Knowledge Fight Interactive Search Tool

All Episodes

Previous Next

Dec. 6, 2017 - Freedomain Radio - Stefan Molyneux

01:09:04

3922 Stolen History | Tom Woods and Stefan Molyneux

Large

Audio Only |

Scroll

Time	Text
	Hi everybody, it's Stefan Molyneux from Free Domain Radio.
	We are going into the woods with Dr.
	Tom Woods, a senior fellow at the Mises Institute and the host of the aptly named Tom Woods Show.
	Dr. Woods is a New York Times bestselling author, has published 12...
	I guess after the number of disciples, including the most recently Real Dissent, A Libertarian Sets Fire to the Index Card of Allowable Opinion, Rollback Repealing Big Government Before the Coming Fiscal Collapse, and Nullification How to Resist Federal Tyranny in the 21st Century.
	Please, please check out tomwoods.com.
	We'll put links to the books below and twitter.com forward slash Thomas E. Woods.
	Tom, thanks so much for taking the time today.
	Glad to be here.
	Thanks for having me again.
	So we're going to have what is colloquially known as a stitch and bitch.
	And what that means is that we're going to sit around and complain about all of the conversations we've had to have repetitively over the years, all the way from Bastiat and indeed back to Aristotle onwards, about common fallacies, misconceptions, lies, misunderstandings, confusion, and the whole mosquito cloud of annoying misunderstandings, confusion, and the whole mosquito cloud of annoying rhetoric that surrounds basic questions of virtue, economics, and free markets.
	So we did put together a list of the ones that give us those Eddie Murphy-style facial tics whenever they show up in our lives.
	This is going to be very useful to people because I guarantee you, if...
	If you are involved in these conversations for freedom and voluntarism, property rights and non-aggression principle, you're going to get these questions quite a lot.
	So you may not be able to entertain them.
	You may not be able to answer them as rantingly as we're about to, but I think there's going to be really good information in there.
	So what's your biggest one, Tom?
	The one that's just like, that makes you lose the will to live or gain the urge to punch when it comes up yet again?
	Well, these days, with socialism on the rise in terms of people's allegiances, we see a lot of young people increasingly having favorable views of socialism and even calling themselves socialists.
	Well, the criticisms of capitalism are just everywhere.
	It's the same, as you said, the same darn ones over and over again, same ones from 10 years ago, 20 years ago, 30 years ago, just more intense.
	And I think what they Generally boiled down to is, you stupid rubes who believe in capitalism don't understand that it's because of capitalism that people are poor, that incomes are low, that the working class struggles under difficult conditions.
	And of course, if we had socialism, we wouldn't have these things.
	And by socialism, they basically mean A system that I would like to see.
	It's very rarely the mechanism.
	Well, how would it work out? What exactly would be steps one, two, and three?
	They want to go to the concluding step, which is everybody's wealthy and happy.
	Well, I also want everybody to be wealthy and happy, but I want to think about it rationally.
	So for example, let's break this down.
	What I often say in my public talks is that the standard view most people have is that if it weren't for the state and therefore some form of socialism, Then, you know, your children would be working in mines for 10 cents an hour, getting their limbs blown off or our, you know, our televisions would be exploding and, you know, our toasters, we'd be electrocuted instantly when we touch them.
	You'd pretend on the tap and like virulent medieval brown sludge would come out that would come up and attack you like some green tentacle.
	Yeah. And so thankfully, we realized that a better system is to have the state in charge and all that.
	All right. So, you know what?
	I like to start with the hardest one there is.
	Let's start with the most difficult objection there is.
	And that'll be people say, look, I know when I was in seventh grade, I know the textbook had pictures of kids working.
	I know that was there.
	And I know that we had capitalism at that time.
	Therefore, capitalism causes kids to be working.
	And Therefore, we need government to stop the kids from working.
	Every single aspect of that understanding is wrong and destructive.
	So first of all, it's not like kids were all just skipping through meadows all the time and then suddenly capitalism came along and we said, all right, kids, off to the mines.
	This has been part of human existence since the beginning of time for the simple reason that we are not born into wealth.
	We're born into poverty.
	The civilizations of the world were born into poverty and they had to figure out how to create wealth.
	And when you have an extremely primitive economy, Where everything is made by hand or only with the most primitive machines.
	You need all the manpower and the labor hours you can possibly exert just to make life remotely livable so people can barely survive.
	It's not like we're saying, hey, you kids are just playing over there in the corner.
	That's a waste of time.
	Let's get you to work.
	It's that even the World Health Organization has looked into why do children work?
	And the answer is because they would starve otherwise.
	The family would starve otherwise.
	So it's not that we're cheering on kids working.
	It's that whenever the West tries to bully third world countries into abolishing child labor, the result is never now the kids are back to skipping in Meadows.
	It's now the kids are prostitutes or they're dead.
	Those are the choices.
	And so that's why the leftist worldview is so utterly unhelpful, that what's standing between us and a perfect world is just institutional barriers.
	No, what's standing between us and a perfect world is reality, is the hard work involved in creating wealth.
	So in other words, where did child labor really wind up going?
	It went away not because we intervened in capitalism and get rid of it.
	By the time they tried to get rid of it, it was mostly gone already anyway.
	The reason we get rid of it is that the economy gets more productive.
	Instead of producing one widget an hour, you can produce 50,000 widgets an hour.
	So now you don't need as many people producing widgets.
	Now you can get widgets way, way, way cheaper because now you've got a huge abundance of them.
	Competition pushes their prices down.
	So now your dollar extends farther.
	And so you don't need to send your kid off to the mine With a heavy heart just because you don't want them to die.
	You don't have to do that anymore because capitalism has created enough wealth for you to opt not to do that.
	That is the only way you're going to ever get rid of child labor.
	If you just simply pass a law against it, this would be like going to Bangladesh and saying, we're going to pass a law against any job that pays less than $100 an hour.
	You would kill everybody.
	I mean, I know it's desirable to have everybody earn more than $100 an hour, but just passing a law is the lowest form of human activity.
	Actually trying to ameliorate the conditions that lead to the problem in the first place is what capitalism has been all about.
	This is a very interesting phenomenon, because when you look at the Middle Ages, the infant mortality rate was staggering, like unbelievably high.
	I mean, basically, it seems like half of Europe got its crop fertility from decomposing baby bodies, because kids just dropped like flies, they'd be buried.
	And when you see kids alive but working in factories, alive but working in mines, if you compare them to now, and this is one of the great fallacies, is that everyone looks back at the past and says, well, compared to now...
	It was terrible. But that's not what you compare the past to.
	You compare the past to The past!
	You compare the past to where it came from.
	Where it came from was infant mortality, but the infant mortality was way out in the countryside where most of the writers, the intellectuals, the aristocrats, they didn't go.
	And so when the proletariat, so to speak, came to the cities and the kids were able to get jobs, they were able to earn enough to actually survive, which is why everyone...
	I mean, if the country was so great, why the hell did anyone ever come to the city at all?
	I mean, it would make no sense. Hey, feel like going to hell and...
	Bathing your face in lava?
	Well, no, actually not so much.
	So people came to the city because it was way better than the country.
	Now, it's so funny to me that the left, in a sense, would rather the children be dead than have jobs.
	Because actually, that's a fairly apt description of the left in many ways.
	I'd rather die than get a job if you're on the left for a lot of these guys.
	And the last thing I wanted to mention as well is that the best way...
	To eliminate child labor is to have a complex enough economy that you need a lot of human capital to be profitable.
	And that way, what you do, like on a farm, I mean, if you've ever worked on a farm or worked in manual labor, it's really brain dead.
	I mean, I don't know how people do it these days.
	I guess with headphones and all that, you can listen to stuff.
	But it's a lot of brain dead labor that I did when I was a kid and all that.
	And you can have a kid go out there and do brain-dead labor, but if economic value requires sophistication, intelligence, human capital, then you make a lot more money by putting your kids in school than by putting them to work.
	So it's just a tipping point.
	The more complex the economy becomes, the more human capital becomes valuable, then the more it's a race to educate your kids rather than give them experience, you know, pounding nails into wood.
	And really, it just frustrates me no end that people have this Idiot reductionist view of saying, well, kids used to work, now they don't, therefore everything to do with the past was terrible.
	That's like saying, I'm a giant because I'm taller than I was when I was five.
	It's like, no, that's not how you imagine things.
	I'm so glad you said all this, and in particular that point about...
	The proper comparison.
	Yes, obviously, if we look back to the 18th or 19th centuries, people are living in conditions we would never choose for ourselves.
	But the point is, first of all, it's not a choice.
	These are the constraints imposed by scarcity and reality as an economy is growing and becoming productive.
	But also, again, we should compare what came before.
	So we look at people living through the beginnings of the Industrial Revolution.
	Well, historians now, by and large, Have come to the conclusion that, yeah, things did get better for people.
	Their living space per capita increased, the amount of clothing per capita, their caloric intake, their life expectancy.
	All these things did go up.
	And they would have gone up even more if Britain hadn't been involved in war for a good portion of the end of the 18th century, the Napoleonic Wars and the, well, first the wars of the French Revolution.
	So the point is that the real debate among historians now is simply How fast or how slowly the improvements came.
	But almost nobody says, I think E.P. Thompson, the Marxist historian, even says, well, look, nobody says everything got worse.
	So even they are saying that, all right, all right, when we look at it dispassionately, And we don't get carried away by photos that are indeed difficult to look at, we can make sounder judgments.
	And it got better for more than just the elites.
	So in the past, you look at ancient Rome and ancient Greece, you've got significant portions of the population are pure slaves with no rights, no economic freedoms, no free market.
	So you had this, you know, creme de la creme, aristocrats hanging around in togas, groping boys, eating grapes and discussing philosophy.
	But for the average person, life was a complete crap fest.
	But... In the Industrial Revolution, and of course, everyone forgets the agricultural revolution that preceded the Industrial Revolution, which is in many ways more important, but it actually got better for the average person.
	If you look at wealth along human history, it's a flat line for most of human history.
	And the only people we ever hear from The.1 of.1 of.1% of people who were educated enough to write down and have their writings recorded and so on.
	The mass of human history just kind of came and went like krill under the ocean surface.
	Nobody even knows what's going on.
	But in the 19th century, I mean, Charles Dickens was able to write, though he came from a poor background.
	He was able to write and get published and become a world-famous author because of the Industrial Revolution, because of machinery, the printing press, new travel opportunities, the newspapers.
	There was a growth of the middle class, which had barely existed before.
	You've got a tiny elite of really, really rich people, and you've got a massive void of serfs and slaves and day laborers and vagabonds and so on.
	You actually had the growth of an articulate and educated middle class for the first time in human history that actually sustained itself not through predation, not through imperialism, not through war, not through predation, and not through hanging off the backs of ground into dust menial labor slaves, but through productivity and freedom.
	How that bothers people is really beyond comprehension to me.
	It is. And Deirdre McCloskey is fond of noting this particular statistic, that if we look back 200 years ago, roughly, people were still living on about $3 a day.
	And you have to try to imagine spreading that out among your food, your clothing, your shelter, your entertainment, ha, all these other things.
	Well, public hangings and all.
	Right, exactly. Now, and that had stagnated.
	That had been that way for a long, long time.
	Then in just 200 years...
	Just a 200-year period, we now have an 11-fold, and we're talking about around the whole world, an 11, even including the worst, poorest place in the world, an 11-fold increase to $33 a day.
	Now, in a pinch, you could live on $33 a day.
	A lot of graduate students live on less than that.
	You know, you could do it. It wouldn't be luxurious.
	I've been there. You're right.
	We've all been there, right? But if we look at The more advanced countries, it's gone to about $100 a day.
	And I know for a fact people can survive through that because a lot of people do.
	I mean, $36,500 a year is not a completely unheard of annual salary in US dollars.
	We should be cheering that.
	And you could try to say that this is because of welfare state programs, but the vast bulk of this is occurring before governments are even seriously involved.
	And the very fact that you could even generate enough wealth in a society to have that much left over That it would be statistically significant to the point of an 11-fold increase, even in the poorest countries in the world, says something about the wealth-generating power of the market.
	So that's why, I mean, Ayn Rand used to say that if these people really cared about the poor, they would be the biggest advocates of capitalism in the world.
	And because they're not, I don't know what it is they were advocating.
	I don't know what their value is.
	I think her formulation of hatred of the good for being the good is not far off because the greatest reduction in human poverty has nothing to do with the Industrial Revolution.
	The greatest reduction in human poverty has occurred over the past 20 or 25 years in India and in China.
	Where literally hundreds of millions of people have gotten out of the poverty trap.
	And this is specifically as a result of the liberalization of the markets in China and in India.
	In India, of course, the great curse was socialism.
	All the Indian intellectuals in the political classes were all indoctrinated into socialism at the elite universities in England, in many cases.
	They went back and instituted socialism, which caused massive grinding poverty to continue.
	In India, of course, there was communism under Mao and others in China.
	When they began to liberalize their economies, there has been hundreds of millions of people out of the poverty trap.
	There has never been a greater advance in the reduction of human misery and the increase in human wealth.
	In the history of the planet.
	And of course, this is in stark contrast.
	This is sort of late 20th century, early 21st century, where the free markets were tried.
	This is in stark contrast to the attempts of the Marxists to attempt to alleviate poverty in Cambodia and North Korea and China and Russia and other places where there was not only not an increase in wealth, but there was a massive destruction of human beings and capital and opportunities and wealth and human but there was a massive destruction of human beings and capital and opportunities and wealth and human
	These two contrasting poles where the Marxists said, oh, we're going to solve poverty and ended up creating totalitarianism that killed over 100 million people versus the free market that said, well, we're going to eliminate poverty and hundreds of millions of people in only a quarter of a century got out.
	If you really care about the poor, I think people should try and learn the lessons from that, but they seem to be studiously avoiding them.
	you You know, it's funny that these days people will try to use Scandinavia instead as an example of socialism.
	Nobody wants to use the USSR or You know, communist Romania under Ceausescu.
	Nobody wants to use that. They say, oh, no, no, no, no, no.
	You know, we have the examples of Scandinavia.
	Now, you've probably, I'm sure, in fact, I feel certain you've covered this on the show, so no need to spend too much time on it.
	But one thing that always stood out to me about that was that if you look at Sweden, which is the one they love to point out the most, even more than Denmark or any of the others, Sweden, they say, look, it's doing great, and it's got a very substantial public sector and a lot of public programs and all that.
	And look at the wealth and the income of people in this country.
	But what's even more significant to me is that when Swedish folks move to the US, and by the way, it's not that it's the smartest or richest ones who move to the US. It's fairly representative of the Swedish population in Sweden.
	They earn close to double What they earn in Sweden.
	And by the way, there's very little Swedish American poverty.
	So yeah, there's not much poverty in Sweden.
	There's not much Swedish American poverty either.
	So that is also kind of a factor.
	In other words, if they had In an even somewhat freer market, they'd be even richer than they are now.
	By a huge margin, and we can just see it through an actual real-life laboratory example.
	There is something that drives me crazy that...
	I remember when I was a kid, and I would be riding...
	They call it the Government of Ontario trains, these little trains that run around in Ontario.
	They're called GO trains. And I remember as a kid, and this is how early and economically geeky my brain was developing, Tom, but there's a little sign up there that says, the operation of this train is financially supported by the Government of Ontario.
	And when I was in my sort of early to mid-teens, I remember looking at that and thinking...
	I don't think that's true.
	Isn't it the taxpayer who is supporting the operation of this train?
	But the way it's always presented is, you know, the government has given this money to this organization.
	The government is supporting the arts.
	The government is funding this.
	It's like there's this big magic mountain of smorgue-style treasure buried under a mountain.
	And the government goes in there with their magic scoops and ends up with this fantastic amount of money.
	It comes out of nowhere and the government, just like a rich uncle, doles it out to make wonderful things in the world.
	And because there is this lack of understanding that the government doesn't create anything, the government doesn't make any money, that the government doesn't have any money.
	It's a flow-through mechanism for stolen currency at best, if not...
	Printed and counterfeit currency in more realistic or in borrowed and debt-enslaving, generational-enslaving currency.
	The fact that there's this idea that the government just has this magic pile of money.
	And if you don't want the government to spend it on something, not only, like, why wouldn't you want?
	If you can get free healthcare for people, what monster, what human sociopath wouldn't want people to get free healthcare, wouldn't want...
	Poor people to get free money wouldn't want people to get magic raises through the minimum wage.
	If it's all free, you'd have to be some kind of human monster to not want all of this magic to bathe humanity in its reality and economy-destroying light.
	And that bothers me the most, the idea that it's not...
	The Marxists always have this perception that the free market is a zero-sum game.
	Like, if I'm making more, you must be making less.
	And if the West is rich, it's because they exploded the third world and all that.
	But the reality is that they ascribe to the free market what's true in government.
	The government's a zero-sum game.
	In fact, it's a negative-sum game.
	And the idea that there's all this magic money because you've borrowed it, it's like having your neighbor who lives off his credit cards doesn't get up till noon and you'd say, well, he's got it made, man.
	I don't know why I have a job, but it's like because the reckoning hasn't hit yet.
	That delusion to me is one of the most frustrating.
	I was in Eastern Europe some years ago, and we would be driving along and I would see signs saying, this highway project or whatever comes to you courtesy of the EU, which is a way of saying, look at the great benefits.
	So again, the idea being that there's just this spontaneous wealth that just comes from the sky and that would have no alternative use that we need to factor in.
	You know, you hit on so many key things there.
	Of course, the old story of the broken window fallacy is the key thing.
	You've got to keep in mind that it's not just what the government spends the money on.
	It's what the money would have been spent on, what people would have preferred to do with it, which we can only presume they would have preferred since they would have done it voluntarily.
	But in terms of government funding things, we're inclined to think that if it weren't for government, there'd be no X, Y, or Z because How about this?
	Who winds up educating young people?
	The government's own schools.
	And what do you know? What's the story we get from those institutions?
	That if it weren't for the state, you'd all be stupid Idiots with one arm and two fingers on one hand.
	Whatever, right? You know, the toaster would have blown up your parents or whatever.
	Everybody gets that because that's the message the state wants to send.
	Without us, where would you be?
	Without us, your wages would be lower, your living stands would be lower.
	But when we actually look at the reality of the situation, well, when it comes to the funding of the arts, I think people, whenever we hear arts funding being talked about in the news, And government arts funding, people think, oh, those stupid right-wingers.
	They just have no culture at all.
	As if the best art we've ever seen is funded by the U.S. arts, right?
	National Endowment for the Arts. I don't think so.
	But also, the U.S. government spends probably, I don't know, I think it's like $150 to $170 million a year on the arts.
	But private People in America spend in the billions.
	Private donors donate in the billions every year to the arts.
	And if they ever heard the government was discontinuing its piddling contributions, that would be even more.
	But nobody knows about that. Or the funding of science.
	Well, I mean, before governments really got into the funding of science, the private sector as a percentage of GDP donated more to the sciences than governments have.
	So I've tried to hit on a lot of this.
	On the health care thing, I finally put together an e-book That has a title that I have to say I'm particularly proud of.
	Now, on Facebook, we all have a lot of people who agree with us.
	That's just a natural sorting process.
	But also on Facebook, you tend to have those people you went to high school with who haven't really kept in touch with you and haven't heard all your brilliant insights about political economy.
	You know, all the people who say, Steph, you haven't aged today.
	No, I'm kidding. Go on. Yeah, I don't get that quite so much.
	But these folks, you look through your feed, and they're all saying inane things about healthcare.
	And without Obamacare, we have 36,000 more premature deaths per year and all that.
	That's all false, but it's completely false.
	So I wrote an e-book.
	I put together an e-book called Your Facebook friends are wrong about healthcare.
	I hereby give you permission to use that.
	Your Facebook friends are wrong about X till the end of time.
	The thing writes itself.
	But I put that thing together, and I give it away for free.
	And my favorite thing about the whole thing is that I was able to buy the following domain name for that book, yourfriendsarewrong.com.
	Man, that warmed my heart.
	Spending that 10 smackers was the most enjoyable of 2017.
	And if you point it out, they may not stay your friends, but it's still worth a try.
	That's right. That's right.
	Now, let's talk about the other big bugaboo, which is the, ooh, scary, doom-laden monopoly.
	The monopoly that is going to crush your economic opportunities, that's going to be like that one company that runs the mining town and runs the store and gives you credit, and that's going to be able to lower its prices to stop anybody from coming into the marketplace and then jack up the prices until the very sky, hold your children hostage and so on.
	Let's talk about this weird fear of monopoly.
	And the strange thing, just to point out, is that I think if you're scared of monopolies, the state might be something you want to have a little bit of a look at.
	Because saying, I really, really want a giant, coercive monopoly to save me from voluntary monopolies is like, oh, I've got a headache.
	I think I'm going to get a guillotine.
	And I also want that monopoly to teach my kids what to think.
	To teach them how the world works.
	And guess what? Here's the way the world works.
	There's terrible struggling and strife.
	But then your wise statesmen come along and bring order.
	I mean, that's creepy.
	So the analogy I've given in the past is, I think people would see the problem with this if most of the schools were funded instead by Walmart.
	And so the Walmart schools up on the wall, you've got all the Walmart CEOs and all the corporate executives looking down upon the children.
	And then every day we have Walmart CEO Day.
	And they stand up and they sing a song to the benign faces on the wall and they salute every day to Walmart, which is the bestower of all good things, including justice itself.
	We would think, oh my gosh, this is some kind of creepy cult.
	I got to get my kid out of this.
	But when it's U.S. presidents up on the wall looking down on them, nobody bats an eye.
	And they get up and they salute, and it's just nuts.
	So, yeah, I don't really believe in them that they're afraid of monopoly, but they learned their textbook lessons well.
	I'll give them that. They learned about the alleged problems of monopoly.
	There are two things that need to be handled on this question of monopoly.
	One would be the history, because we all kind of learned, at least Americans, learned that in the 19th century, we had terrible, exploitative, so-called entrepreneurs who actually I'm sorry, I just wanted to mention, here we get to introduce the entirely politically neutral phrase, robber barons, because that's not at all prejudicial in, let me introduce my good friend, Satan!
	Robber barons, you know you're being programmed when that phrase comes up.
	That's right, that's right. So, alright, the textbooks have to admit, alright, these people Did later on go on to give away hundreds of millions of dollars, which would be many billions in today's dollars.
	Well, we'll grant them that.
	But boy, they were terrible and cutthroat and this and that.
	Well, this is a cute story to tell.
	But when you actually bother to look at the numbers, Which my friend Tom DiLorenzo has done, and he wrote a scholarly article in 1985 for the International Review of Law and Economics, in which he actually looked at the data that we do have.
	It's spotty, but we have some data on a lot of industries in the 19th century.
	Were they really monopolists, which means the neoclassical economic definition of monopoly is you've got a firm or an industry where Output decreases and prices go up.
	So that's what a lazy monopolist would do.
	Wait, that's government schools.
	GPAs are going down, but price per student is going up.
	Sorry, go on. Exactly. Well, supposedly that's what happened.
	So there are 17 industries where monopoly was alleged to exist for which data are available.
	And it turns out that In 15 of them, and the exceptions were matches and castor oil, not exactly a national catastrophe, 15 out of the 17, not only were prices falling, they were falling faster than other prices in the economy were falling during these were deflationary years.
	And then it turns out output was rising much faster in these industries than anywhere else in the economy.
	So forget about that.
	Then we look at the actual contributions of some of these folks.
	Look, I don't like Where the Rockefeller Foundation, you know, gets involved these days or Carnegie or any of these foundations, forget that.
	Just look at the person. Rockefeller took, was able to make oil-based products available to the masses, you know, by dramatically lowering the prices, by making transportation much more feasible for more and more people.
	Cornelius Vanderbilt, for example, was able to make it possible for people to go from major cities in the Northeast for instead of $10 a trip, $1 a trip.
	Or the trip would be free and he would just try to sell you food on board the ship.
	See, this is why what you were saying earlier about the state being a zero-sum game, it really is not true of the private sector because we're all benefiting from this because now I've got nine extra bucks to go spend on something else.
	Vanderbilt is happy. He's got customers.
	We're all happy about this.
	Whereas, yeah, it's true. The government could just take from Vanderbilt and hand it to me, but then he has less And I have more, whereas we all have more under this situation.
	That's how wealth increases.
	And Andrew Carnegie almost single-handedly lowered the price of steel rails by 90%.
	Now, in an economy in the 19th and early 20th century, You know, everything's got steel in it one way or another.
	You're able to bring the price down that much, you're leading to an explosion in wealth.
	So that's the first thing I would want to address is, but I know I read in my textbook that there were these terrible people.
	That's the first thing. And by the way, there were some entrepreneurs who tried to use the state to get special benefits or tariffs on imports, and there's no defending that.
	But the second thing would be, is it really true, this so-called predatory pricing model where A firm will drive all its competitors out, and then with no competition, you can just raise the price.
	The thing is, looking for this is like looking for a unicorn, looking for an actual example.
	If you look through, Dominic Armentano, who's retired from the University of Hartford, actually went through Supreme Court cases pertaining to antitrust.
	And he said, I could not find a single allegation of predatory pricing where the firm actually managed to carry it out.
	And when you think about the strategy of it, you would not dare to walk in and tell your boss, I've got just the thing for us.
	Here's what we'll do. Let's take an 80% loss indefinitely, and then we'll be able to make it all up on volume.
	It doesn't actually work that way for a number of reasons.
	Number one, when you're cutting your prices that much, people stock up on things.
	So then you have to wait even longer.
	I think back to when I was a bachelor, just fresh out of grad school.
	When they lowered the price of Progresso soup down to $1 a can, I was still in my cart.
	You're like a prepper. Right, you know? So yeah, right.
	Suddenly, that appealed to me.
	So there's that. I mean, George Stiegler is a Nobel Prize-winning economist who said it would be embarrassing today to encounter the idea of predatory pricing in actual discourse, not only because we have no real example.
	Yeah, you could give me examples of big firms that drive out smaller ones, but that's not predatory pricing.
	Where's the part where they raise the prices through the roof?
	That's the part... They leave out because it doesn't actually happen.
	It's not the companies.
	Walmart doesn't drive mom-and-pop stores out of business.
	That's giving Walmart this death star.
	They concentrate their rays of economic destruction and boom, boom.
	First of all, mom-and-pop stores, another highly prejudicial phrase, because mom-and-pop, it sounds so nice.
	It is not Walmart who puts the mom and pop stores out of business.
	It is the customers who put the mom and pop stores out of business.
	And that's something that's always left out of the equation.
	And it drives me kind of crazy.
	The other thing with the robber barons, if you want to blow people's minds, just remind people of Rockefeller's two extraordinary beneficial impact on two groups, one.
	Number one, illiterate people.
	And number two, whales.
	By driving down the price of kerosene, he reduced the need to hunt whales into extinction.
	So do you like having orcas around?
	Do you like having whales around?
	Thank John Rockefeller.
	That, of course, blows people's minds because their environmental anti-capitalist watermelon hatred ends up short-circuiting them.
	And the other thing, too, is that by driving down the price of kerosene, He allowed people to stay up later reading.
	I mean, when I was a kid, when we got cold in England, and we had one of these heaters that you had to put coins in, and you would hoard your coins.
	You'd find, oh, I found a coin under the couch.
	It's another half hour of heat.
	You get used to marshalling these resources.
	If you grew up in the 19th century, when kerosene was really expensive, when night fell, you get 20 minutes, and then you can't read.
	But when price of kerosene goes down, reading, opportunities, and so on, and there's a reason why American literacy rose enormously, and it wasn't just government schools.
	It was the fact that there was kerosene that allowed people to read to each other late into the night.
	And so if you like whales and you like having people around who are literate, then Rockefeller's the guy to thank.
	But of course, that doesn't fit into the equation, so it's conveniently left in the rear view.
	Right, right. So all of this is great.
	I mean, the whale stuff, really, then what do they do?
	Their heads explode, right? They like whales.
	I have an article online somewhere called The Misplaced Fear of Monopoly, if people want more on this.
	So I bet we've got others, though, right?
	Oh, yeah, yeah. Okay. There must be.
	I just, I just, I wanted to, I forgot something and I always, I just circle back and mention something.
	So thinking that something can't exist if the government doesn't pay for it is literally like kidnapping some guy, locking him in your basement, sliding some food under the door every day and saying, without me, you'd starve.
	It's like, can I, can I take my chances with freedom?
	All right. Now let's talk about labor unions.
	I get into such a complicated mess.
	When I talk about unions, I never seem to be able to explain myself properly, so I'll let you take a run at it.
	Labor unions gave us the weekend.
	I'm not just talking about the rapper.
	I'm talking about the actual 37 and a half hours.
	You got breaks. You can go to the washroom.
	You get some lunch. You get benefits.
	You get weekends. Without unions, 16-hour days, no face protections.
	You're breathing in black lung.
	You're coughing weekly and expiring in the latter stages of a George...
	Of a George Orwell docudrama in mining towns in the north.
	What is the status and the understanding of labor unions in the free market?
	Yeah, okay. Well, it's interesting for me to talk about this because my father, who's deceased now, was a member of the Teamsters Union for at least 15 years.
	So it's not that I... You know, grew up with a silver spoon in my mouth, so I can't sympathize with workers.
	My father was a teamster.
	So let's just to that.
	All right. Now, this again is another textbook thing that first we had these conditions, then labor unions existed, then we had those conditions.
	So therefore, we would never have gotten to those conditions if it hadn't been for labor unions is the fallacy here.
	So let's just go through what's the logic of a labor union and how does it all work?
	Could it be the case Could it really be the case that the reason Bangladesh is poor is that they don't have enough labor unions?
	Could that really be it?
	That all they need to do is just organize?
	Or could it be that the reason that we were poor in the year 1000, let's say, is that we didn't have collective bargaining?
	And if we'd had collective bargaining, then everybody would have a television, even though there were no televisions for anyone.
	It's in some ways analogous to the discussion that we had about child labor.
	You can't distribute something that doesn't exist.
	And so, of course, we're going to see terrible conditions at a time when the entire society was desperately poor.
	And, you know, you had to work extremely hard just to live a hand-to-mouth existence.
	What generally happens, like, in other words, if I want to get two days off, if I don't want to work seven days a week, I need to live in a society That is productive enough to produce enough stuff to sustain me in my life with only five days worth of my labor.
	That I could exchange five days worth of my labor and I would have the purchasing power to go into that economy and take enough stuff to sustain me.
	If I'm not living in an economy like that, then I have to work seven days a week.
	No matter what a labor union tries to do for me, if they try to give me the weekend off, I'll get another job on the weekend.
	I still need the stuff, is the point.
	A friend of mine named Ben Powell, who's a professor at Texas Tech University, went down to Guatemala and he visited some places that were known to be so-called sweatshops.
	And he asked the workers, he said, now, given that your employer does not care the form that your compensation takes, he'll give you all cash if that's what you want, or he'll give you half cash and half a happier working environment.
	Or one quarter cash and four hours a day you get a massage.
	He does not care. He's indifferent.
	He's got an amount that he's willing to pay for labor, and the distribution of it, he doesn't care what form it takes.
	So Ben Powell was asking these workers themselves, if you could have a somewhat lower salary, but conditions would be better, or then he would ask them separately, you would get this many vacation days a week.
	Or a year. And then, separately, he asked them, each one, I'm pitting your money versus a little bit less money but this benefit.
	It was overwhelming.
	Basically, almost every single question he asked, 95-plus percent said, no way.
	I almost said, no way, Jose, but that might be.
	They said, no way.
	We want the money. And that's exactly where a lot of people were for a long time in the United States.
	We want the money. Yes, our lives are tough, but my assessment of the basket of goods that are available to me right now is, I want the cash.
	Then, again, the economy becomes more productive.
	Entrepreneurs reinvest profits into capital goods that can make my labor more productive.
	I have more bargaining power on my side.
	I can command a higher wage.
	Well, then I can opt for more leisure.
	You know, I could work and keep earning and earning.
	But you know what? I would actually rather not do that.
	I mean, almost any of us, almost anybody listening to this could be working more.
	You could get a second or third or fourth job.
	You could. But you've chosen, you've opted for more leisure instead of that.
	That's because we're rich enough to exercise that option.
	But when you're not, you just want the catch.
	So when a labor union says we demand, you know, and everybody or some government law says the conditions have to be such and such, what you're doing is simply prematurely bringing about something that would have occurred anyway, but now you're giving people a basket of goods they would not have chosen.
	They would have chosen just the cash.
	So that's really what's happening. And then also, what happens to the people who don't belong to the labor union?
	Well, those people, we can't just call them non-union workers.
	That would be dispassionate, right?
	I mean, we call entrepreneurs robber barons.
	What are we going to call people who are so unfortunate not to be in labor unions?
	Yeah, they're scabs!
	I mean, how dehumanizing is that?
	Doesn't the left object to dehumanization?
	How dehumanizing? It's like something you pick off your skin.
	This is like nothingness, these people.
	But think about what is their situation when they are not allowed They want to work.
	They would voluntarily choose to work in a particular field, but a union has made clear that that will not happen because either they're blocking them out or they're antagonizing or attacking them, as has happened in some cases, or they've made the wage so high with the employer that it Just like with a minimum wage, it automatically reduces the number of people, the demand for labor that that firm has, the quantity of labor that it will demand.
	And so what is this person who's trained to be in industry A? What does he now have to do?
	He's now going to go work in industry B, a lower industry.
	Where he wastes the skills he's acquired.
	And now there's going to be a big bunch of people displaced from industry A down in industry B, lowering the wages there.
	Oh, we'll just organize labor unions there.
	OK, but that always involves exclusion.
	So now those people have to go to industry C. So there is a waste of all the skills these people would have had if they'd been able to work in the industries they were trained for.
	So yes, it's true that if you're in a labor union, You earn more than you would have otherwise if you're one of the lucky ones, just like if you're one of the lucky ones who doesn't lose his job with the minimum wage.
	But a lot of people are excluded from jobs entirely or forced out of industries.
	And the result on net, Richard Vedder and Lowell Galloway at Ohio University did a study where they came up with some, I don't recall the exact number, but it was an overwhelming figure in terms of The deadweight loss, how much people who are excluded suffer.
	And it totally swamps the concentrated benefits that the labor union people won.
	And moreover, in the United States, I can't speak for Canada, but in the United States, the The amount of membership, the percentage of membership in labor unions never really got above 33%, about one third, at its height.
	And it was usually less than that.
	So if you're going to say that labor unions brought about our better living standards and working conditions, how could that be if they were never even close to being a majority of workers?
	There must have been some other factor at work there.
	Some of us would say that's the free market.
	Well, if you want more money, increase your value.
	I mean, this is one of these, like, you can then get mad and you can throw things and you can call your union bosses and you can threaten strikes.
	And, you know, in a free market, people can strike, people can quit, people can collectively bargain.
	But if you want to make more money, the idea that you call up your politician or go and get your union members to scream at people and so on, it seems kind of lazy and passive, just at a sort of personal level.
	Like, why don't you just up your value?
	Why don't you learn something about the business?
	Why don't you learn something about sales or marketing?
	You don't have to go to a night course.
	You can study it on your own.
	But why don't you...
	Like, you know, if you're a bouncer and you want to be in the band, learn an instrument.
	Don't just yell at people to make the bouncer part of the band for no reason.
	And this... Kind of offsourcing or outsourcing of personal responsibility for economic value.
	If you are worth a lot to an employer, you can make a lot of demands, right?
	I mean, there's a reason why Brad Pitt gets 15 million bucks a movie, because he can add way more than that in terms of opening the movie.
	So if you don't want to be an extra and you want to be Brad Pitt, I don't know, get a hair transplant, do some sit-ups, learn how to act better or whatever.
	But my sort of feeling is...
	To decomplicate a lot of these issues, because when people get into these issues that I talk to outside of these kinds of conversations, they get very confused.
	It gets very complicated. To me, it's very simple.
	Nobody gets to use a gun except in self-defense.
	That to be, like, non-aggression principle, keep your promises, right?
	Do not initiate force, keep your promises.
	Very, very simple basis of common law.
	When it comes to unions, sure, have a union.
	You know, free association.
	You can all get together and you can threaten to quit.
	And then you can try and get the boss to pay you more.
	That's perfectly valid. That's all free market stuff.
	But you cannot hold the boss hostage by disallowing anyone else to do your job.
	That is the initiation of force.
	The boss can fire everyone and replace.
	And that's a big deal. That's a big deal.
	You've got retraining. You've got hiring costs.
	Some of the hirees won't work out.
	You might get a bad reputation.
	You're going to interrupt your customer flow, you know, especially this just-in-time stuff for manufacturing.
	If you interrupt your flow of goods to a car dealership, they can't wait.
	And so they're going to have to go find someone else.
	So if the entire collective, and there are jerk bosses, just as there are jerk employees and jerk everyone.
	If there's a jerk boss out there, then the people need to be able to organize and threaten a mass quitting.
	And that, to me, is perfectly part of the free market.
	But they cannot, cannot prevent him from hiring other people because that's his exercise of free association.
	And this holding hostage where you've got people beating up other people who want to come and work, that is the initiation of the use of force.
	That's when the labor union goes from advocacy to thuggery.
	You know, in theory, as even Henry Hazlitt said in Economics in One Lesson, of course, you can have a voluntary union that operates on the basis that you're describing.
	And it can have a fraternal union.
	A function where, let's say, provides for final expenses for some of its members or things like that.
	There are a lot of things that a labor union could do.
	But Henry George said something like, the idea, when you tell me about a labor union that operates entirely on voluntary principles, It's like you're telling me about tigers who live on oranges.
	So in practice, it doesn't actually seem to happen.
	But then your other point about how, why don't you just pick up a skill?
	I know that some people, let's say on the left listening to this, would say, oh, gosh, how insensitive that is.
	But on the one hand, we are told that this economy we're living in right now is one of the toughest ever that we can remember in living memory because there's so little job security as compared to before.
	You know, you used to be able to get a degree in anything whatsoever, or even no degree, and go work for some factory and be there for 50 years, and that would be it.
	And that's, that model seems to be disappearing.
	That's true. But at the same, the other side of the coin is that because of the internet, you can learn a skill, like if you have the tiniest bit of initiative, you can learn a skill.
	And yeah, it does mean that when you get home from working hard all day, you're gonna have to spend a couple of hours a day on the computer working on something.
	Well, okay, but that's what taking care of yourself is all about.
	That's what providing value to other people is all about.
	In order to think about what do other people need that I could give them, that takes effort and time on your part.
	And that's what we want to encourage is people who don't think about how can my neighbors make up the amount of money I wish I had.
	It's what can I do to make my neighbors want to give me what I want?
	What can I give them that they want that will make them give me what I want?
	And as I said, you've got Skillshare, which teaches all kinds of different things.
	You can get access for almost nothing.
	You get a month's access for free.
	They have all these different options available to you out there, and very few people exercising them.
	There's no reason you should be trapped in some crummy job forever.
	And even in a crummy job, by the way, even if you didn't have the internet, Generally, if you show some initiative, you stay late, you learn about the business, you ask around, you will be recognized.
	But with the internet, whatever the industry is that you're in, start a website.
	You don't have to get a lot of visitors, but start a website where you review what's going on in the industry, and you link to and comment on articles, or you talk about people at your firm and what's going on at your firm.
	And you review books in your field.
	Nobody else at your firm's going to do that.
	That doesn't take that much time.
	And you will stand out.
	You're not going to be the one who's fired.
	You'll be the one who's singled out.
	And also, people at your firm, they like to be quoted.
	They like to have their pictures on the internet.
	Just do that. I mean, just things like this that don't take that much effort will make you stand head and shoulders above everybody else.
	There were jobs, even back in the prosperous 1980s, There were jobs going unfilled because no applicant knew what 75% meant.
	I'm sorry, but if you want to be a responsible adult, it is not hard to go teach yourself what 75% means.
	I honestly think that this idea that everything is beyond people's control and they're just helpless spectators in a faceless economy is a load of bunk.
	Well, and to me things like the minimum wage and unions are a way of backfilling the lack of economic value provided to people by terrible government schools.
	If after 12 years of education, you can't command five bucks an hour, I'm sorry, there's something seriously wrong with your educational system.
	But rather than try and fix the educational system, what they try and do is force the employers to pay the employees that have been rendered economically inert by terrible school systems.
	They force them to pay them more because that's easier than trying to fix the school system.
	Right. Yeah, I've said this a lot.
	When you get out of the high school, it's okay, go to college, and then college won't teach you that either.
	And so the message is, now that you're done with your formal schooling, sit there by the phone and wait for something to happen to you.
	That's what you have to teach these kids.
	After all those years, they have no idea what their niche is.
	They have no idea how to promote themselves.
	They've never learned how to write sales copy to sell anything.
	I think an English course ought to do that.
	They've never learned anything about how to rank a video on YouTube so people can find it.
	How to make a YouTube video so people learn about you.
	How to establish yourself online.
	Why are they not learning that?
	If I were running a school, that would be the first That would be tops on my list that these kids don't just get knowledge, which if they get knowledge, that's a bonus these days, but they can also convey the knowledge and they can build an audience.
	None of them know anything about what to do.
	They just know I'm going to college.
	Well, then your boss is always looking for someone to replace him.
	Like, when I was an entrepreneur, I ran a research and development team in a software company that I'd co-founded.
	I was desperate. Like, I would go out sometimes two weeks on the road to do sales calls to assist with sales calls and so on.
	And, you know, when you first start doing business travel, it's like, Woohoo!
	I'm Aerosmith! This is the best thing ever!
	And then after like a couple of months, you're like, oh, which city am I in?
	I've had no sleep for a week. I'm eating terrible food.
	There's no gym here. I can't take it.
	And so I had a guy who worked for me who said, you know, I'd really love to learn some of the sales stuff.
	And I'm like... Please, Lord above, come with me.
	We'll pay for you to come with me and if you want to start taking it over.
	And he really applied himself and he read sales books and he figured out, you know, he asked me tons of questions.
	I was really keen for that guy to start taking over some of these responsibilities so I could start working on the next generation of the software rather than going to answer the same questions from clients or potential clients two weeks out of the month.
	Any quality boss is very much looking for someone to groom because you can't move up unless there's someone to replace you.
	Just be that person who has that enthusiasm, who gets involved, who gets interested, and there's very little force that will stop you economically.
	That's the way to go. All right, let's talk about one or two more.
	It's really, really unfair, Tom.
	It's absolutely terrible and wrong.
	We have to raise taxes on the rich because they're just not paying their fair share.
	It's just terrible.
	The poor are just being overtaxed.
	The rich are getting away with blue-blooded murder.
	Raise taxes on the rich. All right.
	Well, this is fun. I remember Peter Schiff going down.
	Remember, we used to obviously fill in for Peter on his show.
	I remember him going down into a Occupy Wall Street protest and asking them how much they thought he should be taxed.
	And the amounts they were saying were less than he was actually being taxed at the moment.
	So he said, look, you already got what you want.
	It's already happening.
	So there is that.
	There is the old reality thing.
	There is the fact that the top 20% are already paying 80% of all the income taxes.
	And I believe that, and this is just US figures, the top 1%, it's like somewhere around 37% of all the taxes paid are paid by the top 1%.
	So if they were paying their fair share, wouldn't it be 1% for the 1%?
	But it's not. It's 37% for the 1%.
	So, I mean, who can figure out a crazy concept like fair share when we're talking about a guy with a gun, really?
	But when you look at these numbers, it doesn't prima facie look like they're not Paying.
	They are paying. Now, it's true that the poor, though, do pay payroll taxes.
	And I'm all for cutting those.
	On the other hand, a lot of them get tax credits on taxes they never paid in the first place.
	So it's not just boo-hoo, they're paying taxes.
	They're also sometimes getting refunds.
	I like Ron Paul's answer when they said to him, did you know that 50% of Americans pay no income tax at all?
	Yeah, something like that.
	I think that's at the federal level, but yeah, it's crazy.
	And his response was, well, we're halfway there.
	And so, I mean, that's kind of the way I think about it.
	But certainly, and then they'll come up with things like, well, if we give the rich a tax cut, it doesn't help the economy.
	I just got done on my, I have the Tom Woods show, and then Bob Murphy and I do a show called Contra Krugman.
	And we critique Paul Krugman every week.
	We just got done with this week's episode.
	Boy, there's a lot of material for that.
	Never be short of stuff to do a show on.
	We're on episode 114.
	Not running out of steam.
	But there is a graphic that's circulating around Facebook these days that says, if you give a tax cut to lower income people, they'll go out and spend the money.
	And this stimulates the economy.
	Whereas if you give the tax cut to the rich, they just hoard it or whatever.
	And that doesn't help. And, okay, first of all, what the rich do with it is they save it.
	And when you save it, you make resources available to investors to invest in capital equipment that makes us more physically productive, that puts downward pressure on prices vis-a-vis wages and improves our standard of living.
	That's the only way any society anywhere on earth has ever improved its standards.
	And raises wages by increasing the demand for workers.
	Exactly right. Exactly right.
	Um, but also the idea that the only thing that stimulates the economy is if people are just buying consumer goods.
	Well, if we take that to its logical conclusion, let's say I give a $50 tax rebate to some working class guy and he uses that to go buy two new shirts.
	The, the thinking of these people is the way the economy works is I spend money on two new shirts.
	The shirt guy can now go buy his groceries at the grocery store.
	The grocer can now fill two gas tanks with gasoline.
	And it's all just people using stuff up and using stuff up and using.
	And completely missing in this picture of how the economy works is, what about the machine?
	What about the drill presses and the 18-wheelers, as Bob said?
	What about all these things that go into making that?
	Does any of that need to be maintained?
	Does any of that need to be created?
	Consumers don't buy 18-wheelers.
	Consumers don't buy drill presses.
	They don't buy factory equipment.
	So if all we're doing is just consumers spending, spending, spending, where does the structure of production that holds the whole system up come from?
	So it's an extremely juvenile way of looking at the economy to begin with.
	But no, the rich are paying way, way more than what any reasonable person would consider their fair share.
	And you know what?
	I'm even going to say it. I think the rich are people too.
	And you know what? I do believe in tax cuts for the rich.
	Yes, I do. I think that is an absolutely morally defensible position, but I favor tax cuts for everybody.
	Right. All right.
	So I guess the question that pops into people's minds now is, why do we hate the environment so much?
	Why do we want capitalist satanic mills to pollute and destroy the glorious and perfect Bambi-infested natural world that surrounds us?
	Why do we want predatory capitalism to rape Mother Earth like Harvey Weinstein in a casting call?
	What is our problem with the environment?
	Why do we hate it so much?
	Yeah, yeah, that's a good question.
	Granted, this is not my immediate area of expertise, but as a libertarian, I kind of know the general way people argue with us about any topic, including the environment.
	I remember in the 1980s and 90s, when I was a high school student and then a college student, I remember back in those days...
	It wasn't the case that environmentalists were accusing everybody else of being anti-science.
	We were accusing them of being anti-science because they would favor regulatory policies where they would clamp down on some form of environmental pollution that wound up harming one out of every three billion people.
	So we were spending like eight gazillion dollars per, whereas if we had spent that eight gazillion on something else, we could have saved eight million lives or something.
	So there was no cost-benefit analysis at all.
	But also, we were told to be terrified of acid rain.
	Ozone holes. Yeah, right.
	Yeah. Well, the acid rain thing, it turned out that just local soil issues, and there are a lot of different explanations for acid rain.
	But in 1990, something called the National Acid Precipitation Assessment Program was funded by the U.S. government that basically kind of downplayed the whole thing and said, whoops, sorry, we kind of Overplayed our hand on this.
	Or there was Alar on the apples and everybody was panicking about that and we realized that really wasn't much to that.
	So that was how it used to be.
	Now they take positions and they just badger us into thinking we're all anti-scientific.
	The long and the short it is, a libertarian thinks about this in terms of non-aggression as he thinks about everything else.
	And so we do think of pollution that has a demonstrable effect on you.
	We think of pollution as being a form of aggression and invasion.
	And so we would look to ways to stop that from happening to you.
	But we also think in terms of private property, what is the best way, for example, of preserving endangered species?
	Is it to say, if a member of this species shows up on your property, we're going to come along and shut it down and tell you you can't use the property or sell it or earn any income from it.
	Well, what do you think people are going to do when nobody's looking?
	They're going to take a gun to the head of that thing and bury it somewhere, right?
	So that, you know, that's, I mean, you look at, by the way, the endangered species list, and we think, oh, the government at least is protecting endangered species.
	I think it's like maybe seven have come off the list in 30 years or 40 years.
	They have no record to speak of, these people.
	Then we look at the socialist societies of Eastern Europe and Russia, and I mean, you're talking about rivers that it was a fire hazard to throw a cigarette butt in there.
	It was so bad. So it's not necessarily the case that central planning solved these problems, but also when we think about, let's say I want to preserve something, if I want to do salmon farming or something like that, there are ways that even the American Indians used to do this, where they figured that if we have no property rights whatsoever, which by the way, everybody assumes the American Indians didn't believe in private property because they wanted to share it.
	Shut up. You're an ignoramus.
	You don't know anything. But in the Pacific Northwest, the view was that if we just say, everybody, go fish or whatever, then all the fish are going to be gone.
	So what we said was, all right, in this particular area, that particular area, you would have rights to the fish.
	And that way, you would have an interest in making sure other people aren't coming in here and just overfishing.
	You don't want them to overfish because then you won't have any left.
	You have a longer time horizon now than you would otherwise.
	And again, when anything is private, you have a long time horizon because you don't want it to lose its capital value.
	You don't want it to be polluted.
	Then you can't sell it, can't do anything with it.
	Whereas if something is just the public water, well, everybody's just going to rush over there and compete with each other to see who can exploit it the fastest.
	Because if you say, well, I'm too good to do that, somebody else will just push you aside and exploit it himself.
	So the record of the market in terms of whether it's Species preservation or pollution or keeping, you know, different forms of property in good shape.
	It's the private sector that is the best at it because it actually has, these people have an incentive because they actually are going to own the thing for the long term or care for the thing for the long term.
	And that's why it's important to carve out, and also hunting rights.
	The American Indians also did that.
	They would say, you can hunt, your tribe can hunt in this particular area.
	And therefore, you have an interest in preserving the game in that area and not hunting every single one because that most sucks for you.
	That's the only area you get.
	You have an interest in making sure the animals reproduce.
	If we don't have that, everybody just goes and shoots.
	And then we wonder, what happened to all the buffalo, for example?
	Not that they're in the woods, but you get the idea, right?
	No, it's funny because I've asked people this question.
	I said, have you ever rented a car?
	And of course, people say, well, yes.
	And I said, well, how many times have you changed the oil on a car that you rented?
	And people say, well, why would I do that?
	I don't even own it. Why would I take care of it?
	And it's like, aha, you see?
	This is exactly... The resources accumulate to the people who can make the best long-term use of them.
	So you think of two people bidding for a forest where they want to cut down the trees.
	Well, the person who's going to replant the trees can bid more because it's a renewable resource than the person who's just going to clear cut.
	Clear cutting happens when you can only buy the lumber rights, not the rights to the land itself.
	That's generally how... It is so disastrous.
	The only way to protect something is to have it privately owned.
	And this idea that there's this group of angels out there who are somehow immune from responding to incentives and all this kind of stuff, and they're just going to be out there like angelic guardians of Mother Nature and so on.
	No, people respond to incentives.
	This problem of the commons, it's a weird one to me, Tom, because the problem of the commons, just very briefly, who don't know it, is that You've got a bunch of people, they've got a bunch of sheep on their own land.
	And then in the middle, think of them like there's a big wheel, right?
	And it's got these little partitions.
	Now, in the middle, there's this big area that nobody owns.
	So everybody has an incentive to push all their sheep to go and graze on the land that nobody owns.
	And then what happens is the land gets stripped bare.
	Now, somehow people think...
	I don't know how. But somehow people think that this is an argument.
	The problem of the commons means that you need the government to protect the commons.
	But the government is the common.
	In the analogy that we're talking about, the idea that you're going to strip mine resources from something that is not personally owned, that is the government.
	It is the government that is the ultimate...
	Commons, in the problem of the commons in society, because people strip mine it all the time.
	People strip mine it for resources.
	People strip mine it for debt.
	They print currency out of nowhere.
	The government is the commons in society.
	And people who don't understand that, who run to the government to solve the problem of the commons, creating the biggest problem of the commons in society, is utterly beyond comprehension to me, but it seems to be this absolutely repetitive error.
	You know, I recall the...
	You probably know about the debate between Paul Ehrlich, the bet between Paul Ehrlich and Julian Simon.
	It's such a great example.
	Simon's view was that, generally speaking, human beings have tremendous ingenuity and they will figure out how to come up with substitutes for things or they will figure out how to conserve things, make them stretch farther.
	And Ehrlich thought, well, under greedy capitalism, we'll just deplete all the resources.
	And Simon said, why would we?
	We have the price system under capitalism, and that will give people the idea that they ought to, again, look for substitutes, figure out ways to make things stretch farther.
	So they wound up having a bet that they said in 1980, and they said 10 years from now.
	And in fact, Simon said to Ehrlich, you pick whatever five minerals you want to pick.
	You can pick them. And I believe that their inflation-adjusted prices will be lower 10 years hence.
	He said, I'll take that bet.
	So he went and conferred with all his sky-is-falling friends, came up with five minerals.
	10 years later, every single one of them had fallen in price.
	He thought they'd skyrocket in price to reflect their increasing scarcity.
	They'd all fallen in price.
	And that's embarrassing.
	That should be. Well, you know what? Let me put it this way.
	That should be embarrassing. If people were capable of embarrassment, yeah.
	That's the problem. All right.
	So let's just do one more quickly, which is something that you hear all the time when there are these natural disasters.
	There's this predatory pricing.
	There are people down in a flood zone, and they have entire boats filled with bottled water, and they're charging $10.
	It's predatory. It's nasty.
	It's evil. It's wrong.
	And therefore, government.
	What's your response to that?
	Well, I lived through Hurricane Irma down here in Florida.
	We didn't know... Day to day, what part of the state it was going to hit.
	We just kept hearing all different stories.
	First, it was going to hit one side of the state.
	It was going to hit Miami. And then it was all of a sudden, no, sorry, no, Tampa is the one.
	Tampa is the place you just drove to to escape it.
	Now it's going to hit Tampa.
	And then, no, no, now it's going more toward the center.
	Nobody knew what was going to happen.
	But one thing I did know, and I think I said on Twitter, is I sure hope there are plenty of price gougers around to help me out after this thing is over.
	I want the price gougers.
	So the thing of it is this.
	Let's suppose there is a natural disaster.
	There's suddenly a huge strain on existing resources.
	There's no time all of a sudden to build 10 additional hotels.
	All we have are the existing hotels.
	So what I would want is I would want the hotel rooms to be more expensive than usual so that my family, You know, basically, we can scrounge into one hotel room.
	It won't be comfortable, but, you know, Abe Lincoln lived in a log cabin and survived for a few nights in an uncomfortable hotel.
	And that way, instead of us splitting up into two rooms, which is what we normally do when we travel...
	We all fit into the one room because we can't afford the two rooms now.
	That opens up another room for somebody else.
	This is a way that we ration what exists.
	So we can ration by gunpoint, if you like it that way.
	One way or another, you have to ration.
	There are only so many resources there.
	And the price system is a way of rationing.
	But also, it's a way of rationing that encourages Additional supplies to come in.
	I'd open my own house if I was going to get that much money to put people up.
	So there's that. All of a sudden, areas of supply you wouldn't even thought of become available.
	You gave the example of water.
	Well, if somebody finds out they're able to sell water for $10 a bottle, there are people two states away who will load up their trucks and drive down there to supply water just to get a piece of that.
	If the water was selling for $1.50, who's going to get off his chair in Mississippi to go supply that water?
	But if it is $10, and by the way, by the time you get down there with all this supply, maybe you can only get away with selling it for $8, because now all these other people have been brought in.
	These are supplies that would not have come in if it weren't for the higher prices.
	Also, the higher prices tell people in other parts of the country, let's say in states near Florida, if, let's say, the demand for lumber to rebuild houses, the demand for lumber goes up, the price for lumber goes up, that Indirectly tell somebody in North Carolina, you better really need to build that gazebo right now.
	Because this lumber is really urgently demanded by people rebuilding their homes.
	And this is a way of prioritizing things that are urgently needed.
	So absolutely, we want higher prices than before.
	Otherwise, people will just use up—they'll continue to use— Their existing pattern of consumption.
	Maybe you like to drink 10 bottles of water a day.
	You don't need to to stay alive, but maybe you do.
	Maybe you would go down to five if the price went up.
	That leaves five more for somebody else.
	That's a way of you not being antisocial.
	The high prices encourage you to think about other people.
	Well, and it's so frustrating, Tom, when people say, well, capitalism doesn't protect the environment, but we're going to stop capitalists from raising prices to minimize usage.
	It's like, pick one, people!
	You can't have it both ways!
	I mean, the whole point of hype...
	And also, this happens with the price of money.
	One of the things that frustrates me enormously is when the government grinds down interest rates so that it doesn't have to pay as much on its debt and also to...
	Stimulate in a cocaine style the economy is that when you reduce the price of borrowing money, you encourage people to overuse resources.
	Look at the housing boom. When the crash came, 10% of American housing was unoccupied.
	Think of the environmental destruction that came about from the oversupply Think about the massive amount of environmental destruction that happens when the government subsidizes this industry and then pulls the subsidies or the industry goes overseas and people have to go back and retrain and a huge amount of environmental wastage that is really frustrating whenever the government tinkers in the economy.
	All the booms and busts, all the ghost towns, all of the excessive resources and anyone who wants to talk about environmental damage that doesn't simultaneously talk about national debts to me is not even remotely a serious person because national debts We'll put a link to that as well.
	The books are fantastic. Tom has an elegant pen, to put it mildly, and it's a great way to understand this stuff.
	You really need to learn this stuff because we know in history, if we don't understand the value of the free market, where things go.
	Check out tomwoods.com.
	Lots of great deals and offers there.
	The man's a great educator.
	And twitter.com forward slash Thomas E. Woods for some very entertaining thoughts on Twitter.
	A great pleasure, my friend.
	Thank you so much for your time.

▲