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July 14, 2019 - Freedomain Radio - Stefan Molyneux
01:18:23
The Peter Schiff Show! Hosted by Stefan Molyneux of Freedomain Radio
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I don't know when they decided that they wanted to make a virtue out of selfishness.
Your money. Your stories.
Your Freedom of Peter Schiff Show.
Your Freedom of Peter Schiff.
It's Stefan Molyneux standing in for Peter Schiff on the Peter Schiff Radio Show.
I hope you're doing very well.
I am contacting you from Canada, or as it's colloquially known in the U.S., the future of your health care.
So, my name is Stefan Molyneux.
I'm the host of Free Domain Radio, which is the largest and most popular philosophy show in the world, in fact.
And I guess I've had Peter Schiff on my show once, and we had a very spirited and enjoyable debate last week about the role of the government in society.
And so I really appreciate the opportunity to have a chat with you further.
We will be taking calls at about 20 after the hour in the second segment.
You can call 1-855-4SHIFT. That's 1-855-472-4433.
Or internationally, you can call 612-465-7356.
I'm very excited to have Chris Martinson.
On the show, he'll be coming in just after the half hour, and we're going to be talking about his amazing data analysis showing the incredible changes that are imminent in the economy, largely as a result of challenges in the extraction and processing of energy.
Energy, of course, is what makes everything go, including this show.
So he's going to tell us what's happening and how we can protect ourselves from these changes.
So, you may be wondering, maybe you are wondering, what is a philosopher doing on this economics show?
Well, I'd like to tell you.
Philosophy is the discipline, really, of examining problems from true root causes.
When you have problems in society, and I'm sure the listeners to this show are very, very aware of the number of problems we have in our societies, You've always got to look for the root causes and make sure that you're not just playing whack-a-mole with all the symptoms.
So, of course, we have the problems in the economy, the Federal Reserve monopoly on fiat currency, the loss of the gold standard, the massive and mounting debt at every level.
At every level of government and lack of job creation, capital flight, I mean, it's all a big, big mess.
And from a philosophical standpoint, I always try to look down at the very root causes and say, what is the one thing that is in common with all of these problems?
And the one thing that is in common with all of these problems is that they all violate a fundamental moral rule that is accepted by all religions, all moral systems that I've ever come across around the world.
And it's something that we all practice in our private lives, but in the public sphere, in the government sphere, it's completely changed.
So in our private lives and the laws that we're subject to say, thou shalt not initiate the use of force against thy fellow human being.
You can use force in an extremity of self-defense, but you cannot morally justifiably initiate force against others.
If you look at all of the economic problems that we're facing, I think if you drill down to the very root of them, you will find that it is a violation of moral law that is foundational to all of these problems.
Let's just take a look at the Federal Reserve.
was largely private in the US in the 19th century and before that, really up until the creation of the Federal Reserve in 1913.
And then there was a seizure of gold under FDR in 1933 and then the closing of the gold window under Nixon in 1971.
But throughout from the founding of the republic through the 19th century, money was largely Banks would issue it in lieu of having to carry gold around.
You would carry these little scripts or notes or pieces of currency.
And there were times when the government took over the currency, such as in the Civil War, and destroyed the currency, as wars always tend to do.
But you know, in the 19th century, this is something that, for those of us who've lived in the last part of the 20th century, is almost incomprehensible.
In the 19th century, in the United States, prices declined for over 100 years.
Prices for everything declined.
I don't just mean for iPads.
You know, we're used to technology prices declining relative to features.
But prices for everything declined.
because that's what a private and free economy, a competing set of currencies, is supposed to do.
Of course, we've just lived with the most horrendous inflation over the past 100 years, less than 100 years.
The Fed is less than, what's next year?
Next year is going to be the anniversary of the doors to the gateway of inflationary hell that opened up in 1913 on Jekyll Island.
And since then, since the government took monopolistic control of the currency, the currency has lost.
almost 98% of its value.
And what that means is that 98% of its value has flowed to the rich, the powerful, and the politically connected away from the poor and the middle classes.
It is an absolutely regressive tax to overprint money.
It taxes those on fixed incomes through inflation.
It steals from the poor.
It is Robin Hood's evil twin from hell.
And so, if we look at what the problem with the Federal Reserve is, it's not the overprinting of money, it's not bad policy, it's not the fact that they happened to print a lot of money right before an election.
The reality is that it is the initiation of force that prevents other people from using competing currencies.
I can't imagine any sane human being if they were offered a choice between a number of compatible currencies.
That they would choose Federal Reserve notes, given their instability, given the wild fluctuations in issuance and the wild fluctuations as a result in interest rates.
Nobody would choose this. So the fact that we're forced to choose and to use this currency is a violation of moral rule.
Choosing to use an alternative currency is not an initiation of the use of force, but it is against the law, and that is one of the reasons that this is all occurring.
If we look at something like national debt, how does this relate to moral philosophy?
Well, I think that we can all agree without getting into horrendously complicated moral arguments that it is not just, it is not moral, it is not right to enter somebody into a contract that they have not agreed to.
I can't sign you up for a cell phone service if you've no interest and no desire for it, or if you already have a cell phone.
And even if I deliver a car to you, I can't sign you up to buy that car.
I cannot make you, force you to enter into a contract against your will.
Or, to put it another way, there are no unchosen positive obligations.
And yet, if we look at something like the national debt, the national debt is founded on one simple evil premise, which is that it is morally good, morally necessary, morally justified to sell off the labor of people who haven't even been born yet.
Because the only reason that lenders lend to the government is because the government is going to return to them The productivity of the labor of people in the future.
And some of those people are still alive, but the majority of those people, certainly the people entering into the workforce now, are inheriting a debt that they never chose, and that was entered into on their behalf before they even had a chance to vote, before they were even born.
Well, that is an unbelievable and egregious violation of a basic and essential moral rule.
And if you look at things like trade restrictions, tariffs, taxes on things like that, if you even look at the minimum wage, these are violations of moral rules.
Minimum wage is pretty brutal and gruesome.
And that is something that is a violation of the free contract between individuals.
If somebody wants to work for $5 an hour and somebody else wants to give them a job, they are violating no moral rules by entering into a free contract with each other.
And so these are all things that we need to look at.
There's an old saying in philosophy, or was it carpentry?
Which is, when all you have is a hammer, everything looks like a nail.
And so we are going to pick this up when we come back.
Please, I want to hear your calls.
855-4SHIFT. Let's talk about philosophy, economics, and what's going on in your life.
To President Obama, Secretary Geithner, Madam Pelosi, and all of the socialist econ professors across America, we're sorry.
Peter Schiff is back on the air.
Go ahead.
All right.
We're back, and let's go straight to the brains of the outfit, i.e. you, the listeners.
So we have Tim from Austin, Texas.
You have a question about Canadian health care.
Please go ahead.
Yes, I mean, a lot of Americans today still believe, and Canadians alike, that the Canadian healthcare is so superior to ours that the big government solution has solved this inequality of wealth relating to healthcare.
I was wondering, maybe you could Give us your opinion or your Well, hopefully, as a thinker, I'll try not to give you my opinion, but I will give you some facts.
Look, the first thing to remember about any socialized, like when you socialize a private system, and this is true for healthcare or NASA or education, you actually get some incredible benefits right up front.
So, when you socialize the healthcare system in Canada, what happened was the government took over a private healthcare system, and all of the doctors and the nurses and the practitioners within that system Had cut their chops in the free market.
So they had really great hours.
They did house calls.
They worked all night. They had incredible customer service ethics.
The moment the government takes over that system, the people don't immediately become bureaucratic, lazy, indifferent doctors.
They still have that work ethic.
So you get this great momentum.
You have the public sector paying, which generally means you're going into debt.
So you're not even raising taxes to pay for it.
you're just going into debt to pay for it or to pretend to pay for it and you inherit this incredible system look at nasa right they they went to the moon right away and then what did they do for the next 40 years well not a whole lot they just kept using the space shuttle over and over and didn't innovate very much because things get bad it's like half a generation to a generation after you take over something after the government takes over something it gets really bad afterwards but the work ethic doesn't decline immediately so i want to point that out so So people who were looking at the Canadian healthcare system may be looking at sort of the first generation of it, when it was paid for through debts and deficit.
Remember, Canadian debt per capita is just under that of Greece, so that's not very good.
And secondly, you've got all this great work ethic.
It's sort of like taking morphine for a toothache.
Yeah, you feel better, but of course the underlying rot gets worse.
But here are some facts. 4.3 million Canadians do not have access to a doctor.
How do they?
They maybe go to a walking clinic, they maybe go to emergency and sit around for 12 hours, but they cannot get a doctor.
Specialist doctors surveyed across 12 specialties in 10 Canadian provinces report a total waiting time of 19 weeks between a referral from a general practitioner and receipt of elective treatment.
So you got a shadow on your lung and it can take you 19 weeks, month after month after month of waiting to get any kind of treatment.
Now, in the early 90s, the Canadian government said, ooh, our healthcare waiting times are really bad, so we're going to spend a huge, huge, huge amount of money to fix this.
And what happened? Well, any libertarian will tell you that the more the government spends on something, the worse it gets.
That has happened. 104% longer waiting times than 1993.
This is measured by the Fraser Institute.
In 2011, people across Canada are waiting for 941,321 procedures.
And the average wait for an appointment with a specialist, 156% longer than 1993.
You can just go on and on.
It is just brutal.
Now, if you have a real emergency, if you get hit by a truck, the Canadian health care system, I think, is pretty good.
I mean, but it's the stuff that's kind of softer that's really, really hard.
And, of course, it's a multi-tiered health care system.
If you know a doctor, if you're friends with a doctor, if you're a politician, you go to the front of the line.
Or, as many Canadian politicians do when they get diagnosed with something serious, they hop in a flight and head to the land of what's left of the free and get health care from the U.S.
So there's pluses and minuses.
But, of course, overall, the system tends to deteriorate.
Sorry, did that answer your question?
Is there anything else I can help you with?
Yes, yes. And just a quick comment, you know, I work in healthcare here in the United States on the EMS side of things.
And most people don't realize this.
There is free healthcare in the United States.
If you call 911, you will get an ambulance and you will get to the ER and you will see a doctor within 10 minutes.
And they can't refuse you.
And most people don't realize this, that the ER rooms of the United States are the free healthcare system.
And because of the way that the government regulation encompasses every process along the whole way, that it has to be forced Paid for by the hospital systems and of course paid for by everyone who has insurance and pays for their procedures and everything costs more because of it.
So we have healthcare right now in the United States.
It's just a roundabout way of doing it.
Yeah, absolutely. And, you know, if people want to compare at least mostly private healthcare with government controlled and regulated, 50 cents on the dollar in the U.S. is spent by the government.
And, of course, the government controls and limits the supply of doctors and has this cartel.
But look at laser eye surgery.
The price for laser eye surgery has gone down 8 or 9 or 10 times since it was introduced because it's largely private.
The price of everything else goes up.
The government pays artificially low prices and therefore the people who don't have insurance or people who don't have government coverage end up paying artificially more prices.
This is just the usual set of circumstances that arises when you violate basic moral rules and you force people into paying for things that they don't want to pay for.
Every time there's a health insurance mandate everybody with an obscure ailment wants to get on that and socialize the costs of their treatment to everyone else.
But most fundamentally, what's not being talked about in the healthcare debate is the fact that 70-80% of major health issues are entirely preventable and are the result of lifestyle choices.
You will not see Barack Obama getting on TV and saying to the average American, listen, if you want to control healthcare costs, You can't control my policies.
You can't control the AMA. You can't control the Medicare and Medicaid.
You can't control any of that.
But you can put down the Doritos and go for a walk.
And you won't hear any of that.
But when you're in a situation where the government is taking over more and more health care, what you need to do, what I strongly urge everyone to do, eat well, exercise, for heaven's sake, take care of yourself.
Because if you start getting caught in the machinery of that dysfunctional system, the outcome is often not good at all.
Alright, thanks very much. We have also on the line, we have Chris from Columbia.
Unfortunately, this is South Carolina, not the space shuttle, and you had a question about the libertarian movement?
Yes, sir. Glad to speak with you.
I'd like to ask you, what do you think the real world analysis of the libertarian party is?
It's not the party, I'm sorry, the libertarian movement.
Back that up. As far as the growth, I mean, I have tons of Facebook friends, you know, it just grows exponentially, but I feel like I'm in a cage not really knowing what the real-world numbers of the growth is.
I wonder if you have any opinion on that.
I don't have any hard numbers.
I think that we can certainly look at the candidacy of Ron Paul.
I mean, I think it's fairly reasonable to say he's not going to get elected, but as an educational bully pulpit, he's obviously doing quite well with some very radical ideas.
I think that I've been doing this for like 30 years, and when I first started, people looked at me like...
I was sort of suggesting that we reintroduce slavery and go back to punishing impudent school children with an iron maiden.
The cage, not the band, although that would be punishment too.
And it was just incomprehensible when I would talk about the non-initiation of force and property rights and the free market and charities and voluntary societies solving social problems and so on.
Now you've got more of an opening because the accumulation of catastrophes is so...
Huge! And you can't miss how these things are really not working.
You can't miss how the great society under LBJ in the 60s has failed to solve the problem of poverty.
You can't fail to miss that educational standards are getting worse.
You can't fail to miss that the economy is getting worse.
You can't fail to miss that this whole egalitarian program to sort of lower the...
Highs and lows, the rich and poor, to make more of a middle class, has failed, and we've got a greater disparity between rich and poor.
So I think that people are much more receptive to libertarian ideas now than they used to be.
That's on the plus side.
On the downside, you have, what is it, between 30%, 40%, and 50%, depending on how you measure it, of Americans are directly dependent upon the government for their daily bread and the roof over their head.
And those people are going to dig in real hard if people start to try and cut government programs.
So you have a growth in openness to the ideas of liberty and freedom and voluntarism, but on the other hand you have a hardening of the defense line against any kind of expansion of human freedom.
So listen, please, please stick around.
We've got a great show coming up.
You've got to listen to Chris Martin.
He's coming up just after the break.
And we're going to be taking more callers over the next hour.
Just remember, 855-4SHIFT or internationally, 612-465-7356.
And we will be right after the break.
We now return to The Peter Schiff Show.
Call in now. 855-4-SHIFT. That's 855-472-4433.
The Peter Schiff Show.
All right. Welcome back, everybody.
I'm very excited to have Chris Martinson on the line.
He is the publisher of The Crash Course video series.
He's a former VP of Pfizer and biochemical scientists.
He's got a PhD in neurotoxology and an MBA from Cornell University.
Welcome, Chris. Great to have you.
Thank you.
It's a pleasure to be here.
So you've done, actually, I met Chris, did some hosting duties for a KC Summit last year, and he just said, if you ever get a chance to see Chris speak, it's really great.
If you watch the video series, my sort of initial reaction was something like this.
Ah, we're doomed.
And as it turned out, there's actually quite a lot more optimism.
But let's talk about the ways in which you view the next 20 years as being completely unlike the past 20 years and why.
Oh, well, you know, I could talk about this in terms of all three E's that I talk about in the crash course, the economy, energy, the environment.
But to make it really simple, I can just do it with just one E, the economy.
If I just had one piece of data that I could give people that could explain so much of my point of view about why the next 20 years are going to be so different, it's this.
From 1970 to 1980 to 1990 to 2000, across those four decades, We doubled our total credit market debt five times.
I mean, these are full doublings.
Like, if we had 100 units in 1970, it went to 200, and then 400, then 800, then 1600.
And so, very simply, in order for the next one or two decades to resemble what we just came through, we're going to have to double and then redouble our credit market debt again.
And there's just nothing on the horizon to say we can do that.
So, guess what?
We're not going to be building our debt loads faster than we're growing our economy, which is what we did during those four decades.
And that alone just says, okay, it's going to be different.
Because what we just came through was the most extraordinary period of debt buildup ever seen in our country's history.
And we're not going to recreate that.
That alone is going to be a very different landscape.
And what does it mean As an individual, if you have to transition from a period of time where you're spending well beyond your means, and that can be fun, right?
You have the car, the house, the vacation.
You're doing all of those things.
But then you have to transition to a period where one of two things happens.
Either you're living below your means as you pay all of that back, or you default and you go into bankruptcy.
Those are your two choices. The hard limit on debt seems to also be matched by one of the other E's that you talk about, which is the fact that the energy required to extract energy is growing relative to the output.
You have this example I think you gave.
They're building some platform, was it, off Australia, which has the metal equivalent of six aircraft carriers just to extract some gas from underneath the ocean.
So the amount of energy that it's taking for us to get energy is also going up, which is another limit.
Well, this is actually, you know, that is the core of the story.
The core of the story is this.
I don't care what kind of an organism you are in nature.
If you have energy, primarily food energy, you can expand your population.
And if you don't have energy, you can't.
Well, the fuel, the food, as it were, for our economy, if we think of our economy as just another organism, the fuel for that is raw energy in the form primarily of fossil fuels.
And the most important of them all is petroleum.
And that is coming in shorter and shorter supply.
We know that we're past the period of peak cheap and easy oil.
We're past the peak on that.
We're getting to the harder oil.
Yes, there's a lot of it, but you made the excellent point.
It's the critical point here, which is that the energy we get back from going after these harder forms of energy.
Think tar sands or the oil sands or the tar shales, or you're thinking about the ultra-deep water fines.
It takes an extraordinary amount of energy just to get that energy.
That's a whole new shift to the landscape.
It's a paradigm shift.
It's a very large change.
And that change alone, to me, explains everything about why we've dumped trillions of dollars into the global economic system and it hasn't sputtered back to life.
And the reason for that is because the fuel just isn't there for the expansion anymore.
Well, and of course, the free market argument, there's an old metaphor from Econ 101, which is like if you're in a room filled with peanuts in the shell, you're never going to run out of them because the first one's going to be easy to find, and then eventually as it gets harder and harder to find, you just stop looking.
And so there's supposed to be a soft landing when things start to run out.
The price goes up gradually.
But I think there are so many government policies in place to stave off the economic reality of this that I think that when the transition occurs, it's not going to be exactly a soft landing.
But I think... Well, I agree.
There's two ways we're going to approach this.
One is on our own terms, and the second is on some other terms.
I think it's going to be some other terms because we're really not going to face up to this at the global or at the national, at the political levels.
There seems to be no willpower for really assessing the true nature of our predicament.
And so we're defaulting to what we used to know, which is we'll say, oh, we'll let the market deal with this.
You know, market forces will Indicate to us when it's time to make the transition to alternative fuels.
And what's missing in that view is the idea that energy transitions take decades and decades, and we don't have decades in this story.
And the second thing is that every single energy transition in the past has been from a lower quality to a higher quality fuel.
And without stepping on too many toes here, alternative energy is a lower quality fuel than petroleum.
It's just lower energy density.
It's not in the form we want.
It has poor energy returns.
You can talk algae, biodiesel all you want, but the energy return on that still is really poor compared to sticking a straw in the ground and getting this beautiful black gold to come out.
And so we have never made an energy transition with market forces or otherwise from a higher to a lower quality energy source.
So we should be looking at that and saying, well, this is a different sort of a transition.
This might require more than the usual amount of attention.
Status quo, business as usual, may not cut it in this regard.
And my concern is that we have, on the one hand, an exponential debt system that just needs to keep expanding constantly, constantly, constantly.
And the only thing that can justify that is if we are constantly expanding the amount of resources that we're pushing through our economy.
And the way we push resources through is with energy.
And if our energy is going into decline, we have an extraordinary predicament on our hands.
That we should be talking about.
We should at least be talking about it.
But here's how unserious we are about it.
The Department of Energy has no money, no department, not one single person dedicated to the idea of assessing what the energy return is on our energy investments.
None. So we don't even know really where we stand in this story in a realistic basis because we haven't even begun to look at it even in the slightest way.
Well, and the only people in the government that I know of who are looking at the ramifications of this are the military.
Well, of course, they have a really elegant threat assessment department, of course.
That's their job, and they look at these things.
But you might think the Department of Energy or Homeland Security or some other department might also have a view towards a similar threat assessment.
But the military looked at it, and you don't have to look very hard at this story to say, wow, yeah, there's a real threat there.
Here's the data. Here's some conclusions.
It's not... We're not making hypotheses up here.
This isn't really esoteric thinking.
This is just cold, hard numbers.
There's trends that have been in play for decades.
There's a lot of evidence around this.
The US military has come to the conclusion there's a very serious threat here.
The German military has.
We know that the UK is dealing with this at the national level.
Sweden has a whole policy for how they're going to get off of imported oil because they're worried about peak oil.
It happens to be percolating everywhere.
We're watching China import massive amounts of oil.
They're happy with whatever cheap oil price they can get and new contracts they can sign because they're filling up their strategic reserves as fast as possible.
Really, the only country that I know about that really hasn't caught on to this idea yet is the U.S. and maybe Australia.
There's just a few that are still in pretty strong denial around this, but it's really not in question anymore.
Now, when I first heard about the energy issues, you know, we all think, well, I'll just turn the thermostat, take the bus, maybe drive a little bit less.
But the thing that sort of gave me goosebumps and, you know, alert, alert, danger, danger, was the degree to which our highly delicate urban-based food supply is energy-dependent.
I wonder if you could talk about that a little bit.
You know, our entire economy is what we call a complex system.
A complex system has just got lots and lots of interacting parts, and those parts have lots of little different feedback mechanisms around it.
So let's just look at food distribution for a moment.
So you're in a big city, you go to the store, there's food there, but every single night there are these trucks that roll in from distribution centers that themselves are getting restocked on a very continual basis, and our entire food system in this country is what we'll call a just-in-time food delivery system.
Every community has maybe three to five days' worth of food in it, And counts on those trucks rolling in every single night like clockwork in order to keep everything moving.
So in that system, that means we have a three to five day food buffer in there.
And if anything came along to disrupt that system, then we would suddenly discover that we have a very, very key vulnerability in our own life, as it were, at that point in time.
So what could disrupt the food system?
Well, I mean, you know, you could think of the usual terrorist attacks, things like that, but what concerns me most Is that in order for the trucks to move from distribution point A to store B, we need to have a functioning credit system.
Meaning that those are different entities and the way they know that it's okay to ship the truck, there are these letters of credit and it involves the banks and the banking system.
We have to have the whole money system operating well, perfectly actually, in order for our entire distribution system to operate.
So what are the threats there?
Well, if you just look over, we had this big crisis in 2008, and it turns out instead of taking the warning signs off of that, what we did instead was we actually built up sovereign debt to even larger levels in at the crisis rather than walking them backwards.
Derivatives are now $100 trillion higher, $710 trillion notional value than they were.
They were $100 trillion higher than they were in 2008.
So what we've done is we've built up these imbalances.
And so now we look into that and we ask the question, Is there anything we could see that could disrupt the global financial system in such a way that it might impact our banking system?
And the answer is, well, yeah, we know it almost happened in 2008, according to Mervyn King of the Bank of England.
We were within hours of the banking system shutdown then, and now we're staring into this mall where Europe has thrown a trillion euros into the system, and all they seem to have done was bought about six months of grace period Before we see Spanish and Italian bond yields starting to creep back up again.
Extraordinary pressures in the global financial system.
So how do I connect rising yields in Spain to food in New York City?
Very simply, if the Spanish situation devolves and becomes a very large banking crisis, we now have a world banking system.
There's no U.S. and Europe banking system.
JP Morgan exists in every single major country and all the banks are interconnected to an extraordinary degree.
My belief is that in this complex system, a banking shutdown in one or more countries in Europe, maybe Europe-wide, becomes a banking shutdown in the U.S. very, very quickly.
All right. Thanks, Chris.
We've just got to pause for a quick break.
If you can stay on past the break, I've just got a couple of more pepper questions.
I know you've got a hard stop at 11.
So if you'd like to hang on, we will continue talking with Chris after the break.
And thanks so much, Chris.
Fascinating stuff. And we will be back in just a moment.
Alright, we're back here with Chris Martinson.
We're talking about energy problems, economic problems, debt problems.
Now, Chris, some of the skepticism that comes about peak oil seems to have arisen from the crying wolf scenario all the way back to Malthusian problems that were perceived to be the case, what, 17th, 18th century, that the growth of population is exponential, but the growth of food is linear.
That really didn't turn out to be the case.
There's been arguments that have been made that the price of these resources is always going to go up.
Economists have made bets where it's turned out that they've gone down.
I remember growing up with food shortage woes and oil shortage woes.
The argument I think that you make is that the difference is that we have better data now than we did in the past.
So I was wondering if you can talk to some of these skeptics about the peak oil scenario.
Well, you know, peak oil itself, often it's described as a theory.
It's not a theory. It's just an observation.
And we know that individual oil fields hit peak, and even with super advanced technologies, all of these horizontal bottle brush drillings and, you know, injection methods, all these end-of-oil recovery methods, we know that these things can squeeze a little more out of the ground, but the idea that They can squeeze an unlimited amount is absolutely not true.
And so we've been looking at peak oil long enough to say, look, we know where we are in this story with respect to conventional oil, and yes, there are very elaborate technological things we can do, but the data is really, really compelling.
And certain large oil companies, the president of Total, the French oil company, has said, listen, we're out of the easy stuff.
This is where we are in this story.
And the most important thing to understand about peak oil is that it's about flow rates.
It's never about are we going to...
Listen, we'll never extract all the oil out of the ground.
Never, because we just can't get some of it out of the ground.
It's not about running out, but it's the flow rates that matter.
What we care about is going from 70 million barrels a day to 75 million barrels a day to 80 million barrels a day.
We just want more and more oil to come out of the ground.
I don't care from what source.
I don't care if it's the tar sands or ultra deep water or some other clever thing we discover.
What I really care about is flow rates.
So recently there have been a huge spate of articles talking about how the United States is going to go to energy independence and there's this Bakken oil field play.
And yes, that has momentarily reversed the decline, but it's not going to get us anywhere close to back to the peak of production we had in the U.S. It's never going to get us to oil independence in this country, despite what misinformation has flown around.
And here's the one simple piece you need to know.
The average well that's drilled in the Bakken field delivers 150 barrels a day.
Now when we were discovering Spindletop and Prudhoe Bay, you'd have field individual wells that would be delivering 5, 6, 7, 8, 9, 10,000 barrels a day from a single well drilled straight down at low cost.
And now we're doing these extraordinary, brilliant, beautiful, wonderful, very expensive drill pads that are giving us 150 barrels a day.
And so the scale of this, you know, how many of those wells do we have to drill and how much do they cost and how much energy is involved?
That's where we are in this story right now.
And so you're right. We have much better data than we used to have.
We know that oil is finite.
We know that we're going to hit peak at some point.
We know that we're past peak on cheap and easy oil.
What we really care about, though, are two things.
The flow rate, the quantity.
How much liquid fuels do we have available each year?
And then the second thing is, what's the energy return that we're getting back on that?
And when we look at this story and we look at the demand in Asia, when we look at the demand in the rest of the developed world, in the past three years, those two sources each have overtaken the total amount of demand coming from the West and, you know, the OECD countries.
And that's a huge structural shift.
We have 7 billion people on this planet And 6 billion of those people want to live like the 1 billion do in the West.
And they are coming at the resources really, really extraordinarily hard and fast.
And that's where we are in this story right now.
You know, the whole world wants to live like we do.
And the reality is they can't.
Because, you know, the United States with 6% of the world's population consumes 25% of the liquid fuels.
Obviously, you can't balance that equation by having the rest of the world consume as much as we do.
But they're going to try and they're going to want to.
So this is really a story.
It's a shift. It's a big shift.
I'm not saying apocalypse is upon us because it all runs out tomorrow.
What I am saying is that we are alive in a moment in time.
When we're going to have to face up to a structural shift in our energy story unlike any that's ever been faced on a global scale before.
This is all new territory.
Yeah, and it seems to me particularly tragic that the two drivers of excessive consumption that are political are fiat currency, which allows, of course, inflation, massive consumption, and central planning.
You think of these ghost cities in China where they've created hundreds of thousands of Oh, I couldn't agree more.
You know, it's It's really, it's our money system requires this faster and faster throughput because we loan our money into existence.
Mysterious condition. You don't have to.
You can just put your money into existence without attaching interest to it, but we don't.
And the whole world does it this way, right?
China too. So we all put our money into existence with interest, which means we have to pay the interest back, which drives behaviors.
And one of those behaviors is we just need more, more, more, faster, faster, faster.
And that's the landscape we happen to live in.
The risk here is that we say, well, we have this money system that's demanding this relentless increase in growth, and we have this physical system over here, the world, which is saying we're going to have difficulty.
Obviously, we can't do that forever, but we're even having difficulty meeting that requirement now.
And of these two systems, I believe the physical world is going to win the battle.
And the risk we face, though, is if we've built for ourselves a monetary system that has a binary state.
It's either growing and happy and functioning, Or it's not growing and it's threatening to literally fly apart at the seams.
And that is going to be particularly tragic.
Now, I really want to make sure that people get your information.
I highly recommend you very generously made available the Crash Course for free.
I know that your books are fantastic.
And I really want to make sure, you know, you may agree with the thesis, you may disagree with the thesis, but what you really want to make sure is you have to look at the data.
The data is about the best data set that's available in the economy at the moment.
And no matter what you think of the pluses or minuses of the arguments, you really do have to deal with the data.
And at chrismartinson.com, I think you do a great job of laying out the data and the case for the arguments that you're making.
I highly recommend that everyone take a shot at that.
So thank you so much for coming in, and we will take callers after the break.
This is Stefan Molyneux for the Peter Schiff Radio Show.
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All right. Hello, everybody.
It's Stefan Molyneux from Freedom Aid Radio.
I am the splendor to the sugar that is Schiff, a reasonable substitute with very little aftertaste.
So, we have Roger from Rally on the line.
You had a question about inflation and deflation.
Go, my friend. Yeah.
Part of the problem in most government budget plans is that they're not taking enough dynamic things into consideration.
And all the inflationary tendencies in the market...
But there's also deflationary tendencies.
I mean, you see real wages declining, housing prices declining.
Which one is the bigger fear?
And what should consumers do to protect themselves from either or both of them?
Right, right. Well, look, first of all, The important thing to remember, and this is something that the Austrian School of Economics is criticized for, is that there was a prediction, of course, of significant inflation as a result of QE1, QE2, QE3, you name it.
And the way that I sort of picture this in my amateur way is to look at it like this.
So if a guy jumps out of a plane, we can say, he's falling, he's going to fall, and there's probably going to be a big ugly third if he doesn't have a parachute.
And if a bunch of guys jump out of a plane, though, and they're all looking at each other and not at the ground of the plane, they're like, hey, we're not falling, it's just kind of windy.
And we're measuring fiat currencies against fiat currencies.
We're measuring the hyperinflated US dollar against the hyperinflated euro against the hyperinflated Canadian dollar and the yen and so on.
So there has not been the outbreak of monster inflation that has been predicted, but I think that's because there's no particularly safe place for money to hide except in gold.
But if you look at the price of gold relative to commodities, it's quite a different story.
So, of course, if you're using Federal Reserve notes, The gas has never seemed more expensive at the pump.
But if you're using gold, priced in gold, it's really never been cheaper.
Think of gold. A hundred years ago, you could buy a nice suit for an ounce of gold.
A really nice suit for an ounce of gold.
Now, with gold at $1,700, $1,800, you can buy a really nice suit for an ounce of gold.
There's a continuity there. So money loses value relative to commodities when it's overprinted and the resulting price increase is the effect of the inflation.
I'm not an economist, but I don't think that's quite the same as deflation.
Deflation means that your money should be worth more, because deflation means that prices are going down relative to your money, so your money should be able to buy more.
If you look at deflation in consumer electronics, you can buy some computer like last year's model, you can buy for like half the price.
So your money is buying more.
That is deflation.
The loss of purchasing power is a little different.
Sorry, go ahead.
Deflation like that is the natural progress of an economy, especially an industrial economy.
That's what happened the first 150 years of the country.
And that's what we want. I mean, I think that's good.
That's a way of solving the problem of poverty is to raise everybody's purchasing power.
Sorry, go ahead. The other point that I had from Chris's videos, which I came across about a year ago, was he mentions in there the concept of why don't governments just print the money interest-free, right?
Why have the Fed as the middleman and have the extra burden of the interest?
And, you know, while that Sounds like, oh great, do away with all this interest, then there's no constraint on the inflationary tendencies of big spenders in government.
Yeah, I mean, the relationship between interest and inflation is a challenging one.
There's two different levels to deal with. Yeah. Look, when you print lots of money, of course, you devalue each dollar, and inflation is the price of money over time.
It's what you pay to rent money in the short term.
And so, if money is worth less, then what happens is, of course, as you know, the inflation has to be taken into account in the interest rate.
So, if you want 5% return on investment and Inflation is 5%, then you need to charge 10% just to get your 5%.
And so if the government was simply to print money on its own and the interest rates were private, then the government would not actually gain any benefit because all the money would be printed, but all that would happen is the inflation rates would go up.
So when the government prints money, what it has to do is to tamp down and control the interest rates.
So that it doesn't have the same effect as it would if the interest rates were private.
And so this is why you see the government setting interest rates all over the place.
But this creates a very artificial situation, sort of builds up the water behind the dam higher and higher, so when the dam breaks, things get worse.
You know, the longer you stave off a disaster, usually the worse that disaster tends to be.
So, yeah, I mean, I think there is going to be a fundamental readjustment in the value of currency.
I think that's inevitable, but hopefully it will be at the expense of the bankers and not the ordinary citizens.
But is the length of the bonds, the term of the bonds that are the $15 trillion of national debt, are those 1 year, 10 year, 30 year bonds?
How often does that $15 trillion turn over?
Well, I'm afraid we've just drifted out of my area of competence with quite a catapult.
I do know that, of course, the Fed is buying up treasury bonds, and it's all just a big circular lend-to-yourself pile of nonsense.
I mean, I think it's mixed, but I think that the short-term one-year bonds recently in Greece were going at over 1,000%, which is basically just saying there'll be interesting wall decorations and a souvenir for the future.
But I don't know that there's a lot of people who are very interested in long-term bonds at the moment because the short-term finances of Western governments is so uncertain that it becomes a big problem.
The uncertainty is what I'm getting at.
If that $15 trillion is generally shorter-term bonds, then the risk is much higher that next year as they get reissued, the interest rates bump up.
And hence the pressure on government expenditures and the need for more revenue.
Yeah. No, and of course, remember when you're buying government bonds, you're just guaranteeing yourself a future tax increase.
Because, I mean, they don't make any money, right?
So if you give the government now and you want 10% more back, all this happens, your taxes are going to go up 10%.
So you're really not making anything.
Listen, I'm afraid I've got to stop here just because this is really, really close to the limits of my amateur expertise in economics.
So I'd like to move on to the next caller.
But thank you so much. It's very, very interesting questions.
Next up we have Nate from East Lansing who's got a very provocative question for me and I guess for the audience as well.
I've got a couple questions for you, actually.
Thanks for taking my call, number one.
Last week you were arguing with Peter and he was making the point about the vacuum that would be created if the government just imploded and we all of a sudden got anarchy.
Now, Is your theory that it needs to be more of an evolution into that?
I know you talk a lot about how we raise our children and how that will affect the future and everything, but are you looking more for an evolution into it, a slow breakdown of the state, or a very quick breakdown and then whatever utopia happens?
I don't think that the quick breakdown is the way to go.
We'll talk about this a little more after the break.
I really appreciate you giving me the opportunity to chat about this.
It's a multi-generational change.
If you look at any major social change in human history from rights for women to the abolition of slavery...
100 to 150 years is the minimum that it takes.
So we're going to take a quick break.
We're going to get back with my roadmap for the future freedom of the planet because I am grandiose to the extreme.
And we'll talk about that when we come back from the break.
And thank you so much for your calls.
Feel free to call back in. Alright, we are back.
And we were talking with Nate from East Lansing, Michigan.
So, Nate, your question was, if we could even think of the possibility of a society that is not organized by a central agency of coercion, or rather destroyed by a central agency of coercion, which, you know, it's called anarchy, but that, of course, has a really negative ring to it.
People expect me to have a mohawk and be throwing garbage cans through a Starbucks window.
Which I haven't actually done this week at all.
But the transition point to me, all of the gains that are important and long-lasting in the moral growth or the moral step up the ladder of mankind are all argued for peacefully and reasonably and persistently.
So as I said, the rights of women, Mary Wollstonecraft Shelley first wrote Vindication of the Rights of Women in the early 19th century and it took 150 years.
You look at the beginning of the Quaker movement against I think that we have to look at why we believe we need a government.
Because we're afraid of bad people.
We're afraid of bad people doing bad stuff to us and taking our property.
Now, logically, it doesn't make much sense to put a government in place to do that, right?
It's like, I'm afraid that someone might come and steal my property, so I'm going to create a monopoly of violence with the right to violate my property and take 50% of it pretty much at will.
And that really doesn't make any sense.
But it's sort of what we've inherited from the past.
So we understand that if everybody was an angel, we wouldn't need a government.
And people who are voluntarists or who are looking for a stateless solution in the long run are often called idealistic.
You know, we just don't understand how bad human beings can be and not everyone is perfect and therefore we need a government.
But if you think about it logically, I think quite the opposite is true.
I think that voluntarists really recognize that human nature has a pretty dark side.
If you create a government in order to save you from bad people, then the smartest and most able bad guys, where are they going to go?
They're going to flock like flies to a big mound of horsey caca.
They're going to flock straight to the government.
Because what do evil people want?
They want something for nothing, and they want to escape the consequences of their actions.
Well, that is the government.
The government gives you something for nothing.
You get to print money, you get to go to war, you get to do all these terrible things with no negative consequences.
So you get to get stuff for nothing, and you get to escape the consequences of your actions.
So I believe that government, the hierarchical violence that we use in society, is something that attracts and draws bad people in to run it.
You do not protect yourself from bad people by creating a monopoly of violence that bad people will infest and expand at your expense.
So I think that we need to find ways to make human beings better.
We obviously need to reduce dysfunction within society, which reduces the excuse that people have for why we need a government.
If we can reduce criminality significantly, if we can reduce things like drug addiction, if we can reduce divorce, if we can reduce single parenthood, if we can reduce just things that mess people up, if we can reduce health problems in society...
Then we're going to be a lot longer along the way of basically asking the question, why do we even need this institution if everybody's doing so well?
And scientifically, statistically, the data seems very clear that if we raise children peacefully, if we do not spank them, do not hit them, do not yell at them, do not aggress them, do not threaten them with abandonment and don't toss them into daycare for 12 hours a day...
Then what's going to happen statistically is we're going to get like one-tenth the criminality, one-tenth the drug addiction, one-tenth the health problems, one-tenth the teenage pregnancies.
Children raised peacefully and well turn out really, really well.
And once we have a generation or two of kids who are raised that way, and that's my encouragement to libertarians, the non-aggression principle, it starts at home.
You've got to start with your own family, with your own kids.
We can't do much about the Fed, but we can do a lot about how we treat the people in our lives.
And And rejecting the use of aggression or threats or violence or hitting within our own lives is a good way to live by the non-aggression principle.
Philosophy, I think, demands that we start with that which is closest to us and only worry about the stuff we can't control when we've dealt with the stuff closest to us effectively.
Once children are raised peacefully and rationally and calmly and non-coercively, they will grow up without creating the kinds of dysfunctions that governments use as an excuse to expand its power, and which makes the contraction of government power almost impossible.
I mean, what are people going to do?
They've been on welfare for 20 years, they have six kids by six different fathers.
What are they going to do if the welfare system...
It dries up and blows away.
Well, they're going to fight like grim death to hang on to it.
But we need to, I think, look at a multi-generational change to make the rational, moral case for a peaceful and voluntary society.
That's not going to be immediate, and there's no amount of force that's ever going to take down a monopoly of force.
So, sorry for that lengthy diatribe, but you really touched one of my sort of core issues.
But can you accept sort of what I'm saying?
Does it make any sense at all? Yeah, I mean, I've listened to your philosophy a lot, and that's just kind of one thing that I really have never grasped.
I thought you were talking multi-generationally, but sometimes it sounds like, oh, we need it now, we need it now.
But I actually have two quick questions, if you could grace me the time.
Let's just do one, because we've got another crawler on the right, so pick your favorite one, and let's go with that.
Okay. Well, I guess I'll go with this one.
You had the other day about a proof of anarchy, and that the state itself was the proof that anarchy works.
Yeah, no, I'll keep it very brief.
Look, so we believe that we need the government to enforce contracts.
And if we don't have the government to enforce contracts, everybody will just take advantage of each other and so on.
Well, eBay is one of the world's largest employees with over 300,000 people who make their income off eBay.
And there's no government, no court system.
It's just a reputation system.
So there's an example that you don't need a government.
But... If we look at the government itself, how does the government run in a democracy?
Well, anywhere. The government runs by people give money to campaign, they give money to candidates, and in return the candidates give them preferential legislation.
Just look at the amount of money that Obama got from the financial industry and the lack of prosecution of the financial industry, and now more recently with the JOBS Act, a loosening up of even the few remaining restrictions on the financial industry.
So people give money to politicians and then politicians give them preferential treatment when they get elected.
That's the basic hideous cycle of democracy.
And this is a contract that's never written down.
It's never written down.
It's actually illegal. And yet it works every single time, or almost every single time.
And so the very transactions that go on in the government take place not only in the absence of government, but in the presence of those transactions being illegal.
These backroom, smoke-filled room deals, the handshakes under the table, the nod, nod, wink, wink, I'll tell the people whatever they want so I can give you preferential legislation.
These things all occur in a state that's even worse than statelessness.
Because in a stateless society, there's lots of alternatives for how to resolve disputes.
You can buy insurance, you can get companies to negotiate with people if you have disputes.
But in this situation, the entire cycle of the bribeocracy we call democracy all occurs not only where...
The government can't enforce it, but the government would actually prosecute it if it's found, and yet it still works.
So even with all of that swimming against the current, the fish of contract still manages to make it to the spawning grounds.
I'm afraid that metaphor really got away from me.
So I hope that helps.
We also have another caller from Andrew in New York, New York, the city so nice, they've named it twice, who's got questions about philosophy.
Yeah, this is Andrew Schiff.
This is Peter's brother. Oh, hi, Andrew.
How are you doing? How's it going, Stefan?
Good. You know, I was listening to the philosophical discussion of how to achieve a government-less society.
And, you know, I've listened to these kind of discussions a lot, and you kind of hit it nail on the head.
We need to change the animal, change the species, change human beings before such a system would be possible, because there are so many built-in trigger mechanisms in humanity now that government is essential.
Because people have a lot of fear, and they want someone to protect them.
But you had talked about the generational change, which brought about the perceptions of slavery, perceptions of women's rights, and these kind of things.
And I just think that those things can change, yes, and I do think they can change generationally.
But I think that the amount of change you assume could take place within human beings themselves are too great.
I just don't think... If you look at humanity throughout history, you can get a sense of what people are like by literature, by stories they're telling, by the way societies are organized.
You just don't see how they react to stress and crises and so forth.
You don't see that much change in the hard wiring of the species.
Personally, I look around and I see I would love to live in a society with as limited government as possible, but I know that At the first sign of some type of crisis, or perceived threats, or perceived violence, or even simply someone looking for an advantage over a society.
Basically, it's kind of like a government will form, it will coalesce, and if there's nothing there to oppose it, if there isn't an equal opposing force to oppose it, that government or that center of force will grow unchecked.
It's kind of like It's kind of like the way stars form or galaxies form.
I mean, originally you have the mass of the universe spread out equally, but then there's a center of gravity and things start pulling towards it.
Right, so there's a power vacuum that will draw bad people to want to rule others in the absence of the state.
I think that's a great, great question, a great argument.
We'll pick this up after the break.
I hope you can stay on the line because that's a very common objection and well worth addressing.
We'll be right back. The Peter Schiff Show.
We now return to The Peter Schiff Show.
Call in now. 855-4SHIFT. That's 855-472-4433.
The Peter Schiff Show.
All right. Welcome back.
I am on the line with the Shift Clone.
So thank you so much for calling in, Andrew.
Actually, we met, I think, last year at New York Liberty Fest.
So the question is, the question before us, a very, very, very important question.
Really, thank you for bringing it up, which is...
Human nature. Is it human nature to have leaders and followers, to have those in control and those who are being controlled?
And if we change the constellation of human society, let's say we carved out a monopoly of force called the state, would it re-coalesce?
Is it like a gravity well?
It doesn't matter whether you throw the ball, it's still going to fall back to Earth.
Well, I'll make a very, very brief case here.
That's a perfect reiteration of what I've asked you.
Thank you. Yeah. Just in case somebody wasn't listening from the beginning, those naughty listeners.
But I'll give you a very, very brief case to the contrary, and then you can tell me if it makes any sense to you or not.
Human nature is a very, very tricky thing, right?
So when I was growing up, There was this argument that, you know, there's genetics.
We have genetics and that's who we are.
But that seems to have changed a lot over the past 20 years.
And now we talk a lot about epigenetics, which is the idea that our genes turn on and off depending on our experiences.
So there's been studies done in psychology where boys who have a certain gene for aggression, if they are Subject to physical abuse as children, they become criminals.
They do not develop empathy.
They have very strong fight-or-flight mechanisms.
Their neofrontal cortex shrinks to the point where they really don't process the consequences of their decisions.
They're highly impulsive. They can't defer gratification.
They generally fall into the criminal class.
And yet, it's not genetic.
It's not their nature that they become that way.
They have that propensity, and then if exposed to violence, they then become that way.
And so it's really hard to talk about human nature without talking about the genes that are turned on and off, depending on...
So there's an argument which I think is fairly compelling, which is to say that homosexuality results from particular hormone changes that occur during a time of the maternal stress at a particular point in the first trimester of pregnancy.
So it's not human nature to be gay or straight.
It depends upon your environment prior to the womb.
And a lot of our personalities are changed according to our environment.
So what this seems to indicate is that the one thing that is true about human nature is it is incredibly adaptable.
To environment. And the environment adaptability starts to occur in the mind and in, dare I say, the soul before we're even born.
Before we're born, in the womb, we're trying to figure out what kind of environment am I going to be born into.
And if the mother is short of nutrition, if there's lots of loud noises and violence, then the body begins and the mind begins to change into a more predatory form because it's going to assume that I'm going to come out of the womb and we're going to be short on resources, there's going to be lots of war, so I'd better be a really...
I'm an angry and hair-trigger and aggressive person.
On the other hand, if the mother during the time of pregnancy is calm and gets lots of nutrition and there's not a lot of loud noises, screams and violence, then we come out of the womb, in a sense, prepared for a more peaceful and negotiating environment.
And this is why the correlation between child abuse and adult dysfunction is so strong.
Because when we harm children, either before they're born or after they're born, when we harm children, We are programming them to become predatory because we're telling them, look, you're going to come in a situation without a lot of empathy, without a lot of trade, without a lot of negotiation, without a free market.
It's going to be kill or be killed, win, lose, and you're just going to have to reproduce as you see best fit.
And so the human nature argument is really tough to make given the degree to which we adapt to the social, economic, and resource cues that are around us even before we're born.
So that's sort of my argument, that if we can raise children expecting and genetically programming them to exist in a state of peace, they'll be much more likely to exist within that, and we'll get much less of this sense of a power vacuum.
I can't close the argument in such a short time, but what do you think?
You're a very good answer.
And it's hard to argue with psychology not being an expert in psychology, but it seems to me that there's some even beyond that.
First of all, the question of I was thinking you were talking about child abuse.
My son, who's seven, would define child abuse as limiting his video games to just one hour a day.
That's it. I'm calling. He's probably getting up.
His cerebral cortex is shrinking as a result of that and getting ready to attack.
But I think even on top of that, and how do you separate the level of fear?
Because that's what I think that I mean, that really causes, and you can see it happening again and again as a crisis.
I remember seeing it at 9-11 when I lived in New York City.
And I saw it.
I lived a couple blocks, maybe a mile or two away from the World Trade in Brooklyn.
And, you know, you saw it a little bit in Brooklyn.
You saw it more in the rest of the country, how fearful people became very quickly and how that instantly rippled out into the politics and things were done that never would have been done without it.
And I think even on a real trauma, traumatic scale, I mean 9-11 was something that most people just saw on television, okay?
So if that level of trauma could create that change with a televised event, imagine what would happen if Americans actually saw real violence or real crisis close to home.
What would that create?
And how far this species has to change For most people to say, you know what, that's a tough shock, but I'm not going to suspend my reason.
I'm going to be circumspect here and realize that this is something we have to deal with rationally.
We don't want to empower government to take care of it because that will create problems down the road.
That kind of reaction, which is the logical libertarian reaction, Right.
Now, we've talked, and I'm sure Peter's talked about this, and I'm sure you're aware of this, the idea that, you know, government programs lead to more government programs.
And the use of force is like a drug.
It escalates, right?
You get diminishing returns on force and you have to escalate.
And so, if we look at American foreign policy as a government program, and the Patriot Act 1 and 2 as another government program, we can see that the foreign policy led to the Patriot Act.
And so, in... A free society and a rational society, in a society where people hadn't spent 15,000 hours in government schools being programmed into bad things happen in the free market and the government is here to save and protect you and there are bad people out there and the government is going to save and protect you, I mean, that repetition leads people in a state of crisis to fall back upon that which they're programmed for.
In a free society, people would be skeptical of this.
So if a disaster occurs, the first place you would look at is the agency in charge of that disaster.
What did you do to cause this?
And of course, when people are programmed by the government in government schools, not necessarily consciously, but it's just the way that power works.
When they get a crisis, they're going to flock to the government because they're told that crisis happens from freedom or from, you know, no fault of our own and therefore you run to the government to save you.
Of course, the more skeptical and rational approach is to say, you know, why are these monstrous flying planes into our towers?
And you'd have to look back in history and look back.
Now, I remember when Harry Brown did that, he really got lambasted six ways from Sunday.
When he said that basically you keep poking a hornet's nest, eventually you're going to get stung.
But remember, in a free society, you asked earlier who will be opposing the coalition of power in this vacuum.
Well, it will be all the agencies that are profiting from there being no government, right?
So there'll be agencies that are there to provide collective defense.
And there'll be agencies that are going to be there to provide restitution for criminal behavior, to ensure you against criminal behavior.
There'll be agencies there to help you negotiate contracts and resolve disputes.
All of those agencies would be the first to go if a government came about.
So they're constantly going to be scouring and publicizing and making sure that there's no coalescing of power because if the government comes back, then they're the ones who are going to be the first to go because, you know, these, quote, solutions will be collectivized and centralized by the government.
same way you know if you're going to hire some company to provide you some sort of collective defense some sort of security your first fear is that they're going to take all your money buy all these weapons and turn into a new government so the first thing they're going to have to do is convince you how that's not going to happen there's tons of different ways entrepreneurs can convince you that bad stuff is going to happen say oh we're going to put 10 million dollars in an escrow account and we're going to have independent auditors you can come audit us and anytime you find that we have one more bullet than we say we're going to give you that 10 million dollars
all of the defense companies are going to be looking out for each other and saying look these guys are accumulating robot armies of laser guided sharks and that's no good and stop then you'll just stop your contract with them and they go out of business So there's lots of checks and balances in a free society that just aren't available in the state, if that makes any sense.
It does, but then again, I mean, you still...
I mean, you know, these...
Just like as these things become more powerful, just like mafia organizations start resembling governments, any type of private enterprise at some point, if given enough power, could start resembling a government as well.
Yeah, and everybody's aware of that as a risk, and there will be a service to be provided, which is prevention of government coming back, which people, I'm sure, will subscribe to.
My last thing, and I'll just leave you with this one thought, is that I also think that, you know, humanity in general always prefers an easy answer to a complicated answer.
That's almost like the opposite of, you know, the opposite of Occam's razor.
I mean, if you could say, presented with two explanations, even if one is, you know, more complicated but true, They'll take the simple lie a lot easier.
They'll just go right to the simple lie.
It's much more comforting.
I agree with you, but I think that that tendency is more prevalent among people who have trouble processing the long-term consequences of their actions.
And I also think that when the negative effects of the lie start to accumulate, then people start questioning that lie.
And as I said at the beginning of the show, I think we're kind of in that place now.
I mean, tell me what you think.
Are you finding that people are more receptive to ideas of liberty now than they were, say, 10 or 20 years ago?
I'm finding that to be the case because the hangover is really hitting.
It's hard to say. I live in a bubble, so everyone I know is predisposed.
So I can't really answer objectively.
I'm still having a hard time with my wife.
So we have a question from Ben.
This is for you, Andrew. I'll just take a smoke break.
Why do you live in the least free state, I guess, if you're on the libertarian side of things?
Why do I live in the least free state?
Because I don't think... I certainly don't consider it to be the least free state.
I mean, I live here. It doesn't feel...
It doesn't feel at all constraining.
I mean, yes, I do pay a lot of money to the state, but, you know, hey, New York City, if you've ever been here, I mean, it's about...
It's a free place. You can do basically whatever you want.
And the thing is, there's so many people here, you can find your bliss in ways that you can't find your bliss in a lot of places.
And I do. I mean, I do.
I take... We take part of a lot of cultural activities here and social activities here.
It's a very free, creative, vibrant place.
That, to me, feels free.
I could go someplace and live in a much more less urban environment, more free, a place like, let's say, Wyoming.
But I would feel like I'm in a cage because I can't take part in the things that I do here.
That's me personally. I think that what Andrew is really trying to say, Ben, is that in New York, New York is the only place where he's free to pursue his passion for improvisational dance.
And I think if you've ever seen one of his shows, you would agree that it is a passion well spent.
If you ever see me on a YouTube video, it's not me.
It's just cutting Photoshop.
All right. Well, we are coming up for another break shortly.
We do have Cy from Great Barrington, Massachusetts, who's got a question about QE3, which means, I guess, either the federal supply of money or a fantastic new super cruise liner that's coming out and the U.S. economy.
So we... Are going to pick up these last calls in the last call segment that we had before noon.
I just really want to thank everyone here for giving me the opportunity.
Thank the listeners. You guys have had some just awesome, awesome questions.
I'm telling you, I'm sweating from the ears with the amount of thought I've had to put in.
So we'll be right back after the break.
This is Stefan Molyneux for The Peter Schiff Show.
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All right. We are back for our last segment.
I can't believe I only get six more wonderful minutes with you beautiful, beautiful people, but I will do my best to enjoy them.
So I think Si from Great...
Is it Si or Siya from Great Parish in Massachusetts?
You had a question or a comment?
Hi. Yeah, it's just Si.
Just two letters, C-Y. My question is about the recent financial crisis and the role of the government and the private sector.
And sort of, I'm just trying to understand what the causes might have been behind it.
And it's really difficult for me to say that the private sector doesn't deserve any of the blame, because it seems like they were sort of engaged in definitely immoral, fraudulent, overly risky behavior, which might have contributed to the bubble in some sense.
So I guess I'm just calling in so I can sort of understand your perspective on the crisis and whether we can say that the private sector was really at fault or not.
That's a great question.
The first thing that I would say is that when government controls the money, there's no such thing as the private sector, because everything is so dependent upon the money supply.
Money is not even the lifeblood.
It is the entire body of the market system.
And when the government is controlling the money, and as a consequence, the government is controlling the interest rates, you really have no free market.
You have people attempting to surf the latest bakeries of the bureaucrats and the bankers' whims.
So it's really, really important to understand that there's not a sort of division between the public sector and the private sector.
I mean, sort of legally there is in some ways and in terms of contracts and so on, but fundamentally we're all awash in the state.
We're all awash in statist economics because the government is controlling the money supply.
Tom Woods had a great metaphor where he's saying sort of blaming...
The crash on greed, on the greed of bankers is like blaming an airplane crash on gravity.
Greed is always present and gravity is always present.
It's got to be something else. And his argument, which I think is a great one, is that it's all about...
The money supply. There, of course, are a number of other things.
The Community Reinvestment Act was pushed by the Democrats, was very, very big on encouraging home ownership.
It's the American dream. You get the little house, the white picket fence, and so on.
And then you get jackboot thugs taking it away from you, even if you've paid cash for it sometimes.
They'll just try and take your house.
But I think something that's underreported in libertarian circles, you know, philosophy is a real challenge for me, and I think it is hopefully for everyone, which is that you've really got to start with a blank slate.
Take nothing for granted.
One of the things that I think is incredibly destructive to what's left of the remnants of the free market is this idea of the corporation.
The corporation is kind of a weird thing that is not part of the free market.
It is a state-created mutant.
It is the Frankenstein of the free market because a corporation allows business executives and owners to take money out of the corporation in good times, but they don't have to put money back in in bad times.
It's a one-way money hose that goes straight out of the corporation and the corporation provides you legal immunity.
For losses. Illegal immunity for most corruptions, right?
We've got 3,000 Occupy Wall Street protesters thrown in jail.
How many bankers? None.
Because the bankers just pay off the government.
It's a shakedown. And then people say, yay, the banks have had to pay all this money.
And then it's like, hey, my service fees seem to have gone up.
I wonder what that's got to do with.
So there's very little that's going on that's left about the free market, particularly in the financial sector.
Remember as well that the financial sector is completely bloated and bizarre because so many people's money is being forcibly herded into the stock market that shouldn't be there.
The purpose of the stock market was to raise capital from knowledgeable investors originally.
Now, through 401k plans, through people trying to evade taxes legally, through trust accounts and putting them in these various financial instruments, Tons of people are just being forced to put their money into the stock market or into the bond market.
People put their money in there just to save themselves from inflation.
If there was no inflation and if the bank paid you a couple of points a year, how much would you want to go and risk your money in the stock market?
The stock market has also become completely bizarre with so much money being funneled and fueled and herded at gunpoint into the stock market.
I spent 15 years as a software entrepreneur at the executive level and did lots of investor stuff and all that.
So I've really seen this from the inside.
When you get this crazy amount of money flowing into a company through this supercharged stock market, everybody's timeframes collapse.
They don't look to create and sustain long-term value in business because you can make so much money in the short run just by pump and dumping the stock price.
And so when you've got all of these crazy incentives in place, when you've got legal immunity from negative results, when you have legal immunity from fraud, it would seem, with these banks, and when you can make a huge amount of money just by focusing on short-term gains, then most human beings, and we can see this throughout history and across the world, most human beings do not have an independent moral conscience.
They merely adapt themselves to the environment that they're in.
I do think that there's personal conscience and personal responsibility in this.
But it's important to remember that in such a chaotic and brutal system that we have, where the money is corrupt, the laws are corrupt, the judiciary is corrupt, the political process is corrupt, it's really, really hard to ask people to be pure when they're neck deep in some pretty foul really hard to ask people to be pure when they're neck deep in some pretty foul substances and when they're promoted to higher positions of economic power or authority within a company based upon the ability to make money in the short run rather than
You know, it's really important, I think, to, yeah, we can blame people individually, won't do much.
What we really need to do is to remember, as I said at the beginning of the show, that we have to look back at the source.
The source of these problems is not individual politicians, it's not individual laws, it's not a particular Congress, it's not a particular group of bank executives.
It is our collective, our collective capacity to accept the use of force in solving society's problems.
I mean, we should not be using force to run the currency.
We should not be using force to run the interest rates.
We should not be using force to pretend we're helping the poor or educating children or helping people in their old age or providing health care.
The use of force is always and forever going to result in short-term gains and long-term extraordinary pains.
And collectively, we need to keep looking at our acceptance of the use of force.
Sorry, I interrupted you. You were going to say?
I was just going to draw a parallel between the Great Depression and the recent subprime mortgage crisis.
I'm totally on board with you in terms of the causes.
The Austrian theory does a really good job of explaining how the crisis happened.
My problem, Laura, is with the response.
It seems that you're very critical of quantitative easing.
And TARP and some of the other measures that were put in place after the crisis happened.
Sorry, just to clarify, and we're going to have to cut out because I'm so sorry.
Please, I hope we get to do this again.
I'm not critical of TARP or QE2. I'm critical of the use of violence.
We have to put down the gun and start negotiating with each other rather than running to the government and hoping that the next law is going to solve all the problems created by the last 10,000 laws.
One more law is not going to solve the problem.
More guns pointed at other human beings is not going to solve the problem.
This is Stefan Molyneux, your host of Freedom Aid Radio.
Thank you so much.
Great listeners, great calls. Thank you to the technical team.
Thanks, Peter, for giving me the opportunity.
Have yourselves a great week, and I guess you'll get your regular host back very, very soon.
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