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July 13, 2019 - Freedomain Radio - Stefan Molyneux
15:13
Socialist Economics 101 | YouTube Comments - Rebutted!
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Ah, yes, the, oh, I know how this video's gonna go.
I haven't watched this video yet, but let me take a guess.
He's a cop defender.
He's a... Whatever, right?
So, um... Guy wrote on the Truth About video, The Truth About Poverty.
I've not watched this video yet, but I think I've started to intuit a few things about the way this guy thinks.
His conclusion will probably be that we need to double down on the disastrous economic policies of the Republicans.
Oh yeah, because I'm such a Republican!
Like more tax cuts, loopholes, and giveaways to the super-rich, and then the cutting back or elimination of all governmental assistance programs to the poor.
Regardless of any political ideology to the contrary, the economic facts are that such government assistance programs are one of the most effective ways to stimulate the economy, as opposed to the failed trickle-down policies that were concocted by Reagan And his ilk.
So, um, give a poor person money and he or she goes right out and spends it on badly needed goods and services.
Oh, man.
Oh, God.
Are you typing with... You could have a forehead small enough to type with.
Like a tiny little ball-peen hammer.
Slowly eradicating reason from the world.
So, give a poor person money and he goes out and spends it, and that stimulates economic activity.
You know what's great about that?
It's like, I need a blood transfusion.
Can you take it from my left arm and put it in my right arm?
Because even though you'll spill a lot along the way, I guess I'll end up with more blood.
I mean, this is madness.
You're giving that poor person money, where's it coming from?
Where is it coming from?
Come on, think!
Just a tiny bit.
Just a tiny little bit.
Look, I have a swimming pool.
It's half full.
I need it to be more full.
So I'm going to take water from the deep end and I'm going to put it... scoop it out from the deep end and pour it into the shallow end, while spilling a lot along the way.
I'm sure that's going to raise the level of the... Oh, God!
People, people, you just need to think a little tiny bit.
Where are the poor people getting the money from?
You're taxing it from other people, which is reducing demand somewhere else.
Or you're printing the money.
Which is causing inflation, which is harmful for the economy, or you're borrowing the money, which means you're stimulating economic demand in the here and now, while further suppressing it down the road.
You're either doing it across class, or across time, or through inflation.
That's where you are reducing demand.
So, this idea that... I mean, and it's not hard.
The reason I'm so contemptuous about this stuff is it's not hard to figure out.
Read any little... Henry Hessler's, you know, Introduction to Economics.
You know, anything like that.
Just a little Bastia.
I mean, a little pamphlet.
Anything.
Just read a little bit outside of the status propaganda of Keynesianism and so on.
Just a tiny, tiny...
Little bit.
That's all you need to do.
I mean, just think about it.
Think about it.
If a guy comes into your store and says, hey man, give me $100 from your till and I promise to spend it in your store, would you do that?
And say, look, I'm $100 richer.
It's like, no, you're not.
You're exactly the same as the way you were before, but now you've lost some goods and all the time and energy and money it took to get those goods into your store.
Oh, and the idea that, I mean, I get this from the resource-based economy people too, it's like, man, you're just stuck in your little box, you know, you can't expand your paradigm, you're just truncated in something or other, right?
And, I don't know, as a radical anarchist atheist, I don't really think that I could be accused of being in some predefined little box.
Anyway, so he says, contrary to their propaganda, the rich are not the job creators.
The poor and working class people who consume the goods and services they provide are.
That's like saying if I go to a prostitute, I've created a woman.
I'm just consuming.
I'm not creating.
The job creator simply having demand does not create jobs.
God!
Just think a little bit about human history for God's sakes.
Do you think that we only have new demand since the Industrial Revolution?
People before that were completely saying, I need nothing.
Well, maybe a Maybe a little less smallpox, that would be nice.
Maybe a little less war and famine, that would be lovely.
Oh, black death, bubonic plague, maybe a little bit... Oh, Genghis Khan, maybe a little bit less of that, but I'm completely content for the most part.
I have no desires.
People always had desires throughout history.
Desires do not create jobs.
I want a jetpack.
I want a jetpack.
Hey, anyone?
See a jetpack?
Anywhere?
Jetpack?
No, look, I have a demand!
Doesn't... If demand created supply, There'd be no such thing as pornography, because everybody would want it.
It appears when you want it, because it's magic!
I mean, that's a relationship a baby has to the mother's nipple, for God's sake, not a mature adult in relation to economic reality.
Give extra money to the rich who don't need the money and it will sit in a Swiss bank account or fund risky and irresponsible speculation on Wall Street.
What the hell does Wall Street have to do with the free market?
I've yet to understand any of that sort of stuff.
Give extra money to the poor and it will be recycled right back into the economy to stimulate consumer demand, which is the real engine of economic growth.
Crazy.
Crazy.
Yeah, I don't know.
I mean, this idea that Wall Street in its current incarnation has anything to do with the free market is just so deranged.
I mean, it's like saying, well, penis goes into vagina both during lovemaking and rape.
Therefore, rape and lovemaking are exactly the same.
Except for the knife to the throat, which is kind of an important distinction.
The only way you know if a free market is genuinely occurring is if there is a free market in money.
Is there a free market in money?
There used to be in the 19th century in America there was a free market in money with some interruptions and of course the massive civil war but there was in general a free market in money.
Banks competed with the stability of their currency with the number of gold reserves and there was incredible price stability and there was in fact a decline in prices, a deflation over the course of that Century.
And so if there's no free market in money, in other words, if government controls currency and as a proxy then has to control interest rates, if government controls currency, there is no free market.
Yes, it's true that people buy and sell things.
Absolutely.
And you know what?
People traded in the Soviet Union.
One razor blade for one sock, you name it.
They traded in the Soviet Union that did not make the Soviet Union under communism a bastion of free market capitalism.
The fact that there's buying and selling going on for their stocks and so on has nothing to do with the free market if the government controls the currency.
Because the currency is that which is common in almost all free market interactions.
If that is controlled by the government there is nothing left of the free market.
But a tiny, tiny aftershadow.
You've got to get away from the cave and the flickering fire, to use that platonic metaphor, and get out into the world and look at the way things really are.
Government controls money.
Government controls interest rates.
No free market.
Only the vestiges of a free market.
I don't know whether the rich or poor create more jobs or not.
I have no idea.
I mean, I'd like to live in a world where I don't care.
It doesn't matter.
Some rich people are parasites.
Some poor people are parasites.
Some rich people are hardworking.
Some poor people are hardworking.
It doesn't matter.
But the idea that you simply take a bunch of money from rich people and put it into the hands of poor people and that stimulates a massive amount of economic growth is simply delusory.
Poor people tend to Spend money on things which they consume because they're poor, right?
And so they buy food which they consume and they buy other goods and services which they tend to consume.
They don't tend to save up a lot of money and invest it in building a business, right?
You don't get investment in capital goods, capital growth and so on.
Nothing wrong with that.
It's just the reality.
So the idea of goods will stimulate, sorry, the poor will stimulate demand for consumable goods, but they will not generally invest in increases in productivity in the long run.
So, I'm sorry, you just need to get your head out of your Socialist Econ 101 and just take a look at the real world and put yourself in that situation.
It's basic empathy.
Economics is basic empathy.
You know, what would I do in that situation?
Well, you know, if somebody came into my store and said, let me have a hundred bucks and I'll spend it in your store, would that drive economics?
It's just basic empathy, which is why, tragically, it is so scarce to see.
Stefan, please grow a beard.
I don't know.
First of all, I'm not gay.
I don't know how to grow a human being that makes me look less gay.
I was a little bit self-conscious about my cancer surgery scar, so I grew a beard because of that.
Plus, it was a really damn cold winter up here in Canada.
The weather has warmed up.
Plus, I can only ask my wife to take so many Brillo pad man hairs up the nose when she kisses me.
So I'm afraid we're back to baby bottom cheek fill.
But perhaps if the winter is bad, I will re-ZZ Top myself.
But yeah, fascinating to see the number of comments about the beard.
So a video I did called Climate Change in 12 Minutes.
Somebody wrote, on your last point on the politics, if the science here were to be corrupted by the influence of power and money, Why on earth do you think it would be corrupted in favor of climate change?
If the scientific community were corruptible in this area, then it would most certainly have been done by the vastly wealthy and powerful establishment of billionaires and oil barons who have an enormous interest in maintaining fossil fuel Dependents, as if to prove my point, they already have done this to the political elite over whom they exert their vast influence to the end of opposing any action on climate change.
If this were also possible for the scientific community, don't you think it would have been done?
So the argument, and it's not an argument that is of course scientific, it's not an argument that is conclusive, but when people say, ah, you know, but the people who are skeptical of catastrophic anthropogenic global warming, which requires massive expansions of government power to solve, people who are skeptical of that are just bought off by the oil interests or the rich people who make money off oil and so on.
If that argument is made, then far more money is flowing from the government to pro-catastrophic anthropogenic global warming that requires massive political power expansions to solve.
Much more money is flowing from the government to those, right?
So we're talking billions and billions and billions of dollars going from government to pro-alarmist Climate change research, as opposed to far, far less money going in the opposite direction.
So that's really the case for that.
More fundamentally, much more fundamentally, if nothing is broken, it's hard to sell people a fix.
If you're not sick, it's hard to sell you a cure.
If you're not lost, it's hard to sell you a map.
If you have no friends, it's hard to sell you a cell phone.
People have to convince you that the system that you're living in is fundamentally broken, fundamentally dangerous, that there are powerful, vast, conspiratorial, shadow, dangerous, chemtrail-laced forces that are working against your long-term happiness and survival and freedom and so on, and therefore you need powerful protector, govobot, transformatron, from democracy to obsidian sword wielder of the black magic of state power against the blah blah blah, right?
So you need this mythical fairy tale wherein the system that you're in is horrendously unjust, unfair, wrong, bad, naughty, broken.
And we've been sold this bill of goods over the last, say, 40 or 50 years, which is that the free market, freedom to trade, is fundamentally broken and unjust.
And it's been sold in three major ways.
Number one, that it is bad for the environment.
That free trade is terrible for the environment and therefore we need massive amounts of government power in order to protect people from the consequences of unbridled consumerism, free trade, the rape of the planet and so on.
And the second is that the free market is inherently unjust to women, right?
That women earn 67 cents on the dollar and so on and all of that.
And the third is that The free market is fundamentally unjust to blacks.
You can't say minorities because Asians are a minority and Asians have a higher per capita income than whites.
Jews are a minority and Jews have a higher per capita income than whites.
You have to say that it is unjust to blacks in particular.
So there's patriarchy, there's racism against blacks, there's environmental predation, and that's why we need this massive government.
Now each of these arguments is Well, let's just say it's potentially susceptible to empirical rebuttal, right?
To empirical and philosophical rebuttal.
And I've done that in a variety of shows.
We don't need to get into it here.
But this idea that something is desperately wrong with freedom and therefore we need the state to protect us from freedom.
We need affirmative action.
We need equal pay laws.
We need the EPA.
We need, you know, all of this sort of stuff.
It's just the bill of goods that's being sold.
It's like people are still repeating this myth that the 2007-2008 financial crash had something to do with deregulation.
See, deregulation produced... Right?
Of course, it's all nonsense.
I mean, I've gone over this in a variety of videos.
You can look at HouseMD for one of them.
It's a video on this channel.
And it's all just complete nonsense.
The financial regulation went up.
But you know Glass-Steagall Act, well, Glass-Steagall Act was also repealed in Canada.
Canada didn't have the same thing.
It was Federal Reserve overprinting of money.
little tiny thing called giant imperialistic wars and of course the massive promotion of home ownership among those who had little capacity to sustain home ownership in the long run.
So zero money down, massive subsidies and so on.
So the printing of federal money caused house prices to go up, which made everyone think that houses were some sort of productive investment rather than a consumption good that ages and gets worse over time.
So that made people want to buy houses and then, you know, no money down, mortgages, variable rate for people who maybe didn't understand how variable rates could happen, could change in the future, combined with, you know, the massive amount of money printing Driven by the need to cover up the cost of war and all this sort of artificial suppression of interest rates, you name it.
This is all government power.
But the idea is you see how you see a little crack of freedom got into the financial sector and that blew the whole thing up.
I mean the idea of course that Deregulation caused the financial crash is nonsense.
The financial crash fundamentally was caused by the lack of moral hazard that the government was going to come in and bail out these companies.
And anyone who can tell me how government bailouts for failure has anything to do with the free market is somebody I would like to see try and navigate a separate crossing.
So that's my argument.
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