WEBVTT NOTE An Austrian Analysis of the Fourth Estate (video) 1 00:00:00.000 --> 00:00:02.000 The Theory of Money and Credit 2 00:00:30.000 --> 00:00:43.080 I'd like to welcome everyone back to the Henry Hazlitt Memorial Lecture. 3 00:00:43.080 --> 00:00:47.780 Discussions of high theory among intellectuals will not by itself win the day. 4 00:00:47.780 --> 00:00:52.400 To convert others to the truth, the theory must prove its merit in application. 5 00:00:52.400 --> 00:00:57.400 The Austrian School has a long tradition of public intellectuals who have dedicated themselves 6 00:00:57.400 --> 00:01:07.400 to Bearing the Fruit of Austrian Thought, men such as Ron Paul in Politics, Benjamin Anderson in Finance, and Henry Hazlitt in Journalism. 7 00:01:07.400 --> 00:01:12.400 To commemorate their efforts, we offer the Henry Hazlitt Memorial Lecture. 8 00:01:12.400 --> 00:01:17.400 It's a pleasure for us to have William Anderson deliver this year's Hazlitt Lecture. 9 00:01:17.400 --> 00:01:22.400 Dr. Anderson is Assistant Professor of Economics at Frostburg State University. 10 00:01:22.400 --> 00:01:32.400 He earned a B.S. in Journalism from the University of Tennessee, an M.A. in Economics from Clemson University, and a Ph.D. in Economics from Auburn University. 11 00:01:32.400 --> 00:01:44.400 He has published scores of articles in scholarly and popular venues, including the Southern Economic Journal, Public Choice, the American Journal of Economics and Sociology, 12 00:01:44.400 --> 00:01:53.400 The Journal of Political, Social and Economic Studies, the Quarterly Journal of Austrian Economics and the Journal of Libertarian Studies. 13 00:01:53.400 --> 00:01:57.400 Dr. Anderson is an adjunct scholar of the Mises Institute. 14 00:01:57.400 --> 00:02:01.400 He will speak on the topic, An Austrian Analysis of the Fourth Estate. 15 00:02:01.400 --> 00:02:04.400 Dr. Anderson. 16 00:02:04.400 --> 00:02:11.400 And as I begin this lecture, I really would like to thank Lew Rockwell first and the Mises Institute for inviting me to speak. 17 00:02:11.400 --> 00:02:21.400 After I realized that Lew had taken leave of a census in giving me this invitation, I decided to accept it anyway. 18 00:02:21.400 --> 00:02:31.400 And I also would like to thank all of you for attending this session and we will determine in about 40 minutes or so if in fact you had taken leave of your census to be here. 19 00:02:31.400 --> 00:02:37.400 But I would like to thank all of you for being here. This is an exciting conference. 20 00:02:37.400 --> 00:02:41.900 In fact, you know, I look at this thing, it's not really so much sessions, it's an intellectual feast. 21 00:02:41.900 --> 00:02:44.900 I mean, I started looking at sessions, I think, which one do I want to go to? 22 00:02:44.900 --> 00:02:49.300 I actually want to go to them. It's not like going to the American Economic Association, 23 00:02:49.300 --> 00:02:52.900 wherever you get a book this thick, and you go through it and say, I don't want to go to any of these sessions. 24 00:02:52.900 --> 00:02:57.400 And so this is what I, you know, I really appreciate. 25 00:02:57.400 --> 00:03:04.900 I will not be giving anything on PowerPoint. I've actually never done a PowerPoint presentation in my life. 26 00:03:04.900 --> 00:03:11.900 I will not be doing anything here on West Virginia PowerPoint, as Richard Vedder calls it. 27 00:03:11.900 --> 00:03:21.900 So we'll just have to deal with the spoken word and hope that everything turns out well. 28 00:03:21.900 --> 00:03:26.900 I am honored to give this lecture today, and especially honored because it's named after Henry Hazlitt. 29 00:03:26.900 --> 00:03:30.900 I think Jeff Tucker aptly named him the People's Austrian. 30 00:03:30.900 --> 00:03:33.740 All of us are indebted to Henry Hazlitt. 31 00:03:33.740 --> 00:03:36.180 As a journalist, he towered above his peers 32 00:03:36.180 --> 00:03:39.940 and as an economist, and I do call him an economist. 33 00:03:39.940 --> 00:03:42.740 He could intellectually overpower the imposters 34 00:03:42.740 --> 00:03:45.540 who have dominated mainstream economics 35 00:03:45.540 --> 00:03:47.260 for more than a century. 36 00:03:47.260 --> 00:03:49.380 To make my point, all we have to do is remember 37 00:03:49.380 --> 00:03:52.940 that Henry Hazlitt once wrote on the same editorial page 38 00:03:52.940 --> 00:03:56.100 that today embraces the rants of Paul Krugman. 39 00:03:56.100 --> 00:03:58.060 Who is a better economist? 40 00:03:58.060 --> 00:04:00.500 One was a high school graduate, 41 00:04:00.500 --> 00:04:17.500 did not go to college, the other has his doctorate from MIT, and all I have to say is, you know, in areas of clarity, sense, and in economics, I don't even think there's a contest. 42 00:04:17.500 --> 00:04:25.500 Mr. Krugman still has yet to learn what opportunity cost is, so he has a long way to go. 43 00:04:25.500 --> 00:04:31.500 As for journalism, remember that Hazlitt wrote for the New York Times. 44 00:04:31.500 --> 00:04:40.500 Now, the New York Times, as we know, also gave us the faux journalist who won a Pulitzer Prize fraudulently, 45 00:04:40.500 --> 00:04:42.500 a man named Walter Durante. 46 00:04:42.500 --> 00:04:47.500 But at least back then, the Times could counter with Henry Hazlitt. 47 00:04:47.500 --> 00:04:54.500 Today, the Times gives us Jason Blair, and then counters with Judith Miller. 48 00:04:54.500 --> 00:05:03.500 So you can tell that the state of intellectual prowess at the New York Times has gone down in the last few decades. 49 00:05:03.500 --> 00:05:14.500 We also owe a huge debt of gratitude to Henry Hazlitt, who along with Leonard Reed helped Ludwig von Mises gain a tiny intellectual toehold upon the U.S. academic world. 50 00:05:14.500 --> 00:05:23.500 You know, academics scorned Mises, but Mr. Hazlitt saw through the chaff thrown about by other academic economists and realized that the rejected Mises still held the keys to the kingdom. 51 00:05:23.500 --> 00:05:28.500 and help to make Mises' work secure even as that handiwork has outlived both men. 52 00:05:28.500 --> 00:05:32.500 And Henry Hazlitt was an outstanding economist in his own right. 53 00:05:32.500 --> 00:05:37.500 We're talking about a man who gave us the book, The Failure of the New Economics. 54 00:05:37.500 --> 00:05:45.500 And Mr. Hazlitt was somebody who actually read Keynes' general theory and understood it. 55 00:05:45.500 --> 00:05:47.500 I'm not sure Keynes understood it. 56 00:05:47.500 --> 00:05:52.500 But he understood, and he wrote a line-by-line reputation. 57 00:05:52.500 --> 00:06:00.500 And one time I was teaching a course at the University of Tennessee at Chattanooga. It was an upper division macro course, and we were using Wallace Peterson's text. 58 00:06:00.500 --> 00:06:08.500 And this was the most popular intermediate macro text. And to give you a sense of what this book is like, it quoted Keynes like scripture. 59 00:06:08.500 --> 00:06:14.500 In other words, I'm serious. I mean, he would present an idea and he would have something from the general theory. 60 00:06:14.500 --> 00:06:19.500 And that was, in his thinking, that was all he needed to do. That was the only argument needed to be made. 61 00:06:19.500 --> 00:06:21.800 Obviously it was right because Keynes said it. 62 00:06:21.800 --> 00:06:23.500 Well, what did Hazlitt do? 63 00:06:23.500 --> 00:06:27.500 Hazlitt took a line-by-line refutation of that book, 64 00:06:27.500 --> 00:06:31.500 and I would use that in that class, 65 00:06:31.500 --> 00:06:36.000 basically use Keynes' foil and use Hazlitt's as the main body of work. 66 00:06:36.000 --> 00:06:40.500 I wasn't supposed to be doing that, but I did it anyway. 67 00:06:40.500 --> 00:06:47.500 And so I would say that Henry Hazlitt was a real giant in journalism. 68 00:06:47.500 --> 00:06:56.700 If you really want to get a sense of his career, I would urge you to read Jeffrey Tucker's piece in the book, 15 Great Austrian Economists, 69 00:06:56.700 --> 00:07:00.300 and this is the one entitled, Henry Hazlitt, The People's Austrian. 70 00:07:00.300 --> 00:07:06.500 And because of that, because it is available, I'm not going to be going through his long career here. 71 00:07:06.500 --> 00:07:12.700 I just want to say that Hazlitt really was a giant in a lot of fields. 72 00:07:12.700 --> 00:07:21.300 And this is a man who, if he applied for a newspaper job today with his educational background, 73 00:07:21.300 --> 00:07:24.060 he wouldn't even be allowed to sweep the floor. 74 00:07:24.060 --> 00:07:31.180 And yet, we look at what he produced versus what all of these people with graduate degrees 75 00:07:31.180 --> 00:07:38.660 working in the media, see what they produce, I leave the results up to you to determine. 76 00:07:38.660 --> 00:07:48.500 And so, again, I'm very much honored. Also, partly I'm interested in Hazlitt the Journalist 77 00:07:48.500 --> 00:07:56.020 because I was a journalism major in college 30-some years ago. That doesn't mean I learned 78 00:07:56.020 --> 00:08:00.860 anything, I will confess to you. I took econ, I was on the track team and we had difficult 79 00:08:00.860 --> 00:08:06.600 workouts and econ class was a very, very good time to sleep and so I did not do very well 80 00:08:06.600 --> 00:08:18.600 And I remind some of my old professors of that every once in a while, saying that you had a chance to kill me off right there, but oh no, now I'm in the profession. 81 00:08:18.600 --> 00:08:27.600 And so, I've always had obviously an interest in the press, having worked for a newspaper and the like. 82 00:08:27.600 --> 00:08:34.100 In fact, I wrote my doctoral dissertation on the media and took some different views of the media 83 00:08:34.100 --> 00:08:39.600 and have off and on dabbled and done some papers. 84 00:08:39.600 --> 00:08:44.600 I've actually done some articles for the Mises Institute on the Mises page 85 00:08:44.600 --> 00:08:49.600 and also done some more formal academic papers in the subject. 86 00:08:49.600 --> 00:08:54.600 So I do have a lot of interest in it and I do hope that I can convey some of that interest to you 87 00:08:54.600 --> 00:09:02.600 One of the things I want to do today, though, is sort of take an Austrian view of the media. 88 00:09:02.600 --> 00:09:05.600 Now, when you say an Austrian view, I know it's a really wide-ranging thing. 89 00:09:05.600 --> 00:09:10.600 I'm going to be coming at it more from the point of view of the Austrian economists, as you shall see, 90 00:09:10.600 --> 00:09:18.600 dealing with Menger, with Mises, some of their theoretical points, and see how this applies to journalism. 91 00:09:18.600 --> 00:09:23.600 Journalism 92 00:09:23.600 --> 00:09:27.760 One of the things that you find though with journalism is that the mainstream economists 93 00:09:27.760 --> 00:09:31.920 simply haven't written very much about it and I would say one of the reasons is because 94 00:09:31.920 --> 00:09:37.760 it doesn't lend itself easily to mathematical modeling and without mathematical modeling 95 00:09:37.760 --> 00:09:48.240 I mean where is economics poor thing and so we tend to shy away from it and or the approach 96 00:09:48.240 --> 00:09:53.040 Which the economics sometimes becomes like, if you look at, for example, Professor Eaglin 97 00:09:53.040 --> 00:09:59.880 and others wrote a book called, Sacred Trust, about the medieval church. 98 00:09:59.880 --> 00:10:06.760 And the assumption is that people were only interested in otherworldly things. 99 00:10:06.760 --> 00:10:09.680 It's sort of the good government viewpoint. 100 00:10:09.680 --> 00:10:12.760 That all politicians are interested in good government. 101 00:10:12.760 --> 00:10:16.520 That's making wise decisions that benefit all of society. 102 00:10:16.520 --> 00:10:18.520 and of course never themselves. 103 00:10:18.520 --> 00:10:22.520 And so often we see this in journalism. 104 00:10:22.520 --> 00:10:26.520 We tend to, if I may use a really crude example, 105 00:10:26.520 --> 00:10:30.520 but in that great classic movie Animal House, 106 00:10:30.520 --> 00:10:35.520 there is a scene towards the end where somebody steals the baton from the bandleader 107 00:10:35.520 --> 00:10:37.520 and marches the band into a brick wall. 108 00:10:37.520 --> 00:10:41.520 And the band keeps trying to march through this brick wall and they never succeed. 109 00:10:41.520 --> 00:10:44.520 And we often come up with that in the area of government. 110 00:10:44.520 --> 00:10:51.520 We continue to come back to the well of good government, good government, we have to have good government, or same thing with journalism. 111 00:10:51.520 --> 00:10:59.520 We know that these guys, quote, are biased, we know that they are going to have certain proclivities, 112 00:10:59.520 --> 00:11:07.520 and yet somehow in the end we still expect them to produce this non-biased material. 113 00:11:07.520 --> 00:11:11.520 And we're asking somebody to do something I think that they're really not capable of doing. 114 00:11:11.520 --> 00:11:26.520 But at the same time, no matter what, and being a refugee of journalism school, I can assure you that the good journalism, good government theme was pounded into us. 115 00:11:26.520 --> 00:11:39.520 And nobody quite knew what good government was, but I think it was regulating those monopolies called businesses, protecting consumers, and all the other things that government is supposed to be doing. 116 00:11:39.520 --> 00:11:58.520 So, first I want to begin in talking about the modern institution of the press and keep in mind that when I'm speaking of journalists today, I'm speaking as part of the institutionalized press, okay, not the idea of simple freedom of speech. 117 00:11:58.520 --> 00:12:01.520 There are times when people confuse the two of them. 118 00:12:01.520 --> 00:12:11.520 To give you an analogy, if people criticize public education, what's thrown back at them? 119 00:12:11.520 --> 00:12:16.520 Oh, well, you're against education. You're against people learning how to read and write. 120 00:12:16.520 --> 00:12:21.520 And you think, no, I'm against public education. I don't know how to learn to read and write in public schools. 121 00:12:21.520 --> 00:12:36.520 Well, when you look at the modern institution of the press, and you say something critical about it, what comes back? 122 00:12:36.520 --> 00:12:48.520 Oh, you are against freedom of the press. Well, obviously, you want to censor people. No, that's not the point we're making. 123 00:12:48.520 --> 00:12:57.520 But I want to concentrate on this institution that we call the press and apply some Austrian insights there. 124 00:12:57.520 --> 00:13:08.520 Now the first thing I think we have to keep in mind is that the modern press, as we know it, really is a progressive era institution. 125 00:13:08.520 --> 00:13:17.520 You really cannot understand the New York Times and these other entities, CBS News or whatever, 126 00:13:17.520 --> 00:13:24.520 without understanding the progressive era and the mentality that was produced there. 127 00:13:24.520 --> 00:13:31.520 Now, if you really want to learn about the progressive era, I would urge that you read one of Professor Higgs' books, 128 00:13:31.520 --> 00:13:40.520 whether it's Crisis and Leviathan, certainly his book Against Leviathan deals a lot with it. 129 00:13:40.520 --> 00:13:52.820 And I think that even though theoretically the progressive era supposedly ended around the time of World War I, 130 00:13:52.820 --> 00:14:00.720 in truth the progressive era is with us today, and even though the institutions that came out of the progressive era don't work, 131 00:14:00.720 --> 00:14:06.920 they're very much like, again, that proverbial band running into the wall, 132 00:14:06.920 --> 00:14:14.320 At the same time, we continue to go back to them, demand that these institutions produce something that they really can't produce. 133 00:14:14.320 --> 00:14:19.220 And so, I would like to look at a little bit about that. 134 00:14:19.220 --> 00:14:30.520 In 1922, a number of journalistic representatives came up with the so-called canons of journalism. 135 00:14:30.520 --> 00:14:35.620 And in the canons of journalism, the idea was that newspaper reporters, 136 00:14:35.620 --> 00:14:41.420 and this was at the time it was really pretty much journalism was dominated by the print media 137 00:14:41.420 --> 00:14:50.420 and the idea was that they should be objective, so the front page you should not be able to tell what a person's ideology is, where they're coming from 138 00:14:50.420 --> 00:14:53.420 but on the editorial page you could say what you wanted 139 00:14:53.420 --> 00:14:57.820 and this was in essence be the institution of journalism 140 00:14:57.820 --> 00:15:05.420 and not only that but they wanted to take a quote scientific approach to it 141 00:15:05.420 --> 00:15:13.420 And the same way that during this particular time they're taking more scientific approaches to government, to management 142 00:15:13.420 --> 00:15:20.420 And I put scientific in quotes, I will let you determine whether or not these things really were scientific 143 00:15:20.420 --> 00:15:25.420 But at any rate, this was the way of thinking 144 00:15:25.420 --> 00:15:34.420 And this is opposed to the older press, what we would call the party press 145 00:15:34.420 --> 00:16:04.420 is something that in many ways is like a lot of today's blogs, you know, you're not going to read the daily costs to see some sort of defense of free enterprise, or the lewrockwell.com to see socialism raised, you know, the banner of socialism raised, these particular, but the party press, you know, once upon a time, you knew where the writer stood, you knew where the points of view 146 00:16:04.420 --> 00:16:32.420 What we also began to see, very much though, with the so-called progressive-era press or the modern candidates of journalism press, was a dominant viewpoint that somehow capitalism in and of itself was bad, or it needed to be curbed. 147 00:16:32.420 --> 00:16:46.420 that you had a lot of writers, for example, up in Sinclair that they're talking about this week because of the 100th year anniversary of his book called The Jungle, 148 00:16:46.420 --> 00:16:53.420 which not only got it, it also got the conditions in the meat packing plants wrong as well. 149 00:16:53.420 --> 00:17:01.420 I mean people think that somehow Sinclair was describing things that actually were happening when in fact it really wasn't. 150 00:17:01.420 --> 00:17:08.420 and Ida Tarbell with her history of the Standard Oil Company and the like 151 00:17:08.420 --> 00:17:13.420 that the view was in fact that there was something wrong with capitalism 152 00:17:13.420 --> 00:17:20.420 and so you needed scientific institutions to sort of take the edge off 153 00:17:20.420 --> 00:17:24.420 what was seen as a system that was very predatory. 154 00:17:24.420 --> 00:17:35.920 Also, the press at that time was seeing something akin in its relationship to government, something akin to a regulatory agency. 155 00:17:35.920 --> 00:17:45.920 Now we have a little bit of an irony here, a privately owned entity, the press, in essence regulating the workings of government. 156 00:17:45.920 --> 00:17:52.920 It was to be a watchdog of government, that the press, their job was to keep government in check. 157 00:17:52.920 --> 00:18:02.920 Well what do we know about regulatory agencies? Well economists over the years have talked about capture theory. What happens with capture theory? 158 00:18:02.920 --> 00:18:15.920 Well what we find is that the entities being regulated often would capture the regulatory agencies and in fact that you would see some sort of cooperative action between them 159 00:18:15.920 --> 00:18:44.920 I think that everybody in this room understands the real limitations of the, everybody understands the real limitations of regulation, government regulation of business. 160 00:18:44.920 --> 00:18:54.920 Regulation of Business, and I don't even want to go into that in this talk, and I don't want to go down, you know, down that particular rabbit trail, but I think people, I think, instinctively understand. 161 00:18:54.920 --> 00:19:08.920 Well, what happened with the press? Well, guess what? Journalism regulating the press, the watchdog of the press, what has happened over the years? 162 00:19:08.920 --> 00:19:17.800 Well, is the outstanding journalist and also advocate of free markets, Warren Brooks, or 163 00:19:17.800 --> 00:19:25.680 should I say the late Warren Brooks, as he wrote an article in the Quill back in 1991, 164 00:19:25.680 --> 00:19:27.680 shortly before he died. 165 00:19:27.680 --> 00:19:33.760 And he said that journalists are not so much interested in the status quo as they are interested 166 00:19:33.760 --> 00:19:37.560 in the statist quo. 167 00:19:37.560 --> 00:19:51.260 And that his point was that our main beat is government and that therefore, if you think 168 00:19:51.260 --> 00:19:55.520 about that, these are where the relationships are formed. 169 00:19:55.520 --> 00:20:04.040 Now I can give you a little bit of a personal side to that, very much an understanding. 170 00:20:04.040 --> 00:20:11.480 For a few years I was a newspaper reporter, and the prize beats were the government beats. 171 00:20:11.480 --> 00:20:17.120 Beats like the political, you know, our top person was the political writer and he covered 172 00:20:17.120 --> 00:20:20.040 the state legislature. 173 00:20:20.040 --> 00:20:25.900 Also the other top beats would be the county courthouse because that's also where the trials 174 00:20:25.900 --> 00:20:26.900 were held. 175 00:20:26.900 --> 00:20:30.880 So you cover county government plus all of the trials going on. 176 00:20:30.880 --> 00:20:38.160 The Police Reporter, and he would play cowboy with the police, to put it mildly. 177 00:20:38.160 --> 00:20:42.760 He ultimately got a job with the Sheriff's Department. 178 00:20:42.760 --> 00:20:47.320 He wrote a lot of articles, let's just say, that were favorable to the candidate running 179 00:20:47.320 --> 00:20:55.440 for Sheriff in 1978 and soon afterwards was rewarded for his coverage with a new job with 180 00:20:55.440 --> 00:21:00.500 the Hamilton County Sheriff's Department, but also City Hall. 181 00:21:00.500 --> 00:21:04.380 Now less so at that time especially was the Federal Courthouse. 182 00:21:04.380 --> 00:21:07.620 The Federal Courthouse was a real backwater. 183 00:21:07.620 --> 00:21:12.420 And for years, by the way, all over the country Federal Courthouses really were a backwater 184 00:21:12.420 --> 00:21:18.420 for journalism until the drug war and until the 1980s when the Reagan administration 185 00:21:18.420 --> 00:21:25.260 pushed through a number of acts that allowed the, either criminalized things that weren't 186 00:21:25.260 --> 00:21:30.300 criminalized before or allowed certain activities that occurred on the local level to somehow 187 00:21:30.300 --> 00:22:00.300 Now, magically be transferred into federal court, and so now with so many cases going to federal court, it no longer is the backwater that it used to be, unfortunately, I say, and those of you who have read my articles on the federal criminal justice system, I think you probably understand that I would not really want to see this particular development, but at any rate, what beat did you not want? You didn't want the business beat. Why didn't you want the business beat? 188 00:22:00.300 --> 00:22:06.300 Businessmen wanted you to write PR stuff for them. 189 00:22:06.300 --> 00:22:15.300 You weren't going to go to their board meetings and see the give and take of activities. 190 00:22:15.300 --> 00:22:18.300 They didn't want you to see any of that. 191 00:22:18.300 --> 00:22:26.300 What they wanted you to see was a favorable view of their operations. 192 00:22:26.300 --> 00:22:56.300 and there was no sunshine law for business meetings and for these private organizations and so you didn't want to you didn't want to see any of that and so therefore you know you had the sense of my I guess my job is just the right PR for the business people that's what they want and so you didn't want that beat now we did have a business reporter who kind of he loved getting these press releases but they also gave him the Tennessee Valley Authority as a sock so he would have some real 193 00:23:26.300 --> 00:23:41.300 in this country. And you get a sense of, you know, where the relationships are. And, you know, you didn't really cultivate sources in the business community. They did you no good. 194 00:23:41.300 --> 00:23:53.300 Nobody in the business community was really interested in being a source for somebody who was a journalist. It just really wasn't, it just wasn't seemly. 195 00:23:53.300 --> 00:24:02.100 Well, you cultivated your sources in government and in fact that if you got that phone call, 196 00:24:02.100 --> 00:24:07.940 that little anonymous tip, I remember once that I'll give you an idea of a story that 197 00:24:07.940 --> 00:24:12.820 I covered in my first year at the Chattanooga Free Press. 198 00:24:12.820 --> 00:24:21.860 There was a plant, it was a fertilizer plant and the equipment blew up and so it was equipment 199 00:24:21.860 --> 00:24:25.460 that was the water pollution control equipment. 200 00:24:25.460 --> 00:24:27.540 Well, now these guys had a real problem 201 00:24:27.540 --> 00:24:31.940 because their stuff coming out wasn't being treated. 202 00:24:31.940 --> 00:24:34.220 Well, what do you do about this? 203 00:24:34.220 --> 00:24:37.380 And so we first had a story about why, 204 00:24:37.380 --> 00:24:40.740 because somebody from the Water Quality Agency, 205 00:24:40.740 --> 00:24:42.580 one of our sources, called us up and said 206 00:24:42.580 --> 00:24:46.220 there's been an explosion at this particular plant. 207 00:24:46.220 --> 00:24:49.740 Well, of course, nobody from the plant called us up. 208 00:24:49.740 --> 00:25:19.740 I mean Jim Dickerson I remember was the plant manager at the time and I don't think he would have called us up but anyway I remember going to a water quality meeting on Saturday and another reporter and I nobody quite knew who we were we just sat there and said nothing then they had a private meeting with the with representatives from the Tennessee Water Quality and the Environmental Protection Agency and we managed to go in there and sit nobody really and finally somebody asked well who are these guys with and I thought it was the 209 00:25:19.740 --> 00:25:39.740 The World According to the Journalist 210 00:25:49.740 --> 00:25:57.740 If you go into a business, into any kind of enterprise, this is where you see the real world happening. 211 00:25:57.740 --> 00:26:03.740 This is where you see people making things, producing things, selling things. 212 00:26:03.740 --> 00:26:06.740 In a very real sense, making life better for people. 213 00:26:06.740 --> 00:26:08.740 You know, you go near and away for a long time. 214 00:26:08.740 --> 00:26:14.740 I go into the courthouses and into the government offices, and there I see the real backwater. 215 00:26:14.740 --> 00:26:20.740 But as a journalist, that view of the world was turned completely upside down. 216 00:26:20.740 --> 00:26:25.740 And I'm just giving you my own perspective. 217 00:26:25.740 --> 00:26:35.740 And one that I think that, you know, you start multiplying it and you get to understand some of the biases across the line. 218 00:26:35.740 --> 00:26:43.740 Also, the people who often go into journalism generally are going to have certain proclivities. 219 00:26:43.740 --> 00:26:49.740 There seems to me almost to be a self-selection bias going on. 220 00:26:49.740 --> 00:27:05.740 But there's something else too that I, in my observations, that what I have found over the years has been that journalists generally do not, they work for organizations. 221 00:27:05.740 --> 00:27:16.740 There's not a lot of selling something. Even though they create a product that ultimately the public consumes, in their minds, that's not the real customer. 222 00:27:16.740 --> 00:27:27.740 The customer is the entity for which they work and or some other publication, not the general public. 223 00:27:27.740 --> 00:27:33.740 Very, very few of them make money simply by selling things directly to other people. 224 00:27:33.740 --> 00:27:36.740 And often what happens is a bit of a disconnect. 225 00:27:36.740 --> 00:27:43.740 And what I find myself observing is that in these newsrooms across the country, 226 00:27:43.740 --> 00:27:48.740 that the makeup of people in some ways represents a college faculty. 227 00:27:48.740 --> 00:27:52.740 Now, and especially the Arts and Sciences faculty. 228 00:27:52.740 --> 00:28:00.740 And being at a university and not in the Arts and Sciences faculty, 229 00:28:00.740 --> 00:28:08.740 I'm in the business faculty and I find that there's a little more common sense that goes on among in discussions there. 230 00:28:08.740 --> 00:28:14.740 The arts and sciences faculty, we have people there, they really believe that if government provides a service, 231 00:28:14.740 --> 00:28:17.740 government has conquered the law of scarcity. 232 00:28:17.740 --> 00:28:20.740 In fact, to them, the law of scarcity really is contrived. 233 00:28:20.740 --> 00:28:25.740 It was something dreamed up by capitalists and if only the government could have its way with everything, 234 00:28:25.740 --> 00:28:32.740 We could abolish all work, all scarcity, life would be good. We would just party all the time. 235 00:28:32.740 --> 00:28:38.740 And you think, I'm exaggerating. I have seen things that some of the arts and sciences faculties have written. 236 00:28:38.740 --> 00:28:44.740 I mean, people really believe this sort of thing. And again, look at the disconnect. 237 00:28:44.740 --> 00:28:51.740 As faculty members, we do not directly sell our services to our customers. 238 00:28:51.740 --> 00:28:58.740 Now, ultimately, in the Mangerian sense, if you remember Carl Menger, one of his important insights, 239 00:28:58.740 --> 00:29:05.740 he was not just simply solving the issue of what we call marginal utility, 240 00:29:05.740 --> 00:29:11.740 but also it was Menger who pointed out that the value of the factors of production 241 00:29:11.740 --> 00:29:17.740 ultimately was derived from, or we would say, 242 00:29:17.740 --> 00:29:19.740 The Theory of Money and Credit 243 00:29:47.740 --> 00:29:51.340 Well, they're just trying to sell papers. They're writing, they're just trying to sell papers. 244 00:29:51.340 --> 00:30:01.140 Well, the journalist, in his or her world, that's not really a big deal to them. 245 00:30:01.140 --> 00:30:07.740 They're selling their work to their employer or to a publication. 246 00:30:07.740 --> 00:30:11.740 They're not trying to sell the publication. 247 00:30:11.740 --> 00:30:17.340 I'm talking about that larger publication. That's really not where they're at. 248 00:30:17.340 --> 00:30:20.340 In fact, there is going to be somewhat of a disconnect. 249 00:30:20.340 --> 00:30:29.340 Look, if you ever read the New York Times editorial page, day after day after day, or the Baltimore Sun. 250 00:30:29.340 --> 00:30:34.340 I remember, in fact, I used an example from the Baltimore Sun editorial. 251 00:30:34.340 --> 00:30:42.340 This editorial appeared 24 years ago, and the editorialist said that Americans obviously don't value education 252 00:30:42.340 --> 00:30:46.540 because professional athletes make more than teachers and so that was you know 253 00:30:46.540 --> 00:30:50.460 proof positive. Well I wrote something in the Freeman that appeared I think in 254 00:30:50.460 --> 00:30:56.260 August of 2000 entitled and praise of athletes high salaries and I took that 255 00:30:56.260 --> 00:30:59.940 and basically I said look this is an issue you know this is an example of the 256 00:30:59.940 --> 00:31:04.540 Diamond Water Paradox. Well it's very interesting you see that a journalist 257 00:31:04.540 --> 00:31:09.340 could not if you said Diamond Water Paradox you journalist this person might 258 00:31:09.340 --> 00:31:21.340 I might have a master's degree from Columbia University, but I can assure you that he or she would just have their eyes glazed over and, you know, you might as well try and explain the diamond water paradox to the wall over there. 259 00:31:21.340 --> 00:31:29.340 But read the New York Times, they believe that we can conquer poverty by raising minimum wages. 260 00:31:29.340 --> 00:31:40.340 That if we order the automobile companies to build automobiles, lots and lots of automobiles that get higher gas mileage, 261 00:31:40.340 --> 00:31:46.340 there's no opportunity cost to this. This would just simply produce nothing but benefits. It would help us save oil. 262 00:31:46.340 --> 00:31:54.340 Nothing about forcing automobile companies to spend billions of dollars in new capitalization for which there's little return. 263 00:31:54.340 --> 00:31:57.340 And if you said that, they can't understand. 264 00:31:57.340 --> 00:32:01.340 So you're really dealing with, I think, a real disconnect. 265 00:32:01.340 --> 00:32:06.340 And to a certain extent, you want to try to educate them. 266 00:32:06.340 --> 00:32:13.340 I know that the Political Economy Resource Center has done that over the years with journalists and environmental issues. 267 00:32:13.340 --> 00:32:32.340 And it sort of had mixed results. Ultimately these journalists go back to where they work and anything that they write that's against the zeitgeist of the day or the prevailing view is one in which it's a view that's going to be scorned. 268 00:32:32.340 --> 00:32:47.340 And sooner or later they realize, you know, if I keep writing stuff that's getting me scorned, you know, my employment, you know, things like raises and promotions, all these other things really, you know, start playing a role. 269 00:32:47.340 --> 00:33:01.340 I'll give you another example. It's more personal. I actually, and I will admit it in this room to these people now that it's being streamed over the internet, the whole world will know, that I actually am friends with Jack Abramoff. 270 00:33:01.340 --> 00:33:06.340 And yes, and no, I have not gotten any money from him. But we did have dinner in his house. 271 00:33:06.340 --> 00:33:22.340 But there was a national editor from the Washingtonian, named Kim Eisler, and he was interviewed by Howard Kurtz of the Washington Post. 272 00:33:22.340 --> 00:33:29.340 And he said, you know, I know Jack Abramoff. He really is not the monster that he's being portrayed in the press. 273 00:33:29.340 --> 00:33:35.340 Well, you can imagine, the next thing you know, I emailed Eisler about it, and he emails me back, and he says, 274 00:33:35.340 --> 00:33:43.340 Well, you're not going to believe it, I got a handwritten note from Chris Matthews telling me that I was defending a dirt bag that I was now the laughing stock of all his friends. 275 00:33:43.340 --> 00:33:48.340 He says, why would a guy who makes a million and a half a year take the trouble to do this? 276 00:33:48.340 --> 00:33:57.340 And to him, now he's got a problem, because now he's committed a major sin in the eyes of other journalists, 277 00:33:57.340 --> 00:34:05.140 and people who ultimately may decide some of his future. 278 00:34:05.140 --> 00:34:16.700 If you look, for example, at the Sunday morning news shows, you know, Phase the Nation, and 279 00:34:16.700 --> 00:34:26.260 Press the Meat, and the George Stephanopoulos show, or whatever that's called, you find 280 00:34:26.260 --> 00:34:31.420 And some other things too, again, people talk about the general consumption, the audience, 281 00:34:31.420 --> 00:34:34.140 the purpose of this is to educate Americans. 282 00:34:34.140 --> 00:34:40.460 Well no, you get a sense of what's going on when you look at the advertisements. 283 00:34:40.460 --> 00:34:45.380 Only on Sunday morning do you find that Arthur Daniels Midland really is the supermarket 284 00:34:45.380 --> 00:34:49.480 to the world. 285 00:34:49.480 --> 00:34:52.220 We don't see ADM advertisements the rest of the time. 286 00:34:52.220 --> 00:35:01.220 And you certainly will not see any ADM advertisements on the, you know, in the basketball that's being broadcast this week from the NC2A tournament. 287 00:35:01.220 --> 00:35:12.220 And again, you know, that you're dealing with the audience from, you know, the what gives goods character to the journalist, the real audience. 288 00:35:12.220 --> 00:35:21.220 It's kind of like in Hollywood. Again, I think that there's a real connection between journalism and what we see in Hollywood. 289 00:35:21.220 --> 00:35:26.220 People have this idea that movie producers are just simply out there trying to quote, make money. 290 00:35:26.220 --> 00:35:33.220 And then they're always puzzled, well gee, the G-movies do really well. Why do they keep giving us this R-rated stuff and the like? 291 00:35:33.220 --> 00:35:40.220 Well, you have to keep in mind that a lot of times producers really do not see the general public as their final customers. 292 00:35:40.220 --> 00:35:47.220 The people they're playing to are the Academy Awards people. Other people living in Hollywood. 293 00:35:47.220 --> 00:36:00.220 Nobody wants to be seen as the producer of G-movies, you've got to show some nudity once in a while, you've got to have some bad words, or something that's pushing the envelope. 294 00:36:00.220 --> 00:36:11.220 And so, again, you have to understand that we have this notion that what these people are saying they're doing is writing the news why to help educate the people. 295 00:36:11.220 --> 00:36:30.220 And sometimes there's complaints about those people. Recently, Aaron Brown, an ex-CNN broadcaster, complained that well, we were trying to give people real news and it's those damn people over at Fox and they're covering Natalie Holloway. 296 00:36:30.220 --> 00:36:37.220 We were trying to cover the tsunami and they gave us the Natalie Holloway story, you know, the girl who disappeared in Aruba. 297 00:36:37.220 --> 00:36:47.220 Of course, Natalie Holloway disappeared in around, I think, the beginning of June 2005 and the tsunami occurred in very late 2004. 298 00:36:47.220 --> 00:36:51.220 So maybe CNN was just getting around to covering the tsunami, I can't tell you. 299 00:36:51.220 --> 00:37:02.220 But the idea, of course, that there is this contempt ultimately for this public that they say they're trying to reach and trying to give them the news that they have to have. 300 00:37:02.220 --> 00:37:09.220 Well, again, how does the Austrian look at this? 301 00:37:09.220 --> 00:37:23.220 Well, number one, I think that the Austrian understands that an institution that was derived in the progressive era 302 00:37:23.220 --> 00:37:31.220 is not going to do what it supposedly is created to do. 303 00:37:31.220 --> 00:37:47.220 The modern journalism, with all of its canons of journalism, they were updated in 1975 by Sigma Delta Chi, which is the Society of Professional Journalists, and it's basically the same sort of thing. 304 00:37:47.220 --> 00:37:55.220 That modern journalism is not a regulator of the state, no matter what they say. 305 00:37:55.220 --> 00:37:58.220 These people are not the watchdogs of government. 306 00:37:58.220 --> 00:38:01.300 They are the lapdogs of government. 307 00:38:01.300 --> 00:38:07.540 I would like to give you a couple of anecdotes, again, to explain to you just how serious this 308 00:38:07.540 --> 00:38:10.920 particular problem is. 309 00:38:10.920 --> 00:38:18.260 I've written a lot about the case of Michael Milken and Rudy Giuliani, and any time I can 310 00:38:18.260 --> 00:38:24.140 get a little slapping against Giuliani, I'm always glad to do it. 311 00:38:24.140 --> 00:38:33.780 In the late 1980s, Giuliani decided that he was going to clean up Wall Street. 312 00:38:33.780 --> 00:38:40.580 Now it was presented in the press as the honest prosecutor simply looking and saying there 313 00:38:40.580 --> 00:38:48.380 are dishonest and wrong things going on on Wall Street and I've got to clean it up. 314 00:38:48.380 --> 00:38:49.460 Well in fact, what do we know? 315 00:38:49.460 --> 00:38:59.460 Let's face it, people, if it weren't for Michael Milken, our standard of living would be substantially lower today than it was. 316 00:38:59.460 --> 00:39:04.460 And there have been other papers presented about that, and that's as much as I can say with it. 317 00:39:04.460 --> 00:39:13.460 But certainly Milken's competitors didn't like him getting his clients, and they didn't like what Milken was doing. 318 00:39:13.460 --> 00:39:24.460 and Rudy Giuliani had, let's just say that he had aspirations of being more than just the U.S. Attorney for the Southern District of New York. 319 00:39:24.460 --> 00:39:35.460 And so Giuliani started his raids, if you remember the raid on the trading floor at Princeton Newport Securities 320 00:39:35.460 --> 00:39:51.460 In which people were hauled out literally in chains and you had US marshals going in with loaded submachine guns with their fingers on the trigger going up against a bunch of unarmed traitors. 321 00:39:51.460 --> 00:40:02.460 And the idea like they were raiding a drug house in Southern California or something, or an illicit arms factory or something. 322 00:40:02.460 --> 00:40:04.460 Of course, why did they do that? 323 00:40:04.460 --> 00:40:09.860 because so the press could come behind and film all this and have the perp walk 324 00:40:09.860 --> 00:40:14.780 and these people dragged out and change obviously well we have a criminal here 325 00:40:14.780 --> 00:40:22.860 this must be dangerous crimes going on and in his investigation of Giuliani 326 00:40:22.860 --> 00:40:30.660 Milken found that things were you know things were being leaked to the Wall 327 00:40:30.660 --> 00:40:39.660 The Wall Street Journal and the New York Times and the Wall Street Journal, the two reporters here were Laurie Cohen and James Stewart. 328 00:40:39.660 --> 00:40:46.660 And what Giuliani was doing was leaking material from the grand jury. 329 00:40:46.660 --> 00:40:53.660 Now this is a felony. This is a real live on the books felony. 330 00:40:53.660 --> 00:41:01.660 And he kept leaking this material out and so what you had were a number of journalists aiding and abetting a felony. 331 00:41:01.660 --> 00:41:06.660 And of course they were all on a great crusade of course of law and order. 332 00:41:06.660 --> 00:41:22.660 And this went on and then later Giuliani leaked to Laurie Cohen a story that he was about to come in a new superseding indictment of a hundred more indictments for Milken. 333 00:41:22.660 --> 00:41:28.860 And Milken was getting ready to go to trial. He said, we have no idea. What are these indictments about? We have no idea. 334 00:41:28.860 --> 00:41:33.460 It turned out Giuliani didn't have any indictments. The whole thing was made up out of whole cloth. 335 00:41:33.460 --> 00:41:39.260 That, again, is a felony. It's called obstruction of justice. 336 00:41:39.260 --> 00:41:47.860 So what we had here, in the name, of course, of following the law, 337 00:41:47.860 --> 00:41:59.860 We had the destruction of a human being with journalists aiding and abetting a criminal or a prosecutor engaging in acts of criminality. 338 00:41:59.860 --> 00:42:02.860 And all of this is the public's right to know? I don't think so. 339 00:42:02.860 --> 00:42:12.860 What we're dealing with here is simply this incestuous relationship between the press and government. 340 00:42:12.860 --> 00:42:24.860 The Martha Stewart case is almost as egregious in that we had the leaking of testimony from congressional committees and also from the grand jury. 341 00:42:24.860 --> 00:42:34.860 Those also were felonies and they were doing it in order to make hits so that Martha Stock and Martha Stewart's company would take a hit 342 00:42:34.860 --> 00:42:39.860 and they were trying to get her to come meet with them because she was not going to be meeting with investigators. 343 00:42:39.860 --> 00:43:09.860 The Press and then her company would take a hit and then finally she did that to stop the bleeding and of course we all know what followed afterwards and I always love it when James Comey the prosecutor said well I was just trying to protect the interests of her stockholders again I don't think so I think that what we had was another example of a very incestuous relationship between the press 344 00:43:09.860 --> 00:43:39.860 and with government, you know, I could go on and on of these kinds of stories, certainly in the, you know, Mises understood the nature of bureaucracy and the idea of spreading bureaucracy, we have reporters all over the place, what do they do, you know, a lot of the, if you cover the EPA, what do you do, well, you cover the, you know, you always are talking about the need for more bureaucracy, 345 00:43:39.860 --> 00:43:47.860 and that if there's ever criticism of these government agencies, it's that they're not really doing enough regulating. 346 00:43:47.860 --> 00:43:50.860 They need to do even more regulating than they're already doing. 347 00:43:50.860 --> 00:43:57.860 And again, you see this relationship that really thrives on the growth of government. 348 00:43:57.860 --> 00:44:05.860 Well, if you think of the power of the press and what a free press was supposed to mean, 349 00:44:05.860 --> 00:44:13.960 The idea that a quote free press would be a major engine in making government grow simply doesn't compute 350 00:44:14.800 --> 00:44:20.220 It doesn't make sense. It certainly did not make a sense at the founding of you know, this country the 351 00:44:22.040 --> 00:44:29.120 The founders of this of the United States did not want a situation in which government was just going to continue to grow and grow 352 00:44:29.120 --> 00:44:34.580 And grow and grow and certainly they saw having a press as a check on that 353 00:44:34.580 --> 00:44:48.580 But once it became institutionalized, and once it became a progressive era institution, then we saw a whole new direction being taken. 354 00:44:48.580 --> 00:44:53.580 One that supported the growth of government, one that supported regulatory agencies and the like. 355 00:44:53.580 --> 00:45:01.580 And in fact, one that modeled that very incestuous relationship of the relationship between government and the private sector. 356 00:45:01.580 --> 00:45:05.580 This being government entities and the press. 357 00:45:05.580 --> 00:45:11.580 But I would like to also say that there is some hope on the horizon. 358 00:45:11.580 --> 00:45:21.580 That we are finding, for example, that the breakup of these large press entities, 359 00:45:21.580 --> 00:45:28.580 and I'm not talking about just as businesses, but what I mean also, the breakup in influence. 360 00:45:28.580 --> 00:45:35.580 If you think of the influence that Walter Cronkite had, no journalist has anywhere close to that today. 361 00:45:35.580 --> 00:45:41.580 And there are just literally too many choices out there for people. 362 00:45:41.580 --> 00:45:46.580 Now, journalists complain about this, and they blame the public for actually wanting choices. 363 00:45:46.580 --> 00:45:49.580 And they say, no, this isn't what you should be having. 364 00:45:49.580 --> 00:45:58.580 But also, the Internet has proven to be something far more powerful than anybody could have ever imagined. 365 00:45:58.580 --> 00:46:12.580 When we moved to Cumberland, Maryland in August of 2001, we had already adopted one child and we had two others that we were in the process of adopting that would be coming to us soon. 366 00:46:12.580 --> 00:46:17.580 And my wife and I decided not to get cable TV. 367 00:46:17.580 --> 00:46:29.580 And if you live in Cumberland, and Cumberland is right in the middle of a bunch of ridges, you don't have cable, you're not getting TV reception. 368 00:46:29.580 --> 00:46:45.580 And so we opted not to get TV reception, which is very tough for, I love college football, and so when my team is playing, sometimes I don't get to see them, that's tough, but I put up with that. 369 00:46:45.580 --> 00:46:57.580 Don't watch television news. Don't subscribe to a newspaper. How do I keep up? 370 00:46:57.580 --> 00:47:00.580 Well, it's pretty darn easy to be honest. It's a thing called the internet. 371 00:47:00.580 --> 00:47:08.580 And what we're finding with the internet is, in fact, to a certain extent, almost a return to the old days. 372 00:47:08.580 --> 00:47:21.580 Return to the Party Press and also a return to being able to get the story from a lot of different sources of what's going on. 373 00:47:21.580 --> 00:47:28.580 And you have some enterprising people who have jumped into this and I think they really are doing a great job. 374 00:47:28.580 --> 00:47:36.580 And so, you know, we're starting to see some real competition again that we hadn't seen in a long time. 375 00:47:36.580 --> 00:47:42.580 of Time. Of course, the big boys don't like it. The New York Times sure doesn't like it. 376 00:47:42.580 --> 00:47:49.580 I remember in the last election, Alex Jones, and I actually know Alex Jones because I used to work with him. 377 00:47:49.580 --> 00:47:55.580 And Alex was with the Times for many years. He got a Pulitzer Prize. Now he teaches journalism. 378 00:47:55.580 --> 00:47:58.580 Last time I checked in with him, he was teaching journalism at Duke University. 379 00:47:58.580 --> 00:48:05.580 And, you know, that Alex just was kind of sniffing about the bloggers. 380 00:48:05.580 --> 00:48:12.580 Well, you know, what could they know that a journalist, you know, a trained journalist doesn't, you know, doesn't know and the like. 381 00:48:12.580 --> 00:48:20.580 And it's kind of, although I look at it, the same analogy is the dartboard and the trained stock picker. 382 00:48:20.580 --> 00:48:27.580 And what they found over the years is that the dartboard works about as well as the supposedly, you know, highly trained securities expert. 383 00:48:27.580 --> 00:48:41.580 And certainly I think that the bloggers have done a very, very good job. If you want to take a Hayek interview of it, what we now see is a way to connect knowledge and information from across a really wide spectrum. 384 00:48:41.580 --> 00:48:49.580 And be able to put it together in a way that wasn't being done before. So I really see this as a positive development. 385 00:48:49.580 --> 00:49:17.580 The growth of government continues and one can only hope, but in conclusion, I would like to say that certainly the old, like everything else that came out of the progressive era, that the press as an institution is finally running into market forces that are forcing people to take a very, very different approach. 386 00:49:17.580 --> 00:49:20.580 to take a very, very different approach to things. 387 00:49:20.580 --> 00:49:26.580 Now, you're still going to have the staffs of the New York Times and the Washington Post 388 00:49:26.580 --> 00:49:34.580 basically having the fanciful views of somebody who's a member of the College of Liberal Arts someplace. 389 00:49:34.580 --> 00:49:39.580 But, they're also going to be countered by a lot of other people. 390 00:49:39.580 --> 00:49:49.580 And they are not going to have the same control over what goes over airwaves and what goes over the wires and what people read. 391 00:49:49.580 --> 00:49:52.580 I happen to think this is a good thing. 392 00:49:52.580 --> 00:50:03.580 And of course, and if we despair, I would also say that there is always mises.org and lewrockwell.com. 393 00:50:03.580 --> 00:50:05.580 Thank you very much. 394 00:50:09.580 --> 00:50:11.580 Thank you very much.