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July 14, 2019 - Freedomain Radio - Stefan Molyneux
46:02
Tom Woods and Stefan Molyneux Take On Wall Street!
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Hi, everybody. It's Stefan Molyneux from Freedom Main Radio.
I am tickled pink as a pony to have Tom Woods on the show, international, intrepid man of libertarian mystery, best-selling author, and high-up scholar at the Mises Institute.
Thank you so much for taking the time.
Oh, my pleasure, Steph. It's an important topic.
Very glad to be here. So, the Occupy Wall Street.
I know I'm coming late to the party because the mainstream media has admitted its deficiencies and has started to address them, but I found them to be quite fascinating.
I myself am quite ambivalent.
It's hard not to be impressed with the energy and the dedication and the capacity to sleep on grass for the cause that they believe in, but at the same time, I find some of their economic ignorance to be...
Sort of like a chasm that Evel Knievel would hesitate to jump across.
What are your thoughts on what's been going on around the country, really, in this movement?
Well, I think I have the same mixed feelings you do, because occasionally we see a bright light.
There was a YouTube of somebody who was talking about the Fed and inflation, and it fuels the wars, and they're exploiting us.
And I thought, okay, okay, this guy understands what's going on, and I bet he's there explicitly in the hope of educating the rest of them.
But the fact that some of them are there in support of re-electing Obama, when Obama got more Goldman Sachs donations than all Republicans running for all offices put together in 2008, indicates there's a kind of naivety at the heart of some of them.
Again, I'm not generalizing.
I don't want to get the angry emails that Hey, my cousin was there, and he's a pretty good guy.
I know that, but there is, nevertheless, a contingent of people who still have a kind of lingering hope that political solutions are going to solve this, and the Democrats are the good guys, and there are the...
I'm inclined to say that it's just, as Butler Schaefer says, two wings of the same bird of prey.
And so I think we should, in all fairness to the heterogeneity of the people there, not just conclude that everybody subscribes to the demands at OccupyWallStreet.org, But if that's really what they're all about, that we want a more democratic society, we want more free stuff, this and that, then it's a colossal waste of energy.
But if they're going to say something like, we want the military industrial complex cut down to size, we're sick of the Federal Reserve, We're good to go.
But, of course, when you allow everyone there, the message gets diluted and the quality of what's being proposed gets muddied.
And in a sense, it sort of becomes like public school itself, where you can't take a stand on any values for fear of offending some vocal minority.
So I think that's one of the things that happens in these kinds of movements, that they just cast the net so wide that they get a lot of junk as well as some good fish.
Yeah, I think that's perhaps what's going on here.
A lot of it is that some of the protesters themselves may be a little bit confused about what exactly it is they want, but they do, and they should be commended for this, they do have some at least co-ed sense of things that matter, right?
That this, clearly the system we live under isn't the ideal system.
There's something wrong with it.
And that's at least better than, you know, 85% of the country that is just going about their lives and I mean, at least you can see that there's something to be commended in this.
But unfortunately, there's just a lot of the typical anti-capitalist kind of rhetoric and, you know, the business world wants an unregulated market and we need more regulation and we need more oversight of them.
You know, the reality of this is always much more interesting than comic book caricatures that you get at an event like this.
I mean, when you look at US history, look at the 1920s, the great laissez-faire 1920s.
What are the businessmen saying in the business magazines?
They're all saying, competition is so ferocious, we need to do something to put a stop to it, to limit it, to agree among ourselves not to compete so fiercely with each other.
And then in the 1930s, Franklin Roosevelt, friend of the people, gets in power, and what does he do?
He suspends the antitrust laws, which, not that I support those, by the way, so that industries can legally collude with each other to keep prices up.
I mean, this is what the businessman, many of them, want.
In fact, Albert J. Nock, one of the great libertarians of the early 20th century, said, if you said to a lot of business leaders, how would you like a real free market economy where there's no special privilege given, you get no politically driven bailouts or anything like that?
He said they would rather see the country burned to the ground We're good to go.
Honest businessmen exploiting you and me, politically well-connected businessmen, politically well-connected bankers, politically well-connected members of the military-industrial complex that are indeed unjustly exploiting all of us.
And these are the people we need to focus our attention on, not some great entrepreneur, great innovator who makes our lives better.
I would say to them that The government is trying to pit us against each other by suggesting that the real conflicts in society are between the rich and the poor or the blacks and the whites or the young and the old.
But the real conflict, and I think here's where libertarian class theory comes in, is between the guys with the guns and badges and you and me.
That's it. It's the state versus us.
And that when you look closely at all your grievances, there is a government involvement in practically everything.
Education's too expensive.
Well, look, the government's all over this.
Fingerprints are all over that thing.
Whatever their other grievances are about war or about crony capitalism, this has nothing to do with a genuine free market.
It's once again the government getting its hands on things.
And whenever we're told that we're going to get all this new regulation that'll put things right, the big guys always know how to game the system.
They always know how to grab hold of that regulation.
There is nobody on Wall Street saying, let's have an unregulated economy.
Absolutely nobody. That's not what they're asking for.
They love the idea of a Dodd-Frank financial reform bill because over a hundred times in that bill it says the committee will determine blah, blah, blah.
Well, who's going to have access to that committee?
Joe's Country Bank? I mean, let's quit being so naive about this system thinking that this – Corruption that we see everywhere and cozy relationship between business and banks and government can go away if we just have campaign finance reform and we put more super people in office.
Look, we were promised that with Obama, that we just put this super guy in and that'll put an end to it.
No, the system itself is the problem.
That is the problem.
And a few more regulations is not going to solve it.
The system is the problem.
Yeah, you can't reform something that is so fundamentally immoral.
And it's sort of wearying in a way, at least for me, to see the degree to which people do not notice that they're attacking the effects of power rather than power itself.
It's like if you want to bring down a statue, you don't take out your pitchforks and attack the shadow, because that's not going to do anything other than tear up the grass.
You've got to take down whatever is blocking the light, not attack the shadow.
And it's so much less controversial to attack the effects of power, i.e.
corporate manipulations and control.
I think I'm going to go.
accept and even praise and find morally necessary the initiation of forced assault problems.
As soon as people get that the violence is being used, they almost will immediately understand that it's going to lead to nothing but bad things.
But people won't even look at the violence, or if they do it, say it's provoked by the citizens, or that it's morally necessary, or that the alternative is going to be Mel Gibson in a shaved head riding around in flaming motorcycles shooting up the citizenry.
You're dealing with these kinds of mad shadow puppets rather than any kind of cogent rational analysis.
Well, it's important for them to see, if I may quote Monty Python and the Holy Grail, the violence inherent in the system, right?
I mean, we...
In our classrooms, we're taught all these civics textbook platitudes about how the government is there to foster the common good.
Without them, it would just be Mad Max and the Wild West, which we now know was not actually so wild after all.
This is the sort of thing that we absorb.
And if you'll forgive me my sharing with you one analogy that I came up with, I think I've come up with two or three good analogies in 39 years.
So when I get hold of one, I really milk the thing.
And my analogy is...
Let's suppose that most kids were being educated not in government-funded schools, as most of them are, but suppose they were educated in schools that Walmart established, and every day the kids go to school and in their Walmart classrooms they see up on the wall All the Walmart CEOs paternally looking down upon them, and they're taught to sing songs to the greatness of the Walmart CEOs, and where would we all be without them?
We'd all be working in a mine for a dollar a day, and all these terrible things would be happening to us.
And then they wave incense in front of the images of the Walmart CEOs, and then every year they get one day off from school where they go home and meditate on the greatness of the Walmart CEOs.
I mean, if that were going on, I think we would probably find that kind of creepy.
However, when it is government-funded schools where the kids are sitting in, and it's not Walmart CEOs but U.S. presidents up on the wall, well, the kids buy the whole package.
Oh, where would we be without president so-and-so?
Let's sing songs to our great presidents.
Let's carve them in Mount Rushmore.
Where would we be? We'd all be helpless and pathetic with our limbs blown off by the terrible feudal overlords in the private sector.
I mean, people buy the whole package, and it's this kind of false consciousness that That's encouraged by the state that in effect that makes us think this thing is indispensable.
Where would we be without organized violence?
That's why to me the most important line in the whole movie V for Vendetta is the line where that terrible rotten ruler looking at you on the big screen is reminding his underlings that we need to remind the people how much they need us.
But maybe we don't.
I mean, let's just stop and consider, isn't it possible that instead of saying, we don't like the people who are exercising violence at the official level now, we just want nicer people exercising the violence.
What if it's possible?
At least consider the possibility that we could live differently.
That we don't need to initiate aggressive force against one another, whether it's to give some bank special privileges or whether it's to have some social welfare program or whether it's to launch some war.
What if we just interacted with each other with respect as one human being to another?
That is, to me, clearly the most attractive social system, but it's one that's not even considered...
It's not offered to you for your consideration in school.
And if you turn on the TV, you're basically told you can either have the Republicans or the Democrats.
Those are the choices you have.
You can pick which ward you want in the prison.
Well, you know, maybe there's another way to live, right, that's worthy of human beings.
Well, it's tragic to me, and it really does show the power of propaganda and the degree to which it can almost physically shape the brain.
It's like foot binding in ancient China.
It fundamentally seems to change the brain that People understand two things about human nature and it's drilled into them over and over.
Violence is bad. I mean, except in the extremity of self-defense and blah, blah.
But violence is bad and power corrupts.
And yet, you know, so we all accept that in our private sphere.
But then when we turn to the public sphere, suddenly up is down, black is white, you know, things fall to the ceiling.
Because now we're in a complete opposite magical world where violence is good and power ennobles.
And it really is amazing.
We get so much propaganda.
Like the serfs have one set of rules and then when you go into the realm of the masters, everything gets completely reversed.
And people don't even notice the switch.
It's really astounding.
I think there are two major things going on here.
There's exactly this point that we've been raising, that we have this duality in our minds about the acceptability or otherwise of violence.
And we think that in the so-called case of the Public sector, so-called, that that's okay for them to loot and expropriate and bash you over the head with a baton.
We think that's okay, even though it goes against every moral principle we've been taught since birth.
But the other thing is, I think a lot of people are given to a kind of intellectual inertia.
Whatever is, must be.
And so even people like these Wall Street protesters, some of whom things are based on sound, at least they care about something.
At least they sense there's something rotten with the system.
But even they are willing to take it only so far.
So they understand that the wars are based on propaganda.
They're not making us safer or any of this 7th grade, not 7th grade, 3rd grade nonsense.
They see that.
But what they're not willing to go so far as to ask themselves the question, would there be likely to be fewer wars or more wars if the federal government had at its disposal a magical money creation machine?
Do you think there'd be more wars or fewer wars?
Do you think there would be more bailouts or fewer bailouts if the federal government had a magical money creation machine?
Well, we don't have to test this.
This isn't some kind of hypothetical test I'm devising here.
We have a Federal Reserve System, and yet there is, on the progressive left, there has been a kind of a refusal to look at this question, I think in part because they feel like, well, I've been taught since birth that government institutions are created for the common good, and I don't want to be some kind of crank or some guy outside the mainstream to go after a long-standing institution like the Fed, so I'm going to assume that it's okay.
I'm not even going to bother looking at it.
Again, the government has created this sort of narrative whereby if you have fundamental questions about the institutions of society, like the Fed, like the federal government itself, like the income tax, there's something wrong with you.
You're not playing the game.
You're supposed to be asking trivial questions like, should the Fed create this much money or that much money?
Should we be taxed 40% or 39%?
Those are legitimate questions.
But to actually ask fundamental questions, this is just out of order.
And as I say, it's part of this inertia that we're all taught.
And yet when you look closely at these institutions that have been created, like the Fed, they're ripping us off like crazy.
And just one example that I give a lot Today, you can't save for the future by simply accumulating cash, accumulating green pieces of paper, because in 50 years, that paper will have lost two-thirds or more of its value.
So how do we have to save for the future today?
We've all got to become speculators in the stock market, at least in the hopes of breaking even.
Most of us don't have any business being in the stock market.
market.
It's a very dangerous thing to do.
Whereas before you had the ability to create paper money out of thin air, when you had a hard money system, people did, in fact, save for the future by just accumulating gold and silver coins.
Because back when they circulated as money, which they don't today, really, but at that time, they were consistently gaining in value.
And there's a reason for that.
And so people could provide for the future with the most conservative investment strategy of all.
That's been taken away from all of us by this system.
We so consider this to be normal.
We so consider a system where prices just routinely rise.
We think that's just built into the nature of things.
We've got to break out of this inertia and not just say...
The people running the system are bad.
Let's get Big Bird and Barney the dinosaur running the system.
I don't even want Big Bird and Barney the dinosaur running the system.
I don't want the system.
I want a humane relationship in which human beings treat each other with respect.
Imagine that. Yeah, I mean an impossible creature and an extinct creature I think would be good to set at the head of government because that would be a ticket I could get behind.
You're imaginary and you are under 2000 yards of shale.
That's a good place for politicians to be.
It's something that people who maybe haven't had business experience or understand this kind of stuff.
I co-founded a company and grew it and then when the company went public, We all went insane because everything changed.
The amount of money that you could make in a short period of time by diverting yourself from long-term management and planning for that business and going into...
It was like suddenly, instead of having orange juice in the morning, you were having crack cocaine.
It just changed the nature of your relationship to the market.
So much money is being forced and herded and compelled.
Thank you.
Thank you. Well, you've got massive amounts of money crashing around trying to find very short-term gains.
That changes the nature of what it's like to be a business executive in this world because you're at the mercy of these massive forces that are almost completely out of your control and you're going to be judged as a CEO based upon how you work with the stock market which is very different from working with long-term growth and you can still do it but it's really fighting a current and people of course mistake The panic of the chickens when there's a fox in the hen house for their normal behavior, and they always blame the chickens, not the fox.
It encourages the wrong kind of entrepreneurial behavior.
People who want to be good, sensible entrepreneurs and do the right thing find themselves in a race to the bottom, because that's not the type of careful, conservative sort of behavior that This type of Fed-fueled market encourages.
And it's also important to note that it's not that you and I are defenders of the system that we have now.
This is a false choice, that it's either the system we have now or it's the semi-socialist alternative that some of the protesters have suggested.
Well, I mean, obviously, that would be a pretty terrible choice.
But the system we have now, I mean, the monetary system is half of every transaction, right?
Every transaction is always money for something, money for hats, money for toothbrushes.
Money is half of every transaction, and money is created in our society.
Legal tender money is created by an institution that has a government-granted monopoly on the creation of legal tender money and can create it and manipulate it, manipulate interest rates.
You know, is there a chance that maybe this has a teensy-weensy bit to do with why we see this economic volatility, and particularly of the past few years?
Maybe this has something to do with it.
Hayek himself said in the '30s that if you're going to try to understand what causes economies to go up and down and up and down, you know, a pretty good place to start would be looking at half of every transaction.
If money is half of every transaction and then you see an economy-wide downturn, maybe it has an economy-wide explanation.
So this is why I'm encouraged to see some people on the more libertarian side trying to push these protesters more in the direction of occupy the Fed.
Go and learn about the Federal Reserve System.
And no, the problem with the Federal Reserve System is not that It's not socialistic enough, and the U.S. government needs to control it more directly.
The problem is that it is a central planning agency at the heart of a free market, and this central plan is not being drawn up to increase the wealth and prospects of you and me.
It is the great banker bailout system extraordinaire, and if you're not going to target this directly, then you're completely missing the boat.
I think what you and I should do is maybe we can head down to wherever they're doing these sort of Occupy Wall Street protests with big banners and we can have on those big banners something like this.
We demand that every citizen have the right to type whatever they want into their bank account.
Just open up your browser and you get full edit capacity on your bank account.
You can type in whatever number you want and people will look at us like we're insane and we say, well, that would destroy the entire economy.
People just type in whatever they want.
It's like, well, if it's not good for everyone, how can it be good for a small coercive minority, right?
It would be an argument from absurdity that I think people might be able to pin their understandings on.
I would hope so, especially when, you know, in the case of the Fed, if you actually want to know, well, gee, where's the money been going?
You're treated as some kind of uppity troublemaker who doesn't know his place.
It's seriously creepy.
Now, there's one thing that I thought, I mean, and I really want to recommend your books to everyone who hears this.
I really want to compliment you on your writing style.
I read half with pleasure and half with envy as an occasional words with myself.
That's very generous. Thank you. But I thought that you recently just nailed beautifully this perspective that it is a lack of regulation that has caused this.
And, you know, this is kind of like a family paradigm.
So you see a bunch of kids that are running around, you know, hopped up on, glassy-eyed from too much candy or whatever.
And you think, oh, these parents should set some boundaries, should set some rules.
And so people look at corporations almost like they're wayward siblings or kids and the government needs to step in sternly and set some boundaries and put some fences around the yards and so on.
There is this perspective that it is a lack of authority and boundaries and power and laws, regulations and so on that allows people to trample this wildly over the future hopes and finances of the general population.
I thought you really detonated this quite nicely.
If you could, you know, pretend for a moment you're talking to these people, what is it that you would say to them about this argument that deregulation caused these issues?
Right. I talk about this in Rollback, which is my most recent title, and I was glad to do it because this is the narrative, right?
We deregulated the markets, and look what happens.
I would just say, I want you to show me, before you just unthinkingly adopt, I mean, you people are supposed to be anti-establishment, right?
I mean, you're supposed to be standing up to the prevailing wisdom, right?
Well, then why are you accepting the prevailing wisdom about this crisis, which is being put forth by people who none of whom saw the crisis coming, but yet they all know what caused it all of a sudden?
Come on. Ask yourself, what is deregulation?
Name me. I want you to try to name me one repealed regulation that would have prevented the crisis.
Tell me one because banks were always allowed to securitize mortgages.
They were always allowed to hold these mortgages as investments if they wanted to.
That's not some newfangled thing.
So the one specific that people give is they talk about the repeal of Glass-Steagall, which is a banking regulation from 1933.
And I don't want to get into too much inside baseball.
It's kind of a technical question. But in rollback, I go through it and basically show this is a red herring.
It has nothing to do with the crisis.
The only part of Glass-Steagall that was repealed was that investment banks and commercial banks could now be controlled by the same parent company.
But that doesn't...
For a lot of reasons, that does not lead to the outcome that we had now.
We had plenty of standalone investment banks that blew up.
We had plenty of standalone commercial banks that blew up.
The problem was not that deregulation made possible all these newfangled things.
The problem was banks made bad loans.
They did traditional banking things badly.
So it's not that there was...
So then the usual argument, the riposte is...
Okay, so maybe it wasn't some regulation that was repealed that caused the crisis, but it was our failure to proactively regulate enough.
That's the next thing.
But, well, this just begs the whole question, because obviously after the fact, you could look at a blown-up housing bubble and say, hey, we shouldn't have done that.
No kidding. The issue is when it's going on, where are the regulators at that time who are going to stand up and say, hey, this is a housing bubble?
Because the vast majority of the regulators said, nothing wrong with it.
Nothing wrong with the housing market at all.
Who's the chief regulator of the whole banking system?
The Federal Reserve. And the Federal Reserve chairman, whether it was Alan Greenspan or Ben Bernanke, they were telling us, We're good to go.
These superhuman attributes that they tend to be unworthy of.
I mean, most regulators are not these superhuman, far-seeing people who can anticipate everything perfectly.
They tend to be time-serving drones with their punch cards.
That's basically what they are. Not exactly top-of-the-class material go into regulators.
Top-of-the-class material go into billions on Wall Street.
I can't wait to get my job in one of the 115 regulatory agencies in the financial sector.
That's not even close to what they're looking to do.
But then also, when you think about the fact that we did have some people in leadership roles in these financial institutions who were bad people or making bad decisions, well, how come it's so hard to get them out of those positions?
And the answer is that a lot of the same people who are protesting them now, they're cut from the same cloth as the people who introduced all these regulations that make it very hard to get rid of these people.
The Williams Act and other...
legislation against hostile takeovers, so-called.
Well, this is basically the CEO Protection Act of 1986.
I mean, these types of things whereby individual shareholders find it very difficult to discipline bank management or corporation management because there are regulatory limits, very strict limits on how much institutional investors can very strict limits on how much institutional investors can own of a bank or a financial company.
They can have like 1% at most.
So this makes all the shareholders who are the natural regulators who want the company to do well, they don't want it investing in crazy things.
This is the natural oversight, and that oversight is artificially debilitated and scattered because of government regulations.
So it's just, again and again, you actually see that it's the government that is consistently protecting the fat cats, not actually helping to bring them down.
And that's perfectly predictable, of course, because...
We had something called the Greenspan put, the sort of unstated policy, that if the market's ever really turned sour or a hedge fund ever really goes under, don't worry, Greenspan will come to the rescue.
He'll arrange for a bailout or he'll...
He'll liquidate the markets.
In that sense, I mean he'll make markets liquid.
He'll pour a lot of money into it.
They all know that they can behave more recklessly than they otherwise would because they've got a giant sugar daddy waiting in the wings.
You don't see this type of behavior in the shellfish industry, in the book publishing industry.
Why do you see it in the financial industry?
Why do people not even ask this question?
Because there's this major sugar daddy that can make all bad things good, that can turn everything right.
So when you look at this, when you realize that the Federal Reserve was manipulating interest rates, making housing seem much more attractive and sensible of an investment than it otherwise would.
And every time the economy tries to correct itself, to tell people, as in 2001, stop spending so much on housing, this is a crazy unsustainable bubble, the Fed intervenes to make all those red lights the economy is trying to convey to us make them all green.
time and again. This is the exact opposite of a free market.
It's a manipulated, crony capitalist, Federal Reserve manipulated market that has nothing whatsoever to do with the free market or deregulation.
It is a nightmare of intervention that has gotten us to this point.
If we'd had a regular free market and somehow you and I had just gone crazy buying houses, what the free market would have done is it would have had interest rates shoot up.
Banks would have run out of money to lend and interest rates would have shot up and that would have told us, stop speculating in real estate.
But every time interest rates were trying to move up, Well, the Fed can just push it back down again.
And so you and I don't get the message.
The economy is trying to send us a message.
We don't get it because there's all this white noise created by the Federal Reserve.
That's where your anger should be directed.
The people on Wall Street, there are a lot of wicked and greedy and corrupt people there.
But in the grand scheme of things, they are bit players.
The whole system is made possible by a Federal Reserve that stands ready to bail them out, number one.
And number two, that because of the Austrian theory of the business cycle, it's the Fed and its manipulation of interest rates that gets the economy on these sugar highs to start with that you inevitably crash from.
And I think an analogy with Red Bull is very much in order.
Yeah, I'm not a big one for Gypsy Curses, but if I could summon one, I would probably send the smoky, skinny, raspy ghost of Ayn Rand to haunt Alan Greenspan's dreams because he really deserves something truly Macbethian in his latter years.
That's right. That's how it should really go down.
And of course, yeah, CEOs have concentrated benefits to get from the state, whereas most shareholders' benefits are diverse and spread out among a bunch of different companies.
So, yeah, I mean, every time you create concentrated power, you draw those with concentrated benefits, always the minority, always those who are wealthy, who have political pull.
And can you imagine being an advisor to either Bush or Obama during the time of this pandemic?
And saying, hey, listen, you know what would be great?
It would be great if we could throw a whole bunch of voters out of their houses because that's really what's necessary to correct the overheated housing market.
And you know what would be great too?
If we could just throw a whole bunch of voting construction workers out of business.
That would be fantastic.
Keep the pain at bay, bribe and placate the electorate until the election.
That's all you have to do is get through that and then you can make up any excuse you want after that.
That's the way politics has always been and going.
And how big, last rant I'll make, how big does the government need to be in people's minds to start solving problems?
From the 1960s, it's grown, what, four or five times in real terms, not even counting the debt and the deficit.
So if you have a government that's five times bigger than the one that was supposed to solve drugs, that was supposed to solve illiteracy, it was supposed to solve inequality, it was supposed to solve poverty, it was supposed to solve war, it was supposed to solve all of these things, now it's five times the size.
Things are even worse, but people say, no, no, no, no.
Once we get six, we're going to break through that sound barrier and all is going to be paradise.
I mean, it's mad.
It totally is.
I think it was John Kenneth Galbraith who back in the 60s said there are no problems in New York that a doubling of the budget wouldn't solve.
Well, the budget was tripled and the problems go worse.
Now, I mean, but see, suppose it was reversed.
I have to use this argument. Let's suppose they tripled the budget and then all the problems went away.
Well, then you know what the narrative would be.
Well, you see, it just goes to show government solves your problems.
But when you triple the budget and all the problems get worse, they just say, well, you can't blame that on us.
I mean, there's nothing we could do.
It's whatever.
It just happens consistently.
I mean, it's like when I talk about government science funding.
Oh, we couldn't possibly live without that because free market can't provide science.
You know, I've heard all the arguments.
But when you look in the 19th century and you see the British spent zero dollars on government science policy, whereas the French and Germans spent a lot on it.
And the British did much better scientifically.
Well, imagine if it was reversed that the British spent all this money and they did well scientifically and the French and Germans hadn't spent anything and they did badly.
You know what we'd hear. Well, obviously, the more you spend with the government, the better your scientific enterprise is.
But when the exact opposite occurs...
We hear nothing. So it's the same sort of thing.
They always turn every narrative to their benefit, and if they just can't figure out how to do that, they just don't bring it up at all.
But you're right about how much bigger would it need to get.
I cited in rollback a figure of 115 regulatory agencies dealing with the financial sector.
So it is not true that there are now fewer regulators than there were, and George W. Bush fired them all.
George W. Bush didn't fire anybody, right?
I mean, he spent more on everything that you could imagine.
So the number of regulators increased.
I mean, it's just over and over.
And so the question that I sort of asked rhetorically is, if we had 115 regulatory agencies, I mean, why are we so sure that if only we had one more, you know, like 116, then we would have nabbed this thing?
I mean, again, if you're a The problem is financial bubbles.
Well, then don't blow them up.
Turn off the air pump.
Turn off the Federal Reserve.
Again, that's where you need to look, but we're being instead encouraged to look in all the wrong directions.
That's exactly what the government always wants to do.
It always wants to misdirect you.
If prices are rising, that's because a greedy businessman or labor unions or whatever has nothing to do with us.
If unemployment is rising, well, that's just because the free market economy doesn't work.
It has nothing to do with anything that we've done at all.
Because by definition, only sunshine and lollipops fall from everything we're doing.
And it takes people who are willing to stand up to and to question the narrative they got in school.
It takes real strength of character.
It takes a skeptical intellect to think differently, to think maybe differently.
The people who can take as much of my money as they want at the point of a gun, who have the right to initiate violence against me, and who have to therefore weave all these rationales so that I will come to accept this, and I will go along with this, Maybe they have a vested interest in making me believe that all social ills are the responsibility of people in the private sector, and all progress is due to them.
They have a vested interest in making me believe this, so that alone should make me skeptical.
Maybe there's another way of looking at the world.
Oh, yeah. I've often thought that, I mean, one of the key roles of the masters is to create We're good to go.
Then we will forever be feeling that we need someone to stand in and intervene and control and limit the negative behavior of others.
And it's just not the case.
If we were to lose our fear of each other and to stop being afraid of voluntary interactions, two things would happen.
The first thing is we would lose the panic that sends us running to the state.
But then, I think the real fear that we're all experiencing would occur.
Look, if I get a letter from Starbucks, I don't get alarmed.
It's usually something quite good inside, a coupon or something.
And yet, if I get a letter from the government, I'm always like...
Yeah, yeah, your heart stops.
Right? I mean, it's that basic an experience that we need to reconnect people with so that they don't think that just because we have this big monster hammer, we can turn everything into a nail that the hammer misses every time anyway.
Well, one of my friends said that one of the great victories of the state is that the word anarchy terrifies people, but the word state does not.
And this whole thing about getting us terrified of each other, I think part of it, though, boils down to a concern that some people have that, well, what would you do with the poor?
I mean, obviously we can't, they would think.
We can't support the poor without expropriating people, without the badges and the guns.
And part of the I think there's sort of a twofold answer to that objection is, One is that the poverty rate fell dramatically in the U.S. long before there were any serious poverty programs worthy of the name.
I mean, you didn't get those until the late 60s, and poverty in 1900 was, this is not a joke, about 95% from our current point of view, and it got down to between 12% and 14% by the time the poverty programs got serious funding, and then it's pretty much stagnated since then.
Now, again, imagine if it had been the reverse.
Imagine if there had been all this government funding of poverty programs for 65 years and that reduced poverty, but then we took those programs away and poverty stagnated.
Well, you know what we'd be told?
Well, it goes to show only government can get rid of poverty.
When it's exactly the opposite and the free market gets rid of the poverty, you don't hear anything about it, you hear crickets, no response whatsoever.
The other thing is you think about how much does it cost to actually help a poor person in terms of money.
Well, the bureaucracy thing is just notorious.
Like, 70% of the money gets eaten up in bureaucracy.
And then there's so much deadweight loss associated with taxation, all the enforcement efforts and all the money and inefficiencies involved in taxing people, that it takes $5 spent to actually get $1 to the poor.
So you wouldn't actually even need to replace the entire budget that the U.S. government is spending.
And there are all these other incentives that a private The group, you know, they want to get more donations.
They don't want to say, hey, look, the number of poor people continues to go up under our direction.
No, no, no. You want to say, look at what we did to get these people off the rolls and make them self-supporting.
So what it boils down to is, do you really think your fellow man is so evil that you and your neighbors are so evil that you wouldn't help some guy out?
And even if you don't have a lot of money, you can help people in kind.
You can help somebody build a shed or, like, whatever needs to be done.
Like, Don't you trust yourself to do these things?
And if you don't, how have you allowed yourself to be talked into this idea that you're that evil?
Maybe you're not. Well, and of course, if you're that evil, you can't be allowed to vote.
Yeah, exactly. You are the last person in the world we should want to be voting.
Well, and I think...
It's not a conspiracy theory, I think, to say that people who profit from a problem are not fundamentally interested in eliminating that problem.
I mean, we may get some great jetpack, but we're not going to get it from an oil company if it doesn't use oil, some solar-powered jetpack.
You know, we may get electric cars, but we're not going to get them from the oil companies.
We're going to get them from somewhere else.
And the fact that the government profits, so to speak, to use the term very loosely, the government profits from social problems means that the government actually has no incentive.
In fact, it has a counter incentive to solve these problems.
If poverty increases, government revenues tend to increase as well.
If there are financial disasters, if there are blowback from foreign policy adventures, the government power tends to increase.
We all understand this in the free market, that the makers of Viagra aren't interested in some limerick that's going to give people perpetual boners because they just want to keep making money off that.
And so this is the incentive of the government is not to fundamentally, and no matter how well-meaning individuals are within that system, it is fundamentally against the, quote, profit of the system to reduce or eliminate these problems.
In fact, you could even make a slightly paranoid argument that one of the reasons we got the Great Society was that poverty was on the verge of being pretty much eliminated, and that would have taken out a huge reason as to why we needed a bigger government to begin with.
Yeah, I mean, that's why there are people who would say that there's just no way that Ted Kennedy, for example, I'm from Massachusetts, so that name just comes readily to mind, that Ted Kennedy was just stupid.
It can't just be that he doesn't understand economics.
I'm willing to believe a lot about these people, but that one I find a little bit hard sometimes.
It could well be he knows exactly what he's doing, but that's his constituency, and if he can keep them down and terrified, then they're not going anywhere, and he builds up a political fiefdom for himself.
That word fiefdom actually is a really useful one to describe All the examples that you've given, like the military, like the CIA, the intelligence operations, are kind of a fiefdom unto themselves.
The welfare social work agencies have fiefdoms.
They want to build up...
Yeah, yeah, yeah, they want to solve problems, doodly-doo, but they want to build up their staffs.
They want to build up their influence.
This is true of whatever, the agriculture department.
There are entrenched fiefdoms that...
Perhaps they fool themselves into thinking that what's good for the Department of Agriculture is good for America, but that's how they act, as if building up my fiefdom is an end in itself, and I'm going to spend every dime that we get so that we can justify doubling the budget next year.
How could you think that people operating under incentives like this are going to yield you anything but the most undesirable outcomes?
And isn't it possible that a voluntary system where we don't have these taxpayer-funded, coercively funded fiefdoms, isn't it possible that could actually yield greater human welfare, not only be morally superior but actually create a better society?
These types of things need to be thought of.
We need to think this way instead of just thinking that our options are Ben Bernanke either hands out money to AIG or we have a socialist planned economy.
Again, you're choosing different types of enslavement.
Isn't there something to the dignity of mankind that demands a more humane solution?
Yeah, I mean, it's like the Republican-Democrat choice.
Would you rather slightly less violence domestically and a lot more violence overseas or vice versa?
It's like, can I not get a none-of-the-above checkbox somewhere?
I also wanted to point out that what I'd like to extract from your last speech, which was great, was that if you, Tom, ever do decide to run for office, I think we can extract a fine campaign slogan from your last speech, which is, you can picture this on billboards, skywritten on lawn signs, "Yeah, yeah, yeah, I want to skywritten on lawn signs, "Yeah, yeah, yeah, I want to solve problems, doodly-doo." I think that if you were to run on that platform, it would be a rocket sled that you would be running on front of.
Tom Bilyeu: Yeah, I appreciate that.
I mean, actually, one thing that I actually said this in an interview, I was interviewed, believe it or not, by the Harvard Political Review, and they said, you know, what What policy area most interests you?
We know that libertarians want to solve problems in this way or that way, so which particular social problem are you most interested in?
I said, that's actually not the way I think about it.
I don't think of myself as solving problems in the policy-wonkish sense.
I think of myself as grandiose as this may sound, but I think of myself as pursuing justice.
And it just so happens we live in a world that when you pursue justice, a lot of these problems are solved by establishing justice.
And so I don't think of myself as saying, well, gee, we've got an educational problem, so...
What kind of voucher system could I replace it with that would be 3% more liberty oriented?
I don't think that way. I just think I want to have a just society and the just society is also the society where these problems tend to be diminished.
Yeah, I hope that somebody would ask me this question at some point, because I think a pretty good answer popped into my head.
So if somebody said, what policy areas most interest you?
It's sort of like asking an unjustly incarcerated prisoner, what part of the prison interests him most?
To which the prisoner can only reply, the outside.
Exactly. That's right.
So, listen, Tom, I really do appreciate your time.
It was very enjoyable, and I'm not sure who ended up with more spittle on the camera.
You or I will find that out in post-production.
So, for people who want to, and again, hugely, hugely recommend your books, it is like having a very, very entertaining person lead you out of the fog and into the sunlit mountaintops.
So, where can people get more information about you, what you're up to, and how can they get a hold of your excellent books and audiobooks and so on?
Well, I've got a lot of stuff up at my website, tomwoods.com.
That's the main place.
I've got a blog and a lot of my speeches and articles and stuff.
A lot of free stuff is available there.
You could order my books.
I wouldn't be disappointed if you did that, but there's plenty to keep you busy there for a while.
And I just want to say thanks, Steph.
I'm glad we finally had a chance to connect.
It was really enjoyable. Yeah, I very much appreciated your time, and thanks so much.
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