WEBVTT NOTE Government as Window Breaker: Hazlitt's Lesson Reapplied 1 00:00:00.000 --> 00:00:08.040 Claim of the Austrian school that has scandalized members of other schools for really 150 years is the following. 2 00:00:08.040 --> 00:00:12.520 The propositions of economics are universal. 3 00:00:12.520 --> 00:00:20.360 The principles apply in all times and all places because they derive from the structure of reality and human action. 4 00:00:20.360 --> 00:00:26.800 What brought about economic growth, inflation, or the business cycle in China 300 B.C. 5 00:00:26.800 --> 00:00:32.800 are the same institutions that drive phenomena in the United States in A.D. 2008. 6 00:00:33.800 --> 00:00:39.800 The circumstances of time and place may change, but the underlying economic reality is identical. 7 00:00:40.800 --> 00:00:48.800 That claim has made other economists, to say nothing of sociologists, historians and politicians, scatter like pigeons. 8 00:00:48.800 --> 00:00:56.800 The historical school poured scorn on the idea, and Carl Menger, the founder of the Austrian School, fought them tooth and nail. 9 00:00:56.800 --> 00:01:05.800 The Chicago School of Positivists found the claim preposterous, and Mises and Hayek and Rothbard battled them. 10 00:01:05.800 --> 00:01:12.800 The Keynesians have long been outraged, and the postwar Austrian generation re-asserted the truth. 11 00:01:12.800 --> 00:01:23.800 The Socialists, who posit that rearranging property titles will transform all of reality, say the claim is absurd, capitalistic nonsense. 12 00:01:23.800 --> 00:01:34.800 But there it stands. No matter where or when, the essential prerequisite for economic growth is capital accumulation in a framework of freedom and sound money. 13 00:01:34.800 --> 00:01:39.800 The consequence of price control is shortage or surplus. 14 00:01:39.800 --> 00:01:43.800 The effect of money expansion is inflation and the business cycle. 15 00:01:43.800 --> 00:01:50.800 The effect of every form of intervention is to make society less prosperous than it would otherwise have been. 16 00:01:50.800 --> 00:01:59.800 The list of universals is endless, which is why every age needs good economists to explain and articulate the truth. 17 00:01:59.800 --> 00:02:04.800 Well, I'd like to add that there are also universal fallacies. 18 00:02:04.800 --> 00:02:10.800 Frederic Bastiat pointed to one, the belief that the destruction of wealth fuels its creation. 19 00:02:11.800 --> 00:02:16.800 He explained this by means of the allegory that has come to be known as the story of the broken window. 20 00:02:17.800 --> 00:02:25.800 Most famously, it was retold in the opening of Henry Hazlitt's economics in one lesson, probably the best-selling economics book of all time. 21 00:02:26.800 --> 00:02:33.800 A kid throws a rock at a window and breaks it and everyone stands around, regretting this unfortunate state of affairs. 22 00:02:33.800 --> 00:02:39.060 But then up walks a man who purports to be wise and all-knowing. 23 00:02:39.060 --> 00:02:42.800 He points out that this is not really a bad thing after all. 24 00:02:42.800 --> 00:02:46.080 The man fixing the window will get money. 25 00:02:46.080 --> 00:02:50.680 Then that will be spent, perhaps on a new suit, and the tailor too will get money. 26 00:02:50.680 --> 00:02:55.400 The tailor will in turn spend this money on other items and the circle of rising prosperity 27 00:02:55.400 --> 00:02:58.200 will go on without end. 28 00:02:58.200 --> 00:03:00.200 What's wrong with this scenario? 29 00:03:00.200 --> 00:03:05.640 As Bastiat put it, it is not seen that as our shopkeeper has spent six francs upon one 30 00:03:05.640 --> 00:03:11.060 thing, he cannot spend them upon another. It is not seen that if he hadn't not had 31 00:03:11.060 --> 00:03:16.320 a window to replace, he would perhaps have replaced his old shoes or added another book 32 00:03:16.320 --> 00:03:21.540 to his library. In short, he would have employed his six francs in some way which the accident 33 00:03:21.540 --> 00:03:24.220 has prevented. 34 00:03:24.220 --> 00:03:28.900 You can see the absurdity of the position of the wise commentator when you take it to 35 00:03:28.900 --> 00:03:35.340 absurd extremes. If the broken window really produces wealth, why not break all the windows 36 00:03:35.340 --> 00:03:42.020 up and down the block? Indeed, why not break down all the doors and the walls? Why not 37 00:03:42.020 --> 00:03:48.140 tear down all the houses so they can be rebuilt? Why not bomb whole cities so producers can 38 00:03:48.140 --> 00:03:54.940 get busy rebuilding? It's not a good thing to destroy wealth. Bastiat put it this way, 39 00:03:54.940 --> 00:04:00.500 Society loses the value of the things that are uselessly destroyed. 40 00:04:00.500 --> 00:04:06.500 It sounds like an unexceptionable claim, but herein lies the core case against everything 41 00:04:06.500 --> 00:04:08.900 the government does. 42 00:04:08.900 --> 00:04:12.620 Perhaps then we can see why this allegory is not better known. 43 00:04:12.620 --> 00:04:20.260 If we took it seriously, we would dismantle the whole apparatus of American economic intervention. 44 00:04:20.260 --> 00:04:24.160 If you were with me to this point, perhaps you have a hard time believing that anyone 45 00:04:24.160 --> 00:04:29.220 really believes that wealth destruction is actually a good thing. 46 00:04:29.220 --> 00:04:33.700 Let me show you that the fallacy is as pervasive as ever. 47 00:04:33.700 --> 00:04:38.200 After every natural disaster, at the Mises Institute we start what we call the broken 48 00:04:38.200 --> 00:04:40.980 window watch. 49 00:04:40.980 --> 00:04:47.480 After Hurricane Katrina, President Bush's labor secretary said, what will happen, and 50 00:04:47.480 --> 00:04:51.640 I've seen this happen in previous catastrophes and hurricanes, is that there's a bright 51 00:04:51.640 --> 00:04:53.740 spot. 52 00:04:53.740 --> 00:04:56.620 New Jobs Will Be Created 53 00:04:56.620 --> 00:05:02.220 The magazine The Economist says, while big hurricanes like Katrina destroy wealth, they 54 00:05:02.220 --> 00:05:08.220 have a net positive effect on GDP growth as the temporary downturn immediately after the 55 00:05:08.220 --> 00:05:13.300 storm is more than made up for by the burst of economic activity that takes place when 56 00:05:13.300 --> 00:05:15.860 the rebuilding begins. 57 00:05:15.860 --> 00:05:19.860 The New York Times said, economists point out that although Katrina has destroyed a 58 00:05:19.860 --> 00:05:29.860 and a lot of accumulated wealth, it ultimately will probably have a positive effect on growth data over the next few months as resources are channeled into rebuilding. 59 00:05:29.860 --> 00:05:37.860 After last year's California fire, we heard this from Alan Ginn, a University of San Diego economist. He said, 60 00:05:37.860 --> 00:05:41.860 In the odd nature of economic accounting, this will be a stimulus. 61 00:05:41.860 --> 00:05:48.860 There will be a huge amount of rebuilding in the next couple of years, financed by insurance payments. 62 00:05:48.860 --> 00:05:51.860 CBS Market Watch said, 63 00:05:51.860 --> 00:05:58.860 Economists have noted the perverse reality that in the wake of disasters, reconstruction spending helps the economy, 64 00:05:58.860 --> 00:06:03.860 even as people are still struggling to recover from their personal losses. 65 00:06:03.860 --> 00:06:11.860 Now note that personal loss here is deemed rather irrelevant compared to the beneficial macroeconomic effects. 66 00:06:11.860 --> 00:06:14.860 Here we have a theme we find often in economics. 67 00:06:14.860 --> 00:06:21.860 The attempt to drive a wedge between what makes sense for individuals and what is allegedly good for society. 68 00:06:21.860 --> 00:06:27.860 We see this on display in a recessionary environment where people are told to spend, spend, spend, 69 00:06:27.860 --> 00:06:32.860 even though most people understand the recessions are times for saving. 70 00:06:32.860 --> 00:06:39.860 Continuing on, we find the broken window fallacy popping up after 9-11. Timothy Noah of Slate wrote, 71 00:06:39.860 --> 00:06:46.860 We live in a very wealthy nation that responds to horrible disasters by spending large sums of money. 72 00:06:46.860 --> 00:06:57.860 This will provide a meaningful, Keynesian stimulus to the national economy that, let's face it, was on the brink of recession before September 11th. 73 00:06:57.860 --> 00:07:03.860 The recession may still come, but the counter-cyclical spending will help shorten it. 74 00:07:03.860 --> 00:07:10.860 Another economist declared, initially this could provide a significant boost for the economy that had been slumping. 75 00:07:10.860 --> 00:07:13.860 The construction industry will benefit from the rebuilding process. 76 00:07:13.860 --> 00:07:19.860 There may also be a boom for slumping tech sales in replacing lost equipment. 77 00:07:19.860 --> 00:07:26.860 Thus we can see the continuing relevance not only of Bastiat's allegory, but also of the characters in the story. 78 00:07:26.860 --> 00:07:34.860 The posturing wise guy who says that breaking windows is a good thing for the economy keeps reappearing time and time again. 79 00:07:34.860 --> 00:07:41.860 So entrenched is this mistake that we might call it the official economic doctrine for the whole country. 80 00:07:41.860 --> 00:07:49.860 I ask you to consider the absurd discussion of a stimulus package designed to rescue the economy from recession. 81 00:07:49.860 --> 00:07:56.860 The idea is that the government will inject funds into private markets to stimulate them to the point that they will run on their own. 82 00:07:56.860 --> 00:08:03.860 Not once in this debate have I heard anyone ask, aside from Bob Higgs, where will the money come from? 83 00:08:03.860 --> 00:08:15.860 It seems that Washington wants us to believe that they have some magic machine that can run up $150 billion in new assets without anyone having done anything to make these assets appear. 84 00:08:15.860 --> 00:08:20.860 One wonders, then, why we need to wait until a recession to stimulate the economy. 85 00:08:20.860 --> 00:08:24.860 Why not magically create hundreds of billions every day? 86 00:08:24.860 --> 00:08:28.860 And not just for this country, but for the whole world. 87 00:08:28.860 --> 00:08:33.860 Why are we holding back? 88 00:08:33.860 --> 00:08:37.860 Now, the ideas of the stimulus package are not 100% awful. 89 00:08:37.860 --> 00:08:44.860 Some people are talking about tax cuts, which is a good thing, although perhaps pointless without spending cuts. 90 00:08:44.860 --> 00:08:54.860 I'm particularly intrigued by the underlying assumption here that taxes work as a drag on the economy, whereas tax cuts fuel expansion. 91 00:08:54.860 --> 00:09:03.860 If that is the case, and is indeed the case, although for different reasons than Washington gives, why wait for the recession to cut taxes? 92 00:09:03.860 --> 00:09:10.860 If taking less from us is good for the economy, shouldn't we institute this as a universal policy? 93 00:09:10.860 --> 00:09:18.860 One great lesson of political economy, emphasized for centuries, is that the government creates no wealth of its own. 94 00:09:18.860 --> 00:09:29.860 Everything it has, it takes from you and me, one way or another. It can tax us, it can borrow, and finally it can inflate by means of credit market manipulation. 95 00:09:29.860 --> 00:09:39.860 This third option is the most disguised. When people hear the words monetary policy, they figure that this is something they will leave to the experts. 96 00:09:39.860 --> 00:09:47.860 And central bankers have an astonishing talent for obfuscation to the point that no one knows with certainty what they are doing. 97 00:09:47.860 --> 00:09:53.860 The whole show is designed to make us go to sleep and not to think about what is really going on. 98 00:09:53.860 --> 00:10:02.860 The unvarnished truth is that when the Fed artificially lowers interest rates, it is creating new money that waters down the value of the existing money stock 99 00:10:02.860 --> 00:10:06.860 and yielding a lower purchasing power for every existing dollar. 100 00:10:06.860 --> 00:10:34.860 This is a form of breaking windows. It is wealth destruction. No matter that there will be more dollars to spend, because prices will be higher and wealth has been drained out of the private sector and redistributed within it, it is Bastiat's fallacy reinvented in a new form. 101 00:10:34.860 --> 00:10:49.860 New Money distorts the production structure. At the very time when the market is pressuring long-term investment to pull back, the lower rates encourage expansion in ways that prolong the crisis. It only delays and worsens the inevitable. 102 00:10:49.860 --> 00:10:57.860 The Great Depression taught us that government is capable of doing this to the point that a crisis can last for 17 years. 103 00:10:57.860 --> 00:11:08.860 So this is no small matter. A government determined to prevent recession is a government that might end up sustaining one to the point of the collapse of civilization. 104 00:11:08.860 --> 00:11:20.860 It is a perverse belief, but pervasive nonetheless. It is believed by both parties. It is held by the President, by the media, by the Congress, except of course for Ron Paul. 105 00:11:20.860 --> 00:11:28.860 It is a reflexive belief, one that reflects a failure to think between stages and see the unseen effects of government intervention. 106 00:11:28.860 --> 00:11:36.860 One reason that Bastiat's example has power is that it applies not to just one area of policy, but to all areas. 107 00:11:36.860 --> 00:11:45.860 If it isn't true that breaking windows creates wealth, it is not true that government spending and inflating is a boon to the economy. 108 00:11:45.860 --> 00:11:51.860 It only ends up draining wealth from the private sector, which is the only source of wealth creation. 109 00:11:51.860 --> 00:11:55.860 It doesn't matter what the government spends its money on. 110 00:11:55.860 --> 00:12:02.860 For example, building pyramids with tax dollars is not good for the economy, despite what Keynes claimed. 111 00:12:02.860 --> 00:12:09.860 But neither is waging war good for us, nor the victim country, despite consistent claims to the contrary. 112 00:12:09.860 --> 00:12:21.860 As Bob Higgs pointed out, it is surely one of the most deadly myths that the Second World War ended the Depression, when in fact, it simply prolonged it, no matter what the phony data claim. 113 00:12:21.860 --> 00:12:31.860 And consider all the spending on the war on terror. If government spending were capable of stimulating the economy, we would not have a recession right now. 114 00:12:31.860 --> 00:12:38.860 Chris Wesley assembled some data on the last seven years of economic conditions, and it's sobering. 115 00:12:38.860 --> 00:12:44.860 Since 2000, tax revenues are up 25%. That's wealth destruction. 116 00:12:44.860 --> 00:12:50.860 Government spending is setting records for expansion, with $1 trillion added to the federal budget. 117 00:12:50.860 --> 00:12:56.860 Military spending up $250 billion over the egregious $400 billion spent annually in 2000. 118 00:12:56.860 --> 00:13:03.860 and this, by the way, according to their own slightly phony statistics, as Professor Higgs has pointed out, 119 00:13:03.860 --> 00:13:09.860 we can pretty much just double the Pentagon figures to get a more accurate idea of what they're actually doing. 120 00:13:09.860 --> 00:13:13.860 But it's certainly, whatever the actual figure, it's wealth destruction. 121 00:13:13.860 --> 00:13:19.860 The national debt is up 59%. That has to be paid. More destruction. 122 00:13:19.860 --> 00:13:25.860 Social security liabilities are up 60%. That, too, is the promise of future destruction. 123 00:13:25.860 --> 00:13:49.860 The money supply is up 72 percent, more destruction. Inflation itself has risen, in terms of the CPI inflation, 20 percent. So the dollar of $2,000 is now worth $0.80. The gas price alone is up 118 percent, so that too is wealth destroyed. As an indication of economic trouble, the gold price is up 206 percent. 124 00:13:49.860 --> 00:14:00.860 Here is the story so far of the government's great stimulus. It has led to hard economic times. More of the same will create more of the same and worse. 125 00:14:00.860 --> 00:14:12.860 The unemployment rate is rising. Savings are falling. Prices are rising. We're less secure, less prosperous, and we have fewer opportunities than ever to dig our way out of this mess. 126 00:14:12.860 --> 00:14:18.860 Government expansion has actually created the absurd scenario mentioned above. 127 00:14:18.860 --> 00:14:28.860 The boy threw the rock, the crowd in Washington believed the sophist, and now they're plotting to raise all the homes on the block in the name of economic recovery. 128 00:14:28.860 --> 00:14:35.860 Have we learned from the Great Depression? Ben Bernanke believes that he has learned something. 129 00:14:35.860 --> 00:14:41.860 He believes that the key problem of the period was a failure of the central bank to pump in enough money and credit. 130 00:14:41.860 --> 00:14:47.980 He has never observed the critical observation of Rothbard that the Fed did attempt to pump 131 00:14:47.980 --> 00:14:54.420 up the money supply from 1929 to 1934. They used every mechanism, but the credit markets 132 00:14:54.420 --> 00:15:01.100 found few takers and without their cooperation the money supply does not expand. The real 133 00:15:01.100 --> 00:15:05.220 lesson of the Great Depression is that there is nothing that the central bank can do to 134 00:15:05.220 --> 00:15:10.300 forestall a recession whose time has come and nothing a government can do to improve 135 00:15:10.300 --> 00:15:17.300 to improve the recession, once the recession, excuse me, to improve the situation, once the recession has arrived. 136 00:15:17.300 --> 00:15:24.300 Everything it attempts to do, except that is shrink, only ends up making matters worse. 137 00:15:24.300 --> 00:15:31.300 So it is in our time. We must ask ourselves what Washington is capable of doing this time around. 138 00:15:31.300 --> 00:15:38.300 I believe the answer is anything and everything. Bernanke will attempt to flood the economy with money. 139 00:15:38.300 --> 00:15:43.300 Washington is perfectly capable of imposing price and wage controls on the entire economy. 140 00:15:43.300 --> 00:15:47.300 It is capable of terrifying levels of protectionist legislation. 141 00:15:47.300 --> 00:15:53.300 New taxes are less likely, but taxation through debt accumulation is probably inevitable. 142 00:15:53.300 --> 00:15:59.300 There might be rationing, spending mandates, anti-hoarding legislation and more. 143 00:15:59.300 --> 00:16:05.300 The assumption that driving up consumption is the key to prosperity is particularly dangerous 144 00:16:05.300 --> 00:16:35.300 is dangerous and also pregnant with irony. During good times, we are hounded constantly by the intellectual elites for our consumption habits. It is said that we are a greedy nation, buying more fripperies and not looking after the long term. The American public is decried by the intellectual elites as materialist, consumerist, short-sighted. Then recession hits and the tune changes completely. Reliable leftists, 145 00:16:35.300 --> 00:16:39.500 Having complained about the egregious spending habits of the American consumer, suddenly 146 00:16:39.500 --> 00:16:45.220 turn on a dime and tell us that more consumption is the key to economic growth. 147 00:16:45.220 --> 00:16:49.540 They favor policies that would get us to fork over even more of our money under a belief 148 00:16:49.540 --> 00:16:53.100 that the core problem is a lack of demand. 149 00:16:53.100 --> 00:16:58.540 A recent example is Barack Obama, who said last year that the problem with popular culture 150 00:16:58.540 --> 00:17:05.080 is that it, quote, saturates our airwaves with a steady stream of sex, violence, and materialism. 151 00:17:05.080 --> 00:17:08.920 But only this week, he seemed to endorse at least one of the three. 152 00:17:08.920 --> 00:17:14.520 Quote, if the economy continues to decline in the coming weeks, we should send checks 153 00:17:14.520 --> 00:17:16.720 to people, he said. 154 00:17:16.720 --> 00:17:21.440 This is the quickest way to help people pay their bills and get them to start spending. 155 00:17:21.440 --> 00:17:27.400 In fact, less spending and more saving is what is called for during a recession, but 156 00:17:27.400 --> 00:17:31.000 is nothing which is nothing but a market correction writ large. 157 00:17:31.000 --> 00:17:36.720 Attempting to coerce spending threatens the value of the dollar itself. 158 00:17:36.720 --> 00:17:40.080 Here we face a very dangerous situation. 159 00:17:40.080 --> 00:17:45.580 If the dollar ever ceases to be the international currency of choice, and this could happen, 160 00:17:45.580 --> 00:17:48.800 we could face roaring inflation. 161 00:17:48.800 --> 00:17:52.240 Here is a problem that could cause panic in Washington. 162 00:17:52.240 --> 00:17:57.320 The irony here is that after a century of failed interventions and socialism, Washington 163 00:17:57.320 --> 00:18:06.320 is no less likely, and probably far more likely, to take the path of least resistance and accumulate ever more power unto itself at our expense. 164 00:18:06.320 --> 00:18:14.320 We are in an election season, so of course people ask, who would be the least bad person to head the state in the years ahead? 165 00:18:14.320 --> 00:18:20.320 The answer here is not at all clear, if it is not, of course, Dr. Ron Paul. 166 00:18:20.320 --> 00:18:31.320 As of the 1930s, among the rest, we face a choice between militaristic fascism and Keynesian-style socialism combined with environmentalism. 167 00:18:31.320 --> 00:18:33.320 These are two grim choices. 168 00:18:33.320 --> 00:18:39.320 I tell you this not to spread gloom, but merely to be realistic of other prospects of the future. 169 00:18:39.320 --> 00:18:42.320 But there is also good news to be considered. 170 00:18:42.320 --> 00:18:49.320 The private sector has raced so far ahead of the state and is so global that it is far more resilient than ever before. 171 00:18:49.320 --> 00:18:54.320 There are safety valves available in the form of international capital markets. 172 00:18:54.320 --> 00:18:58.320 The government is so much bigger now than in the 1930s, 173 00:18:58.320 --> 00:19:03.320 the biggest government in the history of the world by many magnitudes, the US government. 174 00:19:03.320 --> 00:19:09.320 But paradoxically, that makes it, of course, much less effective, which is very good news. 175 00:19:09.320 --> 00:19:16.320 It's a massive lumbering giant of a dinosaur, whereas the markets are a speed racer. 176 00:19:16.320 --> 00:19:22.320 I might also point out that the government enjoys nowhere near the respect it once had. 177 00:19:22.320 --> 00:19:29.320 Once the governing elites consisted of the nation's elites, coming from the best families and the best schools. 178 00:19:29.320 --> 00:19:36.320 Today the governing elite has never been more transparently ridiculous and even freakish. 179 00:19:36.320 --> 00:20:06.320 Gone are the aristocratic public servants of yesterday, or at least people who portrayed themselves as such. Today the government is made up of a class of hucksters and gangsters that inspires zero confidence. This is all to the good, for as Mencken said, it is always great when we do not get all the government we pay for. 180 00:20:06.320 --> 00:20:16.320 On the intellectual level, the teachings of economics in the Austrian school tradition have never been more available to the world or more frequently cited and discussed. 181 00:20:16.320 --> 00:20:27.320 And a recessionary environment guarantees more attention to the Austrian theory of the business cycle simply because this is the only model that makes sense of our current problems. 182 00:20:27.320 --> 00:20:32.320 We should never underestimate the power of ideas to make a difference. 183 00:20:32.320 --> 00:20:36.820 During the Great Depression, the resistance to the state was present, but weak. 184 00:20:36.820 --> 00:20:41.320 Today we have built up a mighty intellectual army that extends across the globe. 185 00:20:41.320 --> 00:20:43.820 We are prepared in ways they were not. 186 00:20:43.820 --> 00:20:47.820 We have thousands of students and faculty members. 187 00:20:47.820 --> 00:20:51.320 We have, for example, many new books that put the whole problem in perspective, 188 00:20:51.320 --> 00:20:55.820 such as Jesus Huerta de Soto's book on business cycles. 189 00:20:55.820 --> 00:21:01.820 We have the great biography of Mises, which illustrates the heroism of political dissidents, 190 00:21:01.820 --> 00:21:09.820 The works of Rothbard on the Great Depression and Central Banking have never been more widely circulated in physical form and on the web. 191 00:21:09.820 --> 00:21:14.820 So this time our masters in Washington will not go unopposed. 192 00:21:14.820 --> 00:21:18.820 At the Mises Institute now we're in our 26th year. 193 00:21:18.820 --> 00:21:26.820 And I want to acknowledge, by the way, the great founding help of Congressman Ron Paul and his great generosity in the very early days of the Institute. 194 00:21:26.820 --> 00:21:29.820 They made all the difference to its getting underway. 195 00:21:29.820 --> 00:21:38.820 At the Institute we try to maintain a careful balance between serious and fundamental scholarly work and public advocacy. 196 00:21:38.820 --> 00:21:42.820 We never want to lose sight of the need for research and detailed work. 197 00:21:42.820 --> 00:21:50.820 At the same time, there are foundational lessons of economics that must be taught again and again with each new generation. 198 00:21:50.820 --> 00:21:56.820 The fallacy of the broken window is one of them, and its implications are truly radical. 199 00:21:56.820 --> 00:22:05.820 Both Bastiat and Hazlitt saw that the government is the great window breaker, the destroyer of wealth that drives the economy backwards. 200 00:22:05.820 --> 00:22:13.820 The engine of creativity, recovery and expansion is the private sector, completely unencumbered by state intervention. 201 00:22:13.820 --> 00:22:22.820 As James mentioned, Ron Paul's newest book is called Pillars of Prosperity, Free Markets, Son Money and Private Property. 202 00:22:22.820 --> 00:22:27.820 That title nicely sums up the message of the economics of freedom. 203 00:22:27.820 --> 00:22:36.820 It bears repeating in every age, in all places, for we will never be free of the great threat of the window breaker. 204 00:22:36.820 --> 00:22:44.820 So long as there are governments with stones ready to throw, there will be need for someone to point out that destruction is never productive, 205 00:22:44.820 --> 00:22:49.820 never beneficial, never a path to the good life that we all seek.