WEBVTT NOTE How Ludwig von Mises Dispels Current Myths About Capitalism 1 00:00:00.000 --> 00:00:05.000 The title in the program was the paper I gave last year, so I don't know how that happened. 2 00:00:05.000 --> 00:00:10.280 Professor Gerson, do you like putting Balkan Sobrani tobacco in your pipe? 3 00:00:10.280 --> 00:00:15.440 Well, you were my professor back in 1977, my professor of metaphysics, 4 00:00:15.440 --> 00:00:20.720 because I remember you had a pipe and you always had that Turkish... 5 00:00:20.720 --> 00:00:25.800 Yeah, you always smoked Balkan Sobrani, so it's the same guy. I haven't seen you since, 6 00:00:25.800 --> 00:00:28.160 but what a coincidence. 7 00:00:28.160 --> 00:00:31.160 Here we are and we're back to back, yeah, with the same... 8 00:00:31.160 --> 00:00:38.160 Yeah, I took up smoking a pipe after that class too. 9 00:00:38.160 --> 00:00:41.160 I still smoke mine sometimes. 10 00:00:41.160 --> 00:00:43.160 Okay. 11 00:00:43.160 --> 00:00:45.160 Yes, I want to talk about... 12 00:00:45.160 --> 00:00:48.160 I have sort of two parts to my paper and of course I'll have to... 13 00:00:48.160 --> 00:00:51.160 I think I have about 20 minutes, is that okay? 14 00:00:51.160 --> 00:00:53.160 Okay, I'll read my abstract first. 15 00:00:53.160 --> 00:00:57.160 The purpose of this paper will be to take a look at Cato's work on agriculture. 16 00:00:57.160 --> 00:01:03.240 of Agriculture, Cato lived in the second century before Christ, to see how Romans organized 17 00:01:03.240 --> 00:01:08.120 agricultural activity. This paper is not meant to be a purely historical reflection, but 18 00:01:08.120 --> 00:01:12.680 the purpose is to see whether there are any elements of Roman practice which could be 19 00:01:12.680 --> 00:01:18.440 applied in a world of highly subsidized agricultural activity today. For example, Cato teaches 20 00:01:18.440 --> 00:01:24.240 that your barn should be bigger than your house, showing propensity towards frugality, 21 00:01:24.240 --> 00:01:26.160 simplicity and investment. 22 00:01:26.160 --> 00:01:32.600 Also, I would like to ask thus, is the small farm an economic possibility today in the 23 00:01:32.600 --> 00:01:34.520 world of industrial farming? 24 00:01:34.520 --> 00:01:37.020 Is the small farm worth promoting? 25 00:01:37.020 --> 00:01:42.920 Can any one country also unilaterally reduce its subsidies and maintain its agricultural 26 00:01:42.920 --> 00:01:45.620 sovereignty at the same time? 27 00:01:45.620 --> 00:01:50.840 What would be the consequences of liberalism in agriculture today, good or bad? 28 00:01:50.840 --> 00:01:54.040 And can we learn anything from the pragmatism of the Romans? 29 00:01:54.040 --> 00:01:57.600 And for those of you that were at the session this morning, as you can see, my paper is 30 00:01:57.600 --> 00:02:04.040 somewhat similar to the one that was given this morning on farming. 31 00:02:04.040 --> 00:02:05.720 Now I'd like to say a few words. 32 00:02:05.720 --> 00:02:11.440 I live in Quebec, and so I can only sort of speak from my region, which I know quite well. 33 00:02:11.440 --> 00:02:16.240 And in Quebec, we have somewhat of a crisis in farming today. 34 00:02:16.240 --> 00:02:21.440 There is a lot of farming activity in Quebec, but I think it's the same thing everywhere. 35 00:02:21.440 --> 00:02:27.040 It's extremely expensive now to acquire a farm. It's almost impossible for young couples, 36 00:02:27.040 --> 00:02:33.080 let's say in their 20s, to acquire a farm. Any farm will cost at least a million dollars. 37 00:02:33.080 --> 00:02:37.500 And if you want to, for example, build a farm from scratch, let's say a hog farm with stables 38 00:02:37.500 --> 00:02:43.240 being about 300 feet long and that could perhaps keep a thousand hogs, you're looking at about 39 00:02:43.240 --> 00:02:46.720 five million dollars. That's including the purchase of the land, a couple hundred acres 40 00:02:46.720 --> 00:02:53.720 of Money, The Theory of Money and Credit of Money and Credit of Money and Credit of Money 41 00:03:16.720 --> 00:03:23.720 Gage à la mort, in French it means it's like a death wish, it's like a bond to write till death. 42 00:03:23.720 --> 00:03:28.720 So it's a very tough way to start when you're mortgaged for over a million dollars. 43 00:03:28.720 --> 00:03:33.720 Another big problem with the farms today too is these large farms is that 39% of the farms 44 00:03:33.720 --> 00:03:37.720 do not have anyone to take them over. It means there's no succession. 45 00:03:37.720 --> 00:03:42.720 The children of the farmers do not want to stay on the farm. They've left the farm. 46 00:03:42.720 --> 00:03:43.720 of the Farm 47 00:03:43.720 --> 00:03:49.320 And even in the cases where one of the children wants to take over the farm, it's not often 48 00:03:49.320 --> 00:03:53.160 a very happy situation for the farmer, because a lot of these farmers, there are couples 49 00:03:53.160 --> 00:03:58.680 who are maybe in their late 50s, they've worked very hard for 30 years, and as you know in 50 00:03:58.680 --> 00:04:04.260 farming it's 7 days a week, you really can't take holidays or go down south, it's a lot 51 00:04:04.260 --> 00:04:09.320 of work, and they don't necessarily want to give their farm to their kids, they would 52 00:04:39.320 --> 00:04:50.320 Now, in Quebec, and this was confirmed to me by a bank, that 50% of the farms don't even make any profit at all, and that is with the subsidies they get. 53 00:04:50.320 --> 00:05:00.320 Despite the subsidies, only half are making some kind of a profit, and on most farms, either the husband or the wife has a day job, because they cannot survive just from the farming. 54 00:05:00.320 --> 00:05:09.320 Now, also we have challenges in the sense that we're in a very cold climate and it's very hard to compete with farms in southern areas like here or in Brazil. 55 00:05:09.320 --> 00:05:23.320 So, what is happening is that a lot of farms are being dismantled and this is leading to a certain risk in terms of, like I said, agricultural sovereignty or as you said this morning, food security. 56 00:05:23.320 --> 00:05:34.560 If farms are going to waste, how can a society, let's say in our case a certain province, 57 00:05:34.560 --> 00:05:38.880 how can we be sure of being able to feed ourselves in the future? 58 00:05:38.880 --> 00:05:43.380 If you rely just on imports, you can say, well you can import food, well that's fine, 59 00:05:43.380 --> 00:05:47.760 but the cost of transportation and oil is going up all the time and food can become 60 00:05:47.760 --> 00:05:49.880 very expensive in that sense. 61 00:05:49.880 --> 00:05:54.200 So it is worth saving, it is worth working towards. 62 00:05:54.200 --> 00:05:59.360 Now also, of course, the subsidies have distorted things to a great extent. 63 00:05:59.360 --> 00:06:05.080 For example, in the 1980s, the Quebec government was subsidizing the creation of hog farms, 64 00:06:05.080 --> 00:06:08.480 but today they're trying to, they've put a moratorium on hog farms. 65 00:06:08.480 --> 00:06:13.940 You cannot create a hog farm today because the environmental movement now is very much 66 00:06:13.940 --> 00:06:23.780 against hog farming and for different reasons that you could perhaps understand. 67 00:06:23.780 --> 00:06:28.580 And another thing is that the subsidies, the system of subsidies that exists has created 68 00:06:28.580 --> 00:06:31.800 the fact that farm equipment is extremely expensive. 69 00:06:31.800 --> 00:06:36.220 And I'm not just talking about machinery, large machineries, tractors or combines, but 70 00:06:36.220 --> 00:06:43.060 even the smallest things like small thermostats and ventilators, regulators in the stables 71 00:06:43.060 --> 00:07:08.060 The whole situation seems to be into a big mess, but it's not a joke, it's a very serious thing. 72 00:07:08.060 --> 00:07:12.060 Also in the world today, there is going to be a food crisis. 73 00:07:12.060 --> 00:07:17.640 Food Crisis, we're already having food riots around food and many parts of the world there's 74 00:07:17.640 --> 00:07:23.260 a desertification going on, in other words deserts are growing, in China more and more 75 00:07:23.260 --> 00:07:26.780 the deserts are expanding, in Australia the deserts are growing, there are problems of 76 00:07:26.780 --> 00:07:30.220 drought even in the Canadian prairies. 77 00:07:30.220 --> 00:07:37.060 So the farm areas that are left somehow have to stay productive otherwise humanity will 78 00:07:37.060 --> 00:07:39.980 be in big trouble. 79 00:07:39.980 --> 00:08:09.980 Now my question is, also as you said this morning in your paper with the problem of subsidies is that of course the subsidies go to the biggest industrial farms and the small farmer gets almost nothing because a lot of the small farmers are working under contract to bigger companies and the bigger companies are the producers, they get the subsidies and then they put the squeeze on the small farmer who has to basically work for peanuts. Now another problem 80 00:08:09.980 --> 00:08:15.980 The problem that this subsidies has created is a lot of the big industrial farms are very, very highly leveraged. 81 00:08:15.980 --> 00:08:19.980 They've had their big expansion because they've borrowed money, huge amounts of money, 82 00:08:19.980 --> 00:08:24.980 knowing that they're going to have the subsidies to make their payments. 83 00:08:24.980 --> 00:08:27.980 So this is all a very complex situation. 84 00:08:27.980 --> 00:08:32.980 What I would like to say is that we have to somehow find a way back to the family farm. 85 00:08:32.980 --> 00:08:37.980 Now, for a family to survive, I have an old book I should have brought it. 86 00:08:37.980 --> 00:08:42.620 of the Garage Sale is called Five Acres in Independence. It was written in the 1930s 87 00:08:42.620 --> 00:08:47.700 at the height of the depression to get to teach people how to farm their five acres 88 00:08:47.700 --> 00:08:54.240 and survive. And maybe a small farm today could be a hundred acres, but somehow this 89 00:08:54.240 --> 00:09:01.240 has to be re-encouraged and we have to find a way to get back to this model and that people 90 00:09:01.240 --> 00:09:04.240 and that people would take pleasure in working on a farm. 91 00:09:04.240 --> 00:09:10.240 And I came across this text by the Roman statesman Cato. 92 00:09:10.240 --> 00:09:12.240 And this text is from the second century. 93 00:09:12.240 --> 00:09:15.240 And when I read it a few years ago, I was just fascinated by it. 94 00:09:15.240 --> 00:09:17.240 And I thought, how much wisdom. 95 00:09:17.240 --> 00:09:26.240 And the text, Cato was a statesman who grew up on a farm himself. 96 00:09:26.240 --> 00:09:28.240 And I'll just read a little bit. 97 00:09:28.240 --> 00:09:34.260 Mises growing up on the farm, he acquired the qualities of simplicity, frugality, honesty, 98 00:09:34.260 --> 00:09:40.520 austerity and patriotism, which were to become the typical Roman virtues. And from his youth, 99 00:09:40.520 --> 00:09:47.160 he also acquired a love for the soil. Nevertheless, he went on to do a military and political 100 00:09:47.160 --> 00:09:54.900 career and then he became a very, very large-scale farmer. He wrote about 150 books and he was 101 00:09:54.900 --> 00:10:24.900 He was actually one of the first self-published author in history, kind of like the rich dad, poor dad guy, he was extremely popular and he also used to, he held some hundred and seventy speeches in front of the Roman Senate and he was once on a mission in Carthage and he hated the Carthaginians and he used to end every speech by saying Carthage must be destroyed and that started the Third Punic War, I mean the Senate then followed his advice. Anyways, of all his writings and all 102 00:10:24.900 --> 00:10:28.660 All his work, everything is lost. We only have fragments that we can read in Cicero 103 00:10:28.660 --> 00:10:35.380 and other authors, except for one book, which is called De Agricultura, on agriculture. 104 00:10:35.380 --> 00:10:43.580 And it is a fascinating book that covers all aspects of agriculture, from land, from equipment, 105 00:10:43.580 --> 00:10:48.440 from planting, the different types of crops, talks about land reform. This is a senior 106 00:10:48.440 --> 00:10:54.500 statesman writing. And at the end of the book, he even gives his own recipe for cheesecake. 107 00:10:54.500 --> 00:11:02.580 So, he covers everything. Now, let me read a little bit. Marcus Cato begins his book 108 00:11:02.580 --> 00:11:07.420 De Agricultura by admitting there are some activities which are more profitable than 109 00:11:07.420 --> 00:11:12.980 farming such as being a trader, which by the way can also be very risky, he says, but the 110 00:11:12.980 --> 00:11:17.940 most honorable of occupations is that of the farmer and so it has been from the times of 111 00:11:17.940 --> 00:11:24.420 the ancients. And to quote Marcus Cato, the trader I consider to be an energetic man and 112 00:11:24.420 --> 00:11:30.180 and one bent on making money, but as I said above, it is a dangerous career and one subject 113 00:11:30.180 --> 00:11:31.780 to disaster. 114 00:11:31.780 --> 00:11:36.780 On the other hand, it is from the farming class that the bravest men and sturdiest soldiers 115 00:11:36.780 --> 00:11:43.260 come and their calling is most highly respected, their livelihood is most assured and is looked 116 00:11:43.260 --> 00:11:49.340 upon with the least hostility and those who are engaged in that pursuit are least inclined 117 00:11:49.340 --> 00:11:50.740 to be disaffected. 118 00:11:50.740 --> 00:11:56.020 Cato gives his advice to one who is thinking about buying a farm. 119 00:11:56.020 --> 00:12:00.280 This book is a practical manual for farmers or those wishing to acquire a farm. 120 00:12:00.280 --> 00:12:03.980 He says, do not rush into it and look around very carefully. 121 00:12:03.980 --> 00:12:07.220 It is not enough to just go over it once. 122 00:12:07.220 --> 00:12:10.180 He recommends examining the investment very carefully. 123 00:12:10.180 --> 00:12:14.400 First of all, the land must be in such a place where you will have pleasure each time you 124 00:12:14.400 --> 00:12:15.620 visit it. 125 00:12:15.620 --> 00:12:18.340 Then he writes, look at the neighbor's farms. 126 00:12:18.340 --> 00:12:22.780 Notice how the neighbors keep up their places. If the district is good, they should be well 127 00:12:22.780 --> 00:12:28.180 kept. The farm should be located where the climate is good, not subject to storms, and 128 00:12:28.180 --> 00:12:33.100 if possible, it should lie at the foot of a mountain and face south. There should be 129 00:12:33.100 --> 00:12:37.500 workers living nearby, water sources should be abundant, and the farm should be close 130 00:12:37.500 --> 00:12:43.480 to a town or a seaport or a good road. It is best if the farm is in an area where ownership 131 00:12:43.480 --> 00:12:48.400 does not change very often and where those who have sold their farms are sorry to have 132 00:12:48.400 --> 00:12:50.320 done so. 133 00:12:50.320 --> 00:12:55.160 It is best to buy the farm from someone who is a good farmer and a good builder. 134 00:12:55.160 --> 00:12:58.400 Observe too how well the farm is equipped. 135 00:12:58.400 --> 00:13:03.320 If there are numerous oil presses and wine vats, you can know that the farm has a good 136 00:13:03.320 --> 00:13:04.320 yield. 137 00:13:04.320 --> 00:13:07.760 If there are few, you know that the yield is poor. 138 00:13:07.760 --> 00:13:10.680 But more important than the equipment is the location. 139 00:13:10.680 --> 00:13:13.200 You don't want to be paying just for equipment. 140 00:13:13.200 --> 00:13:16.120 It is the location which is to be the principal value. 141 00:13:16.120 --> 00:13:21.240 And Cato says, and I quote, See that it is equipped as economically as possible. 142 00:13:21.240 --> 00:13:23.280 Remember that a farm is like a man. 143 00:13:23.280 --> 00:13:28.800 However great the income, if there is extravagance, little is left. 144 00:13:28.800 --> 00:13:32.820 When one acquires the farm, the first thing is to go over everything. 145 00:13:32.820 --> 00:13:37.440 When the master arrives at the farmstead, after paying his respects to the god of the 146 00:13:37.440 --> 00:13:42.360 household, let him go over the whole farm, if possible, the same day. 147 00:13:42.360 --> 00:13:46.240 Then the owner must meet the farm manager and learn what has been done recently and 148 00:13:46.240 --> 00:13:47.840 what is still to be done. 149 00:13:47.840 --> 00:13:53.160 Afterwards, cash accounts must be checked, grain accounts, purchases, etc. 150 00:13:53.160 --> 00:13:58.720 Then decisions must be made, and orders given, and do this in writing, says Cato. 151 00:13:58.720 --> 00:14:02.360 Cato advises that nothing be kept on the farm which is not needed. 152 00:14:02.360 --> 00:14:06.240 Sell superfluous things, don't keep old stock. 153 00:14:06.240 --> 00:14:12.080 Sell worn out oxen, blemished cattle, blemished sheep, wool, hides, an old wagon, old tools 154 00:14:12.080 --> 00:14:26.520 Keto advises that, much before building, planting has to be done first. 155 00:14:26.520 --> 00:14:30.160 The farmer should think a long time about building, but planting is a thing not to be 156 00:14:30.160 --> 00:14:32.200 thought about but done. 157 00:14:32.200 --> 00:14:38.280 You should build when you reach the age of 36, but only if the land has been planted. 158 00:14:38.280 --> 00:14:41.280 Then before the house must come the barn. 159 00:14:41.280 --> 00:14:44.280 It is well for the master to have a well-built barn. 160 00:14:44.280 --> 00:14:48.280 When you do build your house, build within your means, Cato says. 161 00:14:48.280 --> 00:14:52.280 Also, make the house a comfortable one so that you spend more time there. 162 00:14:52.280 --> 00:14:55.280 If you build substantially on a good farm, 163 00:14:55.280 --> 00:14:58.280 placing the house in a good situation 164 00:14:58.280 --> 00:15:01.280 so that you can live comfortably in the country, 165 00:15:01.280 --> 00:15:03.280 you will like to visit it and will do so oftener. 166 00:15:03.280 --> 00:15:06.280 The farm will improve, there will be less wrongdoing 167 00:15:06.280 --> 00:15:09.280 and you will receive greater returns. 168 00:15:09.280 --> 00:15:14.880 Also, be a good neighbour, Cato writes. It will be good for business. Be a good neighbour 169 00:15:14.880 --> 00:15:19.480 and do not let your people commit offences. If you are popular in the neighbourhood, it 170 00:15:19.480 --> 00:15:24.720 will be easier for you to sell your produce, easier to let out your work, easier to secure 171 00:15:24.720 --> 00:15:29.160 extra hands. If you build, the neighbours will help you with their work, their teams 172 00:15:29.160 --> 00:15:34.160 and their materials. If trouble comes upon you, which God forbid, they will be glad to 173 00:15:34.160 --> 00:16:04.160 It is important to find a good manager for the farm. He must not steal. He must settle disputes among the slaves and punish them in proportion to their faults. He must see that the servants are comfortably provided for and do not suffer from cold or hunger. In other words, he must take proper care of the workforce and, in today's terms, pay them a proper wage. The manager must not tolerate any nonsense or shady work, but he must also know how to praise work well done. 174 00:16:04.160 --> 00:16:10.840 Well Done, says Cato. As you can see, it's very modern in his psychology. He must express 175 00:16:10.840 --> 00:16:17.240 his appreciation of good work so that others may take pleasure in well-doing. Furthermore, 176 00:16:17.240 --> 00:16:21.800 the manager must be loyal to the master. He must keep the servants busy and see that the 177 00:16:21.800 --> 00:16:26.320 master's orders are carried out. He must not assume that he knows more than the master. 178 00:16:26.320 --> 00:16:30.680 He must consider the master's friends his own friends. He must extend credit to no one 179 00:16:30.680 --> 00:16:51.320 Kato then also goes into the importance of rationality in business decisions in the farm. 180 00:16:51.320 --> 00:16:56.020 The master must not consult fortune tellers or prophets or diviners or astrologers. 181 00:16:56.020 --> 00:17:02.460 In other words, religious beliefs must give thankfulness to the gods, but basically decisions 182 00:17:02.460 --> 00:17:03.460 are made rationally. 183 00:17:03.460 --> 00:17:08.380 And all of this I found very much, just to finish off, I could go on, but just to finish 184 00:17:08.380 --> 00:17:15.340 off saying, all of this is very much in line with the writings of Ludwig von Mises and 185 00:17:15.340 --> 00:17:23.580 the sort of common sense approach to business and the also reason being our main criteria. 186 00:17:23.580 --> 00:17:29.340 And you have all of this in this ancient text by Cato. 187 00:17:29.340 --> 00:17:32.140 And I think I'll stop there just to respect the time period.