?
I have done business In China.
I have done business in Europe.
I have done business in South America.
It is really, really expensive and difficult and tough to start to do business in another culture.
You have to learn the language.
You have to learn the laws.
You have to learn the taxation.
You have to learn the culture.
You have to develop business contacts and you have to figure out whether you can trust them or not.
You have to figure out how contracts work.
It's hugely expensive and time-consuming.
Plus, you have to pay for a huge amount of travel.
Plus you have to do business in a different time zone, sometimes a completely opposing time zone.
Plus you have to pay all the costs to get things shipped over.
Plus you have to deal with the risks that there's currency changes and currency devaluations occurring all the time.
Plus you have to deal with regime uncertainty in not one but two or three or four or five different countries.
At the time where tax laws can change, new people, there could be revolutions, there could be new policies put into place.
Plus, you're not allowed to bribe in cultures and countries where bribery is endemic.
And how on earth are you supposed to compete in India if you don't have a local company?
Because if you try, if you're an American company and you bribe anyone anywhere in the world, you're running afoul of the law.
And so it's really difficult, really complicated, and really expensive to go and do business in other countries.
It's not just a matter of $15 an hour versus $2 an hour.
There's an entire regulatory environment.
There's an entire overhead of things like affirmative action, enforced diversity, OSHA regulations, EPA regulations, environmental health and safety regulations.
There's also massive amounts of taxation uncertainty and the USA now has one of the highest corporate tax rates in the entire world.
And that makes it very difficult to do business.
Plus, there's massive cost for healthcare in the US because it has this semi-public, semi-private nightmare of a system where things just get progressively more expensive.
Plus the government in America has massive unfunded liability, so everybody who does business in America knows for sure that their costs and taxes are about to go through the roof.
And these are just off the top of my head.
Oh, and also there's getting sued.
There's tort problems in the United States, frivolous lawsuits and so on.
And this is just off the top of my head.
These are the huge amounts of difficulty doing business.
In America versus doing business in China or in India.
The reality is it's not just that they make less money, it's that the regulatory and tax and business environment in America has become virtually impossible to survive in.
Not so much for big businesses who can buy congressmen like their people at the movie theater buying peanuts or popcorn, but for small businesses and startup businesses it's become progressively impossible.
To do any kind of real work.
You can be a tiny business in the US. You can be a huge business in the US. But growing from a tiny to a huge business is almost impossible.
None of these things that I've talked about have anything to do with the free market.
And that is why once we tear down these regulatory barriers, once we open up free trade as much as humanly possible, and once we get people to parent well and think sensibly, the human value and capital of everyone in the world will go up.
That's the end of my rant.
You can take it from here.
So, alright, so let's say that the, because obviously in this particular area you know more than I do about how the business world runs in the US, but so if these companies are going to India, if I've understood you correctly, they're going to India because doing business in the US is so complicated for them.
Is that right?
Well, unprofitable, yeah.
Too much uncertainty and too little profitability.
Okay, so too much uncertainty and too little profitability.
And I totally agree with you with bringing up children correctly and with good values and with the non-aggression principle that a lot of these problems would go away.
So the companies go to India because of what we've just discussed.
But still, if the company, as I said before, is making a hundred million dollars and they can see that the people that are making their clothes are living on the poverty line or below,
then isn't there a moral or an ethical Obligation for these companies to reduce their $100 million profit to $50 million profit and give more money to these employees that are working for them?
Absolutely not.
Okay, and so how would you...
No, no, listen, listen.
If you make a hundred, let's say you have some giant corporation, you make a hundred million dollars.
What do you think happened to that hundred million dollars?
I mean, you've never run a business, you don't know, you probably, but so there's all this money that comes into a business.
Let's say they sell their products for a billion dollars and they make, sorry, they sell their, they make a billion dollars, then that costs a 900 million.
Now, 10% profit is really high and probably pretty unsustainable.
Usually it's two or three or 4%.
But let's say they have a hundred million dollars.
What do you think they do with that money?
Well, what I do know is that, well, what I do know is that the people at the, you know, the big wigs at the top of the company are taking home millions of dollars per year.
No, they're not.
Some of them are, for sure.
No, oh my god.
It's like saying Brad Pitt is stealing from the movie because he's making 20 million dollars.
Do you think that's true?
I don't think it's too important.
No, I don't.
I don't think it's the same.
Okay, so hang on.
Let's take this one step at a time, because this is important to understand.
Okay, hang on, hang on.
Why is Brad Pitt paid $20 million?
Can I just answer your last question quickly?
Because I have an answer.
If Brad Pitt turned around and said, do you know what, I'm only going to take 10 million dollars and I'm going to share out the other 10 million for the camera and the people that are making my sandwiches and stuff, I would say that was a very nice thing to do.
Okay, that's totally fine.
That's totally fine.
And he can do that, of course.
And Angelina Jolie and Brad Pitt give a lot of money to charity and spend a lot of time trying to make the world a better place.
So that's fine.
But we're just talking about the economics of it, not the personal charity of it, right?
Yeah.
And also, there are reasons why that would be a very bad thing for them to do, which we'll get into in a second.
But...
It's not like the company makes a billion dollars and then just hands out money to those executives, which is a subtraction of those billion dollars.
It's not like the movie's going to make $100 million and then they just give $20 million to Brad Pitt.
The reason they give $20 million to Brad Pitt is because without Brad Pitt, the movie only makes $50 million, but with Brad Pitt, the movie makes $100 million.
It's not subtracted from their profits.
It's the reason those profits exist.
So, businessmen don't scoop money out of a big vault of gold that the company magically has.
The company is only making a billion dollars because it's paying those people.
In other words, if you pay a CEO five million dollars, it's because he is going to produce 20 or 30 or 40 or 50 million dollars more Then you're paying him.
So he's not taking money.
The only reason there is that money, the only reason there is that hundred million dollars is because they have paid those executives that amount of money and because those executives are so good at what they do and so great at coming up with new product ideas and knowing how to balance Marketing and sales and research and development and distribution and manufacturing costs and relationships.
Because they're so great.
They're superstars.
They're the rock stars of the business world.
They're incredibly great at what they do.
Because they're so great at what they do, instead of the company making $100 million with only $10 million of profit, it's making $1 billion with $100 million of profit.
So there's not this magical $100 million that then gets subtracted by the executives.
That $100 million only exists because you're paying the executives that amount of money.
Sure.
Well, what I'm saying, though, is that I'm trying to really ask you about the moral and ethical basis for the profit motive.
Because if you are employing Brad Pitt so that you can make many more millions of dollars at the expense of...
to the detriment of people's lives, then perhaps you shouldn't employ Brad Pitt and you should take less profit.
That's what I'm suggesting.
Okay, so walk me through this.
So you want to make a movie.
And you don't want to hire Brad Pitt because you don't want to exploit people?
Well, because we're talking about Brad Pitt and using him as a – or this situation.
Yeah, no, I understand.
We're using Brad Pitt.
I was the one who brought him up.
I'm just trying to understand your point.
For India.
So if we go back to India, I'm suggesting that maybe the – if – Because what you're saying, I believe, is that if they employ Brad Pitt and they pay him so much money because then more people will want to buy their product.
So in that scenario, they're paying the Indian workers this low wages so that they can produce the products that the people will buy.
No, no.
The managers don't pay the workers.
The customers pay the workers.
Yeah.
So you've got to talk about the customers, not the managers.
Yeah, but I think that there's three in this scenario because you've got the workers that are working, you've got the customer who is buying the product, but you've still got the amount of profit that the company makes per year.
And so For example, Fairtrade.
If somebody buys a Fairtrade product, you have Fairtrade over there as well, right?
Is it an international thing, Fairtrade?
I presume it is.
Oh, so this is like if you go to a coffee shop and they say they do fit, so they pay more for the coffee than the market prices?
Yeah, so fair trade coffee, for example, is that you pay more for the coffee and then the workers on the other end are supposed to get then a fair wage or a decent wage and then they get rights as well, such as holiday pay and maternity leave and things like this.
So if you buy a fair trade coffee, the customer is paying more for that coffee so that the worker on the other end can get more wages.
But what I'm saying is that it's not just the customer and the worker.
The company could decide to take less profits.
Why can't the company make a moral decision as well and decide that the amount of money that I am earning per year Doesn't justify the working conditions of the workers.
Well, they can certainly do that, and some people do, and they can charge extra for that.
Yeah, but they don't have to charge extra.
They could also take less profit, couldn't they?
No, no, they can't.
Oh my god.
They go through the same thing.
All managers are employees as well.
And so what you're saying is we should solve the problem of underpaying the workers by underpaying the managers.
Hang on, let me finish.
Let me finish.
If you underpay the managers, then what happens is the managers go to other companies to get better wages.
And then the company's sales collapse, which means they can't hire any workers, which means there's one less group of people who are bidding for the prices of the workers, which means the workers are going to get paid even less.
Yeah, but, sorry, Stefan, I'm not talking about the wage of the manager.
I'm talking about the overall profit of the company.
Yeah, you are talking about the wage of the manager.
You're saying if the managers take less money?
Oh, well, sorry.
If I said the manager takes less money, what I mean is if the company took...
The company could make a moral decision with the shareholders and the CEO or whatever.
They could make a decision to take less profit in order to increase the living conditions of the workers in these situations where the workers have a very bad deal.
The onus wouldn't always need to be on the customer.
Well, okay, but you see, I'm guessing that I'm the first capitalist that you've ever spoken with, so you don't know.
But for you, that's just this magic vault of money.
But if you make $100 million profit, profit means after all of your expenses.
So let's say that you make $100 million and you're in charge of a business, you now have $100 million.
What would you do with that money?
Okay, so first of all, I'm not actually a socialist.
I looked at the capitalist system.
No, no, forget that.
I mean, forget that.
I didn't say you were a socialist.
I said I'm probably the first capitalist that you've ever spoken with.
What do you do with the $100 million that you have in the company?
Okay, I just wanted to say I'm just genuinely investigating different ideologies and theories so that I can make up my own mind.
That's what I'm doing at the moment.
If you had all that money...
I am sure that you would spend a lot of it on your employees back home.
You would invest some of it.
No, no, no, no.
You said profit.
Hang on, God.
You said profit.
Now, profit is after all of your expenses.
So you've got $100 million in your account as a company.
Yeah, well, then you stick it in your own bank account and save it up for a rainy day then, don't you?
Well, you may do that with some of it.
But what else would you do with it?
Because if that's all you do with it, you will not last in the business world.
With your profit?
Yeah.
What do you do with your $100 million?
Yes, you want to save it because business could be worse next year and you might need rainy day money and all that.
But you can't just save your money because...
There's other things that you might want to do with it.
I'm really struggling to think what somebody could do with just $1 million that they personally had as profit.
No, no, no.
God, you said a company.
We're talking about a company.
Yeah, but the company shares that money out, doesn't it?
That has $100 million in it.
What do they do with it?
Yeah, so the company's profit...
If it's the company's profit, some of it will be saved for a rainy day and some of it will be reinvested.
Okay, good.
Now we're getting somewhere.
Okay, so you're going to reinvest some of that money or just invest it.
So what might you do with that money?
Expanding, probably.
Okay, so you will go and hire maybe some more workers, right?
What does that do to the average price of the labour?
The average price of the labour.
Yeah, if you're going out and hiring a thousand new workers in a town, what does that do to the price of labour in that town?
In the town, it would...
I don't know.
What would happen to the price of the labor in that town?
Okay.
If you don't know basic supply and demand, you need to read economics in one lesson.
Henry Hazlitt, it's really simple.
So when the demand for workers goes up, all other things being equal, the wages of the workers goes up.
And so when you take that $100 million and you invest it in...
Opening a new factory or a couple of new factories or whatever, then you're hiring a whole bunch of workers.
Now, either those workers wouldn't have jobs, in which case they're richer than they would have been before, or you're bidding them away from their existing jobs and you're doing that by offering them more money or better working conditions or better benefits or any combination.
Of those things.
So when you have this profit, if you cut that profit, let's say, well, we're just going to give $50 million away, that's $50 million less that you're going to use to invest in creating new jobs and raising the wages of workers wherever you're doing that.
Right.
Do you know what else you might do is you might not build a new factory, but you might bring some automation levels into your existing factory, which adds to your worker productivity, right?
So instead of, say, of having pickaxes for your road crews, you get some sort of pneumatic hammer that goes through the tarmac really quickly.
And that makes each worker that much more productive.
Which means that you can get jobs done quicker, which means that for the same amount of money you're getting more productivity per employee, which means that you can bid for more jobs, you can be more efficient, and you can pay your workers more because they've got more skills now, which means that you have to pay them more, otherwise someone's going to bid them away from you.
So you could do that as well.
The other thing you could do is you could use that money to put out an initial public offering.
You could go public and you could start to sell shares, which gives you a huge amount of money.
For expanding your company or if you wanted to do the opposite, you could buy back a whole bunch of shares and then you could give shares to your workers as incentives for them to work harder or work smarter or whatever it is, right?
So there's six million things you can do.
You could invest in new research and development and figure out entirely new processes and procedures for doing things.
You could figure out a more efficient way to make dye or you could figure out a better way to sew your clothes or you could do more marketing so that you raise demand for your product So that you will then end up having the money through sales to expand and hire more workers.
Like there's six million things you can do with all of that money, most of which will end up benefiting the workers.
So just giving that money away is not going to create a sustainable and beneficial environment for your workers.
Just to let you know, the reason I'm having trouble with answering some of these questions is just because it's 3 o'clock in the morning here now, so I'm just feeling it a bit.
No, the thing is that one of those things that they could do as well is decide to use less of that money to reinvest.
I understand the principle of growth and expansion and making more money and making more profit but what I'm saying is do big businesses doesn't have to be necessarily a huge corporation but do big successful businesses need to be taking home such huge amounts of profit when there are people at the other end that
they are clearly paying the absolute minimum I feel like, I don't know, maybe it's three o'clock in the morning, we need to shut this down, but I feel like we've just had an hour and a quarter or an hour and a half talking about this, and you're asking exactly the same fucking question at the end that you did at the beginning.
Like, we haven't even had this conversation.
No, well, I think the thing is that I'm just not agreeing with you, which I think is okay.
It is okay, but you can't just disagree with me by pretending I haven't talked.
That's not how you have an intellectual discussion.
Like, I've given you all of these reasons, and then you're right back to where you started without rebutting anything.
Yeah, because I don't think that you've answered the question.
Honestly, I don't.
Okay, but then you have to tell me how what I've answered is incorrect.
You can't just ignore the fact that I've spoken and think you've rebutted something.
That's just like la-la-la-la-la-la defense.
No, no, no, because I agree.
I understand and I agree with what you're saying.
I agree with what you're saying.
I agree that if you are reinvesting, you've got the profit, you can expand, you can employ new workers, you can pay for those new workers, and you can use the money that way.
What I'm saying is, when you have these situations, and I realize, you know, we've talked for a while, so just very quickly, Throw in one more example, which is...
No, no, no.
You told me that I'm wrong, so you have to tell me how I'm wrong.
You can't just give me another example.
You have to tell me how I'm wrong.
Or you have to withdraw that I'm wrong.
You're wrong.
I'm saying I disagree.
No, you don't disagree with me because I'm right.
Come on.
Don't Clinton me, bro.
No, no, no.
If you told me that I'm wrong, tell me about how I'm wrong.
I can say that we can have two different perspectives.
So I'm saying that I don't think that your facts...
Wait, wait, wait.
Hang on, hang on.
So we're just arguing perspectives here, in which case this is a philosophy show.
So we don't argue.
This is not a who's the best jazz musician show.
This is a show about reason, evidence, and conclusions.
So if you just have a different perspective, despite the fact that you're talking about morality, which is supposed to be universal, if you just have a different perspective, then I've just lost all interest in the conversation.
If you're telling me that you have a particular approach and I've said that this is not how this approach is valid, And then you say, well, I wasn't saying that you're wrong.
Okay, well, I may be saying that you're wrong, but it's just a different perspective.
I don't care about different perspectives.
This is a philosophy show.
Okay.
Well, so, all right, if morality is universal, what I'm saying is then there should be a right or wrong answer to my question.
So what I'm saying is that surely there's a moral issue of whether a company should be using their profit to reinvest and expand when the conditions that that company already has for some of its employees are morally wrong.
Morally wrong.
I would say that people working for $2 a day, struggling to survive, struggling to pay for food, pay for accommodation, struggling, it's not a minimum wage, is it?
It's not a basic living wage for those people.
It's not even enough money for them to survive in a country that is super cheap.
No, it must be, otherwise they'd be dead.
Well, yeah, but for example...
Okay, so let me just ask you this, because you're just rehashing the same thing.
Let me ask you this.
Just out of curiosity, you have...
How many shows do you think you've listened to?
I'm just trying to figure out your background in this.
Your show is about 10.
About 10, okay.
But not just shows, videos, long videos that you've done as well.
Okay, so let's say that they are...
I don't know, what about...
About 10 hours worth of material?
Yeah.
Okay, great.
Now, each one of those shows, how much time do you think goes into producing an hour of material?
I've done some videos myself, so it can take a long time.
What do you think?
5 to 1, 10 to 1?
I think it depends on whether you're...
I mean, if it's a talk show, if you're talking, then not as much time.
Oh, there's still preparation.
I get the questions ahead.
I have to look this stuff up.
Yeah, yeah.
Okay, let's just say it's about five to one, just for the sake of argument.
So you've listened to about 50 hours of labor from Free Domain Radio, right?
Yeah.
And do you have any memory of what you've paid us?
Yeah, I haven't paid anything as yet.
Oh, Mike, is that incorrect?
Sorry?
Oh, sorry.
Mike said that he thought you'd kicked in five bucks.
Yeah, search your email just in our archives, and we got a $5 donation from you last year.
Oh, right.
Okay.
Well, there you go.
That was a year ago.
Wait a minute.
Are you saying that you donated $5 to us last year?
So you've been listening for over a year, but you've only listened to 10 shows?
Really?
No.
To be honest, if I've donated and listened to you a year ago, then I actually don't recall donating and listening to you a year ago.
Okay.
That's fine.
That's fine.
So you've listened to at least 50 hours of labor, and you've paid us $5.
Mm-hmm.
So by sort of my back of the napkin calculation, you're paying us, what, 50 cents?
Wait, hang on a sec.
You've done 10 hours, 5 hours.
So you've done 50 hours for $5, right?
Mm-hmm.
So you're paying us $5 for almost a week and a half of labor.
Yeah.
So, how do you feel about that?
I mean, you're paying us 10 cents an hour.
Well, I think that...
I mean, you're complaining about people being paid $2 a day.
Do you understand that the people who are being paid $2 a day by these evil capitalists are getting paid more than you're paying us?
You are, in fact, worse than the evil capitalists you are complaining about.
We are your Indian sweatshop workers because you're paying us 10 cents an hour.
Yeah, but that's out of context, though.
Oh, okay, out of context.
Go ahead.
Yeah, because I've started to really look into libertarianism.
So I was on YouTube, and I came across some of your videos, and I've watched some of your videos, and then I've taken the next step, which is talk to you directly.
Which is even more time, but go ahead.
Well, yeah, but the thing is that the way that the show that you have is that people are on YouTube, they come across your videos, they watch some of your videos, then they contact you, then they get involved in the free domain.
Okay, I don't know what you're saying, but it doesn't make any sense to me.
Here's the note that you wrote us a year ago.
You said, Steph, just have to say that I love the work you are doing.
Discovering the show has been a huge improvement to my life.
This donation is the first of many I hope to make to FDR. Keep up the great work.
So this show has been a huge improvement to your life, according to your note.
And you have paid us $5 for 50 hours of work.
Yeah, I'm really not sure.
And then you complain about other people over in India being underpaid by evil capitalists.
Stefan, I really don't think that was me.
I really don't think that was me.
Okay, so let's say it's not you, in which case you have paid us zero dollars for 50 hours of work.
Yeah.
Do you really feel that's an improvement to your position?
Yeah, because of the medium.
Because you come across this show through YouTube.
You check out some of the video.
This is how you get new people interested in your ideas.
Oh, hang on.
After lecturing me when you've never run a business, and I have for 20 years, after lecturing me about running a business, are you now going to lecture me about how to run a YouTube channel and how it works?
I really wasn't trying to lecture you, Stefan.
Please don't tell me how my YouTube channel is supposed to work.
You know the deal.
You've heard the shows.
You've heard that if you listen and find value, It's a decent thing to donate, to not exploit us.
Yeah, and I never said that I wouldn't donate, but what I was saying was...
You haven't!
After you complain about people being underpaid for their labor, you've paid us zero dollars for 50 hours of labor.
I've been watching some videos on YouTube of you for the last few weeks, and then I decided to have a chat with you to find out what it's all about.
You're not going to get it.
You're not going to get it.
You're not going to get the irony.
I get it.
Maybe it's too late and you're too tired, but I think I'm pretty much done.
Okay.
But you want to look at your own behavior, not the behavior of abstract capitalists from your textbooks.
Just look in the mirror.
If you want to do decent things and you want to use moral judgments about others, the first thing you need to do, of course, is not lecture other people about your weight, but look down and see if you can still see your penis.
Well, I would say that...
That's the thing I would suggest.
Yeah, well I would say that I'm not kind of just reading it from textbooks.
I'm actually talking about what I observe and I wasn't lecturing you.
I just wanted to know whether you think that if the profit motive is the underlying motive of the free market, if there should be some morals and ethics and whether companies should make decisions I'm not going to get lectured about the ethics of underpaying people from somebody who's never paid me for the value that they've consumed.
I'm just going to move on to the next caller because it's too ridiculous.
So I appreciate the call.
It was a very enjoyable chat, but let's move on, Mike.
Alright, well up next is Chad.
Chad wrote in and said, As a current 25-year-old, I can often recall the commandment I was given as a child to respect my elders, often in less than polite tones.
Given that respect needs to be earned, I decided to take a look at what it is that my elders have left me.
The Greatest Generation, the Baby Booners, and Generation X, have left my generation, colon, a public education system at its all-time lowest that churns out students with no economically viable skills, a job market where it is less and less possible to easily hire and fire workers,
a healthcare system where they have passed the majority of their costs directly onto us, a college education system that seems entirely necessary to fill the economic void of public school, Unlimited access to debt with which to finance those expenses.
2.5 wars that have accomplished less than nothing.
An over-indebted economy that does not remotely resemble the economy of the 1990s and early 2000s.
You see how I might find it hard to respect those elders.
Is there a more rational way to allocate the moral responsibility and the economic consequences of those issues across the population?
Given that the baby boomers and Generation X will always outnumber my generation.
Do you think that the baby boomers and Generation X owe it to the young to accept these decreases in their government services in order to provide student debt relief for the young?
Put it more simply, given how much they have screwed us, don't they owe us?
That's from Chad.
Yeah.
I think Mike said 2.5 wars.
I think it's 2.75 wars, but...
It is.
Yeah, 2.75 wars, Mike.
My mistake.
Don't be misplacing.
I think I was counting Syria as a quarter of a war.
No, it's great to see that the guy who got Barack Obama, who got the Nobel Peace Prize, pretty much can't turn around without tripping over, invading some damn country.
All right, so Chad, was it Chad or Brad?
It's Chad.
Chad.
I knew it was some yuppie rhyme.
All right.
Just to mention up front, the note that you read, that was mine, and the $5 donation was also mine.
Oh, my bad.
I'm sorry then, Roberto.
Oh, did Mike look up the wrong email?
Yeah.
Looks like I looked up the wrong email.
Well, apologies to Robito.
Absolutely.
I'm glad I didn't push that.
Thank you so much.
Apologies to Robito.
Given how much they've screwed us, don't they owe us?
Is that...
Now, what do you mean by owe you?
Do you mean they should give you money back?
Yeah, that's kind of the question that I was kicking around.
The thought that I had is that they have benefited in ways that we cannot...
We can't take back the fact that they might have had 20 or 30 years worth of a much easier situation, much better job market, much lower housing prices, much cheaper education.
We can't take that back in time.
We can't reach back across the misty barriers of time and claw back the benefits.
That they've received while passing the costs on to us.
So there's kind of a limited amount that we can even attempt to claw back from...
Oh, you can.
Listen, you can.
I mean, in a state of system, you can because you're outvoted and outnumbered.
Yeah.
So that's not going to happen, right?
The only thing that we would possibly have the chance to do is stop them from taking money from us in the future.
How we would go about that, I don't know.
I don't know the answer to that question.
And I don't know that, I mean, trying to figure out how to get restitution from the great semi-fascistic parasite generation of the boomers, I think is, you're just not going to be able to get it.
You can't.
I mean, even to try is just a waste of time and effort.
It doesn't mean that we can't do anything about it.
It just means that trying to get the money back Is not going to happen.
At least not through the States, right?
Yeah.
And the reason this thought came up in the first place was as a result of the truth about Bernie Sanders' video that you did a while back.
And in it, there was a phrase you had said where you were saying that Bernie Sanders' plan is to We redistribute money from those who have made good decisions about their education to those who have made less good decisions.
I think you said, i.e., those with money to those without.
I was kind of trying to contemplate that, and I was wondering, is it fair to say that those Well,
they made good decisions for themselves in the moment.
I mean, it's great fun to get stuff from the government for free.
And most importantly, they avoided the social conflict of calling other people child-eating parasites and cannibals of the unborn.
You know, that can fuck up a dinner party right quick.
You know, like, oh, so you believe in old-age security or social security or old-age pensions or whatever.
Well, you realize there's no money there, so basically you just want to rip off my children because you like free stuff in the here and now, and...
You don't want to pay for your retirement, and you don't want to challenge the government for that.
And anybody who tried, and listen, man, I've got my battle scars, I've got my honorably acquired medals, and my burnt cigarette marks on the forearm from endless amounts of flak jacket-enabled moral and political skirmishing, that any time in the past where you would point out that there's no money in Social Security, we've paid into it!
No, you haven't.
What happened was you gave the government a whole bunch of money.
They used that money as collateral to borrow a whole lot more money to pay for a whole bunch of stuff so you didn't have to pay for it.
You know, they put the road system in, the interstate road system in.
I gave a whole speech about this in Philly one time.
They put the whole road system in, the interstate highway system in, in the 1950s under Eisenhower.
They're still paying for it.
They got all this shit for free.
And they never had to pay for it.
And so nobody wanted to bring that stuff up because it's uncomfortable.
Okay, well, if they can pull off this bullshit, in other words, if they can screw the young and rip off and pillage the young, and the young are like, sounds great.
I'm coming over for dinner.
Well, then they've got it all.
They have Stockholm Syndrome to the young, to the point where the young don't have any issues with them whatsoever.
They got all this free stuff from the government.
They piled all this debt on the young, the people who weren't even born.
And what price did they pay for it?
Zero.
Zero!
I mean, who wouldn't make that choice given that most people are amoral and go with the flow?
Who wouldn't make that choice?
Hey, lots of free stuff and no repercussions from those I've stolen from.
It's like saying to a cat burglar, listen, man, don't go steal from that jewelry store.
I mean, they've got some beautiful diamonds there, rubies, emeralds, tiger eye.
You've got beautiful stuff there, man, but you can't go and steal from it.
Do you know why?
Because if you steal from it, Then the police will never be interested in catching you.
You'll be able to sell this stuff on the open market and the jewelry store owner will give you a new car.
And the guy's going to be like, oh, what?
Wait, I steal from the store, I get to keep it all, I can sell it on the open market, I guarantee that the police will never ever try and catch me and the jewelry store owner will give me a free car?
Yeah, that's not all.
Can I tell you something else?
This is the real reason.
If that's not enough to make you not steal from this store, here's the real reason you should not steal from this store.
Because if you steal from the store, then anyone who criticizes you for being a thief will be shouted down as an immoral hater of the old and the poor and the helpless and the feeble and the sick and the infirm.
They will be verbally lynched and lambasted and everyone will hate them.
So if you steal and anyone criticizes you for stealing, other people will attack whoever criticizes you for stealing and make sure they can never show their face in honest and decent company again.
And that's the main reason you shouldn't steal.
It's not a very effective deterrent.
What?
What universe am I living in?
Isn't there supposed to...
Is there any deterrent?
Any deterrent whatsoever for me stealing?
Because all you're giving me is incentives to steal.
And you'll say, well...
Any disincentives?
I don't know.
Let's just say that if you steal now...
Right now, you've got a 2K PET that you can order for $3,000.
It doesn't even have a modem.
That's how slow the computers are and how bad the computers are.
But let's just say in the future that there'll be this interwebby connected neural net system of all things communicatory.
And, you know, a couple of jerks out there on the internet are going to start criticizing you and they won't be shut down by everyone.
They won't be shut down by the mainstream media and they won't be shut down by the newspapers and they won't be shut down by the magazines and they won't be shut down by the country club.
And they'll be able to talk to people and remind people that you guys were thieves and that's really bad.
And so there's that possibility that that might happen.
We obviously can't guarantee it because nobody can see the future.
But if that happens, there may be some mildly negative viewpoints of your thievery 30 or 40 years in the future.
Well, let's leave that store alone then, shall we?
That's the tough part is that no matter...
What you decide to do about it, you cannot remove the positive benefit.
At least after the financial crisis, at least if you commit some kind of fraud on Wall Street, they can claw back your bonus.
You know, there is no possibility of...
It's very...
Hang on, hang on, hang on.
It's very hard to prove any kind of fraud on Wall Street.
Occasionally a few people...
I know, I know.
I worked on Wall Street, believe me.
I know.
They're not clawing back anybody's bonuses.
That's a fake leaf, but that's, you know, kind of another subject entirely.
I mean, if they clawed back bonuses for fraud on Wall Street, wouldn't there be no Wall Street?
Anyway, that's a topic for another time.
Yeah.
Yeah.
So that kind of, I guess, that leads me, so, you know, there's no possibility of doing it through the government.
I think we're in agreement on that subject.
You know, that's purely a demographic question.
No, but there is something you can do.
Okay.
Do not love people more than they love you.
Do not love people more than they love you.
That is one of the ten commandments of rational self-knowledge and self-protection and virtue.
Do not subsidize people with the unearned affections of your heart.
Do not love people more than they loved you.
If your parents hit you, you're going to love somebody who hits you?
I don't know.
Try bringing that to a woman's shelter and saying, okay, well, your husband might have beat you up, but you've got to go back and love him because God and her...
Not going to happen.
Do not love people more than they love you.
When you were a child, Chad, did people say, we've really got to take on these teachers' unions because, man, these kids are getting a raw deal?
They did not.
Did anyone, when you were a kid, say, damn, we've got to do something about this national debt because we love our children and we don't want them burdened with that?
I think they might have said it, but they never did anything about it.
I remember something about George Bush saying no new taxes, something like that.
Oh, no, no.
I'm not talking about the politicians.
I'm talking about did the people say, did your family say, I've got to go out and protest this.
I mean, I know there's some good shit on TV tonight.
I've got to go out and protest this.
I've got to take a stand.
I've got to have those difficult conversations.
You know, your cousin who's on welfare, we've got to go shut that shit down.
Tell him to get the fuck off welfare and go and get a job because he's taken from your future.
And your aunt who's on social security, we got to tell her, listen, that's not your money.
There's no money.
And your second cousin who's on disability but really isn't that sick and doesn't really have a bad back.
We've all seen him lift pianos into his old house.
We got to go over and sit and say, listen, man, you got to cut this shit out.
You got to go back to work because we got kids coming and they're going to be paying for it.
Anybody having those difficult conversations in your family?
Anybody self-policing for the sake of protecting the future?
We used to be a species that would fight off tigers to save our young.
And now we won't even have uncomfortable conversations with the endless array of social parasites around us to save our young.
We used to care about our offspring.
We used to be wolves and now we're shit them and forget them rabbits.
Yeah, I mean, I didn't even come across the idea of having conversations like that until I discovered this show.
Because the idea...
The elderly...
Demand that the young go off to war, you see, to protect them.
Oh dear.
Is that little Austrian with the funny mustache and the really slick down hair who's going to be the future meme of six billion mistranslated YouTube videos?
Is that little Austrian causing a fuss over there in Europe?
Could that harm us at all, us old people?
Well, for heaven's sakes.
We have the right to demand and enforce and enslave the young through conscription to go out and get the shit blown out of them to protect us.
See, that's how the old people in general look at the young throughout history.
Cannon fodder and someone to wipe my ass out of guilt.
And so if the old people demand that the young people go to war to protect them, doesn't protect young people going to war because they get blown up.
If the old people demand that the young people go to war to protect the old people, then clearly we have generations who are more than willing to sacrifice each other for the sake of their own self-comfort and self-protection.
So if we go to old people and say, sorry!
There's no money in Social Security.
You can't have it.
You can't have what ain't there and you can't take it from the young because that's stealing and you all always told us that stealing was wrong.
Remember that time I took a quarter out of your purse to go and play Space Invaders down at the arcade?
You told me how bad that was, how wrong it was, that property is sacred, that you can't steal from other people?
Well, boomerang time, bitches.
Because that's the way it has to be.
In the past, the old people sent the young off to war.
Now, well, we just have to get those clawed cryptkeeper hands out of our wallets because we sure as shit went around when they maintained this stuff and refused to fight against it.
Yep.
Yeah, that...
I mean, I can definitely see that, you know, being a methodology that can work over the long term, it obviously, you know, is much less effective to help people today.
And it's obviously a methodology that gets more effective as it's practiced by more and more of the population and becomes more of a social norm.
But I certainly think that That's the best method that we, as citizens, not willing to initiate violence against one another, have for regulating one another's behavior.
Yeah, I mean, one of the basic covenants between the generations was for parents to say, I take care of you when you're young, you take care of me when I'm old.
Now, one of the reasons why old people love Social Security is that old people who are assholes to their kids don't have to worry about their kids not taking care of them because the government's going to do it.
You know, let's talk about the women marrying the government and that means they can treat men like shit because they don't need men to provide for them.
But the same thing is true with parents because parents now get their resources from the government.
When they get older, they don't have to be as nice to their kids.
They don't have to get as involved.
They don't have to be as good a parent.
In the same way that women don't have to be as good of wives, because they can just go marry the state and get welfare, child support, huge amounts of subsidized housing, and free government schools, and alimony, and child support, and Section 8 housing, and food stamps, and you name it, right?
They get all this shit from the government, so they don't have to be that nice to men.
And in the same way, old people can get their money from the government, don't need to be that nice to their kids.
And I think that's pretty much what's happened.
Yeah, we can fuck you over because I'm getting the money from the government, so why the hell should I care to protect you?
This is what's so incredibly frustrating about the boomers and the older people.
If you had parents who could have kept you free from Of a debilitating disease.
Simply by having a couple of difficult conversations.
Right?
If I have a couple of difficult conversations, you don't get multiple sclerosis.
And your parents refused to have those difficult conversations, and then you got multiple sclerosis, what would you think of them?
It would be terrible.
Holy shit, are you kidding me?
My health was less important to you than your own selfish need to avoid the discomfort of having a few difficult conversations?
Are you kidding me?
Where the hell did I even show up in your brain scans?
Intergenerational love fest, flatlined.
But that's the reality.
When this stuff started out, you know, in the 50s and 60s, or even back earlier on in the 40s, if you want to go truly old school...
Yeah, a couple of difficult conversations.
If millions of people or tens of millions of people had had those difficult conversations, could have stopped that shit right in their tracks.
Politicians like to stay in power.
If people had had those difficult conversations and said, look, if you support this shit, my kid's going to grow up broke.
It's not brain surgery.
We're not paying for all of this stuff.
We get all these free goodies.
We've got a giant welfare state plus a war in Vietnam that's gone on for 10 years.
And oh, look, our taxes are going down.
We all know what shit's going to happen.
They're piling up a massive amount of debt.
So we've got to stop this stuff.
We've got to go protest.
Get off your fucking asses.
Get a sign.
Do something.
Go have those difficult conversations with people.
And look!
No $200 trillion of unfunded liabilities for our kids.
Look!
Way better life for our kids.
And all we had to do was have a couple of difficult and uncomfortable conversations.
But no!
Can't do that!
Because that's uncomfortable.
You know what's uncomfortable?
$200 trillion of unfunded obligations.
You know what else is uncomfortable?
Really, really shitty schools.
Because when it became impossible to fire teachers in the 1960s, if parents had gone out and protested, then they would have retained that.
It still would have been a shitty system, but at least you could have fired the deadwood.
After the 1960s, it became functionally impossible to fire teachers.
Teachers, particularly in America, and therefore schools got shittery and shittery.
Now, I was lucky insofar as I had some fairly decent, usually older, hanging on by the skin of their teeth, gritting their teeth and surviving the socialist onslaught of incompetent toe morons who jumped into the school and displaced anybody with half a brain.
I had a couple of decent teachers left over from before.
But that is not the case for people who came after me.
Then all of the remotely decent teachers...
Had vanished and, you know, all these loathsome, fat, spotty, frizzy-haired idiots basically waffled in and started sucking the brain juice out of children for fun shits, giggles, and profits.
So if they'd had those conversations and said, no, we've got to allow teachers to be fired.
We're not doing this.
I'm going to go to those town meetings.
I'm going to talk to my relatives.
I'm going to talk to my friends.
I'm going to write some fucking letters so that parents can still be fired.
Teachers, sorry, can still be fired.
But they didn't.
In fact, anybody who suggested that got screamed down, don't you care about the kids?
Those fat people need summers off because it's hot work in those classrooms.
And so they didn't have those uncomfortable conversations.
And so kids got hit with the terminal disease of late statism, indebtedness, lack of economic opportunity, shitty education.
Why?
Because the boomers didn't want to have any uncomfortable conversations.
Because there were key parties to go to where you can screw each other's wives.
It's like late Roman shit, what went on in the 70s and 80s among people.
Just look at the ice storm.
Sorry, go ahead.
And it's inordinately the boomers that are the ones in the positions of most responsibility.
So if you look at the 2008 financial crisis, who held the senior positions in the banks?
The boomers.
Who held the positions in the government?
By and large, the boomers.
Who is in charge of just about every company in the United States, minus some of the tech companies?
The boomers.
Who's in charge of the...
Yeah.
Oh, by and large, the boomers.
The boomers.
Yeah.
And a Jew.
And one Jew, I think.
Yeah, one Jew.
But yeah, it's the boomers.
And these are the people who scream.
You know, there was...
They just scream at anybody who deviates from the general lefty paradigm.
And people put up with it.
I think that's beginning to change.
Like, human beings, like the planet as a whole, is kind of a self-correcting pendulum machine.
And I think that people are beginning to change in that regard.
Like, we put out some videos recently about race, and we've got another one in the cam, which we put out in a little while, about South Africa.
And, yeah, people seem to be vaguely willing to have a vaguely coherent conversation about the occasional truth.
But things are just becoming completely mad, right?
So I'll just give you a tiny example that I happened to notice today.
So there is a...
I think it's in Houston.
This was last night.
A sheriff's deputy was filling his car with gas.
He's a white guy.
And a black guy...
Walked up behind him, shot him in the back a couple of times, shot him in the head, killed him pretty much on the spot.
And now that he's been caught and there's a picture, they're referring to him as black.
Formally, despite the fact that he was clearly black in the surveillance video, they say he was dark-complexioned.
You know how every time they referred to Darren Wilson, they said he was a light-complexioned police officer.
And I think this stuff has just become so obvious.
And this is after a bunch of black activists called for the shooting of cops by blacks.
And this guy just went out and just shot him down.
And you couldn't even refer to an obviously black guy shooting a white guy.
You couldn't even refer to him as black.
Now that he's been apprehended, a few places are mentioning it.
But this game of Guess the Perp is just, again, it's completely obvious because anyone who points it out, oh my god, you're a racist, because they're looking for someone and saying what a skin color is might be kind of helpful.
You know, if they're trying to find me, bald and white might be helpful.
I can put on a hat, but I can't put on a skin in finding me.
So actually rather would people get killed than actually say the race of a perpetrator.
That's how reason and evidence and reality averse these goddamn boomers are.
Yeah, I mean, I was on CNN.com yesterday reading an article about the Virginia shooter.
His race not mentioned once in more than one article that I read.
But of course, you know, right next to, on the little menu with all the headlines, of course, you know, the Virginia shooting, not the top headline.
Top headline, you know, 16-year-old white kid at a prep school rapes some girl.
And gets convicted of, I forget what charge he got convicted of, but...
He was acquitted of the rape, and there was some lesser charge, which still carries some considerable jail time, because he says, and I think the woman agreed that he had consensual sex with a 15-year-old girl, not intercourse, but sex before intercourse.
And he was found guilty of something else, but not of rape itself.
And that's the big story, you see.
How does that overshadow a murder?
Well, no, the whole point is you're supposed to read that and not read about the execution of this cop who was unarmed insofar as he had no chance to pull out his weapon.
This is very cowardly, you know, shoot him in the back of the head stuff.
And so the whole point is you're supposed to be distracted by that because that reinforces the white evil narrative.
And it is unbelievably vicious.
And of course they're saying, well, you know, it's retaliatory killing for Zimmerman.
And it's just, I mean, it's nuts.
This guy's got two kids.
He's got two kids.
And this, of course, is the whole point.
Continue to destabilize the society until there's a collapse and then you get a socialist dictatorship or a communist dictatorship.
That's the whole plan.
That's the whole point.
It's been the plan and the point for over 90 years.
And it's, you know, one thing about communists and socialists, they sure play the long game.
Indeed.
So there was another subject that wasn't in my...
Question, but that I had written to Mike and said that I wanted to discuss.
It was a correction that I wanted to make to a video that you put out about YouTube comments.
This one was on the Great Depression.
Do you remember that video?
I've done a couple of videos on the Great Depression, including...
So this one was one of your more recent ones.
It was...
Somebody had made a comment about the Great Depression.
Being caused by a private debt bubble.
And you mentioned the 1918 depression, etc.
I think it was 20 to 21.
20 to 21, yeah.
So in that video, you had said that the Great Depression was not a private debt bubble and that it was caused by the Federal Reserve.
I know that's a statement that Ben Bernanke has made himself.
Ben Bernanke is not entirely correct on that assumption because what he's referring to in that instance when he talks about the money supply shrinking is actually M2 shrinking, which is not really something that the Federal Reserve has direct control over.
The Federal Reserve can adjust, can Expand and shrink the M0, the base money supply.
Sorry, this is a little technical and a little nerdy and wonkish.
Whereas the M1 and the M2, which includes savings and checking accounts, is something that's more under the control of the banking sector.
No, no, no, that's not correct.
That's not correct.
Because the Federal Reserve has significant control over interest rates, and interest rates have a huge amount to do with whether or not they get saved or spent.
When they crush interest rates down, then there's no point saving any money.
You might as well go and do something with it.
Right?
And so they kept interest rates very low throughout the 1920s.
And then when the crash happened, which was shortly before the crash, they were concerned about an overheated economy, jacked the interest rates up, which caused the crash, and then they kept them high.
So the idea that they don't have a massive...
It's like saying, well, you know, the tide goes in and out on its own.
It's like, well, there's that big blob of rock in the sky called the moon that seems to have quite an effect.
And the fact that they were just up and down like the Assyrian Empire...
As they say with the interest rates, that has a huge amount on saving versus spending.
No, that's true.
I mean, you know, any amount, any interest rate you're going to be charged as an individual is always a spread over the federal funds rate.
So yeah, that does have an impact on individuals' decision to borrow or repay.
But when your economy as a whole When your private debt reaches a certain level of GDP, in 1929-1930, the US private debt hit 100% of GDP,
which typically, they've done economic studies that have shown that recessions tend to be caused by interest payments exceeding 10% of GDP, meaning that interest payments are an excessive burden on the economy.
Even if the Federal Reserve in that case, when you have private debt over 100% of GDP, you can drop the federal funds rate down to zero.
And if you don't get some kind of deleveraging in the private debt markets, people still aren't going to borrow.
You're seeing that today.
But hang on, hang on.
Why did private debt reach 100% of GDP? Because...
Private debt will continue to go up until you kick off a deleveraging.
No, no, that's saying what happens afterwards.
So, for instance, do you think that investors suddenly wanted to make money in the 1920s by going into debt and they didn't in the 1820s or the 1860s or anything?
What changed in the 1920s that people were so willing to go into debt?
I mean, you're going to say the institution of the Federal Reserve and fiat money.
The currency manipulation of the interest rates and so on, that changes people's behavior as a whole.
People can just wake up one day and say, hey, I think I'm going to go completely insane and go massively into debt.
There was a very few people, of course, understood the Federal Reserve at the time.
There are more people writing about it now.
And of course, that started with Rothbard and even Mises and Hayek and so on in the 50s and 60s.
But in the 1920s, the institution was so new, 10, 10 years plus old, that most of the investors didn't take it into account when looking at their investment decisions.
Now investors are more wise to the ways of the Fed and they take it into account when making their investment decisions.
But back in the 20s, you had a whole bunch of investors who'd grown up without the Fed and weren't used to looking at it as closely when it came to figuring out what their investments are going to be like.
And so there was this theory of just, you know, mad prosperity, mad money.
And it was considered to be perfectly sane.
It was considered to be the new normal.
And people went into debt for that.
But, you know, if people are dialing up and down the gravity, it's kind of tough for the gymnast to complete their routine without smashing their face into a horse.
Well, and a lot of people then and even now, even the current group of Federal Reserve economists are working off of models where debt levels are irrelevant.
The bulk of macroeconomists have a model of the economy whereby debt is just a redistribution.
So if I borrow $100, From a bank, it's because you've deposited $100, so your $100 is being lent to me, so there's no kind of increase in the total capacity to spend in the economy.
There's no sort of leveraging up an increase in demand overall in the economy.
That model's not correct.
But that's not how it works.
They just make the money up when you borrow.
Exactly.
When a bank lends you $100, they put that money straight into your account.
Asset, which is the loan, and a liability, which is the deposit.
The idea that they need reserves to lend is a story that a lot of people, that's how they think banks work, but that's not how banks work.
Having worked in a bank, I know more or less how banks work, and that's not at all how they...
People mistake the bank for themselves because they say, well, I put money in and then I take the money out, but I can't just magically put money in.
I can't write $100 just on the envelope, have it in and then take out $100 real dollars, but that's how the banks work.
The only two segments of the economy that have the capacity to create money are the bank and the government.
The bank can create it through lending and the government can create it through running a deficit.
Well, and the bank can only do it because the governments allow them to.
Because if you and I try to do that, it's called counterfeiting.
We go to jail.
But the big-buddy banksters, they can do it.
They're just an arm of the bank.
Like, I always get these comments that, the Fed is a private institution.
Bullshit.
Go try and compete with it.
You know what's a private institution?
A pizzeria.
And then if I go and open up a pizzeria, nobody throws me in jail.
You think the Federal Reserve is a private institution?
Go and try and compete with it.
Go create your own currency.
People get thrown in jail for that shit.
The idea that it's a private...
Okay, the profits are privatized, but so what?
Most of the profits in government are privatized, too, and that the people you pay for bullshit government programs, they get to take their money home and put it in their bank account.
So that's privatized profit, too.
There's lots of ways in which the government's profits get privatized, but the idea that the Federal Reserve is a private institution, holy crap!
I mean, it's that the head is appointed by the government.
That's not the case for your local pizzeria, for God's sakes.
Ugh.
Yeah.
So what I was referring to when it comes to the Great Depression, and I sent Mike a really good packet of information that comes from Bridgewater Associates.
They're the biggest macro hedge fund in the world.
They've got a really nice way of sort of studying and explaining the The macro economy, you know, but what really kicked off the Great Depression and made it, you know, substantially worse than the 1920 to 21 depression was the deleveraging that got set off by the high levels of debt.
So, you know, you've talked quite a few times about deflation.
I don't agree.
I don't agree.
If there had been a correction...
Then it wouldn't have gone on for 13 years and ended in a world war.
If a correction had been allowed to occur, if the bubble had been allowed to pop and collapse, as it did in 1920, it would not have lasted for 13 years and ended in a world war.
The cause of the depression was ever escalating massive socialist programs An ever-escalating and massive intervention by government in the creation of the Job Corps.
Massive tariff walls that went up around the world.
Huge amounts of government intervention and spending and thumb-jiggery of all the precious capital that had been saved after World War I and had survived The Great Crash and it survived the Civil War.
All that capital was ripped apart by the government, spread out to pay off its political friends and destroyed.
And massive amounts of interference in free trade that occurred throughout FDR's first two terms and the tariff walls that went up all around Europe had huge amounts to do with not only the continuing and crushing Great Depression, but its escalation into the conflict which killed 40 plus million people.
I mean, that certainly made the crisis worse than it might have otherwise been or maybe had to be.
But it's impossible that where the private sector was at in 1930 that they didn't have to delever.
I mean, they absolutely did.
When you're running a debt balance at 100% I'm looking at a chart right now.
In 1920, basically what that was was a business cycle recession, not a balance sheet recession.
The packet I sent you from Bridgewater goes into pretty good detail on the difference.
One is a fluctuation in the short-term debt cycle, one is a fluctuation in the cyclical long-term debt cycle, of which you've had two downturns, the Great Depression in 2008.
But the difference in scale, so in 1920, the total private non-financial debt in the United States was about 50% of GDP. By 1933, at the peak, and this is not because the economy borrowed more money after 1930, but because you had deflation and GDP went down, it peaked at 125% of GDP. So that's a delta 75%.
It more than doubled over the course of that period.
I think it's overcomplicating what most people probably want to pursue and understand.
I think to sum it up, the basic reality is that the government intervention causes massive and ever-increasing distortions, misallocations of resources, right?
So the government keeping interest rates low and forcing banks to lend to underqualified people stimulated a great housing boom.
More houses were being built than people could profitably afford to pay for, right?
So this massive misallocation in resources is the result of huge amounts of government interventions in the economy.
Now, it certainly is true that in a free market economy, truly free economy, there will be continual misallocations of capital, for sure.
I mean, a misallocation of capital is, hey, I really thought that lightning thunder, the pony fourth from the left, was going to come in on the race at 5 o'clock, but it didn't.
So I put my bed in and I lost my money.
That's, quote, a misallocation of capital.
People are going to lose money on a roller coaster.
My wallet flew out of my...
I didn't even notice, right?
There are going to be...
People are going to start restaurants that nobody wants to go to.
There's going to be misallocations of capital going on all the time, but they're going to be dispersed and they're going to kind of even out as a whole.
There won't be these giant...
There's catastrophes that occur in the economy.
And so it doesn't really matter in a sense like, oh, was it this or that particular misallocation that was occurring?
That may be interesting for people who are interested in particular details.
But the reality is that just government keeps making everyone put their eggs in baskets with no holes, except it takes a long time for them to fall.
And so this continual misallocation that comes from the Federal Reserve inflating the money supply and jiggering around with interest rates and the government forcing banks to do this and preventing them from doing that, that creates massive misallocations of capital, which can only be sustained for so long.
And when the inevitable reallocation happens, then if you let it happen slowly, then it's god-awful.
And if you let it happen quick, it's god-awful, but at least it's over soon.
And so that is...
I'll just sort of read what...
What Bernanke said.
He said, So what he means by that is that the Federal Reserve was originally supposed to be the lender of last resort, like for banks that ran out of money.
At least that's how it was sold.
It was all about just enriching the banksters.
But it was supposed to be this lender of last resort.
That became supplanted as Federal Deposit Insurance Corporation came into being and so on.
So it no longer had any point as far as that went.
So he says, the problem within the Fed was largely doctrinal.
Fed officials appeared to subscribe to Treasury Secretary Andrew Mellon's infamous liquidation thesis that weeding out, quote, weak bank was a harsh but necessary prerequisite to the recovery of the banking sector.
Moreover, most of the failing banks were small banks as opposed to what we would now call money center banks and not members of the Federal Reserve System.
Thus, the Fed saw no particular need to try to stem the panics.
At the same time, the large banks, which would have intervened before the founding of the Fed, felt that protecting their smaller brethren was no longer their responsibility.
Indeed, since the large banks felt confident that the Fed would protect them if necessary, the weeding out of small competitors was a positive good from their point of view.
In short, according to Friedman and Schwartz, because of institutional changes and misguided doctrines, the banking panics of the Great Contraction Because it's all solved.
There's no more business cycles.
Except for the 90s and the 08.
It's so sad.
Like...
We didn't even have 10 years between a business cycle from the late 90s to 2007, 2008.
This is how pathetic this system has become.
That this thing which was supposed to eliminate the once-in-a-generation business cycles that used to happen in the past, now we can't even go 10 years without some massive 40% wipeout of the entire economy's wealth.
Unbelievable crash that now seems to be lasting forever.
Like, we're coming up to 8-9 years.
Of the Great Recession.
And, of course, the Fed is completely out of ammo.
They can't lower interest rates below zero.
I mean, they can pump more money into the economy, but nobody believes that's going to work.
It's like blowing air into a tiny dinghy on the Titanic.
It's not even going to save you.
And this is just, from a larger perspective, this is how pathetic statism has become, to the point where they say, well, you know, we need the Federal Reserve for economic stability, and then things go completely insane, and now they're like, well, without the Fed, it'd be even worse.
It's like, oh my god, how much longer are we going to leave this junk?
Yeah, we're undoubtedly in a much worse position now than we were shortly after the financial crisis, in terms of What kind of ammo does the Fed have to remedy this crisis?
And the justifications for keeping the interest rate down, I heard you talk about this on the video you did on the stock market crash, the 1,000-point Dow Day.
The justification for why should the interest rate be so low is to stimulate capital investment.
That hasn't happened.
Not only has it not happened, but CapEx numbers for companies have fallen off the face of the earth.
Well, of course they have because the Fed started paying interest on its accounts.
So if the Fed's going to pay interest on its accounts and you can borrow money at 0% interest and then get a couple of points from the Fed, just do that.
I mean, it's free money with no risk.
Business is really risky.
You invest in a whole bunch of...
Look at the Apple Watch, right?
Business is really risky.
You invest in stuff and a lot of times it doesn't really work out.
It's so much easier to borrow money at 0%, park it in some account, get 2% or 3% and call yourself a business genius.
But that only benefits really big companies, of course, right?
Which is why they like it.
It's why they donate to everyone.
Just pay yourself dividends on all the companies you own right now while you're taking advantage of four points on a private company with four or five times debt to EBITDA. And no business is going to do any substantial investments until they know what the fuck is going to happen with the election.
I mean, literally, America is now facing banana republic-style regime uncertainty.
You know, if Bernie Sanders versus Donald Trump, I mean, how on earth are you supposed to make any business decisions that involve tens or hundreds of millions of dollars when you have this degree of polarization and regime uncertainty?
Compared to the differences in the Republicans and the Democrats in, say, the 1950s, They are miles, if not poles, apart now.
And so nobody has a freaking clue what the business environment is going to be like in a year or two.
And even if they like Donald Trump, who the hell knows if he's going to keep his promises when he gets in.
He's certainly not going to write any big contracts that he's going to be personally liable for if he doesn't.
So, and who knows if he's going to be kept in?
And who knows even if he gets his stuff achieved, if he's going to get out, he's going to be kicked out and determined some lunatic is going to undo all of this.
And so the, well, you know, businesses are sitting on a lot of money.
It's like, well, yeah, absolutely.
You sit on your 10 goods when there's a hurricane going over.
Well, statistically, they're actually not.
Their cash balances have gone up over the past few years, but so have their debt numbers.
Their net debt numbers are bigger now.
That's debt minus cash.
Their net debt numbers now are bigger than they were in 2008.
So it isn't true to say that businesses are sitting on this war chest of cash.
That was true in 2008.
It's not true now.
Hmm.
No, that's good.
I wasn't aware that their debt levels had gone up that much.
And I assume that's because they can borrow so cheaply that it's not worth spending their own money.
But if interest rates go up, then it will be cheaper for them to spend their own money than to borrow.
But of course, if they're already in debt, they won't be able to spend much because they'll have to pay their debt back at high interest rates.
Yeah, a lot of debt has been added to companies that has not gone into increasing their productive capacity.
So they borrowed to finance, you know, Bullshit transactions.
They borrowed to finance share buybacks and they borrowed to finance dividends.
None of which increase your capacity to pay back your debt in the future.
And none of which benefits the workers or the rest of the economy.
That benefits the shareholders and the rich.
My blood pressure went up about 20 points listening to the call before this.
Just banging my head against the wall trying to say, you know, profits take into account bonuses and wages.
It's already taken into account.
How many times did I have to make that point?
I just, I gotta tell you, I mean, I just...
I feel like a black guy being lectured to about the black experience by a white person who's grown up only around white people and has never actually spoken to a black person before.
It's just between you and me.
It's just madness when some academic being paid by the government and protected by the government is telling me all about the free market while having not one first clue about business and having never ever talked to a business person.
That is just...
I mean, that's a jaw-dropping amount of arrogance that...
I mean, I would not go and lecture Richard Dawkins about biology.
Like, I just wouldn't.
I know a little bit about biology, but I think he's pretty much a really good expert, and I just wouldn't do it.
I'm not going to go up to Stephen Hawking and sweetly whisper into his ear everything that I think about his physics theories.
It's like, okay, I'll be quiet and listen, because you're an expert.
And anyway, I just...
And they don't even know because it seems to make sense and they're surrounded by the echo chambers and the books all agree with them and the socialists they're surrounded by all agree with them and I hope he doesn't teach a lot of kids.
Anyway, go ahead.
If you were running a company and you were making a profit and you decided to stick all of your profit into your company's bank account, I mean, first of all, your shareholders would go math.
They'd say, what the hell are you doing getting 2% on our cash when we could get...
You know, 15, 20 percent, if we invest that cash, you would also get bought out.
That's what companies that build up large cash balances get bought out by, you know, corporate raiders, private equity firms, bigger companies in their space.
You know, building a giant cash war chest is a fantastic way to no longer have a job as a CEO. Well, because, of course, the corporate raiders go to all the investors and they say, this guy is only getting you 2 percent.
On $50 million, we'll buy this out, we'll invest it in our historical returns of, as you say, being 10%, 15%, 20%.
So do you want to make 2% or 10 times that?
You vote at the next shareholders meeting and next thing you know, CEO's out.
And the other thing too is because everybody knows if you just stick the money in the bank account, you're not investing in increasing worker productivity.
If anyone else in your business decides to do that, you're going to be out-competed and toast within a couple of years.
If you want to run your business at breakeven every year so that you can pay your employees a lot, you're going to get hit by the business cycle and your business will not exist five years later.
You could ask your employees, would you rather have had A slightly higher wage now for the last five years, or would you rather have a job for the next 10 years?
Oh, like that complete ass clown who gave all of his employees $70,000 a year and was living out of his garage in a couple of months without any money left.
Yeah, and to suggest...
Just from a pure accounting basis, if you're going to run no profit every year, that means no investment.
That means those people in India are going to die from malaria or die from some kind of easily preventable disease because there's no more new drugs.
There's no innovation.
There's no technologies.
There's no...
There is a segment of what he was asking about, is there a moral and ethical thing?
There's a segment of the economy that deals with that.
It's called non-profit business.
It's called charity.
And charity requires profit because people have to have some excess capital in order to donate to charity.
So if you're making a lot of money and paying people money and you're contributing to charity because if nobody's making any money, there's no money available for charity.
And the other thing is that the textile industry is the ass of industrial industry as it is.
The textile industry what?
It's the ass of industry.
It's the worst industry out there.
It goes to the bottom of the barrel.
It's the lowest tech industry.
It's where Wait, are you saying I should cover my ass with something?
Sorry, I'm just not following.
I'm not thinking about my butt cheeks.
Yeah, it's the low rent stuff, right?
I mean, because the people in India and China that are working in textile mills, their option aside from textile mills is subsistence farming.
So for them, actually working in a textile mill for $2 a day or whatever it is, is better than subsistence farming.
These people send their children off to work in factories miles away from where they live.
Because it's the possibility of a better life.
I think to just say, I watched a documentary on the fashion industry, and oh, it looks terrible.
You know, I mean, I did some work for clients that made denim in China.
And the problem that they were having with making their denim in China is that the workers were now demanding 10 times the wages that they were getting five years ago.
This was a couple years ago.
You know, the cost of living went up in China and the workers benefited tremendously from even these Wages that most people in the UK and most people in the United States would bitch non-stop about.
But they were very happy to do the work.
Now, is it the greatest situation for them?
No.
It may be the greatest possible situation for them, all other things being equal.
It's the greatest amongst their alternatives.
And the other thing that I don't think you mentioned, but kind of alluded to, but people's economic value is not independent of what task they're doing.
Albert Einstein pushing a shovel is not worth what Albert Einstein in a lab is worth.
So if there's a smart person in a factory in India, their economic value still depends on what they're doing.
Well, yes, except, of course, if there's a smart person in the factory, what you want to do is promote them to a position of greater responsibility so that you can get more economic value out of them.
Yeah, exactly.
Sorry to interrupt, but there's one other thing I wanted to mention since we blew past it and I sort of ran out of...
Will to continue the conversation, which I'm so glad the guy called in.
It was a great chat.
But when he was talking about fair trade, and fair trade is when you overpay because you want the workers to make more when it comes to something like coffee.
Coffee is a big example.
You've probably seen this in Starbucks and other places.
Fair trade coffee.
Well, there's no such thing as a free lunch.
Fair trade coffee, and I'm just going to touch on this very briefly because it's not that interesting to a lot of people, but fair trade has its problems.
So there's a number of things.
Of course, if you overpay people or pay more than the market will bear for coffee, what happens?
Well, a lot more people want to get into coffee, but you can't pay everyone more.
So you get a lot of people who come into the coffee industry.
And this, of course, causes extra despoilation of land because you plow into land, you get rid of parts of the rainforest that precious animals need to live, especially my daughter's favorite brightly colored toads and stuff.
And so you just spoil the natural environment.
More people get drawn into doing this kind of business.
But the problem is, of course, that there's only a certain amount of demand for coffee.
Right?
I mean, I don't know about you.
I can't drink more than 19 or 20 cups an hour.
So there's a certain amount of just, you know, and that's when I'm just sitting directly on the toilet with an IV tube straight up my ass.
But...
There's only a certain amount of demand for coffee and so what happens is if you pay a whole bunch of people fair trade money, you pay them excess, what happens is the poorer farmers who are not part of that deal Get paid less because more people are buying the fair trade coffee, which means they're not buying the other non-fair trade coffee, which means that the poorer farmers end up making less because it just displaces the other stuff that they would have bought.
So there's environmental degradation, there's a misallocation of resources because more people go into the coffee industry than is sustainable.
And there is harm to the poorer coffee workers who otherwise would have received a better income if all the money wasn't flowing and resources weren't flowing into the fair trade deals.
There's also a fair amount of corruption and lots of other problems with it.
So I just want to point out that fair trade is not one of these, you know, glowing stairway to heaven for all the workers in the world, but has significant amounts of problems with it, too.
Another thing that the arguments that he was making didn't address is that when the costs go down, so the cost of your pair of Nikes goes down, that is a benefit for consumers of the product.
So if you care about poor people in the UK, wanting the cost of their goods to go up doesn't do them a whole lot of good.
Independent of their wages going up.
So yeah, it's a zero-sum game.
In fact, it's a negative-sum game.
You can't point only to the costs of the lifestyle of the poor person in India and China.
Most of the textile stuff has moved out of China and has gone to...
Other places in Southeast Asia, like Thailand, Bangladesh, other poorer countries.
But why is it going out of China and into other countries in Southeast Asia?
It's because China has used the benefits that it got from those textile jobs to kind of climb up a rung on the economic ladder and is now producing better, more complicated stuff that...
The iPhones and stuff, right?
You know, chances at a better life.
No, that's a very good point.
And again, this...
I don't know.
I don't want to bitch about this guy, but just so many times, you know, I feel like put forward some very compelling arguments and then people just repeat the same thing they did at the beginning as if I hadn't said anything.
It's kind of weird.
I feel like, you know, is my mic on?
I mean, they're just seeing me making funny faces.
I mean, I don't know if they actually hear it.
There's this weird, like, conflation in everyone I hear talk about business that doesn't have an education between CEOs and shareholders.
Somehow, CEOs have power independent of shareholders.
Yeah, you serve by the pleasure of the shareholders.
That's about it.
They get fired, and they are all the time, by shareholders.
Who are shareholders?
For the most part in the United States, they're hedge funds, mutual funds, and mutual funds means everybody.
Everybody who has a 401k typically is a shareholder in public companies.
So to say that somehow the CEOs are making these decisions, that's not the case.
And the other thing is that shareholders put money up front to start a business.
So if you're not going to run the business out of profit, how do they ever get paid back?
They're just supposed to hand their money over to somebody and never see a return on it?
That doesn't make any sense.
Well, profit is a measure of preference.
That's all.
To say that there should be no such thing as profit is to say that there should be no such thing as preference, because profit is how you measure preference.
Like the other day, I went out and I bought a little e-reader.
And I think it was 90 bucks or something and the $90 I spent on the e-reader was exactly what I wanted to do with that $90.
That's how you could measure the preference, my preference.
I mean, because if I could get everything for free, like most people, I'd order a whole bunch more than I actually needed just in case, right?
And so it's simply a measure of preference and it's a reminder that human desires are infinite and resources are finite.
And we have to have some way of organizing Which resources get applied to which preferences?
And since there's no objective thing called value, It has to be a subjective bidding war to figure out how our scarce resources should be allocated to satisfy human preferences.
There's no other way to do it other than bullshit central planning, which is just corruption, lies, and economic catastrophe and collapse.
So this idea where we shouldn't have profit, profit is the only way that we can measure whether our scarce resources are being applied to make people the happiest.
It is a measure of It is a measure of satisfaction.
It is a measure of preference.
And to say we should not have profit is to say we should scrub the concept of happiness in the world, we should scrub the concept of preference from the world, and we should all be undifferentiated blobs of economic nonsense.
And that's just not how human beings work, especially because the only reason we got here is because evolution and evolution is fairly strict in terms of preference and benefit.
Well, there is also a big conflation between the existing educational system and some kind of free market.
Like if you drop out of school and you don't have a high school diploma or you don't have a college degree, that you don't have any qualifications.
So many of those systems, like you've mentioned before, are done for completely non-objective reasons.
They're political reasons.
Non-discrimination, subsidies for...
All kinds of different...
Things that are just barriers to, you know, kids who are from low-income areas being able to get good positions just by virtue of their raw intellectual horsepower.
Oh, man.
I mean, don't get me started on college.
College used to be a way of drawing intelligent people into the system.
You know, hey, you're really smart.
You're a great communicator.
So you know what we're going to do?
We're going to give you a great job with Three or four months off in the summer.
You're only going to have to work like five hours a week.
You can get sabbaticals every couple of years.
We'll send you to beautiful conferences and sun-drenched beaches and all that sort of shit.
Just don't criticize the system.
Right?
That's how you drew the smart people into the sticky web of state benefits.
And now there's very few state benefits left to give.
So all you're doing is you're burdening them with debt so they can't question the system.
But it's just a way of drawing people who are smart but not too smart.
Because two-spot people get the game, right?
It's a nice net transfer from the young to the old.
Sorry?
I said it's a nice net transfer from the young to the old because the young are borrowing money to funnel it to the, by and large, older professors and administrators.
Right.
Right.
And it's a way of, like unemployment insurance and welfare, it's a way of hiding the massive glaring defects of the system by giving people money that doesn't exist so that they won't clamor for change.
In the way that the Saudi royal family pays men under 30 with the oil money not to work and not to riot, you know, the law schools and graduate schools and everything else, I mean, you know, my first year of college was 2008, so...
I entered college under one assumption and left it under another in terms of how the economy was going to look.
And I was graduating right around the time that significant percentages of my classmates were going to law school because they had no idea what the hell else to do with themselves.
Not because the country needs another lawyer.
But because, hey, what else am I going to do with myself until the economy gets better?
Might as well go get a JD and learn how to sue people.
And now there's no jobs even for them.
Okay, but listen, man, it's a great chat.
I'm sure we could chat online, but I'm going to close the show down because otherwise my bladder is going to do a tiny supernova in my pants.
So thanks so much for calling in.
Great questions.
You're certainly welcome back anytime.
And again, apologies to Rubito for talking about the donation.
We looked that up wrong, but I think that the point still stands.
So again, thank you so much.
Sorry, everybody.
I'm sorry?
Instead of five, it was zero.
Sorry, everybody.
No problem.
So I guess the point stands even more.
Don't exploit your workers.
But be sure to consume their resources without paying.
So yeah, freedomainradio.com slash donate.
Don't end up like Robito.
Be sure to call in and tell me about exploitation without actually having exploited me.
That would be great.
So freedomainradio.com slash donate.
Thank you everyone so much for watching and listening as always.
