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NOTE The Future of Libertarianism

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And unfortunately it has been laid upon me by both Forrest and some other libertarians here to take on the role of messiah or prophet tonight

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and point the way out of the gathering loom, which has been...

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I don't think... I'm not going to try to make it my mission to convert people to optimism tonight, or to point the way out.

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I'll just try to explain why I'm optimistic, and maybe some of this will rub off.

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It's also a peculiar thing for me because it's in so many ways both a factually and an analysis of the present system,

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except I'm very close to the forest and other ways we're far apart and it's a peculiar kind of symbiotic relationship.

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At any rate, let me start this way, and the reason why I'm not worried about Bill Morina's

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Confucian freezing, which is, I guess, similar to the forest analysis, is I think, it's been true throughout history, as far as I said this morning,

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despotism, statism, caste system, etc. has been the norm in civilizations

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how they got that way is something which I don't know that much about

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I have read a little bit about ancient Sumeria, the first great civilization

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and according to Samuel Cramer, the great Sumerologist

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Sumerian civilization started as a free market kind of situation

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free society, free market kind of orientation

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And then the society freezes up, and apparently, from what you can get out of the literature, obviously we don't know that much about specific processes of ancient civilization.

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Apparently what happens is that the defense, the voluntary defense agency, which happened to be also the temple, which was built on the top of a hill in ancient Sumeria,

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The Temple was also the fort, so when the tribes came marauding in from outside Sumeria,

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everybody would take refuge in the temple and the temple organization, the priests, would also perform the military defense function.

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Apparently, as the centuries continued, there's more and more problems from marauding tribes and the temple began to become a permanent military garrison state kind of situation,

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moving in, or perhaps climatic changes, apparently many ancient civilizations were going along very nicely until suddenly bingo, the rain disappears and they've had it.

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At any rate, it seems to me that the, and it's true that Western civilization over the last several hundred years is a great burst of free society or free market and so forth, and individual liberty.

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I think this is not a course for pessimism. One could easily be pessimistic just on that score.

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Looking at the history of the human race, libertarian and free market and prosperity in general,

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a high standard living sector is really only sort of a pimple on human history.

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However, I think a qualitative change has occurred,

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which makes the Confucian model, so to speak, obsolescent, in other words, which leads to epistemological, historiographical optimism.

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And the quantum change, basically, is the Industrial Revolution.

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Let me put it this way. The model, the paradigm we can look at, Oriental Lesbism, let's say, you have the peasants, essentially agricultural society, of course.

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The peasants are down there sweating down on the rice paddies or the wheat fields or whatever and they're overseen and supervised by a giant bureaucracy with a king at the top.

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And the bureaucracy, the power elite, extracts everything above subsistence from the peasants, shoots it up to the top and creates this power elite wealth and civilization.

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and gold and damask or whatever tapestry, all the stuff that we see in the movies about the ancient empires

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and down there is the galley slaves and the presidents dying at the age of 20 and all that sort of stuff

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This sort of system, which we can call oriental despotism, is a monstrous, evil, horrible system from a libertarian point of view

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However, it's viable in the sense that it can continue on indefinitely

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There's nothing, there's no mechanism in the system to necessarily lead to its overthrow.

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So I think if I were around, if any libertarian was around in ancient China, we could be pretty

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or it would be legitimately fairly pessimistic about the chances for changing society and

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so forth and one might well look for forests, you know, a scape hatch down the Yangtze or

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The 17th and 18th century classical liberals didn't have nearly as course to be as optimistic as we do, and the fact that they were optimistic and felt that they could bust through the mercantilist

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and the Socialist and Guild system, etc., etc., was high testimony to their courage and faith, faith in what they could accomplish.

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Okay, we get the Industrial Revolution, which starts around mid-18th century, continues on approximately to the mid-19th as the first great burst.

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And with this, we have a complete change in the viability of social systems,

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Because we have the irreversibility of technology, of the industrial system developing, of a fantastically increased standard of living for the masses, not so much for the guys on top, the king is more or less, the king pegged along pretty well in the old days, before the Industrial Revolution, so it's the mass of the population, you know, has clothes to wear, a place to eat, it's not in the same room with the pigs and that sort of stuff. It's true that the masses of the peasants before the Industrial Revolution were living in one room,

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with the pigs. At any rate, so you have this enormous, enormous quantum change, a qualitative

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change in conditions, and you have also what's called an unfortunate name, a revolution of

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rising expectations. What it really means is nobody is now going to settle, nobody is

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going to settle for the old pre-industrial kind of system. So that every social group,

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with the possible exception of the current anti-technology crazies, they don't really take

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I take them very seriously. They always go off to the woods with the hi-fi sets and so forth under their arms.

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So, whichever camp you're talking about, right-wing, left-wing, communist, new left, etc. etc. across the board,

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every group once is committed, ideologically committed and personally committed to continuing an industrial system,

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to continuing a high standard of living for the masses, a fairly high standard of living for the masses,

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and after all we have an enormous population which we couldn't have had in a pre-industrial system

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if we went back to the land and the communes and all that sort of stuff, scrap technology, maybe a couple of people would be left but 99% of the world population would die off

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so we're locked in to an irreversible commitment to a technological industrial revolution

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Well, given that, given this, there is our sort of free will choice in that sense, where we choose, everybody, I think every group chooses, or hopes to continue the industrial system and to even expand it.

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The Marxists, for example, as utopian and kooky as they are, are committed also to expanding industrialism until the point where we have a garden of Eden and there's no scarcity.

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The point is that they too are committed to an expanding industrial system.

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Given that commitment, which I think is almost universal then,

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the only possible system which could maintain and make an industrial system viable

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is the free market and free society.

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In other words, a basically libertarian world.

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So the libertarianism becomes not only moral, not only the best thing from an excellent moral principle point of view,

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it also becomes the only viable system to maintain the society and civilization and the standard of living and even pure survival of most of the populace.

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So in other words, with the Industrial Revolution we have a fusion of moral principle and necessity, so to speak,

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both of which are now geared into the libertarian matrix

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so, if we say that, then

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and this means that all that we have to do, well, I wouldn't say all we have to do

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but it makes the libertarian task much easier

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because it means that to convince the public, the general public, most of the public

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and the thinking public, or whatever you want to call them, opinion molders

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effective number of people to effect social change

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All you really have to do for this, at least in this basic sense, is to show them that you have to have free market and you have to have a libertarian system to have the whole society and the whole civilization continue to be viable.

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So you don't have to necessarily convince them of every detail of every moral principle, but you can show them that if you want to survive, if you want the country to survive or the world to survive, you have to go over to a libertarian free market setup.

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Now this, I think, is a powerful argument, once the person is really convinced of this.

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Of course, the real question is, why should they be, not so much why should they be convinced of it,

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but why should they be interested in the whole topic?

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Although it seems to me to be an interesting topic, whether the world is going to survive or not.

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But people have other interests.

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There's something, it's sort of like, you know, you have to slap a kid's face or something to focus his attention on when you want to tell him.

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There's a societal need for a bit of attention-getting to focus his attention on.

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And then, I'll get to that a little bit later, the necessity of attention-calling.

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about the first people to realize this, and I think bring in social philosophers who have almost been completely neglected among historians and social philosophers in general

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because they were the first guys to see that industrialism made a big difference

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in other words, it's all well and good to be a libertarian, I don't denigrate the early enlightenment type of libertarians, but they were not dealing with industrial system

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And they didn't see that industrialism brings in this extra argument for epistemological

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dash historiographical optimism.

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The first guy to really see this, I don't know who the first one was, but one of the

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first people was Jean-Baptiste Say, the great French economist, and his successor, from

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whom I shouldn't be talking about this at all, because Leonard is our great expert on

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these two people, Charles Dunwayet and Charles Clompt, Charles Clompt has no relation either

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Auguste Compe, Charles Compe and Charles Dunway have only been even mentioned by Elie Hallevy in his very interesting work The Era of Tyrannies and Andrzejewski in passing, at least in English.

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And anyway, these are some of the first people to focus in on this whole question, industrialism,

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if you're committed to industrial society, committed to industrial revolution, you have

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to have liberty, even if you might not have to have it before, and they weren't really

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interested in whether you had to have liberty before the industrial revolution, you certainly

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need it now, is essentially their point.

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And they began to analyze why this was true, they analyzed it largely from the economic

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from a social point of view and also from a sociological point of view and they were observing of course England being industrialized and France being industrialized and they were thinking about that very seriously and in great depth and they come up with

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What was the essence of the pre-industrial system?

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What was the essence of the industrial system?

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What difference has the whole thing made? What has really been happening?

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And it was called the Numele and Say who originated, but later came to be called, class analysis.

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Of course, we think, in our present benighted age, we think of class analysis as being Marxist,

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coming. It was not originally Marxist or coming. It was originally libertarian. Not only was

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it libertarian, it was a key element of the libertarian ruling block.

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They looked at the past epoch. It was a pre-industrial epoch. What did they see? They saw essentially what you read in the Albert J. Nark book. They saw class domination. They saw ruling class.

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The analysis basically goes something like this. In Oriental despotism, you have the bureaucracy and the king on top, the emperor on top, constitutes the ruling class, peasants subjected underneath.

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A lot of picnic?

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In a feudal society, the landlords have come in as a ruling group and carved out more decentralized areas of rule.

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So you have this concept of the ruling class as being the rulers.

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Here, of course, one of my major epistemological-historiographical differences with Forrest is I think there is a them,

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and there is a ruling class at any given period, and they can be identified by historical contemporary investigation.

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One of the problems is...

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What was I saying? Class ruler. I think one of the differences here is that I'm a methodological individualist,

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meaning there ain't no such thing when you get right down to it as institutions or collectives or groups or societies or nations,

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that they're all only individual people. Of course these individual people have played different roles and acted as if they were collective things.

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And when dealing in common sense terminology, it's helpful to use these collective nouns as metaphors.

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When you really get down to it, there are only individuals who will act, think, and so forth, and choose, and so forth, et cetera.

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So, of course, these individuals interact all the time. Nobody knows that.

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There's never been, incidentally, individualism has been smeared, of course, through history.

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And individualists are always said to believe that every individual is atomistic.

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The famous term atomistic individualism, every individual is an atom sort of riding around in a vacuum and having no contact with anybody else.

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That, of course, no individual, even the crazed Max Sterner, has really ever held that.

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So, those are the most extreme individuals of all.

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So, every individual is recognized, of course, as individuals that interact and learn from each other and affect each other and so forth and so on.

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The point is that there are, when you get that right down to it, only individuals and only they are around.

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So therefore, if this is true, that some individuals are getting a net out of any system,

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if there is a ruling class in any state kind of setup, some individuals are getting a net balance advantage out of this state process and others are losing in.

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One of the best political philosophers on this whole topic, by the way, is John C. Calhoun.

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I recommend his, his Disquisition on Government. Outside, of course, unfortunately, Calhoun happened to come from South Carolina, so he was a little wrapped up on the slave question and deviated from libertarianism a bit, a bit on that.

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When you get him off the slave question, he was a brilliant libertarian thinker. One of the things he said, he said more than 30 pages, the most political scientists saying about 8,000.

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And one of the things he said there is any, given any state at all, even the most minimal functions and the most minimal degree of taxation, even the tiniest state in the world, you still have immediate, immediately a state, the very existence of a state generates class conflict.

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Why is that? Because existence of taxes means that one set of the population is paying the

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taxes on net, the other set of population is what Calhoun's brilliant terminology called

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consuming the taxes. So you have the net taxpayers on the one hand and the net tax consumers on

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the other. And of course some of these net tax consumers are kicking back a little bit

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and so forth. Well, pointed on net, they are just, just praxeologically, so to speak, just looking at it, just pure arithmetic. If one group is paying taxes on balance, somebody else is getting it. So, therefore, the existence of any state at all sets up class conflict. And the more power you give to the state, the more functions the state takes on, the more intense, the more aggravated the class conflict becomes, because you're fighting over a bigger share of the loot, bigger amount of the loot to begin with. Take, for example, a bureaucrat.

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The bureaucrat receives, I guess, a $20,000 salary, let's say. He's working for the assistant

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commissioner in charge of stamping a signet or whatever. And he pays taxes, supposedly

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like everybody else. See, the fiction is maintained that he pays taxes. He kicks in $5,000 or

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whatever to the internal revenue service. Actually, of course, he doesn't pay any taxes

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at all. He's getting $15,000 tax-free out of the system. The fiction that he pays taxes

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This is a purely accounting device, where his entire income is derived from taxes.

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So the very existence of a state sets up this tax consumption, tax consumer versus tax payer thing.

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And then, of course, when the state starts doing anything beyond the pure police function,

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it immediately sets up some more class conflict, more subsidies, more privileges and so forth and so on.

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So in any society, in my view, in any society, you have identifiable net tax gainers and net tax consumers.

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I think Brezhnev and Kosygin, whoever else is there, I've really forgotten their names because they don't have the colorfulness of Khrushchei in the old days, they've sort of lost touch with the Kremlin, but they're the top of the ruling class in Russia, and there are others, you can sort of cut the thing off at somewhere in the upper bureaucracy,

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Okay, so what the original ruling class analysts of Dunweier, Comte, and Say, etc., the libertarian

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ruling class analysis, identify the ruling class as those people, whatever groups they

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happen to be, whether they're merchants, landlords, oriental despots, bureaucrats, or whatever,

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who have seized control of the state apparatus and are ruling the rest of the society through

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taxation.

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This definition of class, a ruling class, was a very precise one and there was no problem with it.

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In other words, the ruling class of the guys who got control of the state.

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To quote the later words, not in the same context, much more confused social theorists,

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Sockless Jerry Simpson, later in the late 19th century.

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In the century, we had to endorse Sarkozy-Gerri's social analysis.

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He didn't have theoreticians of great merit to advise him.

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But when he said one time, there were two classes of people,

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said Sarkozy-Gerri, the robbers and the robbed.

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That's essentially the nub of the thing.

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Notice the difference between this and the Marxian class analysis.

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Well, what happens by various...

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Well, one other thing.

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Ludwig de Nya also say that industrialism acquires a free market, established conditions for industrialization and the industrial system can only be maintained by continuing a free market

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and went through the whole analysis and predicted that if this free market principle continues and expands as it should, we will eventually get to what they call a classless society

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What they meant by a class of society was a society without a ruling class. Not a society without differences, without specialization, without division of labor, but a society without a ruling class in which, quote,

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a government of men will be replaced by the administration of things. This is supposed to be a quote from Karl Marx. It's not a quote from Karl Marx. It's a quote from one of the great libertarian theorists.

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What they meant by that was that, that the government will wither away, because it's obviously unviable and as it's demonstrated to be more and more unviable, they will wither away and the market will replace it.

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They also had another great quote, which I forgot, but in a similar line, another great Marxian, supposedly Marxian quote, is the Convénoyer analysis of what will happen in the future of libertarian society.

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Okay, so they set this up, and also the thing is that we begin to have this distinction,

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the great ideological party distinction, so to speak, in the early 19th century, as essentially

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and of course it's oversimplified, but we've gone to the stage, the last day of the day

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of oversimplification because we don't want to cut through to the truth, and essentially

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what we have is the so-called party of the left, to be, the party of the left is ussence,

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The Party of the Left is essentially libertarians, quasi-libertarians, minimal government, I

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was a friend of mine called, monarchists, and so forth.

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These people were essentially interested, they wanted to press on to a free market,

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free on a free market, and along with the free market comes individual liberty, separation

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of church and state, international peace, free trade, hard money, etc., etc., the whole

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business, the whole quasi-libertarian setup.

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That's the so-called left, or later to be known as classical liberals or classical radicals.

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Now on the right, the bad guy, the enemy, are the conservatives, the capital C,

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defenders of the old order, of the throne and altar, of the fixed caste,

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of what I've mentioned before about intellectuals as bodyguards of the ruling class, etc.

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International Warfare, high tariffs, fixed nobility, and so forth and so on, what we can call the old order, the capital low, capital low.

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And the classical liberals, or the revolutionaries in the widest sense, who were smashing the old order from within and from without and by various methods, sometimes violent, sometimes peaceful, depending on the situation.

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The conservatives really developed conservatism as a reaction to the revolution quotes of the early 19th century.

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And so originally conservatism is an explicitly reactionary attempt to smash this new upstart and go back to the old order.

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and Bonol and Mestura and all these characters, essentially what they want to do is to end the American, French and industrial revolutions and go back to the good old days of the Throne and Altar.

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What happens, it seems to me, my general interpretation of what happens later on with conservatism and also with the center, what happens is that they begin to realize that the right wing, in quotes,

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The Classical Rightists begin to realize that the jig is up. They ain't going to restore the old law.

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They're not going to get absolute monarchy back in the same form.

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They only have industrialization to cope with.

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You can't really say you've got to smash industry.

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They tried to do it in the factory acts, for example, in England,

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an attempt by the Tory landlords to try to cripple the industrialists who were competing for labor supply.

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They want to keep paying very low wages to the guys on the farms.

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They didn't like the people racing off and getting higher wage jobs in industry, but these things were basically, they had to realize, they realized that they had to transmute old-fashioned conservatism and some kind of new guise and accept this kind of new system, at least appear to accept a new system, accept industrialization and accept democracy in some sense. Democracy originally was a libertarian kind of weapon.

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and the weapon to at least have some say in the situation, along with the nobles, the king, and so forth.

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Okay, in this situation, classical liberalism is sweeping victories all across the board.

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Sweeping victories not only because it's a mass movement, it's a movement designed to telling the masses,

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this is going to give you liberty and a higher standard of living and mobility and so forth and so on,

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an opportunity to break out of the caste, all of us.

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And it's obviously working very well. It means paying off its promises pretty quickly.

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And old-fashioned conservatism is getting more and more discredited.

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Something happens around the mid-19th century. Several things begin to happen.

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One of the things I mentioned about war, classical liberalism hives off and becomes super patriotic and goes off on war adventures.

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The other thing that happens is that conservatism pops up again in a curious new guise known as socialism.

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Socialism is a very new kind of thing. It's one of the newest classical liberalism and classical socialism about the newest political philosophies, and I guess anarchism and all that stuff.

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These things are all new, basically, in the early 19th century, and socialism is even newer.

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Socialism appeals to a lot of people for various reasons.

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One, it's a new utopian thing, which really hasn't been advanced before on any kind of

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large scale, which is we're going to bring a second revolution.

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It's okay to have a liberal revolution, an industrial revolution, against the old order,

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and we're going to come to fulfill the promise of the old liberal revolution.

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We're going to bring in a new socialist revolution, which is going to bring everybody not only

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abundance, not only industrialism, which they're going to keep.

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I mean, they're frankly now saying, okay, we're going to keep industrialism, et cetera, but we're also bringing you something else, which is equality, uniformity, the end of specialization, division of labor, and so forth, all those kooky utopian goals.

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So we have this very peculiar blend of situations where the socialists are using to try to achieve classical liberal goals such as peace, classical society,

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the liquidation of the government of men into the administration of things, industrialization, abundance, high standard of living for the masses, etc., and freedom, in quotes.

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The socialists proposed to achieve this by old-fashioned conservative means.

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It's a very peculiar kind of hybrid, because in other words, okay, they say we accept classical liberal goals, they're right.

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But we're going to bring you these goals, and by bringing back the good old conservative sense of belonging, as it's now called, community, caste kind of system,

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collectivization, statism from the top and so forth and so on.

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Socialism begins as a peculiar hybrid movement with a grave intercontradiction in it, which only becomes pretty evident later.

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What happens on the Comte de Dunlaie front is that one of Comte de Dunlaie's disciples during their high period, their high period was shortly after the restoration period, after Napoleon was beaten,

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one of their disciples is some nutty old guy named Sassy Moore who was sort of hanging around salons.

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As far as I remember reading Leonard's material, San Simon never read anything, just sort of listened to Paul or gossip.

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So he was a libertarian at that point. He was a free market libertarian.

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And then he, after some years, he sort of rips away from the Complinoia circle and becomes something of a socialist.

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It's not very well known what he actually became because he didn't really write much.

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and the Saint-Simonians who follow him are sort of much more socialistic than Saint-Simonians

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but anyway, it's through the fuzzy and confused mind of Saint-Simonians

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that the libertarian class analysis filters down to the Saint-Simonians

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codify the whole thing and put it in around 1830

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and the Saint-Simonians transmute by this whole process

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filtering through the fuzzy mind of Saint-Simonians

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the Saint-Simonians change the whole class analysis and make it really completely self-contradictory

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and Paying Workers for Their Server Services.

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So in other words, what the Marxist-Leninist theory of class is a completely confused self-contradictory

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amalgam of the old libertarian theory of ruling class, which is he who controls the state

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or that who controls the state, blended into the whole thing shifting completely when you

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get to the employer-employee relationship, but suddenly the employer, just by virtue

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of paying the worker for his services, becomes a ruler over him.

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This is all mixed in, everything follows them with the Marxian class theory, and then Karl Marx himself picks up the Saint-Simonian theory of class, and we're off to the races, and this is combined, and also the concepts, such as the government of men will be replaced by the administration of things, and the classless society, these things are strictly libertarian concepts, now become left-wing utopian concepts, in the sense that now they've become...

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will take over the state, the working class will take over the state, but the working class is also oppressed,

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and then we'll smash everything, we'll eventually wind up with a classless society, meaning no division of labor, no specialization, everybody in uniform,

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and no scarcity, and all the rest of the stuff, and you have a communal collective kind of thing, and so forth and so on.

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All this stuff is this new hybrid, which is attached to the libertarian class analysis by Marxists.

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OK, so the meantime, this whole analysis that industrialism requires a free market continues on through the 19th century.

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Herbert Spencer was mentioned already here as one of the last people who really had this firmly.

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He called the two concepts of society, the industrial society versus the military society.

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What he meant by military society was essentially the status and militarism, the old order.

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and the industrial society requires a free market.

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This whole analysis gets lost on the shuffle

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by the turn of the 20th century as laissez-faire

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begins to die out, thinkers begin to die out.

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But the reality, the actual reality of the situation

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of the free market requires,

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industrialism requires the free market, still continues on.

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The reality is not affected by the fact

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The Marxists and the theoreticians have died out.

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What happens incidentally to the socialists and the Marxists,

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at all times, the Marxists have always been fronted with a crunch,

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which is part of their inner contradiction.

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On one hand, the Marxists claim that they're in favor of revolutionary smashing

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of the bourgeois state apparatus.

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On the other hand, they claim that they want to take over the state

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and have a big stateism before the withering way of the state,

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which might be for, you know, somewhere over hundreds of years.

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And so usually when the crunch comes and Marxists arrive

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One of the things about the law of cause and effect, and we can analyze reality, and one

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of the things about the law of cause and effect is that status measures and increasing status

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will make the system unviable, will make it unworkable, will ruin it.

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The problem is, however, it takes time, and it's not one of these immediate things.

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You know, when I take vitamin pills and I'm tired or something, I like to have the idea

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that when you take this vitamin pill and suddenly you'll pep up, you know, it's like some instant

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pill, just taking this vitamin B pill and now I'm just raring to go.

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Of course, it doesn't work that way.

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The time element is more of a cause and effect.

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And the social sphere is a big time element, a big time lag.

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For one thing, laissez-faire, you know, virtual laissez-faire, relative laissez-faire, has

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The State has built up in the United States and in Western Europe an enormous industrial machine, an enormous capital investment and so there was an enormous amount of play in the system, an enormous amount of looting zone, which the State could fasten onto and without visible deterioration for a long, long time.

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When you get to the late 19th century libertarian, quasi-libertarian thinkers, they are very pessimistic, they are gloomy as all get out and with good reason.

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I mean, there might not be epistemological, maybe it shouldn't have been epistemologically gloomy, but it certainly is historiographically gloomy, because they were, at the beginning of this process, people like Spencer, some there, Pareto in Italy, who was essentially a libertarian, an extremely pessimistic one, they look around them and they see the state closing in for the kill, and Pareto writes letters, Pareto started off as an aggressive young libertarian, and finally he sees that everybody's bad, essentially he was attacking the plutocracy, what was known as the plutocracy,

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Banking, Mercantilist, Big Business, Statism, etc., and he thought that the labor unions

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were essentially his allies because they were supposed to be against Statism, and then he

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finds out that socialists are just as totalitarian, even more so than businessmen, and he gives

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up.

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He doesn't see any hope for classical liberalism continuing, and then he does what one political

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scientist called retire to Galapagos in a sort of spiritual sense.

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He just says, they're all hopeless, they'll always be a ruling class, and that's it.

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This has been wrongly interpreted as him favoring a ruling class. He didn't. He was just a libertarian who gave up.

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But there was some good reason for giving up because the poor guys who were living around 1900

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would look ahead of them and saw that those who were more far-seeing than the others saw statism advancing and encroaching

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and saw no hope of any counteraction because the laissez-faire people were dying out.

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And you have the E. Lee stuff that we were talking about and the Bismarckian influence and all the rest of it.

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All this stuff is growing. This is a big new thing, a big new fad.

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And of course you have a Bolshevik Revolution, you have socialism and so forth and so on.

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It looks like socialism is the way of the future.

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If we could put it, I think it was Lincoln Steffens' famous remark,

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a great progressive muckraker visited Russians and came back and said,

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I've seen the future and it works, a famous Steffens remark.

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Well, one of the things that happened and one of the reasons why I'm optimistic

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is now 70 years later, after these poor old confrairs looking very gloomily at the future,

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and we've all seen the future, and it doesn't work.

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In other words, just as far as the brilliant lines are, the trouble with pragmatism is that it doesn't work.

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We've seen that all these things don't work, and this is becoming more and more acceleratedly, if that's the word, evident in this current period.

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For some reason, I find this a very optimistic thing as far as it doesn't, at any rate.

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In other words, what's happening here is that all these trends which are taking place, all these measures, higher taxes, inflation, the whole business, which Keynesian measures and cartelist measures, all these things which could apparently be gotten away with because there's so much fat in the system, so much fat that has been developed by the industrial system, by laissez-faire system.

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The Theory of Money and Credit

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The Exhaustion of the Reserve Fund

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What he meant by that is that you have this reserve fund that has been built up by capitalism, by free market capitalism

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This reserve fund is now being tapped, has been extracted more and more by

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by socialists or status measures

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and we're now getting to the point where the reserve fund is exhausted

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and that means that the cause and effect will now be catching up the cause. In other words, the next chips, you chip away at the tower that holds up the sky

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pretty soon the sky is going to start wobbling

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The Power is in a Wobble and the Sky is in a Stock Collapsing

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I mean like the price control thing, one metaphor. We had the first price freeze in August 1971, and those of us who were free market economists were leaping up and down and shouting, saying this thing can't work, and nobody paid attention to us at all.

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The whole world, the whole country at least, loved the price freeze. It was great, it was terrific. Businessmen loved it, labor leaders loved it, economists even so loud and loved it, because the economists were supposed to be against it.

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Free Economists accept Galbraith before August 1571, so price controls are ridiculous, they

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can't work.

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As soon as August 15th comes, economists rush into the exception of Friedman and say, this

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is great, this is terrific, and so forth and so forth.

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So everybody loves it, and it didn't work, but it didn't not work that quickly because

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there was a lot of slack in the economy during the recession period, and so the shortages

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didn't show up that quickly.

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The frozen price was not that much below the free market price, but things began to leak out a little bit, and fissures began to show in the system, and so Nixon goes over to phase two.

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Now he reimposes a price freeze in the current situation, a couple of years later, where the economy is booming, there's no slack of oil left, and immediately we meet shortages of development, and margarine shortages, and so on and so forth.

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So the cause and effect relationship, the length of time between initiating the evil cause and garnering the evil effect, is becoming much more shorter.

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Finally, it reimposes a price freeze in the current situation, a couple of years later, where the economy is booming, there's no slack at all left, and immediately we meet shortages that develop, and margarine shortages, and so on and so forth.

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So the cause and effect relationship, the length of time between initiating the evil cause and garnering the evil effect is becoming much more shorter.

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So this is sort of like teaching kids, I guess. I'm not an expert in kid teaching.

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Teaching kids is supposed to be very important to show the cause and effect relationship very quickly.

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You don't have to bother with a long chain of resulting consequences, etc. You have to have a thing be dramatic, short-run, and immediate.

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And this condition of immediacy is now becoming general throughout the system.

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Let me try to go through some of these areas.

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What we're seeing in the United States, certainly, is what we can call a crisis of liberalism. It's a crisis of liberal-dash conservatism.

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liberalism, progressivism, state monopoly, capital, whatever you want to call the system, corporate liberalism,

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has been really running the system at least since the 30s, and I think we've shown also really in the wider sense since the progressive period

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and the reserve fund is being exhausted, in other words, the effect is now cashing up the cause

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and all throughout the system we see breakdowns and crises, which are becoming more and more aggravating

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What are some of them? They're almost all over the place. I mentioned before already the public school system, which only 30 years ago was absolutely beloved, really beloved, and you couldn't attack it at all.

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And now everybody's attacking it. It's generally accepted that the whole thing is just not working as a miserable rotten mess.

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in the US, that's one area. Crime on the street, the whole urban question, urban decay is getting

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so evident that one of the big jokes for talk shows is, you know, New York, you can't walk

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out of streets in New York. It's a little exaggerated on a talk show, but the drift

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is clearly there. So the whole urban question, which is solely a function of government,

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I mean, government has been handling, if you look at the crime on the streets question,

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every aspect of crime on the street has been totally the responsibility of government all

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The police are government police, the streets are government streets, the courts are government courts, the prisons are government prisons.

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The whole thing is government, yet the whole thing is collapsing. Not yet, of course. Therefore, the air pollution question and water pollution is a question of pure government responsibility.

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The government courts have been owning the rivers all this time, and the courts are deciding the air pollution question, who could dump water into the air, and so forth.

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And of course the regulatory commissions and all that stuff, all these things we've been talking about all week,

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it's getting more and more evident that these things are collapsing.

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The ICC or the CAB now acknowledge that these things are all terrible.

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It's a melange of cartelization, etc.

362
00:45:40.760 --> 00:45:44.760
And the railroads are collapsing and all over the place.

363
00:45:44.760 --> 00:45:50.760
We have more and more, especially for the most governmentally affected, regulated, or controlled areas,

364
00:45:50.760 --> 00:45:52.760
more and more of this kind of collapse.

365
00:45:52.760 --> 00:45:54.760
More broadly, we have a tax question.

366
00:45:54.760 --> 00:46:01.760
I really think, maybe this is wishful thinking, but I really think that we politically reached a tax ceiling in this country.

367
00:46:01.760 --> 00:46:06.760
We've gotten to the point where the government does not dare to put on an increase in income tax, for example.

368
00:46:06.760 --> 00:46:11.760
There's a tax rebellion in the United States, which takes many different forms.

369
00:46:11.760 --> 00:46:17.760
Things like voting down school bonds, which used to be fantastically outside, I mean, in the payout,

370
00:46:17.760 --> 00:46:21.760
because it was outside the payout to vote against it.

371
00:46:21.760 --> 00:46:29.760
And various areas of the public can vote directly. They vote down the tax kind of thing.

372
00:46:29.760 --> 00:46:32.600
and uh... so the income tax i think is pretty well at least

373
00:46:32.600 --> 00:46:36.900
looks like it's pretty well reached the ceiling, the government cannot politically raise it

374
00:46:36.900 --> 00:46:39.800
property taxes on a severe attack

375
00:46:39.800 --> 00:46:41.420
for the first time in many years

376
00:46:41.420 --> 00:46:46.800
there's even talk of abolishing property tax or reducing it, certainly it can increase it very much

377
00:46:46.800 --> 00:46:50.780
uh... the VAT hasn't stopped up in the past, that was very important because the

378
00:46:50.780 --> 00:46:52.460
the value added tax

379
00:46:52.460 --> 00:46:53.400
Nixon was first

380
00:46:53.400 --> 00:46:57.420
tinkering with the idea of value added tax, it was a very sinister tax

381
00:46:57.420 --> 00:46:59.160
basically because it was hidden

382
00:46:59.160 --> 00:47:05.560
and nobody would know about it, and they think that the reason why businessmen are suddenly charging these increased prices is because of business greed

383
00:47:05.560 --> 00:47:13.040
and it would have been very, very difficult to convince the public, no, no, it's because the VAT has been imposed on each step of the way from the manufacturer to the processor, etc.

384
00:47:13.040 --> 00:47:18.480
So Nixon tries the VAT, this is during the Nixon honeymoon, this is before Watergate

385
00:47:18.480 --> 00:47:22.920
and there's a big hullabaloo arises in Congress and it withdraws the whole plan

386
00:47:22.920 --> 00:47:26.160
so we have, I think, a pretty well

387
00:47:26.160 --> 00:47:30.020
political tax ceiling

388
00:47:30.020 --> 00:47:35.800
okay there's also the inflationary rule, but inflationary rule is now catching up as I've been saying this week

389
00:47:35.800 --> 00:47:38.920
you can pump in the inflationary engine for a long time

390
00:47:38.920 --> 00:47:42.880
let me give you this little example about the German inflation

391
00:47:42.880 --> 00:47:49.880
because I think it's very relevant

392
00:47:49.880 --> 00:47:56.880
Social Security Tax, which starts off as a great bonanza for the guys who have become 65 in one year.

393
00:47:56.880 --> 00:47:59.880
It looks like this is a fantastic giveaway.

394
00:47:59.880 --> 00:48:04.880
Now, of course, the young people are locked into it, and the tax benefit and the tax rates keep going up every year.

395
00:48:04.880 --> 00:48:07.880
So that this is...

396
00:48:07.880 --> 00:48:12.880
Yeah, well, it's got to keep going up, because the bonanza is only a very short-run bonanza.

397
00:48:12.880 --> 00:48:20.880
If you're a so-called social security insurance, if you're 64 in 1936, and in one year you

398
00:48:20.880 --> 00:48:23.040
reach to be 65, you get the full benefits.

399
00:48:23.040 --> 00:48:28.240
So obviously these guys, this windfall group is now passed out of the picture, and now

400
00:48:28.240 --> 00:48:32.800
the full weight of social security is beginning to be increasingly evident to the public.

401
00:48:32.800 --> 00:48:37.960
So the German inflation thing, what happens is, the first year of the German inflation,

402
00:48:37.960 --> 00:48:52.460
In other words, from 1914 to 1922, approximately that, the money supply keeps going up, something like that, but prices are going up less, they're going up and they're going up less, and why are they going up significantly less than the money supply?

403
00:48:52.460 --> 00:49:02.960
Because the public, the German public, the poor, deluded German public thinks that the inflation is truly a wartime phenomenon, because of war, as soon as the war is over, it will get back to normal, get back to the old price level.

404
00:49:02.960 --> 00:49:07.960
They don't get back to the old prices, but they keep thinking this for quite a while.

405
00:49:07.960 --> 00:49:11.960
Oh, and the speak of normalcy after the war and all that stuff will get back at the old price level.

406
00:49:11.960 --> 00:49:15.960
And so they save up, they don't buy machine and all that, and they're waiting for prices to fall.

407
00:49:15.960 --> 00:49:19.960
And then they begin to realize that as time goes on, the psyche of the public changes,

408
00:49:19.960 --> 00:49:23.960
and they begin to realize that nothing is going to fall, and prices are going to keep going up,

409
00:49:23.960 --> 00:49:28.960
and then the thing changes, and as the money supply keeps going up, there's a crossover,

410
00:49:28.960 --> 00:49:31.960
and prices are going to rise faster than the money supply.

411
00:49:31.960 --> 00:50:01.960
And you get the situation where the boobs in the German Reichspark were issuing statements saying don't worry about it. We hear on all sides there's a money shortage because the people are clamoring about the fact that they haven't got enough money to buy the goods, which is now being priced astronomically high, and the German government said don't worry about it in Reichspark. We have the printing presses working all night long. We're keeping night shifts to pour enough money out into the public. And of course, this would slowly spiral even more. But the point is that inflation, the point I want to make here is now

412
00:50:01.960 --> 00:50:14.960
Inflation is a great thing, seemingly great thing, in the early years of inflation. In the early years of inflation, interest rates are low, and prices aren't going up that much, and it seems like a big boom period, and so forth and so on.

413
00:50:14.960 --> 00:50:24.960
In the later years of inflation, retribution begins to catch up. In other words, in effect, begins to catch up the cause. Prices start going up faster, something like exponentially at this point.

414
00:50:24.960 --> 00:50:34.960
The prices start going up faster. Interest rates start going up. You can't push them down. Wage rates begin to catch up. The prices were falling behind before creating inflationary profits.

415
00:50:34.960 --> 00:50:46.960
And so the crunch comes as no way out. And as these effects occur, the high interest rates occur, and the higher costs occur, and the higher prices, the public begins to get very irritated, as you, of course, have seen.

416
00:50:46.960 --> 00:50:55.960
The first step is lashing out and saying freeze everything, but not only does it work, it's becoming evident it doesn't work, but something else has to happen.

417
00:50:55.960 --> 00:51:05.960
So we see in the public school system and the racial integration attempts, an enormous amount of headaches and conflict.

418
00:51:05.960 --> 00:51:18.960
So we see all through the system increasing crises, and these crises are systemic, they're inherent in the status system, and they're getting more and more evident.

419
00:51:18.960 --> 00:51:23.960
See, I would analyze it to be as a fact catching up with the cause, that the fat has now been taken off, the reserve fund has been exhausted.

420
00:51:23.960 --> 00:51:33.960
From now on, it's an accelerating effect, because every time a new status measure comes in, we're going to get a new bang-bango kind of response out of it.

421
00:51:33.960 --> 00:51:35.960
and the evil that's bad to respond to.

422
00:51:41.960 --> 00:51:48.960
So things are getting progressively worse, will continue to get worse because of the status measures are now reaching their effect,

423
00:51:48.960 --> 00:51:55.960
the effect of the fact that the accordion is now having the effects coming out from the causes.

424
00:51:55.960 --> 00:52:10.960
Getting back on the Marxists, I enjoy reading Marxist-Leninist literature. Of course, there is a certain point when you sort of get stuck in your eyebrows with a jargon and so forth.

425
00:52:10.960 --> 00:52:24.960
But one of the reasons I enjoy Marxist-Leninist literature is the Marxist-Leninists, even though I disagree completely with their goals, about the only group that has been talking about or thinking about social change for the last 100 years or so.

426
00:52:24.960 --> 00:52:28.120
In other words, they're the only radical group of any substance

427
00:52:28.120 --> 00:52:31.360
who've been spending a lot of time thinking about strategy, thinking about social change

428
00:52:31.360 --> 00:52:36.240
Of course, what we're confronted with tonight is, why should I be optimistic and why should for us be pessimistic?

429
00:52:36.240 --> 00:52:42.320
In other words, we're talking about analyses or theories or predictions of social change

430
00:52:42.320 --> 00:52:47.200
And I think the Marxists have been remarkably successful in affecting social change

431
00:52:47.200 --> 00:52:53.240
Not in the United States, of course, but if you look at the world picture

432
00:52:53.240 --> 00:53:23.240
and especially considering the holes in the theory, holes in the doctrine, so I think it's important to study the literature, find out what they've been saying, how do they think, in other words, if libertarians have a radically different system than is now in power, which we do, and the Marxists have a radically different system than is now in power, what have the Marxists been saying, how do they think social change can be effective? Well, one of the things they say is, well, two particular things,

433
00:53:23.240 --> 00:53:33.240
One thing they say is, there's a ruling class, and of course libertarians, in my view, believe there's a ruling class, but we have a different view on this, we don't believe the capitalists rule the workers.

434
00:53:35.240 --> 00:53:48.240
And one of the problems, one of the reasons why the Marxists say we don't have revolution by the oppressed classes, by the subject classes, or the majority, is because the oppressed class suffers from what they call false consciousness.

435
00:53:48.240 --> 00:53:54.240
In other words, they think that they're really being benefited by the king or whatever.

436
00:53:54.240 --> 00:54:00.240
So, therefore, the task of the... So how do they get to the true conscience? How do they find out about reality?

437
00:54:00.240 --> 00:54:06.240
How do they find out they're being oppressed by the nobles or the king or the Marxists in terms of capitalists?

438
00:54:06.240 --> 00:54:10.240
The way they find out about it is by intellectuals telling them about it. That's one way.

439
00:54:10.240 --> 00:54:18.640
Anyway, in other words, you need a cadre or a group of self-aware, dedicated, professional

440
00:54:18.640 --> 00:54:24.040
intellectuals of some sort, who are dedicated to telling, enlightening the public, enlightening

441
00:54:24.040 --> 00:54:27.960
particularly the oppressed classes, there's no really need to enlighten the ruling class.

442
00:54:27.960 --> 00:54:31.560
I mean, they might be enlightened or not, but the point is to enlighten the oppressed

443
00:54:31.560 --> 00:54:38.000
classes so they'll do something about it and to give them the message and show them how

444
00:54:38.000 --> 00:54:47.000
In this way, their blinkers are taken off and they will become a mite into their own subjection.

445
00:54:47.000 --> 00:54:52.000
And one of the problems with this is, and the Marxists face this fact pretty quickly,

446
00:54:52.000 --> 00:55:00.000
mostly the mass is just uninterested, they don't give a damn about all this stuff about the ruling class and the bookers and the capitalists and so on.

447
00:55:00.000 --> 00:55:06.000
There's a lot of fretting going on among Marxists with these people. Here we are trying to help these SOBs, and they're not even interested.

448
00:55:06.000 --> 00:55:15.520
So the point then becomes, and Marx has lent in a strategy, there has to be a reason for

449
00:55:15.520 --> 00:55:16.520
them to get interested.

450
00:55:16.520 --> 00:55:19.680
After all, most of the public are not professional political theorists, they don't really care

451
00:55:19.680 --> 00:55:21.000
that much about the whole business.

452
00:55:21.000 --> 00:55:26.360
They're like, they're, whether they're Russian or German, they're equivalent of watching

453
00:55:26.360 --> 00:55:28.960
television and that sort of stuff, and going bowling.

454
00:55:28.960 --> 00:55:31.520
It's a major interest, there's really nothing wrong with that, there's no real reason why

455
00:55:31.520 --> 00:55:34.160
they should be great political theorists, or be interested in political theory.

456
00:55:34.160 --> 00:55:54.160
The point is, this kind of enlightenment, this kind of spread of enlightenment, so to speak, to the oppressed classes, can really only take place, as the Marxists began to realize, if two conditions are met.

457
00:55:54.160 --> 00:55:59.160
Conditions which really mean that their attention is caught.

458
00:55:59.160 --> 00:56:04.160
I remember I mentioned before that you have to catch the attention of somebody to get them to learn something if he's not really interested.

459
00:56:04.160 --> 00:56:13.160
So these conditions really amount to the masses or the oppressed classes or whatever being forced in quotes to get interested in the topic.

460
00:56:13.160 --> 00:56:18.160
For this you need two conditions, what Marxists call objective conditions and subjective conditions.

461
00:56:18.160 --> 00:56:25.160
Peculiar terminology, I guess Hegelian terminology, I'm not going to argue Hegel.

462
00:56:25.160 --> 00:56:28.160
At any rate, the terminology is objective in the subject of conditions.

463
00:56:28.160 --> 00:56:32.160
What the Marxists mean by objective conditions is that the conditions have to be right.

464
00:56:32.160 --> 00:56:39.160
In other words, there have to be a lot of terrible things happening, breakdowns in what they call crisis situations.

465
00:56:39.160 --> 00:56:45.160
Either wars or defeat in a war or runaway inflation or depression or whatever.

466
00:56:45.160 --> 00:56:47.800
This is an attention-getting device.

467
00:56:47.800 --> 00:56:50.520
In other words, a breakdown in the system is a big attention-getting device.

468
00:56:50.520 --> 00:56:52.520
People suddenly get interested in the problem.

469
00:56:52.520 --> 00:56:56.320
During the thirties, a lot of everybody got interested in unemployment.

470
00:56:56.320 --> 00:56:57.320
Why is there unemployment?

471
00:56:57.320 --> 00:56:58.320
What's going on?

472
00:56:58.320 --> 00:56:59.320
Why is there a business cycle?

473
00:56:59.320 --> 00:57:02.040
This doesn't mean there's any great theorizing emanating from the thirties.

474
00:57:02.040 --> 00:57:05.520
The point is, a mass of the public, for the first and last time in their lives, got interested

475
00:57:05.520 --> 00:57:06.520
in business cycle theory.

476
00:57:06.520 --> 00:57:13.280
So the point is, crisis situations create the object of conditions for the success of

477
00:57:13.280 --> 00:57:19.000
and Radical Social Change, and what I'm trying to say here is that the objective conditions

478
00:57:19.000 --> 00:57:24.000
are increasingly being fulfilled in the United States and more and more can be fulfilled

479
00:57:24.000 --> 00:57:29.880
asivid the effect is more and more going to catch up with the cause, as the prophecies

480
00:57:29.880 --> 00:57:34.720
of Spencer Braco, etc. are going to be fulfilled and more and more evidently so, as taxes get

481
00:57:34.720 --> 00:57:38.240
more and more crippling, as inflation gets more and more crippling, as the urban mess

482
00:57:38.240 --> 00:57:42.880
gets worse and worse, etc., etc., the whole business, I should also add here foreign policy

483
00:57:42.880 --> 00:57:44.880
and, of course, a special Lagnati.

484
00:57:44.880 --> 00:57:48.880
The Wilsonian foreign policy, collective security,

485
00:57:48.880 --> 00:57:50.880
and that whole bit is obviously going down the drain.

486
00:57:50.880 --> 00:57:53.880
Clearly and patently has failed.

487
00:57:53.880 --> 00:57:56.880
The idea of fixing everybody up all over the world,

488
00:57:56.880 --> 00:57:59.880
the whole liberal system, the whole corporate liberal system

489
00:57:59.880 --> 00:58:01.880
is in a state of aggravated collapse.

490
00:58:01.880 --> 00:58:03.880
And more and more evidently so to the public.

491
00:58:03.880 --> 00:58:07.880
Okay, so the objective conditions for radical social change

492
00:58:07.880 --> 00:58:10.880
are not only being more and more fulfilled,

493
00:58:10.880 --> 00:58:25.120
The future is great for the increasing presence of the objective conditions.

494
00:58:25.120 --> 00:58:27.680
What about the subjective conditions?

495
00:58:27.680 --> 00:58:33.000
What Marx says to me in this peculiar term, subjective conditions, means essentially people

496
00:58:33.000 --> 00:58:34.000
to carry the message.

497
00:58:34.000 --> 00:58:38.760
In other words, you need the breakdown and you need the people to carry the message.

498
00:58:38.760 --> 00:58:49.760
People, of course, the cadre, or the hardcore, whatever it's called, what Lenin called professional revolutionaries, is a dramatic term.

499
00:58:49.760 --> 00:58:57.760
In other words, what it's really meant is a group of self-conscious intellectuals who offer the alternatives.

500
00:58:57.760 --> 00:59:02.760
In other words, people will say, look, you see the system is breaking down, right?

501
00:59:02.760 --> 00:59:13.760
And here's why it's broken down. We can show you how it all fits in, and why we predicted this before, and we can show you our writings 20 years ago that predicted inflation, and so forth and so on, the whole business.

502
00:59:13.760 --> 00:59:31.760
And the theory then is that the public increasingly turns to these guys who have shown themselves to predict it correctly, and have shown an answer that makes sense to this problem which has been called forcibly to the attention of the masses by this breakdown in the system.

503
00:59:31.760 --> 00:59:38.760
Well, if the object of our conditions for the success of liberty are great and getting better, what about the subject of condition?

504
00:59:38.760 --> 00:59:47.760
Well, here, I'm not going to stand here and say that libertarianism has become a mighty force in the land, but I think, certainly, the rate of increase has been fantastic.

505
00:59:47.760 --> 00:59:57.760
And for those of us who are veterans in the movement, I mean, not only 20 years ago, but five, seven-something years ago,

506
00:59:57.760 --> 01:00:04.760
The number of libertarians in the eastern seaboard was just about, you know, could fit comfortably in my own small living room, usually did.

507
01:00:04.760 --> 01:00:12.760
You know, five, six, something like that. These are five, six brilliant theoreticians, but they ain't got no movement out there.

508
01:00:12.760 --> 01:00:22.760
Okay, of any sort. And then 1969 is the famous big takeoff, I mean famous within the movement.

509
01:00:22.760 --> 01:00:52.760
The famous take-off, and all of a sudden, and young people are suddenly walking in the movement of great numbers, and this is exponentially accelerating. I'm not saying this exponentially accelerating trend will continue, but all I can say is reporting as an historian at this point, that from 1969 through 1973 has been an enormous rapid rate of increase in the number of libertarians. It's gotten to this point, you see, it's gotten to the point, as Marx's friend and mine of course are steering this whole thing, and I haven't got any people there.

510
01:00:52.760 --> 01:00:56.200
So one of the conditions of the Marxist say, we're now fulfilling conditions where if somebody

511
01:00:56.200 --> 01:01:01.920
writes a libertarian article of some merit, in some publication which I've barely heard

512
01:01:01.920 --> 01:01:06.040
of, and I haven't heard of this person, this is a big thing for the ideological movement.

513
01:01:06.040 --> 01:01:09.520
In other words, up until a couple of years ago, I knew every libertarian in the country,

514
01:01:09.520 --> 01:01:13.840
and if somebody writes an article, this is J.R. Jones or something, I would know who

515
01:01:13.840 --> 01:01:15.400
this guy is, and etc., etc.

516
01:01:15.400 --> 01:01:19.160
Now people are popping up all over the place who I've never heard of before, who are plugged

517
01:01:19.160 --> 01:01:20.160
into the whole thing.

518
01:01:20.160 --> 01:01:24.480
We don't need to be hashed over and educated and brainwashed and such.

519
01:01:24.480 --> 01:01:29.280
In other words, if suddenly pop up, all of it, and this is true all over the country.

520
01:01:29.280 --> 01:01:31.440
So I find this an exciting development.

521
01:01:31.440 --> 01:01:37.280
I'm not going to predict victory on the basis of that, but certainly consistently the idea

522
01:01:37.280 --> 01:01:41.960
that victory is a common.

523
01:01:41.960 --> 01:01:45.920
Then we had the different organizations.

524
01:01:45.920 --> 01:01:50.020
We started off as our only organization for several years was a campus-based organization

525
01:01:50.020 --> 01:01:58.020
The New Left was never able to break out of the campus, even at its height. They were much more numerous than we are at this point.

526
01:01:58.020 --> 01:02:04.020
But they were never able to break out of the campus. Somebody graduates from the campus, he's a big leader of SDS, he's a senior.

527
01:02:04.020 --> 01:02:10.020
One year later he's completely dropped out of golf somewhere. They found it impossible to mobilize to go the next step and get into the Vogue Group.

528
01:02:10.020 --> 01:02:27.020
We now have some of those groups. The Libertarian Party, which started last March, which I figure was a crazy joke, in the sense that here were 200 Libertarians from the country who were running for presidential candidate.

529
01:02:27.020 --> 01:02:41.580
I think every state now has a nest of libertarians, they're largely highly intelligent, they're

530
01:02:41.580 --> 01:02:46.500
active, dedicated, etc., and they're popping up everywhere, and in different communities

531
01:02:46.500 --> 01:02:47.500
all over the place.

532
01:02:47.500 --> 01:02:53.820
We have a Buffalo chapter, for example, just started, etc., not only that, but our presidential

533
01:02:53.820 --> 01:02:58.820
I'm a political candidate, an distinguished philosopher, got an electoral vote last year.

534
01:02:58.820 --> 01:03:03.820
This is undoubtedly the cheapest electoral vote per dollar in the history of the United States.

535
01:03:03.820 --> 01:03:07.820
I mean, they had a campaign fund of, I don't know, $500 or something like that.

536
01:03:07.820 --> 01:03:11.820
And you get an electoral voter for that. $500 per vote is pretty darn good.

537
01:03:11.820 --> 01:03:18.820
So we have that as a first, as a groundwork.

538
01:03:18.820 --> 01:03:25.460
And not only that, but the sort of reception I get as a veteran in the movement is an amazing

539
01:03:25.460 --> 01:03:29.060
change in the sort of reception I get from average intellectuals and professors, et cetera.

540
01:03:29.060 --> 01:03:34.340
Twenty years ago, these ideas were dismissed as being fascist, neanderthal, reactionary,

541
01:03:34.340 --> 01:03:36.460
paleolithic, et cetera, et cetera.

542
01:03:36.460 --> 01:03:39.780
And now the same sort of people, same liberal intellectual types say, well, you know, that's

543
01:03:39.780 --> 01:03:42.140
pretty interesting, and I really believe most of that, and so forth.

544
01:03:42.140 --> 01:03:45.300
Now, whether they really believe most of that or not is another story, but they think they

545
01:03:45.300 --> 01:03:50.780
do, which is, I think, great stuff forward. So from having the whole thing treated as

546
01:03:50.780 --> 01:03:54.060
a reactionary in the end of all fascism stuff, I say, yeah, that's pretty good. How do you

547
01:03:54.060 --> 01:03:58.780
think the courts will work and all that sort of stuff? You get the sort of technical questions.

548
01:03:58.780 --> 01:04:05.940
And the general matrix of libertarian policy and programs seems to be very much widely

549
01:04:05.940 --> 01:04:10.180
accepted. We've been getting a lot on radio and television. One of the, a friend of mine

550
01:04:10.180 --> 01:04:14.780
is also libertarian in New York, and I were comparing notes over a couple of radio interview

551
01:04:14.780 --> 01:04:18.860
programs, and we were both amused by the fact, instead of being attacked bitterly by guys

552
01:04:18.860 --> 01:04:24.020
being fascist and heartless and all that, they say, yeah, what are your views on this?

553
01:04:24.020 --> 01:04:26.820
And you tell them that you have crazy views on that, and they say, yeah, that's interesting,

554
01:04:26.820 --> 01:04:27.820
what are your views on that?

555
01:04:27.820 --> 01:04:31.340
And it's sort of a reverential questioning.

556
01:04:31.340 --> 01:04:39.060
I was on the John Wingate All Night program a couple weeks ago, and I thought my guy would

557
01:04:39.060 --> 01:04:43.180
be a hassle, et cetera, and at first, before the program starts and while the commercial

558
01:05:13.180 --> 01:05:19.580
of the Place. I mean, it's really fantastic, in my own experience, to find this sort of

559
01:05:19.580 --> 01:05:32.580
reaction among the public. So I think the time is right. And libertarians, I say, proliferating

560
01:05:32.580 --> 01:06:02.580
The General Culture of Receptivity is much greater, and the media, that's true that the media has not been converted, obviously, but you're going to get this sort of thing, I mean, Farz was asking this morning, how do you get the

561
01:06:02.580 --> 01:06:13.580
and the Media. Well, I mean, look, we've had a situation in the old days. I mean, 5, 10, 15, 20 years ago. The sort of books we write were published by the, you know, the Archon Press or something like that.

562
01:06:13.580 --> 01:06:27.580
Either privately published, a lot of handcrafted and no margin and that sort of thing, or else some very obscure publisher didn't have any distribution facilities and so forth.

563
01:06:27.580 --> 01:06:32.580
And now we're getting published by Macmillan and Harper and Row and Harcourt Brace and all that sort of stuff.

564
01:06:32.580 --> 01:06:37.580
Now it's true this could be a fad, but on the other hand, the very fact that even if it's a fad, it's a good thing.

565
01:06:37.580 --> 01:06:43.580
The establishment, the media consider us important enough or interesting enough or whatever to become a fad.

566
01:06:43.580 --> 01:06:52.580
Macmillan, the August publishing house of Macmillan and Company this year published, this season published no less than three libertarian books, which is fantastic.

567
01:07:22.580 --> 01:07:51.580
In the United States, while the objective conditions are proliferating, and the subjective conditions are proliferating,

568
01:07:51.580 --> 01:07:54.580
at a lesser but a more rapid rate.

569
01:07:54.580 --> 01:07:56.580
What's going on in the communist countries?

570
01:07:56.580 --> 01:07:59.580
I've already said Marxism has conquered half the world.

571
01:07:59.580 --> 01:08:03.580
What's going on there? Well, there are some of the most exciting developments in the 20th century,

572
01:08:03.580 --> 01:08:08.580
in my view, developing there, which has gotten very little attention,

573
01:08:08.580 --> 01:08:12.580
a little bit of attention in the Western press, but very little relative to its importance.

574
01:08:12.580 --> 01:08:17.580
And the great hero, if you're not concerned, in this whole process,

575
01:08:17.580 --> 01:08:24.260
is Marshal Tito. Marshal Tito has gotten a little crotchety at this point. So I don't

576
01:08:24.260 --> 01:08:28.380
endorse his recent actions. But the point is, here he is, Marshal Tito has written the

577
01:08:28.380 --> 01:08:33.460
power in 1948, excuse me, 1945, during World War II. He's written the power with his own

578
01:08:33.460 --> 01:08:38.440
army, his own guerrilla army. He's not completely beholden to Stalin, but here we have an international

579
01:08:38.440 --> 01:08:44.020
communist system where Stalin was the guru and everybody took orders from him. And naturally

580
01:08:44.020 --> 01:08:48.540
He hates the Russian system and he puts on a full collectivized system, it collectivizes

581
01:08:48.540 --> 01:08:52.560
everything, has a communist party on everything, has a Politburo and the National Planning

582
01:08:52.560 --> 01:08:53.560
Board and everything else.

583
01:08:53.560 --> 01:08:57.080
There's a full Russian collectivist model, abolishing private enterprise, abolishing

584
01:08:57.080 --> 01:09:00.540
price system, etc.

585
01:09:00.540 --> 01:09:05.780
What he sees, even though Yugoslavia is not really industrialized at this point, but even

586
01:09:05.780 --> 01:09:11.020
with their small amount of industry, what he sees is that the collectivized planning

587
01:09:41.020 --> 01:09:46.260
The State gets worse and worse because every time, as Mises has always pointed out, if

588
01:09:46.260 --> 01:09:48.940
you have one intervention in the system, the government intervenes at one point, saying

589
01:09:48.940 --> 01:09:51.140
the farm price thing, this messes up the system.

590
01:09:51.140 --> 01:09:53.940
You're trying to solve a problem by intervening, but this messes up the system.

591
01:09:53.940 --> 01:09:55.660
You create two other problems.

592
01:09:55.660 --> 01:09:56.660
Then you're faced with a choice.

593
01:09:56.660 --> 01:09:59.700
Either you repeal the whole thing and go back to square one, or else you have two other

594
01:09:59.700 --> 01:10:03.380
interventions to try to cure the two problems, but this creates two more problems, et cetera,

595
01:10:03.380 --> 01:10:07.500
et cetera, and you wind up with a full-stated system which doesn't work very well either.

596
01:10:07.500 --> 01:10:10.340
But the point is, this process can also be reversed, and we always know in theory this

597
01:10:10.340 --> 01:10:23.340
We always knew in theory that you could start with statism and have it step by step rolling back and freeing each sector and as the problem develops you say, well, I guess we have to liberate this sector now in order to get that thing to work.

598
01:10:23.340 --> 01:10:32.340
We always knew this in theory, but it seemed to be utopian, the idea that this could actually happen in practice, because historically all we saw was the process working the other way, at least in the modern world.

599
01:10:32.340 --> 01:10:38.580
World. But Marshall Tito launches the process of systematic step-by-step, not so gradual

600
01:10:38.580 --> 01:10:48.860
either, radical step-by-step destatization. This is what they call it, by the way. And

601
01:10:48.860 --> 01:10:54.780
in 1948, and by 1952, in just a few years, he established a market kind of socialism,

602
01:10:54.780 --> 01:11:02.060
which is a fantastic kind of breakthrough. First of all, they had a private sector as

603
01:11:02.060 --> 01:11:07.300
is very strong. Agriculture is essentially private now in Yugoslavia. It has been since

604
01:11:07.300 --> 01:11:14.420
1948. Agriculture is private. There's a private sector of small businesses. In those days,

605
01:11:14.420 --> 01:11:18.260
hiring, I'd say, up to five people or something like that, which was private. And the so-called

606
01:11:18.260 --> 01:11:23.420
public sector was denationalized. And the workers in each plant own the, you know, only

607
01:11:23.420 --> 01:11:27.620
workers own each plant. It's sort of like producers co-op, co-ops. They don't officially

608
01:11:57.620 --> 01:12:14.180
So Tito does this in a great leap in 1953-52. By 52 we have this new system, worker ownership

609
01:12:14.180 --> 01:12:19.900
of each socialized plant, so to speak, and then a free price system between the plants

610
01:12:19.900 --> 01:12:25.780
and profit and loss tests for each plant, and plowing back of profits, etc. etc. Also

611
01:12:25.780 --> 01:12:35.780
The banking system gets decentralized, and the banks are essentially owned up by the government but by the consumers, by the sort of consumer co-op banks owned by the various firms.

612
01:12:35.780 --> 01:12:47.780
So we have a system that looks very much like quasi-capitalism. As a matter of fact, even before 1967, even in this phase two, the first big phase of destabilization, Yugoslavia was probably less socialist than France.

613
01:12:47.780 --> 01:12:55.680
And that's the way it toss up. But the interesting thing is, as they began to do this, as they

614
01:12:55.680 --> 01:13:00.100
began to free each sector, they found the problems began to be eliminated. They found

615
01:13:00.100 --> 01:13:03.460
that here's a problem with steel or something, they have free pricing in the steel industry

616
01:13:03.460 --> 01:13:07.060
and profit and loss test, and then the steel problems clear up. And so they got more and

617
01:13:07.060 --> 01:13:12.020
more excited about the process and the process began to accelerate. Finally, in 1967, there

618
01:13:12.020 --> 01:13:18.980
A third phase, which went over to a much more free market than in Yugoslavia, where you

619
01:13:18.980 --> 01:13:25.020
have a price system that's completely free, profit and loss has to be more stringent,

620
01:13:25.020 --> 01:13:31.740
a firm can now go bankrupt if they lose money, and the state control of investment, which

621
01:13:31.740 --> 01:13:35.780
is the last big state control, and Mises has always said that if you want to know whether

622
01:13:35.780 --> 01:13:38.820
a country is socialist, look at who controls basic investment.

623
01:13:38.820 --> 01:13:50.820
The US lobby and state had taxed each firm something like 70% of its income and had taken all this money and decided on who would get what allocation of capital, which plants should be built where.

624
01:13:50.820 --> 01:13:59.820
In the reforms of 1967-68, the state income tax on plants was reduced from something like 70% to something like 20%, you know, less than the United States.

625
01:13:59.820 --> 01:14:07.820
So now the investment is free also from the stateism. You really have a very close to a free market system.

626
01:14:07.820 --> 01:14:12.460
One of the things that happens, one of the exciting things also is the ideology of the

627
01:14:12.460 --> 01:14:18.940
U.S. law of communism. I've read some of the, I don't read Serbo-Croat, but I have read

628
01:14:18.940 --> 01:14:24.140
quite a bit of the English translations of the U.S. law of communist theoreticians. And

629
01:14:24.140 --> 01:14:29.100
what they're saying is, they're very excited about the idea of free market and they're

630
01:14:29.100 --> 01:14:35.060
reading Friedman and Mises, etc. And they agree with it. And one of the things they,

631
01:14:35.060 --> 01:15:05.060
and they try to apply them free market principles, libertarian principles, systematically wherever they can find any kind of anomaly or problem and you have them sounding like, very much of that stuff sounds very much like, you know, right wing Republicans in the United States or like Barry Goldwater or Ronald Reagan, for example, you read the communist economist, the economist has only been in the forefront, I'm happy to say, of this liberalization or free marketization, you read a typical Slovenian or Croat, Slovenian is a Croat by his ethnic determinism,

632
01:15:05.060 --> 01:15:35.060
and Socialism coming in also. For various reasons, the Serbs have always been the SOBs, the Yugoslavians, and the statists, and the Slovenes and the Croats have been the most industrialized, thriftiest, et cetera, et cetera, most entrepreneurial. So the Slovenes and Croats have been on the forefront of this liberal de-statization. And when you read a Slovene or Croat communist economist, let's say he sounds like Barry Goldwater or Ronald Reagan, when he says things like this, there shouldn't be any of what they call political factories. We shouldn't have the state taxing us and building factories in Montenegro.

633
01:15:35.060 --> 01:15:54.980
The whole analysis, the whole way of looking at things is that the individual is a free

634
01:15:54.980 --> 01:15:55.980
market.

635
01:15:55.980 --> 01:16:00.700
In the philosophic front, the Yugoslavs are now talking in terms of the individual should

636
01:16:00.700 --> 01:16:08.700
And they do not have to sacrifice themselves to the social welfare and social benefit, which is a tremendous thing that marxists, supposes marxists, to say.

637
01:16:13.700 --> 01:16:17.700
And now they're talking about, the latest thrust of what they're talking about.

638
01:16:17.700 --> 01:16:28.700
Oh, one of the things, politically they're so decentralized, for example, Slovenia, which is a part of Yugoslavia, can make its own consular treaty with Austria, which the treaty would not apply to the rest of Yugoslavia.

639
01:16:28.700 --> 01:16:34.380
and something like the Articles of the Federation, it's almost unbelievable for a modern country,

640
01:16:34.380 --> 01:16:39.420
especially for a communist country. And there are things like foreign investment, they welcome

641
01:16:39.420 --> 01:16:43.020
foreign investment, they welcome American investment, Yugoslavia, and so forth and so

642
01:16:43.020 --> 01:16:48.620
on. They're trying to get back to hard money for the denar, they want a freely convertible

643
01:16:48.620 --> 01:16:55.180
denar, they're even talking about going over to gold standard denar eventually. And reporters

644
01:16:55.180 --> 01:16:58.820
People who go to Belgrade, especially to Zagreb, which of course being Kroat is better, is

645
01:16:58.820 --> 01:16:59.820
better than Belgrade.

646
01:16:59.820 --> 01:17:04.340
When they go into the Yugoslavia, they find this fantastic spirit, very different from

647
01:17:04.340 --> 01:17:09.340
the gray, dead spirit of Russian Eastern Europe, and people, there's a lot of food in the shops

648
01:17:09.340 --> 01:17:11.780
and people are happy and so forth and so on.

649
01:17:11.780 --> 01:17:16.380
So the whole kind of bourgeois spirit is not completely taken over Yugoslavia, as well

650
01:17:16.380 --> 01:17:20.580
as the bourgeois economics.

651
01:17:20.580 --> 01:17:22.860
One of the things they're also trying to push, although they admit there's going to be some

652
01:17:22.860 --> 01:17:26.860
The problem in getting the old communist functionaries to accept it is to have a stock market.

653
01:17:26.860 --> 01:17:32.860
See, one of the things is this, the workers own the plant, but they're facing this kind of a problem.

654
01:17:32.860 --> 01:17:36.860
He didn't have 200 workers in the plant, but what happens if one worker retires?

655
01:17:36.860 --> 01:17:38.860
Why shouldn't he continue to have a vote?

656
01:17:38.860 --> 01:17:42.860
And why shouldn't he be able to pass his share on to his children?

657
01:17:42.860 --> 01:17:47.860
Of course, this means a stock market. It means that each individual worker should have his pro rata share,

658
01:17:47.860 --> 01:17:50.860
and then he should be allowed to sell it or give it away.

659
01:17:50.860 --> 01:17:56.860
So they're talking in terms of stock market, and they realize it's going to be kind of tough to get the old Communist Party hacks to accept it.

660
01:17:56.860 --> 01:18:06.860
So they propose to call it, and I get this, socialist people of capitalism.

661
01:18:06.860 --> 01:18:11.860
So they can't call it capitalism, obviously. That's the one thing that they ideologically bar from that.

662
01:18:11.860 --> 01:18:18.860
Outside of that, they're virtually going all the way. There has been some setbacks since life proceeds in a zigzag path.

663
01:18:18.860 --> 01:18:23.180
path, unilinear process.

664
01:18:23.180 --> 01:18:25.700
So set back to the last six months or a year or so,

665
01:18:25.700 --> 01:18:27.280
Tito has gotten very upset at everybody.

666
01:18:27.280 --> 01:18:30.700
He calls it anarcho-liberalism, or Yugoslav intellectualism,

667
01:18:30.700 --> 01:18:31.900
Yugoslav economy.

668
01:18:31.900 --> 01:18:34.380
He's trying to go back a little bit to a little bit more

669
01:18:34.380 --> 01:18:35.340
statism.

670
01:18:35.340 --> 01:18:37.220
But it seems to me that when Tito dies,

671
01:18:37.220 --> 01:18:40.180
which he will eventually, supposedly, someday,

672
01:18:40.180 --> 01:18:41.780
that the thing is going to bust open,

673
01:18:41.780 --> 01:18:43.540
and they're going to have a big march back

674
01:18:43.540 --> 01:18:48.780
and so on and so forth, free marketization, de-stabilization.

675
01:18:48.780 --> 01:18:52.140
I had an interesting experience along this line, but what happens is that Yugoslavia

676
01:18:52.140 --> 01:18:55.460
set the great beacon light for the rest of Eastern Europe.

677
01:18:55.460 --> 01:18:59.500
So after a few years of seeing how the Yugoslav economy was developing and doing much better

678
01:18:59.500 --> 01:19:07.500
than the rest of Eastern Europe, Poland and Czechoslovakia and Hungary, and what else?

679
01:19:07.500 --> 01:19:11.660
Romania, not Romania, Bulgaria a little bit.

680
01:19:11.660 --> 01:19:15.740
Poland, Czechoslovakia and Hungary began to shift over and began to follow in the path

681
01:19:15.740 --> 01:19:18.980
blazed by Yugoslavia. They had a lot more problems, obviously. One of the reasons, by

682
01:19:18.980 --> 01:19:22.580
the way, why Czechoslovakia was reinvaded by Russia was not only because of the democracy

683
01:19:22.580 --> 01:19:26.160
aspect but because Czechoslovakia was going to make the full leap virtually to the Yugoslav

684
01:19:26.160 --> 01:19:27.160
position.

685
01:19:27.160 --> 01:19:32.260
And Stalin was seriously considering invading Yugoslavia when Tito broke with him. He didn't

686
01:19:32.260 --> 01:19:38.220
do it because Tito threatened to fight forever on the hills. It's the great Yugoslav guerrilla

687
01:19:38.220 --> 01:20:08.220
Traditions. They didn't want to feel like they were trying to come back. But at any rate, it seems to me the process is more and more inevitable. What happens, what's happening is that one of the standard jokes among economists and when you have a world economic or a European, you know, Anglo-American, European economic conference, the Western economists are talking about the glories of Keynesianism and planning and the Eastern and the communist economists are talking about the glories of the free market. I had an interesting experience when I was teaching a part of economic systems something, this is about 66, 67 during the height of the reform push.

688
01:20:08.220 --> 01:20:14.220
And I was talking the whole term about the glories of the free market and the evils of socialism and state planning, etc, etc.

689
01:20:14.220 --> 01:20:19.220
And finally, to appease the kids and so forth, we're getting a little restive at this point.

690
01:20:19.220 --> 01:20:24.220
So, okay, we've got another side of the picture. We're bringing this guy as a top Hungarian economic historian.

691
01:20:24.220 --> 01:20:28.220
I was here on an exchange fellowship for a year.

692
01:20:28.220 --> 01:20:31.220
He'll give you his side of the story from Hungary, communism, etc.

693
01:20:31.220 --> 01:20:37.220
He gets up there and what does he do? He starts his whole lecture announcing the central planning of socialism and praising the free market.

694
01:20:37.220 --> 01:20:53.220
which made our Maoist types very unhappy, at least. Eugen Leubel, the Czech communist economist who escaped from Czechoslovakia after the rollback, also came and lectured to us, and it was the same story.

695
01:20:53.220 --> 01:20:59.220
He was talking about the glories of freedom and freedom of prize and whatever, and the evils of planning. It was the same sort of thing.

696
01:20:59.220 --> 01:21:04.660
So anyway, so what I'm saying here is I think the same situation is happening in a communist

697
01:21:04.660 --> 01:21:05.660
country.

698
01:21:05.660 --> 01:21:10.700
Interestingly enough, apparently not by a radical kind of one-shot change or revolution

699
01:21:10.700 --> 01:21:15.940
in a sense, but by a gradual, a cumulative de-statization.

700
01:21:15.940 --> 01:21:18.780
In Russia, the process has gotten more publicity, but it's been less effective.

701
01:21:18.780 --> 01:21:21.700
The so-called Liebermanism is really a flash in the pan.

702
01:21:21.700 --> 01:21:26.780
It's been very, very slow compared to the, I mean, Russia has had much many more years

703
01:21:26.780 --> 01:21:49.180
China is going to take a much longer time, China being the fundamentalist, the communist,

704
01:21:49.180 --> 01:21:54.900
and dedicated etc., but as I said a few days ago, when this original generation of Chinese

705
01:21:54.900 --> 01:22:17.900
I think that sort of rounds out. I could go on and talk about the Third World, et cetera, and the land question, but I think this is enough for tonight, at least for the lecture.

706
01:22:17.900 --> 01:22:26.780
I think the reasons for optimism, to wrap it up, are that we have this quantum leap,

707
01:22:26.780 --> 01:22:31.220
this great qualitative and quantitative leap with the Industrial Revolution, with everybody

708
01:22:31.220 --> 01:22:35.100
from the communist rightward now being committed in one way or the other to industrialism,

709
01:22:35.100 --> 01:22:41.380
maintaining the industrial system, and with that, the conditions to maintain and flourish

710
01:22:41.380 --> 01:22:47.500
with industrialism, you have to have a free market, but this knowledge is now permeating

711
01:22:47.500 --> 01:23:02.500
The General Public and even intellectuals with the breakdown of Western Liberalism, the breakdown of Neo-Mercantilism and Western Liberalism, increasingly accelerating, and with the breakdown of the socialist planning, which is even now being admitted by most socialists themselves.

712
01:23:02.500 --> 01:23:13.500
There are very few even socialists now who will defend, even the new left historians, and William Apple and William's group, don't talk about socialism and say, yeah, yeah, the state's bad, we have to have some kind of decentralization.

713
01:23:13.500 --> 01:23:16.500
and now it's a big step forward from what they used to say back in the 30s.

714
01:23:16.500 --> 01:23:22.500
So there's a general revulsion against Leviathan state and against simple planning and so forth

715
01:23:22.500 --> 01:23:27.500
and so the whole communist kind of state planning is cracking up also.

716
01:23:27.500 --> 01:23:33.500
And so with this advance, with this acceleration of the object of conditions,

717
01:23:33.500 --> 01:23:38.500
with the processes of libertarian word change accelerating,

718
01:23:38.500 --> 01:23:48.500
and Growth of an Active, Intelligent, Dedicated, Self-Aware, Libertarian Movement, I see the future as being a noble one. Thank you.