WEBVTT NOTE The Rhetoric of Economics 1 00:00:00.000 --> 00:00:08.240 I have to start by thanking the Mises Institute and the organizers of this conference, 2 00:00:08.240 --> 00:00:14.600 in particular, Professor Joseph Salerno, for allowing a non-traditional scholar. 3 00:00:14.600 --> 00:00:19.800 And I call myself a scholar now that this is the Scholar's Conference. 4 00:00:19.800 --> 00:00:23.400 And I'm also from a non-traditional institution. 5 00:00:23.400 --> 00:00:30.560 and the University of Phoenix is not known as a hotbed of intellectual endeavors. 6 00:00:30.560 --> 00:00:38.200 I am non-traditional because I don't have a PhD in economics, I'm largely self-taught 7 00:00:38.200 --> 00:00:45.340 and after wandering in the desert for many years, I found my home in the Austrian School 8 00:00:45.340 --> 00:00:52.400 of Economics, so I am very happy to be here because I feel like I'm coming home. 9 00:00:52.400 --> 00:01:05.400 In that quest for knowledge, I came across Didri McCloskey. And this is from Peter Betke. 10 00:01:05.400 --> 00:01:13.480 He says that McCloskey's Bourgeois Virtues is one of the most ambitious and important 11 00:01:13.480 --> 00:01:20.240 works published in classical liberal political economy for at least half a century. He goes 12 00:01:20.240 --> 00:01:26.700 It goes on to say that only Mises's Human Action and Hayek's The Constitution of Liberty 13 00:01:26.700 --> 00:01:32.400 aspire to have the same breadth and scope as works written by economists of a classical 14 00:01:32.400 --> 00:01:34.040 liberal persuasion. 15 00:01:34.040 --> 00:01:41.400 So this is a thinker of the Austrian School of Economics that says that McCloskey is right 16 00:01:41.400 --> 00:01:43.760 up there with Mises and Hayek. 17 00:01:43.760 --> 00:01:51.340 So I got to read this. I absolutely must read in my quest for knowledge. And the first thing 18 00:01:51.340 --> 00:02:02.440 that I discovered when I researched McCloskey was that before she was Didri, she was Donald. 19 00:02:02.440 --> 00:02:13.120 To me, macho, Latino, I mean, talk about preconceived ideas. I was predisposed to absolutely disagree 20 00:02:13.120 --> 00:02:20.800 with whatever she said. What a surprise. Just to give you an idea of, I'm sure you're all 21 00:02:20.800 --> 00:02:26.720 familiar with her, but one of the things that struck me is how much of a renaissance man 22 00:02:26.720 --> 00:02:39.480 she is. I mean, renaissance man. Her job title at the University of Illinois is Distinguished 23 00:02:39.480 --> 00:02:44.760 Professor of Economics, History, English and Communications 24 00:02:44.760 --> 00:02:48.360 and she's also an adjunct in philosophy and classics. 25 00:02:48.360 --> 00:02:52.040 I mean renaissance all the way. 26 00:02:52.040 --> 00:02:56.920 For five years she was the Timberg Distinguished Professor of Economics, 27 00:02:56.920 --> 00:03:01.000 Philosophy, History, English and Arts and Culture 28 00:03:01.000 --> 00:03:04.200 at the Erasmus University of Rotterdam. 29 00:03:04.200 --> 00:03:07.560 So she's not only recognized here in the US but she's also 30 00:03:07.560 --> 00:03:19.560 Boejois Dignity is actually the second volume. 31 00:03:19.560 --> 00:03:27.560 Bethke was talking about the first volume of what is going to be a six or seven or eight volume opus magnus. 32 00:03:27.560 --> 00:03:36.560 A draft of the third volume is available online for your review and she's taking comments from anybody that wants to read her stuff. 33 00:03:36.560 --> 00:03:52.560 And so you'll notice on my quotes that I reference the online version. If I bought all the books that I found interesting, I couldn't buy these nice suits. 34 00:03:52.560 --> 00:04:07.200 So, in her Bourgeois books series, she wants to understand, she wants to have the explanation 35 00:04:07.200 --> 00:04:14.640 of why the industrial revolution happened. Why? I think why is a very important key term 36 00:04:14.640 --> 00:04:19.160 here. Take the why and put it in your pocket, you're going to need it at the end of my presentation. 37 00:04:19.160 --> 00:04:33.160 Why is very important. She goes on to discuss the different explanations of why the industrial revolution happened. 38 00:04:33.160 --> 00:04:38.160 Some people say it was about technology. Some people say it was about private property. 39 00:04:38.160 --> 00:04:43.160 Some people say it was about the accumulation of capital. She claims that it's nothing like that. 40 00:04:43.160 --> 00:04:48.960 and you have the quotes there, it's about the dignity that was given to the bourgeoisie 41 00:04:48.960 --> 00:04:53.360 and it was about the liberty to innovate that was given to the bourgeoisie. 42 00:04:53.360 --> 00:04:59.560 And she notes that it was the first, the Spanish scholastics, 43 00:04:59.560 --> 00:05:04.360 the same people we in the Austrian School of Economics claim to be the founders of economics, 44 00:05:04.360 --> 00:05:10.960 the ones that gave this new dignity and this liberty to the bourgeois. 45 00:05:10.960 --> 00:05:19.960 So she claims that the change that allowed the Industrial Revolution to happen was actually a change in rhetoric. 46 00:05:19.960 --> 00:05:24.960 It was the way we looked and this dignity we afforded to the bourgeois. 47 00:05:24.960 --> 00:05:28.960 And that's the basic motivation of the thoughts that I want to share with you today. 48 00:05:28.960 --> 00:05:37.960 McCloskey argues that it is actually the change in rhetoric that produces the explosion in GDP. 49 00:05:37.960 --> 00:05:48.360 So my thinking is, okay, so if this happens on the plus side, in order for it to be actual real and provable, it also has to happen on the minus side. 50 00:05:48.360 --> 00:06:03.560 So is the change in rhetoric against the bourgeoisie what has produced a diminishment of economic well-being? 51 00:06:03.560 --> 00:06:09.680 And things changed in 1848. 52 00:06:09.680 --> 00:06:12.760 The elite turned against innovation, 53 00:06:12.760 --> 00:06:16.360 turned against the bourgeoisie, first in nationalism, 54 00:06:16.360 --> 00:06:19.560 then in socialism, then in national socialism, 55 00:06:19.560 --> 00:06:22.800 and finally in environmentalism. 56 00:06:22.800 --> 00:06:24.000 You have to give it to her. 57 00:06:24.000 --> 00:06:28.640 I mean, talk about knowing how to write a really good phrase. 58 00:06:28.640 --> 00:06:30.000 You have to love this. 59 00:06:30.000 --> 00:06:34.160 The environmentalists are actually Marxist-Nazis. 60 00:06:39.600 --> 00:06:43.240 So, my thinking, my thoughts, 61 00:06:43.240 --> 00:06:46.680 or my modest contribution to the debate 62 00:06:46.680 --> 00:06:49.840 is containing this next quote of her. 63 00:06:49.840 --> 00:06:51.640 If the rhetoric of innovation 64 00:06:51.640 --> 00:06:53.040 is what caused the modern world, 65 00:06:53.040 --> 00:06:56.680 then if we lose it, what happens? 66 00:06:56.680 --> 00:07:01.000 And if we lose it, do we lose the modern world? 67 00:07:01.000 --> 00:07:05.480 And I claim that we are actually losing the rhetorical debate, the rhetorical battle, 68 00:07:05.480 --> 00:07:06.680 we are losing it. 69 00:07:06.680 --> 00:07:12.800 And I use as an example, just one small book, The Cube and the Cathedral, written by George 70 00:07:12.800 --> 00:07:19.840 Weigel at the time when the Europeans were discussing the new European, the EU constitution 71 00:07:19.840 --> 00:07:24.040 and decided to leave out of the preface God. 72 00:07:24.040 --> 00:07:33.720 The Christian roots of Europe are not acknowledged when they acknowledge the roots of their civilization. 73 00:07:33.720 --> 00:07:40.320 And that of course gets Wiggle very flustered and he writes this wonderful book. 74 00:07:40.320 --> 00:07:46.080 If you skip the part about the Constitution, it's actually a very interesting take on the 75 00:07:46.080 --> 00:07:58.040 cultural decline and the cultural diminishment. He called it the crisis of civilizational 76 00:07:58.040 --> 00:08:04.160 morale that is happening in Europe. And he brings a point home by saying, well, should 77 00:08:04.160 --> 00:08:10.080 we Americans look ourselves in the European mirror? It's what's happening, this crisis, 78 00:08:10.080 --> 00:08:15.000 this crisis of civilizational morale that's happening in Europe. Is it possible that we 79 00:08:15.000 --> 00:08:29.760 In his book, Weigel embraces the Christophobia argument, largely arguing that when we abandon 80 00:08:29.760 --> 00:08:36.680 our belief in Christ, when we become a secular society, then we are actually embarking on 81 00:08:36.680 --> 00:08:38.180 losing our values. 82 00:08:38.180 --> 00:08:43.020 And if you read McCloskey closely, she doesn't go there exactly all the way. 83 00:08:43.020 --> 00:08:48.380 He doesn't claim that it's losing God, but when you look at the values that she claims 84 00:08:48.380 --> 00:08:55.160 that the bourgeoisie had, well, all those are Christian values. So there's something 85 00:08:55.160 --> 00:09:06.160 here that's interesting to think about. And of course, all of this happened in Europe 86 00:09:06.160 --> 00:09:30.160 In 1848, one of the small things, but it's a change in rhetoric, we used to call our world Christendom, Christendom, the crusades, and all of that was Christendom, now all of a sudden that changes, we are now the western world, we are the western civilization. 87 00:09:30.160 --> 00:09:51.160 So we are becoming, that's just a small example of how much we become and without thinking we become a secular society and we lose our moral compass and we lose our moral values which if you believe McCloskey is what made us great because it's what made the Industrial Revolution possible. 88 00:09:51.160 --> 00:10:05.160 So, after looking at all of this and looking at the irony that God, the God of Christians is a liberating God. 89 00:10:05.160 --> 00:10:19.160 It's a God that gives us free will. It's a God, I know, I should make assumptions, but I haven't found much Christian, 90 00:10:19.160 --> 00:10:30.440 and Christian Literature in the Austrian School of Economics. Hayek, the closest I've seen 91 00:10:30.440 --> 00:10:38.200 in the traditionals, Hayek talks about, you know, it's unfortunate that I don't believe 92 00:10:38.200 --> 00:10:48.360 in God. It's unfortunate because it's important to believe in God. And Mises, George Guido 93 00:10:48.360 --> 00:10:55.560 Dr. Holtzman, in his wonderful book, Mises, The Last Night of Liberalism, reminds us that 94 00:10:55.560 --> 00:11:03.920 in 1922, in the first edition of socialism, Mises said, a living Christianity cannot exist 95 00:11:03.920 --> 00:11:08.120 side by side and within capitalism. 96 00:11:08.120 --> 00:11:17.200 Now, I think it's important to recognize that maybe some of that is changing. 97 00:11:17.200 --> 00:11:26.880 By 1950, Holtzman reminds us that Mises had softened his view on Christianity and he acknowledges 98 00:11:26.880 --> 00:11:32.280 that because, and these are not the exact words of Mises or of Holtzman, this is my 99 00:11:32.280 --> 00:11:38.680 understanding of what Holtzman says, Mises said, because God does not contradict himself 100 00:11:38.680 --> 00:11:46.240 in endowing man with this faculty of thinking, both reason and revelation are manifestations 101 00:11:46.240 --> 00:11:49.800 of the Lord's Power. 102 00:11:49.800 --> 00:11:58.520 I must note, with a lot of interest, the work of Tom Woods Jr., who was the moderator in 103 00:11:58.520 --> 00:12:00.120 the previous session. 104 00:12:00.120 --> 00:12:06.300 He's done wonderful work in explaining free markets to Catholics in his book, The Church 105 00:12:06.300 --> 00:12:07.800 on the Markets. 106 00:12:07.800 --> 00:12:17.000 Jeffrey Tucker has been actively blogging in a blog called Inside Catholic, and he blogs 107 00:12:17.000 --> 00:12:23.920 with a deep understanding of the Catholic faith and with profound faith, with deep-felt 108 00:12:23.920 --> 00:12:35.240 faith. And of course, we must note Gary North, who has written tremendous work on explaining 109 00:12:35.240 --> 00:12:40.960 The economics from an Austrian economics point of view of the gospel. 110 00:12:40.960 --> 00:12:50.560 So the most important element of Christian faith, and I'm sorry, I don't want to speak 111 00:12:50.560 --> 00:12:55.400 about Christians because I'm a Catholic, so I understand Catholic faith. 112 00:12:55.400 --> 00:13:00.280 There's a lot of commonality, but let me speak only as a Catholic. 113 00:13:00.280 --> 00:13:08.480 God died on the cross, Jesus died on the cross for my sins, to save me. But I am not saved 114 00:13:08.480 --> 00:13:17.000 because he sacrificed himself for me. I am saved when I, by my own free will, accept 115 00:13:17.000 --> 00:13:26.560 him. It is free will. The foundation of Catholicism is free will. It's the exercise of free will. 116 00:13:26.560 --> 00:13:33.160 And isn't Austrian economics based on humans exercising their free will? 117 00:13:33.160 --> 00:13:41.600 I mean, in the basis, in the fundamental dimension of the free will of men, the free will that 118 00:13:41.600 --> 00:13:49.000 was endowed to us by our Creator, we are exactly the same, the Catholics and the Austrians. 119 00:13:49.000 --> 00:13:52.680 Maybe that's the reason why I found my house here, maybe that's the reason why I found 120 00:13:52.680 --> 00:13:54.280 my home here. 121 00:13:54.280 --> 00:14:15.280 So, I conclude by saying that if the adoption of bourgeois values is what made the Industrial 122 00:14:15.280 --> 00:14:20.880 Revolution possible, then the rejection of the same values is directly linked to the 123 00:14:20.880 --> 00:14:22.160 current crisis. 124 00:14:22.160 --> 00:14:30.480 For us Americans, it's difficult to understand this because we don't have a bourgeoisie here 125 00:14:30.480 --> 00:14:31.480 in the United States. 126 00:14:31.480 --> 00:14:36.040 There's no anti-bourgeois rhetoric in the U.S. 127 00:14:36.040 --> 00:14:42.240 Now substitute bourgeois with capitalism, there is a lot of anti-capitalism rhetoric. 128 00:14:42.240 --> 00:14:47.000 And go outside of the United States, ask any of the people here who are from other countries. 129 00:14:47.000 --> 00:14:55.080 There's plenty of anti-bourgeois rhetoric in Venezuela, in Cuba, in Spain, and in many 130 00:14:55.080 --> 00:14:58.080 countries that are not American. 131 00:14:58.080 --> 00:15:00.800 So are we in the same path? 132 00:15:00.800 --> 00:15:01.800 I don't know. 133 00:15:01.800 --> 00:15:10.680 Now, being here, how can you have something beyond your conclusions? 134 00:15:10.680 --> 00:15:16.680 Please indulge me for a second, because I have been stimulated. 135 00:15:16.680 --> 00:15:24.500 This is not part of the paper, the paper is available online, but how do we go about this, 136 00:15:24.500 --> 00:15:29.440 win the battle, I cannot just say that we lose the battle, how do we win the battle? 137 00:15:29.440 --> 00:15:36.200 I teach at a management school, I teach at a business school, so I have tools from other 138 00:15:36.200 --> 00:15:37.200 worlds. 139 00:15:37.200 --> 00:15:44.560 Simon Sinek, who's an interesting thinker about leadership, claims that it's what you 140 00:15:44.560 --> 00:15:50.660 What you do, how you do it and why you do it, it's so simple, it's stupid. 141 00:15:50.660 --> 00:15:56.320 But if you look at the way companies are and the way companies become successful and the 142 00:15:56.320 --> 00:16:02.360 way leaders are successful, the successful ones are not the ones that say, this is what 143 00:16:02.360 --> 00:16:03.360 we do. 144 00:16:03.360 --> 00:16:06.440 The successful ones are not the ones that say, this is how we do it. 145 00:16:06.440 --> 00:16:10.880 The successful ones are the ones that say, why we do it. 146 00:16:10.880 --> 00:16:20.760 So now you understand why you have it in your pocket. Why? We must very humbly tell you 147 00:16:20.760 --> 00:16:28.720 that maybe we must reflect on why Austrian economics is important and maybe that's the 148 00:16:28.720 --> 00:16:34.400 message we must carry. When we talk about returning to the gold standard, when we talk 149 00:16:34.400 --> 00:16:39.480 about free markets, when we talk about a defense of capitalism, when we talk about the socialist 150 00:16:39.480 --> 00:16:46.200 Economic Calculation, we are talking about the what's and the how's. Maybe the why is 151 00:16:46.200 --> 00:16:52.640 free will. Should we be talking about free will and should we be talking about how important 152 00:16:52.640 --> 00:16:58.120 each individual is and about how important freedom is and how important it is to liberate 153 00:16:58.120 --> 00:17:06.680 ourselves? I don't know, but those thoughts came to me here in this conference. C.S. Lewis 154 00:17:06.680 --> 00:17:14.640 There's a wonderful book called the Screwtape Letters. It's about bureaucracy. It's the 155 00:17:14.640 --> 00:17:23.560 bureaucracy in hell. So Screwtape is a senior demon who's advising his nephew, who's a 156 00:17:23.560 --> 00:17:34.480 junior demon trying to conquer a soul here on earth to take to hell. And Screwtape reveals 157 00:17:34.480 --> 00:17:38.800 that one of the devil's most successful subterfuges 158 00:17:38.800 --> 00:17:43.140 is making us humans believe that he does not exist. 159 00:17:44.140 --> 00:17:46.760 So maybe that's the reason why our motto 160 00:17:47.880 --> 00:17:50.300 is yield not to evil. 161 00:17:50.300 --> 00:17:53.880 And I write evil with a capital E. 162 00:17:53.880 --> 00:17:55.320 Thank you very much.