The Theory of Money and Credit
Mr. Waller, sir.
Mr. Valentine, Waller?
Due to your refusal to pay Social Security taxes,
the Internal Revenue Service is confiscating your horses to sale at public auction.
The money will be used to fulfill your taxes.
All legal and...
You'll be refunded any money over the amount due to you.
You know that it is by my faith.
that I cannot resist we appreciate that mr. Biler yes we certainly do you
Thank you. We appreciate that.
Stephen Anthony!
By the authority of the County of Los Angeles, under the law of the dominant domain, you are ordered to leave your property.
Come on, Anthony, give it up. Stop making a fool of yourself. You don't have a chance and you know it.
Don't keep us out here all night. Come on out of there.
Stephen Anthony has held Los Angeles County sheriffs at bay for almost 10 weeks now.
You may remember that Anthony's home and several others around it were condemned
to make way for the construction of the Hollywood Motion Picture and Television Museum.
Anthony's neighbors moved out, but Anthony is holding out.
It's my house, and you're not going to take it away from me!
The Theory of Money and Credit
It was terrible. They tore the furniture apart. They tore everything in our house apart.
They shouted at us and handcuffed me and put me on the bed.
And they were violent burglars and I thought we were going to be killed.
What the hell of it was?
It was terrifying.
We didn't know it at the time, of course. They were justice department agents or federal agents.
They were looking for drugs.
The scenes you have just witnessed are based on fact.
The Amish farmer received $37.39 back from the Internal Revenue Service after it auctioned
off his horses to pay his Social Security taxes.
The man defending his home was finally arrested and his house was torn down.
The property is now a parking lot. The private museum was never built for lack of funds.
The narcotics officers had burst into the wrong house without properly identifying themselves.
The victims sued, but the agents were acquitted of all charges, and no compensation for damages
was awarded.
Okay, it's a wrap.
Oh, don't kill those lights yet.
I want to play around a little bit.
It's getting arty again. Nobody's saying anything, you guys.
Tell Lee to keep his sound rolling.
Are you still rolling, babe?
I know, it's a real thing, but it's not...
How much you may say is right, you've got to admit that what happened shows the government had good intentions.
At least it starts out that way. But when you try and force good intentions on people, it's very easy to set up a humanitarian gift team.
I tell you, Carly, you usually do.
Oh, come on, that's not necessary, is it?
Yes, it is.
There they go, there they go.
You guys never agree on anything, do you?
What do you mean, we don't?
You never agree on anything.
You're the strangest combination of people I've ever been.
Okay, up against the wall.
The bus keeps knocking.
Look, Paul, the reason you're so confused is that you can't pitch and hold it.
We're all different and we have different ideas on a lot of things.
Ideas.
Everybody's got a different one on what should be done.
When faced with a problem, most people think there ought to be a law. But who decides?
The trouble is that laws often do more harm than good.
Well, we have our viewpoint too, and we wanted to get it across straight, so that's why we're in the movie.
We figured we could play ourselves better than anyone else, and we wanted our points to be made clear.
We're saying that individuals can solve problems better than government,
and can keep their personal and economic freedoms at the same time.
Personal and Economic Freedoms, they go together, and that's what this movie is all about.
People love to take chances, take all the risk out of life, and you take all the life out of life.
I mean, the only safe way to get through life is to stay in bed so you can't trip on your own shoelaces.
Do this, don't do that. Hey, whose life is it anyway?
Well, you might say, isn't the freedom of choice you lose worth the protection you get?
But who gets to draw the line? I want to draw my own line.
I calculate my own risk, and this is my regulator.
Hey, you ever had any trouble with the police about permits or anything like that?
No, they all want to be in the movies.
Hey, Scott, what if I were to say to you that all cameramen had to be licensed by the state or federal government?
Why? I mean, why would they want to do that?
Well, porno flicks. To keep people from making porno flicks.
Now, that's a good idea. I approve.
You ever worked on a porno flick?
Oh, wait a minute. I've got to get this reaction for posterior.
Wait a minute. Wait a minute. Wait a minute.
It begins with a wall now, man.
Okay.
Once, it was boring, dumb, and the pay was lousy.
Oh, come on, Scott. You don't have to lie.
We're all your friends.
This is you, isn't this you, Susan?
Yeah, and that's good to my little girl.
As long as I do not initiate force or fraud against others,
I wish to live my own life in accordance with my own convictions.
That's nice.
But, listen, aren't there things that benefit society as a whole that should limit your freedom?
Well, I shouldn't be allowed to initiate force or fraud.
For example, I shouldn't be able to force you to give up something that's yours.
I shouldn't be allowed to force you to finance something you don't believe in or have no interest in.
Yes, I see.
If I don't have that right, then why is it legally, morally right for the government to have it?
The government should be protecting my rights, not violating them.
Once upon a time, there was a land of plenty, Ceylon.
Food was abundant, but not all were fed.
For the blessings of heaven showered not equally on all the subjects of this country.
For there are always a few who are hungrier than others.
But this was accepted as one of the vicissitudes of life,
until one day a great lady, Mrs. Bandaranaike,
brought forth a plan wherein all would be fed equally
and contentment would rule the land of Sri Lanka.
Because the less fortunate of the people had not the means to pay for the food,
It was given to them for free.
Now clearly, her intentions were benevolent.
But as is the way of best laid plans of the mongoose and the cobra,
true equality seemed elusive.
For among those people who loved equality so dearly,
those who worked to grow their food felt unequal.
They too felt they should have their food for free, but lo and behold, the more who ate for free, the fewer who tilled the fields.
The land of enchantment turned into the land of discontentment, for now there was no food, although it was for free.
Promises, promises. But now our people starve. The people's voices did plead. Patience, patience. We'll get the food. But first must come the money.
Now the discontentment grew among not only those who cried for food, but from those forced to pay the bills.
For the freer the food, the higher the taxes.
Alas, the lines grew longer, the food grew shorter, for one cannot give away what one does not have,
The voice of the people grew louder still. The press did clamor for more food.
Hush the stinging barbed the lady charge. Now is not the time for dissent. We must pull together.
The army faithful did not question. The deed was done. Silence reigned at the point of a gun.
Now all is silent and peaceful again in the land of Sri Lanka.
For problems which we cannot talk about are no problems at all.
Let me put it to you this way. It's the classic question.
How long can personal freedoms, freedom of speech, the press,
be preserved in a society that denies you your economic freedom?
But it doesn't. It doesn't at all. It's nothing. Interventionist...
I used to think that minimum wage job was a good idea.
Then I got this job helping me through night school.
Then, when the government raised the minimum wage, I thought I had it made.
But then, my boss told me that he couldn't keep me at that rate.
so now the job's gone starting next week folks around here gonna have to put down
a deposit and carry their own umbrellas around minimum wage
uh lights please around the film please
we've been talking about the housing problem in urban america which has become
an explosive problem today we're seeing a film on urban renewal
There's the government tearing down some housing units.
Pretty soon we'll be replacing them, presumably, with new housing units.
Empowered by the people's demand for urban renewal legislation,
the government from 1940 to 1971 has torn down over 500,000 housing units,
and has built some 200,000, which you will see in a moment, I presume.
It seems that the government has torn down two and a half times as many units as it's built
This is a bill at a cost of 7 to 10 billion dollars. Of the new units being erected, almost
half are lower income units. Of course, that means more than half are upper income units.
I think this must be a new government plan to keep people upwardly mobile.
No, seriously, what about the people that were displaced, the poor people who lost their
homes and then when the government tore this down and then they couldn't afford the new
house?
Well, I'm sure the government must have taken care of that problem. They're building these new apartment units.
I suppose.
Some more being torn down.
Ah, there's a new project. Pretty expansive, fairly neat looking in a way.
I'll be seeing some new projects. Oh, what's that?
Uh-huh. There she goes.
Hmm. Oh, I know what that was. That was the St. Louis Project.
The government, as I understand it, built that project to replace a slum, but unfortunately it too turned into a slum pretty soon.
So they had to tear it down again. Well, I guess it's back to the old drawing board in Washington.
I don't know if I'm married or if it's because I'm a woman, but I am being discriminated against.
Because if a married woman can have Social Security without working as her husband's dependent,
then why should I have to pay Social Security taxes?
You guys, they take it out of my payroll, but where does it go?
It isn't fair, just because I'm married and working.
Well, I knew there had to be some advantage to not being married.
I don't see much point in worrying about it.
The system is already billions of dollars in debt.
And even as a single guy, I may not get anything out of it.
It's a real fraud.
But aren't they doing something about it?
I mean, the Equal Rights Amendment and all that.
So what?
All that means is it will be equally bankrupt for everyone.
But if it wasn't for Social Security, my grandmother would be starving.
Hey, by the way, how is your grandmother doing these days?
Starvings.
Doesn't it bother any of you that people are starving everywhere?
Sure it does. A lot of things do. Housing shortages, not enough food, unemployment, all kinds of stuff.
The point is learning how best to solve these problems.
And you don't solve problems by violating people's rights.
Okay, you feel that way, but not everybody does.
Not everybody's that smart.
If you want to solve housing and food shortages, you've got to make more housing and food, right?
Means you've got to produce them, which means production is the thing that counts.
And government doesn't produce anything. People do.
Yeah, right. Millions of electronic toothbrushes, automatic door openings, tons of non-biodegradable junk.
And then they spend millions of dollars getting people to buy the worthless stuff.
They can't force anyone to buy their junk.
The Theory of Money and Credit
Government isn't perfect. Look, I admit government isn't perfect.
Paul, will you break down another camera?
I mean, really, government isn't perfect.
And I really believe in free enterprise and the free enterprise system.
But if you don't have government regulation and big business, you know, the multinationals just take over.
Today the country, tomorrow the world. That's how they feel.
If you don't have government, you've got to have government to protect from the force of big business.
Forced? What forced? How can business, operating legitimately in a free market, force anybody to do anything?
Well, the big ones have a lot of dollar power.
That kind of power, they just corner the market. They buy up all the competition, form cartels, monopolies, screw the people.
This man has a monopoly in bathtub gin. He's well organized. He provides the consumers with a product they desire.
He has a manufacturing plant, the means of distribution, salesmen and outlets.
He sets his price and he gets it. He doesn't have to worry about competition. He controls the market.
This is a government monopoly. The U.S. Postal Service. It provides the country with a needed service.
The prices aren't enough to cover its costs, but the difference is made up in taxes.
The government has simply outlawed all competitors, and the U.S. Postal Service controls the market.
These companies are government sanctioned franchise monopolies.
They furnish the utilities in their areas, but their rates, policies and territory are determined by government commissions.
If you don't like it, you can lump it.
Because of special government franchises, they control their markets.
And there are yet other forms of market control.
For when government has been given the power to grant legislative favors,
private interests will not hesitate to bend that power to their own direction.
Once there lived a king. His kingdom was California and his throne was Sacramento. His subjects were the gentlemen of the state legislature.
From 1922 to 1950, Arthur H. Samish, a private lobbyist, ruled California.
Since the idea of government intervention in business is widely accepted, it was just a question of getting the proper legislation passed or keeping unfavorable legislation from being passed.
Although in his legislative activities, Samish never broke a law.
His powerful influence as a lobbyist resulted ultimately in the use of force through legislation
and hurt the consumer and of course business outside the Samish circle.
Arthur Samish one day received a telephone call from Louis Rosenstiel,
owner of famous four-year-old Schenley Whiskey in New York.
Artie, I've got something important on my mind I want to discuss with you.
Hello, Joseph.
Come see me.
Well, when the big man calls, the little man jumps.
I met him at his office and he said to me...
Are you?
I'm very much concerned about Harry Hatch.
You mean the President of Hiram Walker?
Yes, he's a mean man.
I'd like to see something done about him.
What do you suggest?
Well, he has a whiskey called Ten High, and it's the biggest seller in California.
Tell me something about it.
It's a three-year-old whiskey.
Three years older. That's all I need to know.
You leave it to me. I'll take care of Mr. Harry Hatch.
When the legislature came back into session, I had one of my friends in the assembly introduce a bill
The bill, which provided an all-whiskey soul in the state of California, had to be at least four years old.
The bill zipped through the legislature without a whisper of opposition.
Governor Olsen vetoed it, but his veto was overwritten.
The dries loved the bill.
For once I had him on my side. He'd vote for anything that could tail the liquor industry.
industry. The others thought it was a good bill because it protected the
quality of whiskey. After all, I was looking out for the public's interest. It
just happened that the public's interest coincided with that of Louis Rosensteel.
But getting favors from government is not sin. The sin is when the government has
these favors to give out. Right. If the government didn't have the favors to sell,
Well, the consumer would be king, not sammish.
Are you ready?
Yeah, I'm still rolling. Take this, will you?
All right.
Oh, give me that, bro.
Okay, Scott, what's your problem now?
Well, I understand the illegal monopolies, gangsters, right?
Okay, and the phone company and Amtrak,
And the power companies, due to government franchises, legal monopolies again.
Okay, so we have monopolies due to private enterprises getting the government to pass
legislation, laws, licensing, things like that, right?
Which inhibits free enterprise.
But do you have the guts to show how real big business monopolies can screw the people?
Hey, hey, let me ask you a question.
Can you give us an example, any example, of a really true, current free market monopoly?
Well sure, every state and union...
Now remember, a free market monopoly can't get any favors from the government.
Listen, I know...
No restrictions outline the competition or giving it an unfair advantage.
There are lots...
No tax breaks, no subsidies, no franchises, no legislation in its favor, no tariffs, no licensing...
There's not a place in the country...
No price fixing, a true free market monopoly.
This is a legend of success and thunder and a man, Tom Smith, who squelched world hunger.
Now Smith, an inventor, had specialized in toys.
So people were surprised when they found that he, instead of making toys, was baking bread.
The way to make bread he'd conceived cost less than people could believe.
And not just make it, this device could in addition wrap and slice.
The price per loaf, one loaf for many, the minuscule sum of under a penny.
Can you imagine what this meant?
Can you comprehend the consequence?
The first time yet, the world well fed and all because of Tom Smith's bread.
A citation from the president for Smith's amazing bread.
This and other honors, too, were heaped upon his head.
But isn't it a wondrous thing how quickly fame has flown?
Smith, the hero of today, tomorrow, scarcely known.
Yes, the fickle years passed by.
Smith was a millionaire, but Smith himself was now forgot,
though bread was everywhere.
People, asked from where it came, would very seldom know.
They would simply eat and ask, was not it always so?
However, Smith cared not a bit, for millions ate his bread,
and everything is fine, thought he.
I am rich, they are fed.
Everything was fine, he thought, he reckoned not with fate.
Note the sequence of events starting on the date
on which the business tax went up.
Then, to a slight extent, the price on every loaf rose, too.
Up to one full cent.
What's going on, the public cried.
He's guilty of pure plunder.
He has no right to get so rich on other people's hunger.
A prize cartoon depicted Smith with fat and drooping jowls,
snatching bread from hungry babes,
indifferent to their howls.
Well, since the public does come first,
it could not be denied that in matters such as this,
The public must decide.
So, antitrust now took a hand.
Of course, it was appalled at what it found was going on.
The bread trust, it was called.
Now, this was getting serious,
so Smith felt that he must have a friendly interview
with the men in antitrust.
So, hat in hand, he went to them.
They'd surely been misled.
No rule of law had he defied.
But then their lawyer said,
The rule of law in complex time has proved itself deficient.
We much prefer the rule of men.
It's vastly more efficient.
Now, let me state the present rule.
The lawyer then went on.
These very simple guidelines you can rely upon.
You're gouging on your prices if you
You can charge more than the rest, but it's unfair competition if you think you can charge less.
A second point that we would make to help avoid confusion.
Don't try to charge the same amount. That would be collusion.
You must compete, but not too much, for if you do, you see, then the market would be yours, and that's monopoly.
Price too high, or price too low? Now, which charge did they make? Well, they weren't loath to charging both, with public good at stake.
In fact, they went one better. They charged Monopoly. No muss, no fuss, no woe is us.
Begat, they charged all three.
Five years in jail, the judge then said.
You're lucky it's not worse. Robber barons must be taught. Society comes first.
Now bread is baked by government. And as might be expected, everything is well controlled.
The public, well protected.
True, loaves cost a dollar each.
But our leaders do their best.
The selling price is half a cent.
Taxes pay the rest.
The Theory of Money and Credit