WEBVTT NOTE A Critique of Yunus and His Micro-Finance 1 00:00:00.000 --> 00:00:06.240 The way I see matters, there are two teams out there. There's us and them. 2 00:00:06.240 --> 00:00:10.600 And what does the us team, the libertarian team believe in? 3 00:00:10.600 --> 00:00:16.360 The non-aggression axiom and private property rights based on homesteading. 4 00:00:16.360 --> 00:00:19.960 What does the other team believe in? The other team believes in 5 00:00:19.960 --> 00:00:23.040 coercion, violence, 6 00:00:23.040 --> 00:00:27.140 smashing innocent people, stealing from them, robbing them, 7 00:00:27.140 --> 00:00:36.140 Ordering Them Around. The other team has got several subsections. The main subsection is 8 00:00:36.140 --> 00:00:41.700 socialism and fascism. They're both on the same team. What does socialism believe in? 9 00:00:41.700 --> 00:00:47.500 Well, one definition of socialism is government ownership of the means of production. And 10 00:00:47.500 --> 00:00:56.300 we have the USSR. The other means, facade of private property, as in the Nazi or the 11 00:00:56.300 --> 00:01:03.700 Fascist Society. But the state orders everyone around. You know, what's-his-name used to 12 00:01:03.700 --> 00:01:09.260 say, there's not a dime's worth of difference between them. I think the governor of Alabama, 13 00:01:09.260 --> 00:01:13.500 George Wallace. Well, there's not a dime's worth of difference as far as I'm concerned 14 00:01:13.500 --> 00:01:21.140 between international socialism, the Soviet kind, and national socialism, the German kind. 15 00:01:21.140 --> 00:01:26.280 They're both bad guys, and we, if we want to be libertarians, are honor-bound and duty-bound 16 00:01:26.280 --> 00:01:50.280 Okay, so how do we look at Eunice? Who is Eunice? Eunice is a complex thing, because in some sense he's on the other team, but in another sense he's not really violating any libertarian laws. 17 00:01:50.280 --> 00:02:03.280 Let me try to explain that. Well, a platonic unis isn't anyway. The actual unis does. The actual unis takes money from governments and uses it to engage in microfinance. 18 00:02:03.280 --> 00:02:15.280 What's microfinance? You go to the third world country and you give small loans, a hundred bucks, a hundred and fifty bucks, to women, mainly women in these third world countries, and they set up a business. 19 00:02:15.280 --> 00:02:20.720 Now, it's sort of complicated because I am on record as saying it's okay to take government 20 00:02:20.720 --> 00:02:28.760 money, a la Ragnar Danischkold, redistributing from government to us guys. 21 00:02:28.760 --> 00:02:31.600 And I conclude that it's only legitimate for libertarians to do it. 22 00:02:31.600 --> 00:02:36.440 It's only legitimate for a libertarian to use the government roads or for a libertarian 23 00:02:36.440 --> 00:02:39.760 to be a professor in a state school. 24 00:02:39.760 --> 00:02:44.800 But that's a different paper and it's worthy of its own. 25 00:02:44.800 --> 00:02:48.020 So I am against him for taking government money, not because there's something intrinsically 26 00:02:48.020 --> 00:02:51.620 wrong with taking government money, but he shouldn't be doing it because he's on the 27 00:02:51.620 --> 00:02:57.140 other team, at least according to libertarian laws, I see it. 28 00:02:57.140 --> 00:03:04.560 He's also a feminist, you know, that the market is inherently anti-feminist, it's sexist, 29 00:03:04.560 --> 00:03:08.220 and the women are deprecated, well in many of those societies they are deprecated in 30 00:03:08.220 --> 00:03:11.500 a way that they're not here in an improper way. 31 00:03:11.500 --> 00:03:17.100 So he's, but he's really a socialist, and I don't mean in the voluntary socialist sense 32 00:03:17.100 --> 00:03:22.460 of from each according to his ability and to each according to his need, whereby the kibbutz 33 00:03:22.460 --> 00:03:28.600 and the monastery and the family is a socialist institution, but they're voluntary socialist 34 00:03:28.600 --> 00:03:29.600 institutions. 35 00:03:29.600 --> 00:03:33.740 He's not a socialist in that sense, which is certainly compatible with our team, but 36 00:03:33.740 --> 00:03:35.180 he's a socialist in the bad sense. 37 00:03:35.180 --> 00:03:40.780 You know, capitalism is evil and the fact that we're not giving microfinances and market 38 00:03:40.780 --> 00:03:44.940 failure, and what he's doing is coming with all sorts of bells and whistles and promoting 39 00:03:44.940 --> 00:03:52.940 socialism. But we could take a platonic eunus or a platonic microfinance shorn of all these 40 00:03:52.940 --> 00:03:58.460 problems and let's just say that he didn't take government money and he wasn't, well, 41 00:03:58.460 --> 00:04:02.820 I can't say he's not promoting communism, but let's say he wasn't acting incompatibly 42 00:04:02.820 --> 00:04:07.860 with libertarian law at all. Let's stipulate that just for argument's sake. A little bit 43 00:04:07.860 --> 00:04:11.580 background the reason I got into this is two of our very good students at Loyola 44 00:04:11.580 --> 00:04:17.460 University New Orleans are hopped up on this they're really into microfinance so 45 00:04:17.460 --> 00:04:22.140 much so they went over to where was it Bangladesh or somewhere and they showed 46 00:04:22.140 --> 00:04:26.580 a they gave a presentation and at the end of the presentation there were the two 47 00:04:26.580 --> 00:04:30.620 of them and Eunice's got his arms around them and they're all smiling and if I 48 00:04:30.620 --> 00:04:33.860 had a you know a tomato or something I were thrown it at the screen because 49 00:04:33.860 --> 00:04:58.860 Fair Trade Coffee 50 00:04:58.860 --> 00:05:02.460 This is a leftist thing against free trade. 51 00:05:02.460 --> 00:05:08.300 Can we really on our team support fair trade coffee? It seems problematic. Let me make 52 00:05:08.300 --> 00:05:15.300 a distinction. The distinction is, is it compatible with libertarian law to have fair trade coffee? 53 00:05:15.300 --> 00:05:21.060 Sure it is. So on the one hand we have, is it compatible with libertarian law? On the 54 00:05:21.060 --> 00:05:27.820 other hand is, will it promote libertarianism? A very, very different question. And not only 55 00:05:27.820 --> 00:05:34.640 Do I want things that are compatible with libertarianism, but I also want things that promote libertarianism. 56 00:05:34.640 --> 00:05:40.860 And my claim is that microfinance is compatible with, but does not promote, and therefore 57 00:05:40.860 --> 00:05:45.260 we should not root for. Doesn't mean I want to prohibit it by law. There are a lot of 58 00:05:45.260 --> 00:05:49.660 things I don't like that I don't want to prohibit by law. Rap music, I don't like, but I don't 59 00:05:49.660 --> 00:05:52.900 want to prohibit it by law. 60 00:05:52.900 --> 00:05:59.620 Take another one. There's this thing, the Jitney, the Institute for Justice does yeoman 61 00:05:59.620 --> 00:06:03.740 work. People want to drive around and put a little sign up and say, you know, we'll 62 00:06:03.740 --> 00:06:09.260 drive you around on this street. Jitneys, free market jitneys, fine. But suppose you 63 00:06:09.260 --> 00:06:17.460 had a lefty jitney and it said, capitalism sucks, promote socialism, this is the people's 64 00:06:17.460 --> 00:06:47.460 transportation. Would we put them in jail for that? No. We would support keeping them out of jail because they're doing nothing incompatible with libertarian law. But would we be on their side? Would we promote them? Would we take pictures of us smiling together arm in arm with them? Not if we want to promote liberty. So there's a very important distinction between promoting liberty and being compatible with liberty. And this is something that I can't get anyone at my school to see the difference. 65 00:06:47.460 --> 00:07:06.460 My colleagues in the economics department, most of the students that we're trying to get to promote liberty, many of them whom are here, I think we have 13 students from Loyola at this event, and most of them are weak on this, so I'm trying to convert them back to the one true faith on this. 66 00:07:06.460 --> 00:07:11.460 Take another case. There's this thing called the Provo White Bicycle Scheme. 67 00:07:11.460 --> 00:07:13.460 What's the Provo White Bicycle Scheme? 68 00:07:13.460 --> 00:07:18.460 You buy 10,000 white bicycles that are distinguished because they're painted white. 69 00:07:18.460 --> 00:07:22.460 And you put little signs that capitalism is evil and socialism is the way to go. 70 00:07:22.460 --> 00:07:24.460 And these are people's bicycles. 71 00:07:24.460 --> 00:07:29.460 And the idea is everyone should just ride them around and then leave them there out of under the rain. 72 00:07:29.460 --> 00:07:32.460 And people should just ride bicycles like that. 73 00:07:32.460 --> 00:07:38.960 that we should sort of have socialist bicycles in that sense, in a sense that is not incompatible with libertarianism, 74 00:07:38.960 --> 00:07:44.160 but is this something that we support on the grounds of promoting liberty? 75 00:07:44.160 --> 00:07:52.760 Well, I don't think so. My strategic sense is that this would be a horrendous, gigantic mistake. 76 00:07:52.760 --> 00:08:03.480 Another example is there was this movie where the guy played this little horn and he went 77 00:08:03.480 --> 00:08:09.200 dead. Does anyone know the movie? I should have got the movie down before but I took 78 00:08:09.200 --> 00:08:15.480 my notes, I don't remember it. He turns into another body and now he's in the body of a 79 00:08:15.480 --> 00:08:21.800 big businessman and he has this thing, buy my tuna even though it costs ten cents more 80 00:08:21.800 --> 00:08:31.520 Again, just one more example of a lefty kind of a thing that is compatible with libertarianism, 81 00:08:31.520 --> 00:08:37.600 but is not promoting libertarianism, or affirmative action. 82 00:08:37.600 --> 00:08:41.680 Another lefty kind of a thing that we have to have affirmative action. 83 00:08:41.680 --> 00:08:47.560 Well, coercive affirmative action is incompatible, but voluntary affirmative action is compatible 84 00:08:47.560 --> 00:08:51.440 with libertarianism, but does it promote libertarianism? 85 00:08:51.440 --> 00:08:59.320 I think, I think not. Take one more example. Another example of a student of mine who got 86 00:08:59.320 --> 00:09:06.600 involved in unionism. We have to promote unionism. The tomato pickers were being exploited by 87 00:09:06.600 --> 00:09:12.000 the bosses. We had bossism. And I said, well, you know, this isn't really on our side promoting 88 00:09:12.000 --> 00:09:19.640 unionism. He said, well, it's voluntary unionism. And, and again, you can have voluntary unionism. 89 00:09:19.640 --> 00:09:24.520 Freedom is a complex thing that not all unions are incompatible with the libertarian theory. 90 00:09:24.520 --> 00:09:30.760 I mean, as long as they limit themselves to a mass quit, it's fine. And that's this kind 91 00:09:30.760 --> 00:09:35.280 of a union according to the student of mine. But again, it's not really our issue. Let 92 00:09:35.280 --> 00:09:39.840 me give you two cases where it really was our issue and how we distinguished properly 93 00:09:39.840 --> 00:09:46.720 from the lefties with whom we were making common cause. One was the war in Vietnam. 94 00:09:46.720 --> 00:09:52.800 And we libertarians were as much against the war in Vietnam as the lefties were. 95 00:09:52.800 --> 00:09:57.560 And I remember one lefty parade where there were millions of lefties, you know, war, U.S. 96 00:09:57.560 --> 00:10:05.180 out of Vietnam, capitalism is evil, you know, the usual combination of things. 97 00:10:05.180 --> 00:10:12.720 And our group had a thing, U.S. out of the Bronx, which is, you know, sort of uniquely 98 00:10:12.720 --> 00:10:13.720 libertarian. 99 00:10:13.720 --> 00:10:15.640 So I don't mind cooperating with these people. 100 00:10:15.640 --> 00:10:19.480 I certainly don't mind taking over their activities. 101 00:10:19.480 --> 00:10:22.960 But as long as we remain true to our principles. 102 00:10:22.960 --> 00:10:26.360 Another one was I was involved when I first 103 00:10:26.360 --> 00:10:29.520 met Murray in this thing called the Peace and Freedom Party. 104 00:10:29.520 --> 00:10:32.520 The Peace and Freedom Party had three caucuses. 105 00:10:32.520 --> 00:10:35.560 One was the Progressive Labor, the Maoists. 106 00:10:35.560 --> 00:10:39.880 Another was the Trotskyites. 107 00:10:39.880 --> 00:10:41.640 And then we had a Libertarian Caucus. 108 00:10:41.640 --> 00:10:43.000 And we were in the Peace and Freedom Party. 109 00:10:43.000 --> 00:10:47.000 and We Kept Our Own Identity and there's nothing wrong with that. 110 00:10:53.000 --> 00:10:59.000 So, how could we react with regard to microfinance in this regard? 111 00:10:59.000 --> 00:11:02.000 Well, we could start our own microfinance thing. 112 00:11:02.000 --> 00:11:08.000 I'm not against microfinance, per se, if we had a libertarian slant on it. 113 00:11:08.000 --> 00:11:16.880 on it. And it certainly wouldn't include smashing capitalism. But if we said, well, bank regulations 114 00:11:16.880 --> 00:11:23.520 are illicit. And the reason we don't have microfinance as part of the market, the reason 115 00:11:23.520 --> 00:11:29.720 the lack of microfinance is not a market failure is because of the government limitations on 116 00:11:29.720 --> 00:11:34.160 entry into banking. In order to become a licensed bank, you have to go through all sorts of 117 00:11:34.160 --> 00:11:39.000 of Hoops, and the microfinance people are not allowed to go over those hoops. So if 118 00:11:39.000 --> 00:11:45.120 we had a free market microfinance, there's nothing in it intrinsically that I would oppose 119 00:11:45.120 --> 00:11:52.000 on the grounds of promoting liberty. But if we just go and join them and don't distinguish 120 00:11:52.000 --> 00:11:57.520 ourselves from them, as these two kids did not distinguish themselves from them, then 121 00:11:57.520 --> 00:12:02.560 I see a problem with that. Right now at Loyola University, New Orleans, we have a microfinance 122 00:12:02.560 --> 00:12:11.560 This is a microfinance initiative. Does this microfinance initiative distinguish itself from the Eunice type? No. It's just, you know, microfinance. 123 00:12:11.560 --> 00:12:19.560 Now, if they said something like free enterprise microfinance or capitalist microfinance or something in any way to distinguish ussens from themens, 124 00:12:19.560 --> 00:12:28.560 given that ussens are the good guys and we want to promote our team, but they don't do that. They just sort of say, well, microfinance is great. 125 00:12:28.560 --> 00:12:35.200 Well, what microfinance means in the view of most people is unis and opposition to free 126 00:12:35.200 --> 00:12:39.880 enterprise and opposition to markets. 127 00:12:39.880 --> 00:12:42.840 What about curing poverty in the third world? 128 00:12:42.840 --> 00:12:44.020 Will microfinance do it? 129 00:12:44.020 --> 00:12:45.720 Now I'm getting a little bit off this topic. 130 00:12:45.720 --> 00:12:49.620 I'm now addressing a positive claim, not a normative claim, before I was doing normative 131 00:12:49.620 --> 00:12:50.620 and strategy. 132 00:12:50.620 --> 00:12:55.960 Well, to me, to be an entrepreneur is a matter of specialization and division of labor. 133 00:12:55.960 --> 00:12:58.920 Not everyone can be an entrepreneur. 134 00:12:58.920 --> 00:13:03.280 The way to be an entrepreneur in the free enterprise system is you just spend a little 135 00:13:03.280 --> 00:13:07.080 less than you earn and now the difference is your savings and you invest it and you 136 00:13:07.080 --> 00:13:08.080 become an entrepreneur. 137 00:13:08.080 --> 00:13:13.680 In other words, there's nothing, even in a semi-free country such as the United States, 138 00:13:13.680 --> 00:13:19.440 there's nothing preventing self-microfinance. 139 00:13:19.440 --> 00:13:22.580 The best way to help poverty in the third world, though, I don't think is really with 140 00:13:22.580 --> 00:13:23.580 microfinance. 141 00:13:23.580 --> 00:13:28.580 If that's your goal, this is not a good means toward it, even though it's compatible with libertarianism. 142 00:13:28.580 --> 00:13:38.580 The best way is to, well, not to promote sweatshops, but at least to defend sweatshops against attacks by the left who hate sweatshops. 143 00:13:38.580 --> 00:13:44.580 What's her name? Gifford, Gifford's wife, Emily Lou Gifford, something like that? 144 00:13:44.580 --> 00:13:47.580 Kathy Lee Gifford, she's my gal. 145 00:13:47.580 --> 00:13:52.800 She goes over there and she sets up a shop in Bangladesh and she pays 50 cents an hour 146 00:13:52.800 --> 00:13:58.040 and everyone says, oh, 50 cents an hour, that's despicable. But they're getting 10 cents an 147 00:13:58.040 --> 00:14:03.200 hour and it's like quintuple what the salary is there. She has to pay more otherwise she's 148 00:14:03.200 --> 00:14:05.900 not going to get a labor force. 149 00:14:05.900 --> 00:14:11.000 What would be the leftist view toward sweatshops? Well, I don't have to answer that question 150 00:14:11.000 --> 00:14:15.240 in a group such as this. We all know what the leftist view is toward sweatshops. Smash 151 00:14:15.240 --> 00:14:24.840 The same people who are supporting microfinance are opposing sweatshops and opening up industries 152 00:14:24.840 --> 00:14:26.880 and maybe getting rid of tariffs. 153 00:14:26.880 --> 00:14:31.280 Do these guys, do these microfinance types want to get rid of tariffs? 154 00:14:31.280 --> 00:14:32.280 No. 155 00:14:32.280 --> 00:14:37.120 Whenever we have these free trade things like in Seattle or somewhere, all the lefties are 156 00:14:37.120 --> 00:14:38.120 running rampage. 157 00:14:38.120 --> 00:14:39.400 No, we have to have fair trade. 158 00:14:39.400 --> 00:14:41.000 We can't have free trade. 159 00:14:41.000 --> 00:14:47.440 So in aligning ourselves with these guys, we're aligning ourselves with people who oppose 160 00:14:47.440 --> 00:14:53.440 free trade, who oppose sweatshops, who oppose multinational corporations. 161 00:14:53.440 --> 00:14:55.240 That's their team. 162 00:14:55.240 --> 00:15:00.520 And I'll be damned if I'll be happy with our best students joining the other team. 163 00:15:00.520 --> 00:15:01.880 We want to keep them on our team. 164 00:15:01.880 --> 00:15:02.880 Rah-rah, our team.