WEBVTT NOTE Keynes and His Influence 1 00:00:00.000 --> 00:00:06.600 There's a certain distinction that there is in my life with Professor North, an incident 2 00:00:06.600 --> 00:00:13.320 that I think is part of the history of modern Austrian economics. It's not very important, 3 00:00:13.320 --> 00:00:21.200 but it turns out Gary North was the first Austrian economist I ever met in person and 4 00:00:21.200 --> 00:00:27.160 heard speak in person. So I thought, you know, pretty cool guy. I think I want to do this. 5 00:00:27.160 --> 00:00:33.720 It was in Camden, New Jersey, which before Philadelphia was known for being the murder 6 00:00:33.720 --> 00:00:38.880 capital of the world, or of the US, excuse me. 7 00:00:38.880 --> 00:00:44.800 Dr. North received his PhD in history from the University of California at Riverside. 8 00:00:44.800 --> 00:00:49.800 He served on the senior staff at the Foundation for Economic Education and then at the Caledon 9 00:00:49.800 --> 00:00:50.800 Foundation. 10 00:00:50.800 --> 00:00:59.600 He has been the editor of the Remnant Review since 1974 and of GaryNorth.com since 2006. 11 00:00:59.600 --> 00:01:02.920 In 1976 he was a research assistant for Ron Paul. 12 00:01:02.920 --> 00:01:07.880 Dr. North's publications have appeared in the Wall Street Journal, Journal of Political 13 00:01:07.880 --> 00:01:14.960 Economy, the Freeman, National Review, LewRockwell.com, Journal of Libertarian Studies, Reason and 14 00:01:14.960 --> 00:01:18.480 dozens of other periodicals and websites. 15 00:01:18.480 --> 00:01:21.480 He will speak to us today on Keynes and his influence. 16 00:01:21.480 --> 00:01:25.480 Ladies and gentlemen, please join me in extending a warm welcome to Dr. North. 17 00:01:25.480 --> 00:01:47.480 In discussing Keynes and his impact, I'm going to take you through basically four points. 18 00:01:47.480 --> 00:01:55.920 Four points. The main thing I'm going to be talking about is the way in which the influence 19 00:01:55.920 --> 00:02:03.580 of Keynes spread in the United States, the English speaking world, which is I think not 20 00:02:03.580 --> 00:02:11.600 what you generally find in the standard histories of economic thought. Then I want to talk about 21 00:02:11.600 --> 00:02:19.100 Keynes's influence today, very specifically today, within the last 24 months, where there 22 00:02:19.100 --> 00:02:25.520 has been, I think, a significant change. 23 00:02:25.520 --> 00:02:33.680 Third part of my presentation is going to be on the positioning of the Austrian School 24 00:02:33.680 --> 00:02:39.520 in relation to Keynes and why I think the situation that we're facing at the present 25 00:02:39.520 --> 00:02:48.040 time offers greater opportunity than anything we've had in the past seven decades. 26 00:02:48.040 --> 00:03:01.160 And then finally I want to talk about a potential, I would say, research and publication agenda, 27 00:03:01.160 --> 00:03:06.640 which I'm going to invite some of you to participate in, because I think the division of labor 28 00:03:06.640 --> 00:03:14.440 is the effective way to accomplish certain goals that I think need to be met. 29 00:03:14.440 --> 00:03:20.280 I begin then with Keynes's influence. 30 00:03:20.280 --> 00:03:27.500 Keynes was an extremely good writer when he wanted to be. 31 00:03:27.500 --> 00:03:35.440 And in 1919, when his book, The Economic Consequences of the Peace, first appeared, 32 00:03:35.440 --> 00:03:40.680 It created almost an immediate sensation. 33 00:03:40.680 --> 00:03:49.200 The basic argument of the book was that the Versailles Treaty imposed unreasonable reparation 34 00:03:49.200 --> 00:03:56.680 demands on Germany, and that those demands were going to cripple the economy, would not 35 00:03:56.680 --> 00:04:03.720 lead to anything like peace and prosperity for Germany. 36 00:04:03.720 --> 00:04:07.480 In many ways, this, I would say, would be a free market argument. 37 00:04:07.480 --> 00:04:15.880 He was not trusting of the wisdom of the gathered victors at Versailles in working out any kind 38 00:04:15.880 --> 00:04:22.040 of an economic arrangement in some centrally planned way which was going to guarantee the 39 00:04:22.040 --> 00:04:25.520 repayment of the war debts. 40 00:04:25.520 --> 00:04:32.360 Now the book was well timed because this was the beginning of second thoughts about the 41 00:04:32.360 --> 00:04:53.360 and the Wisdom of the war, and in fact, I think you could almost argue that it was the most important initial document to receive wide attention with respect to the lack of wisdom associated with the war, and it made his reputation rapidly. 42 00:04:53.360 --> 00:05:04.720 He continued to write, usually smaller pieces, very often on monetary affairs, and the difficulty 43 00:05:04.720 --> 00:05:12.820 in assessing his influence is that time and again he changed his policy prescription depending 44 00:05:12.820 --> 00:05:15.820 on the external circumstances. 45 00:05:15.820 --> 00:05:20.520 You could find him when he was favorable towards free trade, you could find him when he was 46 00:05:20.520 --> 00:05:24.000 is favorable towards tariffs. 47 00:05:24.000 --> 00:05:31.920 He made a famous statement in The Economic Consequences of the Peace regarding a statement 48 00:05:31.920 --> 00:05:38.320 he attributed to Lenin with respect to the breakdown of capitalism. 49 00:05:38.320 --> 00:05:45.040 And he said that Lenin had taught that inflation is an extremely effective way to undermine 50 00:05:45.040 --> 00:05:46.900 the capitalist system. 51 00:05:46.900 --> 00:05:52.020 And he repeated that time and again in subsequent writings. 52 00:05:52.020 --> 00:05:58.140 The difficulty is that we've never been able to find any primary source document that indicated 53 00:05:58.140 --> 00:06:01.020 that Lenin said it. 54 00:06:01.020 --> 00:06:07.940 But on the other hand, it was certainly a cogent observation that he really should have made. 55 00:06:07.940 --> 00:06:16.380 The oddity, however, is that this made Keynes's reputation early as a man who was highly suspicious 56 00:06:16.380 --> 00:06:40.380 of price inflation. And then, within really months of the publication of the economic consequences of the piece, both Germany and Austria began their nearly suicidal policies of expanding the money supply in order to create a boom in the economy. 57 00:06:40.380 --> 00:06:48.380 And that led, of course, to the most famous of the modern inflations in Germany between 1921 and 1923. 58 00:06:48.380 --> 00:07:02.380 So again, what took place as not the consequences of Cain's book, but which took place consistent with what he had said, elevated his reputation. 59 00:07:02.380 --> 00:07:15.380 And so he was, no question about it, influential in the sense of a man that the intellectual class would look to when he would publish something. 60 00:07:15.380 --> 00:07:18.380 He certainly had his ideas discussed. 61 00:07:18.380 --> 00:07:35.380 I don't think, however, you could say that he was a major influence at the time in terms of getting anybody in the British Treasury or anywhere else to adopt specific policies based on the cogency of his reasoning. 62 00:07:35.380 --> 00:07:45.380 So it was a peculiar form of influence. He would make cogent statements, many times consistent with what free market economists would have said. 63 00:07:45.380 --> 00:08:04.380 He got attention in literary magazines and in circles that are certainly outside the purview of most people with economics degrees and, of course, one of the reasons was that he never earned an economics degree. 64 00:08:04.380 --> 00:08:22.380 His field was mathematics. His father put up the money to get him the chair at Cambridge, at which he taught, as the leading economist, as it turned out, of the 20th century, when, in fact, he never received a degree in economics and certainly not an advanced degree. 65 00:08:22.380 --> 00:08:31.380 And in that respect, I kind of say, well, that's not a bad deal either. I'm always glad to see somebody beat the system, and he certainly did beat the system. 66 00:08:31.380 --> 00:08:52.380 The influence that we think in our day, that Keynes had, has come down as a result of what Lenin would have called a transmission belt, but it was not the standard transmission belt, 67 00:08:52.380 --> 00:09:09.380 In terms of an individual rights for an economic journal, that idea becomes widespread, the idea seeps down to the treasury or to some other government agency and that thereafter the particular idea is implemented. 68 00:09:09.380 --> 00:09:17.380 In fact, the strange phenomenon about Keynes is that almost none of that ever happened. 69 00:09:17.380 --> 00:09:45.380 In the early 1930s, the two most prominent economists, certainly in the English-speaking world and in Great Britain, were Keynes and F.A. Hayek. Hayek, having come over in the late 20s to the London School of Economics and was gaining a reputation, a very deserved reputation at the time, 70 00:09:45.380 --> 00:10:02.380 by translating into terms and charts acceptable to academia the ideas of Ludwig von Mises with respect to monetary policy and also with respect to the trade cycle. 71 00:10:02.380 --> 00:10:11.380 And he gained his reputation basically, to be quite honest, as a second-hand dealer in Mises' ideas. 72 00:10:11.380 --> 00:10:41.380 But that was okay because Mises wrote in German and he was not widely read in the English-speaking world and so it was perfectly legitimate for one of his disciples to begin to translate not the words but the concepts that Mises had taught him and had converted him from socialism on the basis of the power of the ideas that he should sit down and begin to gain an audience for Mises' ideas, I think, 73 00:10:41.380 --> 00:10:45.380 and certainly legitimate and valuable service to the English-speaking world. 74 00:10:45.380 --> 00:10:58.380 And it became very obvious very early that Keynes was being challenged in a systematic way by Hayek's arguments. 75 00:10:58.380 --> 00:11:07.380 And the debate began specifically in the Economic Journal, and the Economic Journal Keynes had edited, 76 00:11:07.380 --> 00:11:20.380 that is now being edited by Roy Herod, and in that journal a series of exchanges took place over Keynes' treatise on money, which first volume appeared in 1930, 77 00:11:20.380 --> 00:11:36.380 and Hayek spent hours, really more than hours, he spent an enormous amount of time going through Keynes' book, published a critique of it, Keynes responded, 78 00:11:36.380 --> 00:11:47.380 Hayek responded, and finally, in discussing the matter with Keynes, because he knew Keynes, they were on good speaking terms, 79 00:11:47.380 --> 00:11:52.380 Keynes made this remarkable statement, according to Hayek. 80 00:11:52.380 --> 00:12:01.380 He said, oh well, I really don't believe it anyway, I'm onto something now completely different, 81 00:12:01.380 --> 00:12:04.580 So I'm not really interested in continuing the debate. 82 00:12:04.580 --> 00:12:09.380 That, at least, is how Hayek summarized what Keynes had told him. 83 00:12:09.380 --> 00:12:14.180 This would have been probably 1934 or 1935, that period. 84 00:12:14.180 --> 00:12:18.580 So the debate ended. 85 00:12:18.580 --> 00:12:24.580 When the General Theory was published in 1936, 86 00:12:24.580 --> 00:12:28.180 Hayek made what had to be one of the great 87 00:12:28.180 --> 00:12:32.500 strategic intellectual miscalculations of the 20th century. 88 00:12:32.500 --> 00:12:36.220 He decided he would not respond to the book 89 00:12:36.220 --> 00:12:39.480 because he said, I will spend an enormous amount of time 90 00:12:39.480 --> 00:12:42.100 responding to this book and then Keynes will shrug it off 91 00:12:42.100 --> 00:12:44.980 and be on to something else. 92 00:12:44.980 --> 00:12:47.580 And so he did not respond. 93 00:12:47.580 --> 00:12:51.940 And the problem was that the world 94 00:12:51.940 --> 00:12:55.940 of anything resembling classical political economy 95 00:12:55.940 --> 00:13:03.700 expected him to respond because of his reputation, and when he didn't respond, there were questions 96 00:13:03.700 --> 00:13:08.980 then raised as to whether he was capable of responding or whether Keynes had made this 97 00:13:08.980 --> 00:13:17.900 monumental advance in economic thought in which defenders of the old political economy 98 00:13:17.900 --> 00:13:22.820 could not effectively respond at all. 99 00:13:22.820 --> 00:13:28.320 Hayek expressed regret on repeated occasions through the rest of his life that he had not 100 00:13:28.320 --> 00:13:35.520 taken up the challenge as he personally should have done. 101 00:13:35.520 --> 00:13:42.780 The book is unreadable. 102 00:13:42.780 --> 00:13:51.180 That was its great strength because then nobody got in trouble for never having read it. 103 00:13:51.180 --> 00:13:57.660 The ideas certainly motivated a younger group of scholars in Great Britain, especially at 104 00:13:57.660 --> 00:14:01.300 Cambridge. 105 00:14:01.300 --> 00:14:07.140 They believe that Keynes had done what Keynes said he had done, which Keynes had not done, 106 00:14:07.140 --> 00:14:13.940 which was to overcome Say's law, that is the clearing of markets, by means of price 107 00:14:13.940 --> 00:14:18.260 adjustments. 108 00:14:18.260 --> 00:14:26.620 Keynes basically said, yes, the answers that I provided here have refuted Say, but he had 109 00:14:26.620 --> 00:14:34.140 a caricature of Say, did not really analyze Say, and the academic world, being deep in 110 00:14:34.140 --> 00:14:41.280 its heart, almost congenitally lazy, figured, I guess Keynes refuted Say because now we 111 00:14:41.280 --> 00:14:46.440 don't have to go read Say, which they hadn't done in a hundred years anyway. 112 00:14:46.440 --> 00:14:53.320 And that really did happen. And so you have from time to time a free market economist 113 00:14:53.320 --> 00:15:00.160 going back to reread Say. And what you find is that when that perfectly cogent economist 114 00:15:00.160 --> 00:15:06.880 gets done with his book, his book is almost as incomprehensible as the general theory. 115 00:15:06.880 --> 00:15:14.160 Say has not really been given a fair shake in our time. And if I were to say of any 19th 116 00:15:14.160 --> 00:15:26.160 The 19th century economists who really should be studied in depth and taught in depth say would be my choice if I had a choice at least for the first half of the 19th century. 117 00:15:26.160 --> 00:15:32.720 Mises created his own reputation as having destroyed the argument that market pricing 118 00:15:32.720 --> 00:15:36.640 clears the market. 119 00:15:36.640 --> 00:15:46.600 Now when the book appeared, the world had been in a crisis for six years. 120 00:15:46.600 --> 00:15:53.480 A crisis of massive unemployment of both resources and individuals. 121 00:15:53.480 --> 00:15:59.120 Now there were answers provided, and the answers are the standard ones that any economist should 122 00:15:59.120 --> 00:16:00.700 go to. 123 00:16:00.700 --> 00:16:12.680 Price floors, higher taxes, government intervention into markets, political intervention for the 124 00:16:12.680 --> 00:16:18.440 sake of votes, which led to the disruption of market exchange, all the standard answers 125 00:16:18.440 --> 00:16:26.600 and the years that we would go to, to say why is this long-term unemployment continuing? 126 00:16:26.600 --> 00:16:34.080 But by 1936, free market economists, even those within the camp of the faithful, even 127 00:16:34.080 --> 00:16:41.400 those who had been followers of Mises, were beginning to lose faith. 128 00:16:41.400 --> 00:16:49.160 We have an example, the most egregious example, I guess, of all of them, would be Lionel Robin's 129 00:16:49.160 --> 00:16:56.520 book in 1934 on the Great Depression, which is a fine analysis of the Great Depression. 130 00:16:56.520 --> 00:17:01.460 He later repudiated the book, and he once told Mark Skousen that he wished he had never 131 00:17:01.460 --> 00:17:13.780 were written. You had others who had been obvious messesians in the 1920s. 132 00:17:13.780 --> 00:17:21.160 Gottfried Haberler would be one, Fritz Machlup would be another, who steadily by the 1940s 133 00:17:21.160 --> 00:17:28.660 were beginning to drift away from anything openly attributable to any idea or work that 134 00:17:28.660 --> 00:17:40.460 Mises Roke. I believe the Great Depression basically shell-shocked some of the best minds of its era. 135 00:17:40.460 --> 00:17:45.660 Now that was not true of Hayek, but then Hayek was in that stupid position of saying, 136 00:17:45.660 --> 00:17:55.460 I'm not going to respond. Keynes, in effect, got a free ride, and he got a free ride for a very short period of time, 137 00:17:55.460 --> 00:17:58.220 And then it was no longer an issue. 138 00:17:58.220 --> 00:18:03.140 And the free ride was from 1936 to, in Britain's case, 1939. 139 00:18:03.140 --> 00:18:05.900 And then World War II began. 140 00:18:05.900 --> 00:18:08.780 And the printing presses began. 141 00:18:08.780 --> 00:18:11.220 And government rationing began. 142 00:18:11.220 --> 00:18:14.740 And everybody accepted it as a war effort. 143 00:18:14.740 --> 00:18:17.280 And they solved the unemployment problem 144 00:18:17.280 --> 00:18:19.700 by drafting men into the armed forces 145 00:18:19.700 --> 00:18:21.420 and sending them into Europe. 146 00:18:21.420 --> 00:18:28.220 and then, in our case, Asia, in the 40s, taking them out of the labor force. 147 00:18:28.220 --> 00:18:33.700 So certainly that reduced the problem of unemployed resources. 148 00:18:33.700 --> 00:18:39.020 We made bombs and we bombed whatever we could find. 149 00:18:39.020 --> 00:18:44.040 And then on the other side, they rebuilt whatever we had recently bombed. 150 00:18:44.040 --> 00:18:49.500 And so the world did not have a problem any longer with unemployed resources. 151 00:18:49.500 --> 00:18:56.060 They just had a problem with approximately 60 million dead people, most of whom were 152 00:18:56.060 --> 00:19:01.940 civilians. That was the problem. 153 00:19:01.940 --> 00:19:11.140 So Keynes went to the Treasury after the war began and was part of Treasury finance, part 154 00:19:11.140 --> 00:19:17.780 of the whole system of rationing and financing of the war effort. And across the world we 155 00:19:17.780 --> 00:19:27.460 We had the war effort and war financing overcome the problems of the 1930s by means of vastly 156 00:19:27.460 --> 00:19:30.620 worse problems. 157 00:19:30.620 --> 00:19:35.000 Mises would have understood that and did understand that. 158 00:19:35.000 --> 00:19:39.980 The middle-of-the-road policy, as he said, leads to socialism, however, in that case 159 00:19:39.980 --> 00:19:46.420 it was wartime socialism and much more destructive than any other kind. 160 00:19:46.420 --> 00:19:55.420 So Keynes during the period from 36 until his death in 46 received almost a free ride 161 00:19:55.420 --> 00:19:57.540 academically speaking. 162 00:19:57.540 --> 00:20:06.640 So his followers went to work as good followers did, extending the insights of the master 163 00:20:06.640 --> 00:20:11.980 and then the wartime economy eliminated the problem. 164 00:20:11.980 --> 00:20:20.780 The curious phenomenon that is never discussed in the textbooks is the chronology of that period. 165 00:20:20.780 --> 00:20:25.880 That is, the book appeared in 1936. Now consider the United States. 166 00:20:25.880 --> 00:20:34.480 The United States had been suffering from deflation because of the collapse of the fractional reserve banking system. 167 00:20:34.480 --> 00:20:41.780 And so from 1930 through 1933, 9,000 banks went under. 168 00:20:41.780 --> 00:20:48.780 And when they went under, they took the deposits, and when the deposits went under, the money supply shrank. 169 00:20:48.780 --> 00:21:01.280 And then you couple that with the various forms of price floors that were established initially in the Hoover administration and then carried forward into the Roosevelt administration. 170 00:21:01.280 --> 00:21:05.280 So naturally, you got massive unemployment. 171 00:21:05.280 --> 00:21:11.280 In 1934, the FDIC went into effect. 172 00:21:11.280 --> 00:21:15.780 That was the end of the bank runs. That was the end of the deflation. 173 00:21:15.780 --> 00:21:20.580 From that point on, the inflationary policy of the Federal Reserve system 174 00:21:20.580 --> 00:21:26.080 were able to be transformed into actual M1, 175 00:21:26.080 --> 00:21:34.280 and the money supply went up and the price level also began to move. 176 00:21:34.280 --> 00:21:42.780 Then, in 1936, after the change had already been going on for at least two years in the United States, 177 00:21:42.780 --> 00:21:51.280 then comes the general theory calling for the expansion of money and the running of massive federal deficits 178 00:21:51.280 --> 00:21:55.280 as a means of curing the economy's problems. 179 00:21:55.280 --> 00:22:01.780 Well, the main problem, which had been deflation, which had been the result of the fractional reserve banking system, 180 00:22:01.780 --> 00:22:06.780 That problem was no longer a problem, certainly in the United States. 181 00:22:06.780 --> 00:22:09.780 So again, Keynes got a free ride. 182 00:22:09.780 --> 00:22:14.780 It looked as though what he had recommended was working, 183 00:22:14.780 --> 00:22:18.780 when in fact, by the time he got into print recommending it, 184 00:22:18.780 --> 00:22:21.780 the policies had already been implemented. 185 00:22:21.780 --> 00:22:24.780 And they were political facts throughout the West, 186 00:22:24.780 --> 00:22:34.780 and the politicians wanted to see that they had been validated by an economist and that is exactly what Keynes did. 187 00:22:34.780 --> 00:22:50.780 He didn't change the policy, he didn't establish the policy, he simply wrote the footnote to justify the policy and his reputation soared. 188 00:22:50.780 --> 00:23:00.460 Hayek gave an interview, which is on YouTube, which I posted on my site this week, in which 189 00:23:00.460 --> 00:23:07.860 he talked about Keynes's influence, and he made a cogent observation, which is very rarely 190 00:23:07.860 --> 00:23:10.020 referred to. 191 00:23:10.020 --> 00:23:18.220 He said Keynes in 46 at the time of his death did not have overwhelming support within the 192 00:23:18.220 --> 00:23:21.220 Community of Economists. 193 00:23:21.220 --> 00:23:25.220 He said that overwhelming support came later. 194 00:23:25.220 --> 00:23:28.660 Well, it came very fast. 195 00:23:28.660 --> 00:23:35.580 By 1950, there was a survey made, or at least published, by the American Economic Review 196 00:23:35.580 --> 00:23:41.060 on the opinions, the general opinions of members. 197 00:23:41.060 --> 00:23:46.020 And something in the range of 80% of them had by then adopted the Keynesian position. 198 00:23:46.020 --> 00:23:54.340 They didn't do it by reading Keynes. They did it by reading Samuelson's textbook published 199 00:23:54.340 --> 00:24:02.780 in 1948. That was the source of the enormous extension of the influence of John Maynard 200 00:24:02.780 --> 00:24:10.240 Keynes. Samuelson put it into something at least remotely resembling English, in arguments 201 00:24:10.240 --> 00:24:15.840 Notice that if you struggled, you might occasionally begin to follow, and it was assigned as a 202 00:24:15.840 --> 00:24:19.000 textbook to almost every student in the country. 203 00:24:19.000 --> 00:24:21.520 No economic textbook has ever matched it. 204 00:24:21.520 --> 00:24:26.320 I would go so far as to say that at the collegiate level, no other textbook has ever matched 205 00:24:26.320 --> 00:24:32.040 it in terms of the number of sales and the royalties generated. 206 00:24:32.040 --> 00:24:38.340 And by the time that the book began to get competitors, the competitors had basically 207 00:24:38.340 --> 00:24:46.840 They all adopted some version of Samuelson's approach to the discipline of teaching first-year students. 208 00:24:46.840 --> 00:24:52.840 They did not read Keynes, and he did not use the Keynesian formulas. 209 00:24:52.840 --> 00:25:01.840 He used his own formulas, and he was certainly famous for his book, his monumental study, 210 00:25:01.840 --> 00:25:10.580 which I guess was an extension of his doctoral dissertation on the foundations of economics. 211 00:25:10.580 --> 00:25:11.980 Now, nobody read that either. 212 00:25:11.980 --> 00:25:16.960 In fact, there was an old statement when I was in grad school that said nobody, meaning professors, 213 00:25:16.960 --> 00:25:21.600 nobody ever got fired for assigning Keynes's textbook 214 00:25:21.600 --> 00:25:26.200 and nobody ever got fired for not having read foundations of economic analysis. 215 00:25:26.200 --> 00:25:31.960 So I guess you'd have to say, Samuelson got the best of both worlds. 216 00:25:31.960 --> 00:25:37.960 He established his reputation with a book nobody read, and he established multimillion-dollar 217 00:25:37.960 --> 00:25:45.120 stream of income with a book that everybody had to read. 218 00:25:45.120 --> 00:25:50.760 So I contend that it was the writers of the textbooks, especially Samuelson, as the model 219 00:25:50.760 --> 00:25:53.580 that led to the enormous influence of Keynes. 220 00:25:53.580 --> 00:26:00.180 But remember, by the time those policies were being recommended, in the name of the general theory, 221 00:26:00.180 --> 00:26:06.100 in fact the conditions that had led to the crisis had been gone for at least 15 years. 222 00:26:06.100 --> 00:26:15.280 That is, collapsing banks, collapsing money supply, and the inability of markets to clear. 223 00:26:15.280 --> 00:26:20.160 That world in the post-war world of inflation, 224 00:26:20.160 --> 00:26:27.080 That world, in the post-war world of the FDIC, no longer existed. 225 00:26:27.080 --> 00:26:32.500 And what happened was, the general theory, which was not general, which was applied to 226 00:26:32.500 --> 00:26:38.640 a unique historical set of circumstances which no longer really existed by the time the book 227 00:26:38.640 --> 00:26:47.680 came into print, that was transmuted and translated into textbook applications that said, you've 228 00:26:47.680 --> 00:26:52.300 You've got to run massive deficits, and if need be, you've got to fund them by the expansion 229 00:26:52.300 --> 00:26:59.360 of money, when the conditions which generated the initial demand for the book and the popularity 230 00:26:59.360 --> 00:27:02.380 of the book were long gone. 231 00:27:02.380 --> 00:27:09.080 So the solution that the politicians had applied before Keynes wrote the book, for which Keynes 232 00:27:09.080 --> 00:27:16.620 got the credit, now those solutions were translated into a world in which the problems no longer 233 00:27:16.620 --> 00:27:24.780 existed. Now it became clear by the mid 1960s that Keynes had had this enormous 234 00:27:24.780 --> 00:27:31.820 triumph. There was the famous cover of Time magazine in which they featured 235 00:27:31.820 --> 00:27:37.820 Keynes. They had that famous quote of Friedman that we're all Keynesians now. He 236 00:27:37.820 --> 00:27:41.220 backed off later and said he meant methodologically but then that's kind of 237 00:27:41.220 --> 00:28:03.120 a decade later, under the enormous impact of, first, the Nixon recession, then the Nixon-Arthur 238 00:28:03.120 --> 00:28:11.300 Sanderburn's inflation, the abolition of what remained of the gold standard, followed by 239 00:28:11.300 --> 00:28:17.800 whip inflation now under Ford, followed by an even worse recession than Nixon had. 240 00:28:17.800 --> 00:28:23.480 By that time, the old Phillips curve was being called into question, that you could have 241 00:28:23.480 --> 00:28:30.520 expansion of money, rise of prices and rising unemployment all at the same time. 242 00:28:30.520 --> 00:28:38.420 And that event called into question, at least in some people's minds, the legitimacy of 243 00:28:38.420 --> 00:28:40.280 the Keynesian paradigm. 244 00:28:40.280 --> 00:28:43.160 And Keynes began to get a challenge. 245 00:28:43.160 --> 00:28:50.400 And the main challenge he got was from Friedman and the Chicago School of Economists. 246 00:28:50.400 --> 00:28:53.720 But at least there was a challenge. 247 00:28:53.720 --> 00:29:01.520 And then other schools of thought came along that were not tied openly to Keynes' worldview 248 00:29:01.520 --> 00:29:08.800 on the absolute necessity of running the government deficits in times of crisis. 249 00:29:08.800 --> 00:29:13.640 And then you actually had, lo and behold, you had a Federal Reserve chairman under Volcker 250 00:29:13.640 --> 00:29:17.160 who said, if we don't stop expanding the money supply, we're going to destroy the capital 251 00:29:17.160 --> 00:29:18.160 market. 252 00:29:18.160 --> 00:29:19.160 He said, we're going to stop. 253 00:29:19.160 --> 00:29:21.580 And he did stop. 254 00:29:21.580 --> 00:29:27.040 And he got the recession that any good Austrian economist would have predicted. 255 00:29:27.040 --> 00:29:29.380 And he pretty much stuck to his guns. 256 00:29:29.380 --> 00:29:35.400 And the inflation of the money supply certainly slowed. 257 00:29:35.400 --> 00:29:42.380 And you did get marginal tax cuts in the income taxes under Reagan's reforms. 258 00:29:42.380 --> 00:29:48.740 So at least you had plausible alternatives to the Keynesian orthodoxy that had certainly 259 00:29:48.740 --> 00:30:02.540 prevailed from 48 to say 71, 72, maybe 73. There was at least debate. Now we're into 260 00:30:02.540 --> 00:30:12.580 another adventure, like the 1930s, and we went through that adventure in 2008. And in 261 00:30:12.580 --> 00:30:19.720 In a period from the beginning of September to the end of October, the American economic 262 00:30:19.720 --> 00:30:25.080 system was hijacked, I don't know what else to call it, it was hijacked. 263 00:30:25.080 --> 00:30:32.460 A secretary of the treasury comes before the public and unilaterally announces the nationalization 264 00:30:32.460 --> 00:30:39.380 of what constitutes 90% of the mortgage market, and there is not a whimper, there is not a 265 00:30:39.380 --> 00:30:44.680 A hand go up in Congress, other than one hand go up in Congress. 266 00:30:44.680 --> 00:30:48.260 Ron Paul's hand that said there was anything wrong with this. 267 00:30:48.260 --> 00:30:54.100 And then, the next month, you have the bailouts of the largest banks. 268 00:30:54.100 --> 00:30:59.120 You have the beginning of massive expansion of the monetary base, approaching a trillion 269 00:30:59.120 --> 00:31:00.720 dollars by the Federal Reserve. 270 00:31:00.720 --> 00:31:14.520 You have swaps at face value of treasury debt in exchange for unmarketable pieces of paper that the banks were holding, 271 00:31:14.520 --> 00:31:30.160 which if you want an image for it, it was like trading the family heirloom sterling silver for crushed beer cans at face value in terms of pounds. 272 00:31:30.160 --> 00:31:35.480 and nobody said a word save one. 273 00:31:35.480 --> 00:31:40.480 So you have a situation in which the entire 274 00:31:40.480 --> 00:31:45.200 academic community of economists said 275 00:31:45.200 --> 00:31:46.820 we don't like it 276 00:31:46.820 --> 00:31:48.720 but it is necessary 277 00:31:48.720 --> 00:31:51.980 with the only exceptions being the Austrians 278 00:31:51.980 --> 00:31:58.280 who said don't expand the money supply, don't intervene into the mortgage markets, 279 00:31:58.280 --> 00:32:08.280 Don't swap federal debt. Don't bail out the banks. Stop, stop, stop. 280 00:32:08.280 --> 00:32:12.680 Now, that's a standard response of Austrian economists. 281 00:32:12.680 --> 00:32:20.580 What made it different in 2008 is that in 2006, a lot of them said the thing's going to break. 282 00:32:20.580 --> 00:32:25.380 And it's going to break soon. It's going to crash. 283 00:32:25.380 --> 00:32:34.680 And the conventional economist riding high on the bubbles that Greenspan had created said, 284 00:32:34.680 --> 00:32:38.680 there is no such crash coming, it is not going to happen. 285 00:32:38.680 --> 00:32:49.080 And the archetype of it, the standing testimony, which I hope will be here on YouTube up to the final judgment, 286 00:32:49.080 --> 00:32:55.880 was the confrontation between Peter Schiff and Arthur Laffer, which many of you have seen, 287 00:32:55.880 --> 00:33:00.880 in which Schiff says it's going down, and Laffer basically said, 288 00:33:00.880 --> 00:33:09.280 I don't know what kind of economics this man is basing his theories on, but it is not going down. 289 00:33:09.280 --> 00:33:14.780 And Schiff spoke representatively for the Austrian perspective, and he was right. 290 00:33:14.780 --> 00:33:18.380 And he was not the only man to do it. 291 00:33:18.380 --> 00:33:28.620 But certainly he did it, he did it on television and in a very short period of time it was on YouTube where it remains. 292 00:33:28.620 --> 00:33:38.900 Because you need a representative crisis once in a while and you need a representative confrontation once in a while and if it happens to be videoed and on YouTube it becomes a permanent testimony. 293 00:33:38.900 --> 00:33:43.380 So the Austrians got credit in retrospect for having predicted it, and therefore when 294 00:33:43.380 --> 00:33:48.900 they said don't intervene to bail it out, they established themselves as people who 295 00:33:48.900 --> 00:33:53.480 had the bona fides of having predicted the crisis. 296 00:33:53.480 --> 00:33:59.260 And the Chicago School and the Rational Expectations School and the Behavioral Economists and all 297 00:33:59.260 --> 00:34:06.020 the other subdivisions of the profession sat on the sidelines and basically said either 298 00:34:06.020 --> 00:34:14.760 Is there nothing, or they said, well we don't like it, but I guess it's necessary? 299 00:34:14.760 --> 00:34:21.860 Now that is my, I guess you would say, my second point. 300 00:34:21.860 --> 00:34:32.860 That is, the Austrian School between 2006 and late 2008 established territory, marked out territory 301 00:34:32.860 --> 00:34:39.380 said we can explain causation, we predicted it, and now we're going to tell you why the 302 00:34:39.380 --> 00:34:47.340 next round isn't going to work. And this is an historic opportunity. And this is what 303 00:34:47.340 --> 00:34:57.380 I hope is not going to be followed by what might be called a Hayek moment of 1935. This 304 00:34:57.380 --> 00:35:01.580 This is an extraordinary opportunity. 305 00:35:01.580 --> 00:35:10.460 The 2008 recession was like what was known in Vietnam as the bouncing beddy, which was 306 00:35:10.460 --> 00:35:18.980 a landmine which would pop out of the ground and scatter shrapnel in all directions. 307 00:35:18.980 --> 00:35:26.060 And that's what it did to every school of thought out there except the Austrian School. 308 00:35:26.060 --> 00:35:33.820 And we didn't get taken down by that event, because we had buried ourselves, in effect, 309 00:35:33.820 --> 00:35:35.100 behind a barrier. 310 00:35:35.100 --> 00:35:39.540 And the barrier was, we predicted it was going to happen, and it's happening in exactly the 311 00:35:39.540 --> 00:35:41.500 way that we said it was going to happen. 312 00:35:41.500 --> 00:35:47.500 And by the way, we're going to show you, once again, why it happened. 313 00:35:47.500 --> 00:35:48.980 Now Lew Rockwell has a rule. 314 00:35:48.980 --> 00:35:55.860 He says, you really don't get very far by telling somebody, I told you so. 315 00:35:55.860 --> 00:36:02.500 But you can get a long way with the general public by saying, we told them so. 316 00:36:02.500 --> 00:36:08.920 There is a difference. 317 00:36:08.920 --> 00:36:13.720 And that is our opportunity. 318 00:36:13.720 --> 00:36:19.980 In my view, Keynesianism now is taking all of the credit for illegitimate reasons. 319 00:36:19.980 --> 00:36:27.100 I did not know literally until yesterday that there is a concept so wide in the public today 320 00:36:27.100 --> 00:36:35.380 called the Keynesian resurgence that wiki has a long extended paper on it with all the footnotes 321 00:36:35.380 --> 00:36:42.060 on Keynesian resurgence on Wikipedia. 322 00:36:42.060 --> 00:36:49.460 They are taking the credit for having saved the economy just like they did in the 1930 323 00:36:49.460 --> 00:36:57.860 to 1940 era, just like they did after 36. They're taking credit for what wasn't Keynesianism. 324 00:36:57.860 --> 00:37:05.500 Look, you can't find any Keynesian economist, including Keynes, who would have said that 325 00:37:05.500 --> 00:37:13.540 you should nationalize the mortgage market unilaterally and bail it out by 1.25 trillion 326 00:37:13.540 --> 00:37:22.100 dollars of Federal Reserve credit as a means of keeping the American economy going. 327 00:37:22.100 --> 00:37:26.320 There would not have been any Keynesian so mad as to have gone into print with something 328 00:37:26.320 --> 00:37:29.300 like that in 2006 or 2007. 329 00:37:29.300 --> 00:37:34.540 There's nothing Keynesian about that policy. 330 00:37:34.540 --> 00:37:36.820 It's ad hocery to the core. 331 00:37:36.820 --> 00:37:42.220 It's just Bernanke sitting up there saying, what are we going to do? 332 00:37:42.220 --> 00:37:43.260 What are we going to do? 333 00:37:43.260 --> 00:37:52.620 I know, we'll write checks. And that's what he did. There's no systematic policy or theory 334 00:37:52.620 --> 00:37:58.980 of causation behind that other than, wait a minute, Goldman Sachs is going down. Citibank 335 00:37:58.980 --> 00:38:04.220 may go down. That's the only cause and effect. We've got to keep the doors open. There's 336 00:38:04.220 --> 00:38:11.400 no rationality behind it. There's no paradigm behind it. It's just a central banker creating 337 00:38:11.400 --> 00:38:17.000 Making Digits and Buying Anything He Could Get His Hands On. 338 00:38:17.000 --> 00:38:24.680 Now yes, there was a bailout of what, $787 billion, we don't know how much, but some 339 00:38:24.680 --> 00:38:31.920 number in that range, after the bailout, after the checks were written, after the mortgage 340 00:38:31.920 --> 00:38:33.560 markets were nationalized. 341 00:38:33.560 --> 00:38:39.240 Yeah, yeah, then sure, they get the Keynesian bailout, which in terms of the percentage 342 00:38:39.240 --> 00:38:48.440 that you're talking about, compared to this vast expansion of fiat money by the Fed, is nickel and dime stuff. 343 00:38:48.440 --> 00:38:51.940 It's not in the same league at all. 344 00:38:51.940 --> 00:38:56.140 And they say, well, see, the economy has been sold. 345 00:38:56.140 --> 00:38:58.240 The recovery is here. 346 00:38:58.240 --> 00:39:05.840 Oh, yeah, you've got this problem of about 10% unemployment, but the recovery is here, right? 347 00:39:05.840 --> 00:39:13.340 Banks are lending less money today than they did last year, and they lent less money in 2009 than they did in 2008. 348 00:39:13.340 --> 00:39:21.740 The greatest contraction of bank loans since the Great Depression, the continuing collapse of the housing price market, 349 00:39:21.740 --> 00:39:30.740 and we're told this is a recovery, and furthermore, it was the stimulus policy that gave us the benefit. 350 00:39:30.740 --> 00:39:36.020 ad hocery, retroactive assessment. 351 00:39:36.020 --> 00:39:37.420 Now, we know where it's going to... 352 00:39:37.420 --> 00:39:41.980 Well, there are two scenarios of where this can lead. 353 00:39:41.980 --> 00:39:44.820 Two basic scenarios. 354 00:39:44.820 --> 00:39:47.820 And I'm a great fan of country music, 355 00:39:47.820 --> 00:39:50.700 and there is a country music figure 356 00:39:50.700 --> 00:39:53.580 who appeared almost out of nowhere 357 00:39:53.580 --> 00:39:55.500 about a year and a half ago, 358 00:39:55.500 --> 00:40:02.780 who laid down the basic framework of what we've got in front of us. 359 00:40:02.780 --> 00:40:12.740 He goes by the name of Merle Hazard, and his partner is Bretton Wood. 360 00:40:12.740 --> 00:40:17.380 And they recorded this song, and it's on YouTube. 361 00:40:17.380 --> 00:40:24.780 And the song is called, Will It Be Zimbabwe or Japan? 362 00:40:24.780 --> 00:40:33.060 Now I'm not saying that Breton and Merle are the most talented musicians, certainly, and 363 00:40:33.060 --> 00:40:40.640 musically they're not the best of Nashville, but certainly methodologically they are. 364 00:40:40.640 --> 00:40:47.320 This massive expansion of the monetary base, once the banks begin to lend again, is going 365 00:40:47.320 --> 00:40:53.140 to lead to massive expansion of M1, a reversal of the money multiplier where it will actually 366 00:40:53.140 --> 00:40:57.260 should be multiplying money and we're going to get massive price inflation and the only 367 00:40:57.260 --> 00:41:04.500 way out of that is Japan, the banks never start lending and the government becomes the 368 00:41:04.500 --> 00:41:11.720 primary buyer of all assets practically in the economy, this massive expansion of federal 369 00:41:11.720 --> 00:41:16.540 presence in the capital markets because the banks have given up. 370 00:41:16.540 --> 00:41:20.440 So we know where it's going to lead and I think of course it will lead ultimately to 371 00:41:20.440 --> 00:41:27.560 Monetary Expansion and Bankruptcy because of the massive size of the deficits all over 372 00:41:27.560 --> 00:41:31.520 the world. 373 00:41:31.520 --> 00:41:38.040 And we have the advantages that we have a system of analysis that tells people why it 374 00:41:38.040 --> 00:41:46.040 is going to happen and we have held to this analysis since certainly 1912 which is a long 375 00:41:46.040 --> 00:42:08.500 Now this leads me to the part of my presentation which in the other part of my life I would 376 00:42:08.500 --> 00:42:13.860 call the close, which is the sales pitch. 377 00:42:13.860 --> 00:42:19.860 And that sales pitch is basically let us not have another Hayekian moment. 378 00:42:19.860 --> 00:42:28.540 What we need, I believe now, for the first time, is a full-scale attack on the general 379 00:42:28.540 --> 00:42:35.940 theory from every possible angle in every venue we have access to. 380 00:42:35.940 --> 00:42:38.260 This has not been done. 381 00:42:38.260 --> 00:42:39.860 We have bits and pieces. 382 00:42:39.860 --> 00:42:41.940 We have a book here and a book there. 383 00:42:41.940 --> 00:42:52.940 But what we have not had within the Austrian camp is a systematic analysis of all aspects of the general theory. 384 00:42:52.940 --> 00:43:08.940 And that is needed at the present time in order finally to, in effect, finally to get a stake through the heart of this vampire. 385 00:43:08.940 --> 00:43:28.940 We have got to undermine the confidence that younger economists have in the basic Keynesian paradigm which is spend and spend, tax and tax, inflate and inflate, because that's all they got. 386 00:43:28.940 --> 00:43:32.940 That is the Keynesian paradigm. 387 00:43:32.940 --> 00:43:39.940 We have to go back to the basics and say we've got to do what Hayek didn't do, but now we have tremendous advantages. 388 00:43:39.940 --> 00:43:49.940 We have print on demand, we have blog sites, we have YouTube, we have conventional books. 389 00:43:49.940 --> 00:44:01.940 We have tremendous opportunities now once and for all to go back to the general theory from an Austrian perspective to say what's wrong with it. 390 00:44:01.940 --> 00:44:10.940 Now I've created a site, for those of you who want to go through this, called canesproject.com. 391 00:44:10.940 --> 00:44:18.940 And if you'll go to that site, you'll get an outline of at least 13 separate areas that I think 392 00:44:18.940 --> 00:44:25.940 Keynes is vulnerable to the core, and that any one of you with any kind of training, 393 00:44:25.940 --> 00:44:55.940 training, master's level training could sit down and begin working on vision of labor opportunity and when you get materials out get a blog site up and do some videos of whatever you've come across and put them on YouTube and create a YouTube channel if necessary and if it's really any good send it to Tucker and see if he'll publish it in one venue or another and if Tucker rejects it then send it to Rockwell 394 00:44:55.940 --> 00:45:01.540 Well, because maybe he can use it. 395 00:45:01.540 --> 00:45:11.060 This is the way we literally use the division of intellectual labor and the tremendous advantage 396 00:45:11.060 --> 00:45:17.300 which we've been given in terms of the ever lower cost of technology, which means the 397 00:45:17.300 --> 00:45:20.500 ever lower cost of communicating ideas. 398 00:45:20.500 --> 00:45:25.060 This is perfect for folks like us. 399 00:45:25.060 --> 00:45:33.900 Our ship has basically come in, what I'm saying is, don't be at the bus station. 400 00:45:33.900 --> 00:45:37.160 This is a tremendous opportunity. 401 00:45:37.160 --> 00:45:46.720 Rockwell has created, with Tucker's assistance, this digital nightmare for the Keynesians, 402 00:45:46.720 --> 00:45:52.580 in which we have something like even ground. 403 00:45:52.580 --> 00:45:58.620 And as the New York Times and the other outlets become less and less profitable, I think the 404 00:45:58.620 --> 00:46:05.140 decentralization of ideas is going to lead to a time in which essentially it's the ants 405 00:46:05.140 --> 00:46:14.140 versus the elephant. And one bite at a time you take the elephant down. Now I've said 406 00:46:14.140 --> 00:46:20.020 that I didn't think that the Keynesian ideas in the form of Keynes' original ideas were 407 00:46:20.020 --> 00:46:30.020 were the major source of the influence. I've said that I think it was the textbooks. And so then why bother with Keynes? That's only stage one. 408 00:46:30.020 --> 00:46:42.020 Going after Keynes, eliminating that as a challenge, is the first step in this, what I call, if not spontaneous order in a Hayekian sense, 409 00:46:42.020 --> 00:46:48.260 at least a spontaneous nudge or two to get people in terms of division of labor to begin 410 00:46:48.260 --> 00:46:54.020 concentrating on one or another aspect of the general theory and take the thing down. 411 00:46:54.020 --> 00:46:56.260 Once and for all, just take it down. 412 00:46:56.260 --> 00:47:02.780 Then once that is done, then we move to the next stage of teaching, which can be in part 413 00:47:02.780 --> 00:47:07.540 conventional forms of textbooks, although I don't think it's probably the best way to 414 00:47:07.540 --> 00:47:13.860 to do it, where we go to videos, where we go to short presentations, again, the ants 415 00:47:13.860 --> 00:47:16.100 versus the elephant. 416 00:47:16.100 --> 00:47:23.740 The other side has controlled this distribution of ideas, and the old A.J. Liebling comment 417 00:47:23.740 --> 00:47:31.220 that freedom of the press is a great thing if you own one was true, but now because of 418 00:47:31.220 --> 00:47:39.380 of the Web and because of programs like Wordpress, anybody can have a printing press and because 419 00:47:39.380 --> 00:47:46.460 of Google it is possible that the ideas will be found and then that amazing thing begins 420 00:47:46.460 --> 00:47:53.500 to take over that I labeled years ago the word mouse that the ideas begin to spread. 421 00:47:53.500 --> 00:48:00.760 People are forwarding videos, forwarding whatever it is they've found that they think is fascinating 422 00:48:00.760 --> 00:48:05.520 to their friends. And now this phenomenon, really, this phenomenon with Facebook, which 423 00:48:05.520 --> 00:48:11.680 is beyond me, but I understand what's going on. Facebook is just extraordinary. The number 424 00:48:11.680 --> 00:48:16.460 of people who can be mobilized. And this is what shook Washington, the core, shook them 425 00:48:16.460 --> 00:48:23.460 to the core when Ron Paul raised over $20 million. It couldn't be true. It could not 426 00:48:23.460 --> 00:48:29.860 be true. I remember watching, it's on YouTube, remember watching the interview on Face the 427 00:48:29.860 --> 00:48:37.600 of the Nation with Schieffer who really sat there with his jaw down listening to Ron describe 428 00:48:37.600 --> 00:48:44.480 how the money just kind of rolled in. 429 00:48:44.480 --> 00:48:46.040 It stunned them. 430 00:48:46.040 --> 00:48:48.440 Now this is what they're up against. 431 00:48:48.440 --> 00:48:50.620 And the elephant can stomp. 432 00:48:50.620 --> 00:48:55.080 And the elephant can dance, but there are a lot of ants. 433 00:48:55.080 --> 00:49:00.760 And so what I am recommending is that we take advantage of this particular opportunity in 434 00:49:00.760 --> 00:49:01.760 history. 435 00:49:01.760 --> 00:49:08.480 That Cain's got a free ride and almost from a point of view of Austrian economics, he 436 00:49:08.480 --> 00:49:10.280 almost still gets a free ride. 437 00:49:10.280 --> 00:49:16.400 Now he would not have had a free ride if Murray Rothbard had not died in 95 and had been able 438 00:49:16.400 --> 00:49:19.840 to finish the third volume of his history of economic thought. 439 00:49:19.840 --> 00:49:23.120 The free ride clearly would have ended, but he did die. 440 00:49:23.120 --> 00:49:31.820 So you have to move in 15 years later and begin filling that gap. 441 00:49:31.820 --> 00:49:40.140 And I've talked about the various media that you can use, right down to what we all love, 442 00:49:40.140 --> 00:49:51.360 the rap video, the Keynes-Hayek rap video, tremendous presentation, creative, but that 443 00:49:51.360 --> 00:49:56.160 only is sort of a tantalizing hint at what can be done. 444 00:49:58.160 --> 00:50:03.160 And I'm hoping that those of you who are here 445 00:50:03.500 --> 00:50:07.600 will say, I think I'm gonna devote some years to doing this. 446 00:50:07.600 --> 00:50:11.840 Now it may be, for some of you who are non-tenured, 447 00:50:11.840 --> 00:50:15.280 it may be a career derailing operation, 448 00:50:16.660 --> 00:50:20.720 but Mises had his career derailed on several occasions. 449 00:50:21.360 --> 00:50:28.960 And Rothbard never had a career through the first, what, 30 years of his career. 450 00:50:28.960 --> 00:50:34.360 He didn't have a career because of his position, but he didn't care and neither did Mises. 451 00:50:34.360 --> 00:50:39.460 And it's that attitude that does make the difference. That is, I don't care. 452 00:50:39.460 --> 00:50:45.260 And Murray would have loved the technology. I realized that he sat there with his electric typewriter 453 00:50:45.260 --> 00:50:53.020 And he resisted until his dying day the idea of even correction tape on a typewriter. 454 00:50:53.020 --> 00:51:01.660 But he would have loved the web because of the enormous power to get ideas out cheap and fast. 455 00:51:01.660 --> 00:51:06.140 And ideas can compete now. 456 00:51:06.140 --> 00:51:11.180 And we need to have a full-scale frontal assault on the general theory. 457 00:51:11.180 --> 00:51:17.380 And then once that's done, take it out to all the other areas of communication. 458 00:51:17.380 --> 00:51:25.980 We have positioned ourselves in terms of a piece of economic analysis published in 1912 459 00:51:25.980 --> 00:51:34.580 that has proven accurate time and time again, and proven unsaleable time and time again. 460 00:51:34.580 --> 00:51:36.780 That's the problem. 461 00:51:36.780 --> 00:51:44.420 But now we're into a situation in which you can deliver, free of charge, except for time, 462 00:51:44.420 --> 00:51:48.900 ideas that challenge the whole system. 463 00:51:48.900 --> 00:51:54.540 And I remember Matt Drudge, several years ago, almost ten years ago, was invited, I 464 00:51:54.540 --> 00:52:00.980 think, to speak to the National Association of whoever invited him. 465 00:52:00.980 --> 00:52:06.700 I think it was somebody, it was a group connected with reporters. 466 00:52:06.700 --> 00:52:08.940 And he said, do you have any ideas? 467 00:52:08.940 --> 00:52:12.140 So I dropped him an email and he actually got it and he read it and responded. 468 00:52:12.140 --> 00:52:17.020 I said, look what the situation is here. 469 00:52:17.020 --> 00:52:23.860 The web has destroyed the function of the gatekeepers. 470 00:52:23.860 --> 00:52:24.860 And it has. 471 00:52:24.860 --> 00:52:27.300 And do you realize it's the first time in the history of man, or this is true, as far 472 00:52:27.300 --> 00:52:31.900 as I can tell, first time in man's history, or this is true, the gatekeepers were doomed. 473 00:52:31.900 --> 00:52:37.260 Oh, yeah, sure, they're at the gate, but the walls are down. 474 00:52:37.260 --> 00:52:39.380 The walls are down. 475 00:52:39.380 --> 00:52:42.540 They can't stop the flow of information. 476 00:52:42.540 --> 00:52:48.940 The only area where they're really still in power is the collegiate degree-granting system, 477 00:52:48.940 --> 00:52:56.680 and that is because they have government control over what is defined as a university degree. 478 00:52:56.680 --> 00:53:01.280 So they still maintain that monopoly as a kind of fiefdom. 479 00:53:01.280 --> 00:53:04.340 But it's the last, it is the last. 480 00:53:04.340 --> 00:53:11.840 The rest of it, in the immortal words of Mr. T, is going down. 481 00:53:11.840 --> 00:53:13.800 The gates are down. 482 00:53:13.800 --> 00:53:19.640 And we are coming in with a systematic approach to these questions, with a lot of documentation, 483 00:53:19.640 --> 00:53:29.600 although we can always use more, to say Keynes was wrong in 36 and he is wrong now and his 484 00:53:29.600 --> 00:53:35.600 His disciples are wrong and they are in control and they're either going to destroy the dollar 485 00:53:35.600 --> 00:53:40.920 or if in its wisdom finally the Federal Reserve pulls a Volcker, we're going to get another 486 00:53:40.920 --> 00:53:46.800 massive recession maybe leading to a depression. 487 00:53:46.800 --> 00:53:48.820 But at least we've got the analysis. 488 00:53:48.820 --> 00:53:51.360 We have got the background. 489 00:53:51.360 --> 00:54:01.480 We have got, if you date it at 1912, we've got 98 years of an answer to these people. 490 00:54:01.480 --> 00:54:10.440 And I think now we should take advantage, if we can, as we can, of undermining the system. 491 00:54:10.440 --> 00:54:17.320 The old line about if you see something wobble, push it, I think is where the Keynesians are 492 00:54:17.320 --> 00:54:18.320 now. 493 00:54:18.320 --> 00:54:20.280 They seem to be in place. 494 00:54:20.280 --> 00:54:28.480 They seem to be unmovable, but they are no more unmovable than the status of the capital 495 00:54:28.480 --> 00:54:34.540 markets and the next time we have another massive breakdown, they're going to do the 496 00:54:34.540 --> 00:54:39.200 same old thing and it isn't going to work and we have positioned ourselves to tell people 497 00:54:39.200 --> 00:54:48.200 why it won't work and to give them a systematic, comprehensive outlook and analysis of economics 498 00:54:48.200 --> 00:54:49.460 as an alternative. 499 00:54:49.460 --> 00:54:53.900 The old line is you can't beat something with nothing, and we are not going in trying to 500 00:54:53.900 --> 00:54:57.460 beat something with nothing. 501 00:54:57.460 --> 00:55:03.460 The only problem we've had is they have been able, through the gatekeeping system, to lock 502 00:55:03.460 --> 00:55:05.060 us out for a long time. 503 00:55:05.060 --> 00:55:11.880 I think that's breaking down, and a big part of it is what the Mises Institute has done 504 00:55:11.880 --> 00:55:17.960 and LewRockwell.com has done, taken advantage of the digits. 505 00:55:17.960 --> 00:55:22.640 And I think they're going to be hard-pressed to catch up. I really do. 506 00:55:22.640 --> 00:55:27.160 I think this is an outstanding opportunity that we have in front of us. 507 00:55:27.160 --> 00:55:36.680 And I would say get back to your word processors, find a topic, buy a copy of the General Theory 508 00:55:36.680 --> 00:55:41.880 and begin picking some area of that book, if it's only for a monograph, if it's only 509 00:55:41.880 --> 00:55:51.280 for a blog, it doesn't matter, begin to take on that book which has been like an albatross 510 00:55:51.280 --> 00:55:54.520 around our necks for over 70 years. 511 00:55:54.520 --> 00:55:55.960 I think it can be done. 512 00:55:55.960 --> 00:55:58.680 I think this is the group to do it. 513 00:55:58.680 --> 00:56:04.840 And I would encourage all of you not to take the approach that Hayek took all those years 514 00:56:04.840 --> 00:56:07.880 ago to say it's just not worth my time. 515 00:56:07.880 --> 00:56:13.080 It was worth his time and it is worth our time and I encourage you to get at it.