WEBVTT

NOTE The New World of Capitalism

1
00:00:00.000 --> 00:00:08.000
Now I'd like to say a few more things in regard to the Industrial Revolution considering that it is such an important topic.

2
00:00:08.000 --> 00:00:22.000
Those of you who have consulted Rosenberg and Virgil, which I urge you to do, sum up the evidence, the historical and statistical evidence as follows.

3
00:00:22.000 --> 00:00:27.520
By now it is quite clear that the new factories and towns were a large part of the solution

4
00:00:27.520 --> 00:00:32.360
to Europe's problem of employing a rising population outside of agriculture.

5
00:00:32.360 --> 00:00:35.080
They were not part of the problem.

6
00:00:35.080 --> 00:00:39.360
The assessment of the rise of industrial capitalism as an unprecedented revolution in economic

7
00:00:39.360 --> 00:00:45.120
growth is supported by much of the recent work of economic historians and especially

8
00:00:45.120 --> 00:00:59.120
and finally, cleometricians as they're called, that is, historians who use sophisticated mathematical methods, although there are disputes over particular sets of statistics and the appropriate analyses.

9
00:00:59.120 --> 00:01:12.120
It's interesting that Marxist historians like Eric Hobsbawm and E. P. Thompson, Thompson is now deceased, have been reduced to a rearguard defense of the older conventional wisdom,

10
00:01:12.120 --> 00:01:17.340
mainly by shifting the grounds of the debate from material standards of living to the quality

11
00:01:17.340 --> 00:01:18.340
of life.

12
00:01:18.340 --> 00:01:24.320
You can take for an example the position of E.P. Thompson in his celebrated work, The

13
00:01:24.320 --> 00:01:26.240
Making of the English Working Class.

14
00:01:26.240 --> 00:01:30.960
In approaching the old question of living standards, which was a standard question that

15
00:01:30.960 --> 00:01:37.760
was supposed to be the decisive question, the criterion of the success or disastrous

16
00:01:37.760 --> 00:01:40.760
and the First Failure of the Industrial Revolution,

17
00:01:40.760 --> 00:01:43.760
Thompson states,

18
00:01:43.760 --> 00:01:47.760
It is quite possible for statistical averages and human experiences

19
00:01:47.760 --> 00:01:50.760
to run in opposite directions.

20
00:01:50.760 --> 00:01:53.760
Uh-oh, what's he up to now?

21
00:01:53.760 --> 00:01:56.760
A per capita increase in quantitative factors

22
00:01:56.760 --> 00:02:00.760
may take place at the same time as a great qualitative disturbance

23
00:02:00.760 --> 00:02:03.760
in the people's way of life.

24
00:02:03.760 --> 00:02:06.760
People may consume more goods and become less happy

25
00:02:06.760 --> 00:02:21.760
This is all by way of Thompson setting up the reader for the concession, the decisive concession that he was about to make.

26
00:02:21.760 --> 00:02:29.760
Over the period 1790 to 1840 there was a slight improvement in average material standards.

27
00:02:29.760 --> 00:02:59.760
By 1840, by the way, it's also suggestive that one selects the year of 1840 rather than 1850, big changes occur in that decade, but he says by 1840, most people were, quote, better off, unquote, and scare quotes around better off than their forerunners had been 50 years before, but they had suffered and continue to suffer the slight improvement as a catastrophic

28
00:02:59.760 --> 00:03:22.760
Experience. Well, that may be as it may be. The most that can be produced in regard to this last statement, that they continue to suffer this slight improvement in material standards of living as a catastrophic experience, tends to be totally anecdotal.

29
00:03:22.760 --> 00:03:34.260
It is safe to say that the old immiseration thesis, it was called, as a celebrated Fabian husband and wife team of J.L. and Barbara Hammond put it,

30
00:03:34.260 --> 00:03:41.160
the industrial revolution felt like a war or a plague on the working people of England, is dead.

31
00:03:41.160 --> 00:03:49.160
Thus, for instance, to take an example at random, the University of Wisconsin historian,

32
00:03:49.160 --> 00:03:55.040
Nero Hamerow, a scholar clearly unsympathetic to the market economy, grants that there was

33
00:03:55.040 --> 00:04:01.360
no general amazement in the early stages of the Industrial Revolution, either in Britain

34
00:04:01.360 --> 00:04:08.980
or on the continent, while for the later stages, as he says, never before had there been such

35
00:04:08.980 --> 00:04:15.900
such a substantial growth in the income of a labor force in such a short period of time.

36
00:04:15.900 --> 00:04:23.060
Even the East German Communist Economic Historian, Kaczynski, even Kaczynski concedes that the

37
00:04:23.060 --> 00:04:29.060
income of the working class improved rapidly after the early stages of economic rationalization.

38
00:04:29.060 --> 00:04:36.660
The stage of the debate, I want to mention one thing in particular before I forget and

39
00:04:36.660 --> 00:04:45.020
And that is the question of women, the labor of women and women in the factories.

40
00:04:45.020 --> 00:04:49.900
Women of course, as we all know, sorry, have never really done very much work in the history

41
00:04:49.900 --> 00:04:53.060
of the human race.

42
00:04:53.060 --> 00:05:01.080
All they did was raise the kids, take care of the house, do all the gardening for fruits

43
00:05:01.080 --> 00:05:29.080
The men went out and hunted the mammoths and other wild beasts and had a really great time as a kind of guide thing and dragging the chunks of the mammoth back home.

44
00:05:29.080 --> 00:05:36.960
And as the wife kept with her trivial chores of taking care of the kids and everything

45
00:05:36.960 --> 00:05:41.960
else about the family and the household, the guys would sit around and talk about how,

46
00:05:41.960 --> 00:05:47.400
yeah, you see the way I killed that man, you killed the man, but I killed the man, and

47
00:05:47.400 --> 00:05:48.400
go on like that.

48
00:05:48.400 --> 00:05:53.200
So women really have not counted very much in regards to the labor of the human race

49
00:05:53.200 --> 00:05:55.200
through history.

50
00:05:55.200 --> 00:05:59.680
It was really just the Industrial Revolution that drove them to labor.

51
00:05:59.680 --> 00:06:09.720
Before that, they used to have a lot of hobbies, macrame and ceramics and so on, learning enough

52
00:06:09.720 --> 00:06:13.800
Italian to read opera libretti and that kind of thing.

53
00:06:13.800 --> 00:06:16.320
Well, obviously a big fantasy.

54
00:06:16.320 --> 00:06:24.120
Women have always worked, except for the higher classes and the elite, have always worked

55
00:06:24.120 --> 00:06:41.120
The Industrial Revolution allowed women an independent source of income. They didn't

56
00:06:41.120 --> 00:06:47.240
have to go from their father's house immediately into the house of their husband and then for

57
00:06:47.240 --> 00:06:53.400
the rest of their lives remain under the thumb of their husband, regardless of how he chose

58
00:06:53.400 --> 00:07:00.400
for those to behave and conduct themselves for the years to come, they could go out and work in a factory.

59
00:07:00.400 --> 00:07:05.400
And that was experienced as an enormous liberation by women.

60
00:07:05.400 --> 00:07:13.400
If you take the example of America, the textile factories of New England, the cigarette factories of the Carolinas and Virginia and so on.

61
00:07:13.400 --> 00:07:21.400
And then afterwards when the telephone came in, tens and hundreds of thousands of female telephone operators,

62
00:07:21.400 --> 00:07:33.400
This was a liberation from the psychological cage that very often the husband-dominated family was.

63
00:07:33.400 --> 00:07:40.400
She was bringing in her own income, so she had a certain place in the family for that reason.

64
00:07:40.400 --> 00:07:49.400
Or if it came to that, you know, the hell with the louse, she could go out and make a living on her own.

65
00:07:49.400 --> 00:07:53.720
So that, and we see this in third world countries as well.

66
00:07:53.720 --> 00:08:01.080
The factory system and the other accoutrements of industrial capitalism were a liberation

67
00:08:01.080 --> 00:08:03.160
for women.

68
00:08:03.160 --> 00:08:11.760
And this explains why legislation to limit the work of women, exclude women from certain

69
00:08:11.760 --> 00:08:17.520
occupations, exclude women, limit the hours that women could work and so on, were pushed

70
00:08:17.520 --> 00:08:26.840
not by women's groups, but by the male-dominated labor union movement to do away with the increasing

71
00:08:26.840 --> 00:08:30.520
competition that women presented to them.

72
00:08:30.520 --> 00:08:46.140
Well, the stage of the debate on the Industrial Revolution has been reached by this statement

73
00:08:46.140 --> 00:08:52.900
from a totally mainstream British historian named E.J. Evans, wrote a textbook on England

74
00:08:52.900 --> 00:08:59.300
in this period, critical of the Industrial Revolution in certain respects, on quality

75
00:08:59.300 --> 00:09:00.300
of life grounds.

76
00:09:00.300 --> 00:09:05.660
But you know, on the other hand, this was the first time mankind was faced with this,

77
00:09:05.660 --> 00:09:10.460
the problem of pollution, for instance, from industrial sources.

78
00:09:10.460 --> 00:09:18.820
It's not surprising that they could not have come upon the answers to all of these problems

79
00:09:18.820 --> 00:09:20.180
all at once.

80
00:09:20.180 --> 00:09:28.260
Now what Evan says is this, judging the Industrial Revolution, it is relevant to mention a counterfactual

81
00:09:28.260 --> 00:09:33.700
point, a hypothetical point.

82
00:09:33.700 --> 00:09:38.380
What would have happened to Britain's teeming population had industrial growth not rescued

83
00:09:38.380 --> 00:09:44.020
from a Malthusian poverty trap. It is difficult to see how a check on an even

84
00:09:44.020 --> 00:09:51.460
more catastrophic scale than the Irish famine of 1845 to 47, a check in the sense

85
00:09:51.460 --> 00:09:55.260
that Malthus used the term, that is when the population reaches a certain level

86
00:09:55.260 --> 00:10:00.580
outgrowing the means of subsistence, then nature provides certain checks and as he

87
00:10:00.580 --> 00:10:06.260
says the Irish famine was such a check and now he says hypothetically there

88
00:10:06.260 --> 00:10:15.260
could have been a check on the British population on an even more catastrophic level than the Irish famine.

89
00:10:15.260 --> 00:10:19.260
How could that have been avoided? It's difficult to see how that could have been avoided.

90
00:10:19.260 --> 00:10:31.260
And to this not considerable extent, the Industrial Revolution brought the benefit of permitting a much larger population to survive and in the long term thrive.

91
00:10:31.260 --> 00:10:40.260
T.S. Ashton, one of the major so-called optimist historians that I mentioned before, puts it this way.

92
00:10:40.260 --> 00:10:50.260
If you want to see an area, a territory that has undergone a population explosion without industrialization,

93
00:10:50.260 --> 00:10:56.260
then go to Calcutta or go to Famine-Torn Ireland.

94
00:10:56.260 --> 00:11:12.260
They're one of none of these terrible smokestacks, none of this terrible pollution, none of this awful dreadful industrialization, none of the satanic mills, and we see what happened there.

95
00:11:12.260 --> 00:11:22.260
The democratization of consumption, a term that is used by some historians, was a key feature of the modern capitalist revolution.

96
00:11:22.260 --> 00:11:31.340
This has been analyzed especially by a historian named Neil McKendrick of Cambridge University.

97
00:11:31.340 --> 00:11:36.920
McKendrick arranges himself solidly on the side of the optimists, he emphasizes the benefits

98
00:11:36.920 --> 00:11:42.500
that ordinary people derive from the Industrial Revolution and the accompanying Revolution

99
00:11:42.500 --> 00:11:48.420
in Consumption, contrasting the new world that capitalism made with the older world

100
00:11:48.420 --> 00:11:50.220
of poverty.

101
00:11:50.220 --> 00:11:54.100
After all, what was it that these factories were producing?

102
00:11:54.100 --> 00:11:59.420
They were not producing silk and linen fabrics for the elite.

103
00:11:59.420 --> 00:12:02.460
They were producing wool and especially cotton.

104
00:12:02.460 --> 00:12:10.420
They were producing cheap ceramics and pottery, cheap cutlery, cheap of everything for mass

105
00:12:10.420 --> 00:12:16.220
consumption and consumption by the masses.

106
00:12:16.220 --> 00:12:23.100
Now one crucial claim of the pessimist case was that the Industrial Revolution represented

107
00:12:23.100 --> 00:12:28.820
a deterioration, but pre-capitalist ages have been increasingly shorn of their Garden of

108
00:12:28.820 --> 00:12:35.740
Eden myths, Kendrick believes, by the kind of social history fostered by the Annales

109
00:12:35.740 --> 00:12:40.580
group of French scholars. There was a group of French historians connected with the journal

110
00:12:40.580 --> 00:12:50.740
called ANAL, ANALS, and their trademark was to investigate as they saw deeper levels of

111
00:12:50.740 --> 00:12:57.660
social history, to get a sense of the fabric of life of the people of the time, rather

112
00:12:57.660 --> 00:13:03.300
than great historical military political events. One of the most famous of them is Ferdinand

113
00:13:03.300 --> 00:13:21.960
And Braudel, died a number of years ago, celebrated historian, and Braudel wrote about France,

114
00:13:21.960 --> 00:13:27.000
the poor in the towns and countryside lived in almost complete deprivation.

115
00:13:27.000 --> 00:13:32.300
The average man's income was so low that even a poor man's diet absorbed 60 to 80 percent

116
00:13:32.300 --> 00:13:39.420
In pre-industrial Europe, the purchase of a garment or the cloth for a garment remained

117
00:13:39.420 --> 00:13:47.220
a luxury that common people could only afford a few times in their lives.

118
00:13:47.220 --> 00:13:52.740
McKendrick points out that even the clothes of plague victims were eagerly sought by their

119
00:13:52.740 --> 00:14:00.180
relatives in a world marked by low expectation of life, high infant mortality, chronic sickness

120
00:14:00.180 --> 00:14:07.180
and Very Few Comforts, that a major revisionist effort is involved in the work of McKendrick

121
00:14:07.260 --> 00:14:13.840
and other more recent historians is clear. Among the targets of attack are historians

122
00:14:13.840 --> 00:14:20.840
themselves who for generations so assiduously portrayed businessmen as exploiters and parasites.

123
00:14:22.980 --> 00:14:29.980
As McKendrick states, when Napoleon dismissed England as a nation of shopkeepers, he said

124
00:14:30.180 --> 00:14:49.080
He little knew how eager English historians would be to try to live down the jibe and to efface from the record of historical significance the efforts of those busy, inventive, profit-seeking men of business whose activities help bring the new world of plenty into existence.

125
00:14:49.080 --> 00:14:57.080
So what I've presented here is a quite different view from the one that has been instilled in us, in all of us.

126
00:14:57.080 --> 00:15:13.080
I mentioned in connection with the idea that the Middle Ages were simply dark ages, no matter how many facts to the contrary, how many obvious realities to the contrary, one brings up, very hard to erase that idea from your mind.

127
00:15:13.080 --> 00:15:43.080
And similarly, well not to this group, of course, the enlightened people, but similarly to the massive people, it would be hard to imagine how much effort by economic historians and other scholars would be necessary to get rid of this idea so deeply embedded in their minds from Dickens and other authors and movies and everything they were taught in public school that the Industrial Revolution was a

128
00:15:43.080 --> 00:15:48.680
Catastrophe. Unfortunately, I don't know whether that will ever be, whether that will ever change.

129
00:15:49.640 --> 00:15:54.200
In this connection, I wanted to bring up one thing, and I'm not going to spend too much time

130
00:15:54.200 --> 00:16:01.320
with it, but I did want to bring it up, and that is that back in 1830 there was a debate also on

131
00:16:01.320 --> 00:16:10.520
the Industrial Revolution, kind of an interesting polemic between two authors. One was Robert Southey,

132
00:16:10.520 --> 00:16:21.040
Southey, who was the poet laureate of England at the time, and Southey wrote a book called

133
00:16:21.040 --> 00:16:27.240
The Colloquies of Thomas More, and he imagined in his book that the great English statesman

134
00:16:27.240 --> 00:16:32.600
and saint and scholar had come back to the England of his time, early 19th century and

135
00:16:32.600 --> 00:16:41.200
looked around and how horrified the 16th century man would be to see what industrialization

136
00:16:41.200 --> 00:16:49.120
had done to England. It was just something to cry over, how awful England, merry old

137
00:16:49.120 --> 00:16:59.160
England had become. And Southey goes on and on in this, and he's answered by a great

138
00:16:59.160 --> 00:17:14.160
A famous historian, a classical liberal historian of the 19th century, who lived in 19th century England, named Thomas Babington Macaulay.

139
00:17:14.160 --> 00:17:26.160
Now Macaulay actually ties in again with how I began this whole discussion, that is the impact of history.

140
00:17:26.160 --> 00:17:36.560
Corley was one of a series of British historians who presented their historical accounts with

141
00:17:36.560 --> 00:17:41.480
an underlying classical liberal lesson and theme.

142
00:17:41.480 --> 00:17:46.040
He was a classical liberal, he wasn't a total libertarian, that's fine, but certainly believed

143
00:17:46.040 --> 00:17:51.560
in private property, the rule of law, civil liberties, and so on, and he was the most

144
00:17:51.560 --> 00:17:59.560
He was the most popular historian of his time. He was a brilliant historian. He was a brilliant man.

145
00:17:59.560 --> 00:18:06.560
He had photographic memory, which is pretty useful for a historian.

146
00:18:06.560 --> 00:18:14.560
So that one time when he was traveling over to Ireland and somehow his books had been left behind

147
00:18:14.560 --> 00:18:18.560
and the journey was going to be, I don't know what, some hours anyway,

148
00:18:18.560 --> 00:18:26.560
He simply sat down in a deck chair and closed his eyes and repeated Milton's Paradise Lost to himself.

149
00:18:26.560 --> 00:18:31.560
As a child even, he showed promise.

150
00:18:31.560 --> 00:18:36.560
As a very young child, as a matter of fact, since he hadn't spoken very much at all,

151
00:18:36.560 --> 00:18:43.560
people thought that he was somewhat retarded until when he was about four years old,

152
00:18:43.560 --> 00:18:53.560
His aunt happened to spill tea on his foot while she was pouring tea for the family.

153
00:18:53.560 --> 00:18:57.560
And they were very worried about the little Tommy.

154
00:18:57.560 --> 00:19:03.560
And he said, how are you Tommy? How is it? How do you feel?

155
00:19:03.560 --> 00:19:08.560
He said, madam, the pain which at first was very great is now much abated.

156
00:19:08.560 --> 00:19:13.560
So, it turned out to be somebody special.

157
00:19:13.560 --> 00:19:23.000
Now, remember I mentioned the Edinburgh Review to you as the editor of whom had studied under

158
00:19:23.000 --> 00:19:29.600
Google Stewart, who got the classical liberal ideas of Adam Smith in that line of tradition,

159
00:19:29.600 --> 00:19:34.520
and they published McCauley's most famous book is A History of England, which we have

160
00:19:34.520 --> 00:19:35.520
here.

161
00:19:35.520 --> 00:19:36.520
I think we have his essays also.

162
00:19:36.520 --> 00:19:45.520
His essays are more manageable, the history of England is in a number of volumes, even for a short period of time that he deals with,

163
00:19:45.520 --> 00:19:49.520
and the essays range all around the place.

164
00:19:49.520 --> 00:19:55.520
He was a master of many, many languages, loved literature as much as he loved history,

165
00:19:55.520 --> 00:20:03.520
and wrote reviews on many different topics, and really he had a masterful style as far as I'm concerned.

166
00:20:03.520 --> 00:20:11.520
So he decided to enter the lists against Southey on behalf of the New England of the Industrial Revolution.

167
00:20:11.520 --> 00:20:17.520
And if you don't get a chance to read any of his other essays, you might read this one.

168
00:20:17.520 --> 00:20:23.520
And I'm pretty sure we have copies in the library here. In any case, any other library has copies of this.

169
00:20:23.520 --> 00:20:31.520
It begins by talking about Southey's background. Southey started as a Jacobin, as a supporter of the worst excesses of the French Revolution.

170
00:20:31.520 --> 00:20:42.520
And now, he'd become a total reactionary, not only against the industrial revolution, against civil liberties in favor of the total power of the Church of England and on.

171
00:20:42.520 --> 00:20:49.520
So, McCauley says, Southey has passed from one extreme of political opinion to another.

172
00:20:49.520 --> 00:20:57.400
By the way, when I read this, you might think to yourself of the neoconservatives, beginning

173
00:20:57.400 --> 00:21:07.360
as proteges of Trotsky, many of them, and winding up now as American hyper-imperialists.

174
00:21:07.360 --> 00:21:12.960
Southey has passed from one extreme political opinion to another, as Satan in Milton went

175
00:21:12.960 --> 00:21:17.960
Round the globe, contriving constantly to ride with darkness.

176
00:21:17.960 --> 00:21:22.960
You can get the astronomical image there.

177
00:21:22.960 --> 00:21:27.960
So we see,

178
00:21:27.960 --> 00:21:32.960
Southey has in store for him a real hatchet job.

179
00:21:32.960 --> 00:21:37.960
He attacks Southey, well, of course, as being a reactionary, but a funny kind of

180
00:21:37.960 --> 00:21:49.240
and Reactionary, because this Tory is verging on modern socialism, he carries his hatred

181
00:21:49.240 --> 00:21:56.740
of the free market to the point of demanding total government control, better the government

182
00:21:56.740 --> 00:22:06.120
than these profit-seeking greedy businessmen, he conceives that the business of the magistrate

183
00:22:06.120 --> 00:22:12.640
is not merely to see that the persons and property of the people are secure from attack,

184
00:22:12.640 --> 00:22:18.080
but that the magistrate, the state, or to be a jack of all trades, architect, engineer,

185
00:22:18.080 --> 00:22:24.480
schoolmaster, merchant, theologian, a lady bountiful in every parish, a pole pry in every

186
00:22:24.480 --> 00:22:32.120
house, looking into people's private affairs, a spying, eavesdropping, relieving, admonishing,

187
00:22:32.120 --> 00:22:43.000
His principle is that no man can do anything so well for himself as his rulers, be they

188
00:22:43.000 --> 00:22:48.760
or whoever they may, that a government approaches nearer and nearer to perfection in proportion

189
00:22:48.760 --> 00:22:53.680
as it interferes more and more with the habits and notions of individuals.

190
00:22:53.680 --> 00:23:06.380
You see that there's a not very fine line, not very clear line, between a kind of hyper-conservatism

191
00:23:06.380 --> 00:23:14.180
and socialism and tomorrow when I talk about the origins of the socialist movement, I will

192
00:23:14.180 --> 00:23:15.180
bring that up again.

193
00:23:15.180 --> 00:23:20.540
They were both in the early stages, in the early decades of the 19th century, combined

194
00:23:20.540 --> 00:23:35.040
Against the New Liberal Society and Capitalism, and well, this is an example of his flashy style, I think.

195
00:23:35.040 --> 00:23:41.840
It says, Southey and his ilk think that the working people of England are so bad off.

196
00:23:41.840 --> 00:23:47.240
It will scarcely be maintained, I hope, that the Lazzaroni who sleep under the porticoes of Naples,

197
00:23:47.240 --> 00:23:54.600
Well, the beggars who besiege the convents of Spain are in a happier situation than the English working man.

198
00:23:54.600 --> 00:24:00.280
Again, contrasting what the Industrial Revolution is doing for common working people in England

199
00:24:00.280 --> 00:24:13.800
with the old static society that's not able to spark economic growth in, for instance, Spain or Naples.

200
00:24:13.800 --> 00:24:37.480
History is full of the signs of this natural progress of society in the absence of obstacles set up against it.

201
00:24:37.480 --> 00:24:59.640
We see in almost every part of the annals of mankind how the industry of individuals struggling up against wars, taxes, famines, conflagrations, mischievous prohibitions, and more mischievous protections creates faster than governments can squander and repairs whatever invaders can destroy.

202
00:24:59.640 --> 00:25:06.080
You see how in these historical works, because much of this is simply history and not just

203
00:25:06.080 --> 00:25:12.600
a presentation of his political principles, within these historical works of the most

204
00:25:12.600 --> 00:25:19.000
famous and popular historian of his time, you see embedded a classical liberal philosophy

205
00:25:19.000 --> 00:25:25.640
that then is imbibed and absorbed by the people who read him.

206
00:25:25.640 --> 00:25:31.960
And he points out something that I had mentioned before. Yes, he says, things are very distressful

207
00:25:31.960 --> 00:25:37.800
in England. What would you expect that we have had over the past 40 years? A war compared

208
00:25:37.800 --> 00:25:44.160
with the French and Napoleonic wars, a war compared with which all other wars sink into

209
00:25:44.160 --> 00:25:50.180
insignificance, taxation such as the most heavily taxed people of former times could

210
00:25:50.180 --> 00:25:59.180
would not have conceived, a debt larger in England than all the public debts that ever existed in the world added together,

211
00:25:59.180 --> 00:26:05.180
the food of the people studiously rendered dear to Corn Laws, the currency imprudently debased,

212
00:26:05.180 --> 00:26:16.180
going off the gold standard, and imprudently restored, yet there is progress because of the efforts of the people.

213
00:26:16.180 --> 00:26:30.180
I wanted through McCauley to make you, as I did before, through Cobden and Bright to an extent, make you somewhat familiar with some of these actors in the history of classical liberalism.

214
00:26:30.180 --> 00:26:41.180
Now, I want to turn my attention to another topic, and that is the role of the intellectuals in society,

215
00:26:41.180 --> 00:26:47.180
What has sometimes been called the problem of the intellectuals and the marketplace.

216
00:26:50.180 --> 00:26:56.180
Many of you, most of you probably, are familiar with the name of Robert Nozick.

217
00:27:00.180 --> 00:27:05.180
Nozick became a libertarian,

218
00:27:05.180 --> 00:27:15.680
which was a big plus for us because he was a Harvard professor and known as a hotshot,

219
00:27:15.680 --> 00:27:21.180
one of the universally admitted, one of the brightest young philosophers of his time,

220
00:27:21.180 --> 00:27:29.180
and throughout his brief career he died unfortunately too young, regarded as a very important philosopher.

221
00:27:29.180 --> 00:27:33.680
In case you're interested on how he became a libertarian,

222
00:27:33.680 --> 00:27:40.980
You can look up my archive at www.lewrockwell.com and there's a historical note on Robert Nozick after he had died.

223
00:27:40.980 --> 00:27:50.980
Nozick was a brilliant philosopher. His best known work is Anarchy, State and Utopia,

224
00:27:50.980 --> 00:27:59.980
which was a turning point because for the first time conventional academic philosophers

225
00:27:59.980 --> 00:28:05.980
had to deal with free market and libertarian arguments.

226
00:28:05.980 --> 00:28:12.980
There's a lot of original stuff in the book. On the other hand, there's a lot of stuff in Anarchy, State and Utopia,

227
00:28:12.980 --> 00:28:17.980
which won all kinds of prizes, that we'll be familiar with, to any one of us, really.

228
00:28:17.980 --> 00:28:21.980
However, to academic philosophers, it came as a revelation.

229
00:28:21.980 --> 00:28:44.980
His demolition of the Marxist theory of labor theory of value, and the idea that workers are always at the mercy of their employers, and on and on, Bob deals with these, and philosophers were amazed, wow, we thought it was always a lot more simple than that.

230
00:28:44.980 --> 00:28:58.980
In one of his essays, Nozick writes of an experience he often had when he came to reply to criticisms of laissez-faire capitalism.

231
00:28:58.980 --> 00:29:26.480
Bob said that after he refuted some particular charge that laissez-faire leads to monopoly or to systematic overproduction or to pollution or whatever, he said, let's say he's answered that charge, his interlocutor, the other person, drops the point and quickly leaps to another.

232
00:29:26.480 --> 00:29:33.980
Well, what about child labor? What about racism? What about advertising, brainwashes people into buying things they don't need?

233
00:29:33.980 --> 00:29:41.480
Bob says, point after point is given up. What is not given up, though, is the opposition to capitalism.

234
00:29:41.480 --> 00:29:48.480
He concluded that the particular arguments are not important. The particular charges that are brought up are not important.

235
00:29:48.480 --> 00:29:58.480
There is an underlying animus against capitalism, and I think that many of us will find this experience very familiar.

236
00:29:58.480 --> 00:30:06.480
That is, you answer one point and they immediately go to another point, and that's the answer to another point. Why?

237
00:30:06.480 --> 00:30:14.480
Well, because, as Bob says, there's an animus against capitalism.

238
00:30:14.480 --> 00:30:30.480
Another example of this, and this is relevant to the question of the intellectuals in the marketplace because the people that Bob is talking about, the people he habitually would come into contact with, would be other intellectuals.

239
00:30:30.480 --> 00:30:38.480
Then there's an example given by Ronald Coase, Nobel Laureate in Economics.

240
00:30:38.480 --> 00:30:44.480
He relates an incident highly revealing of the state of mind of opinion molders in America.

241
00:30:44.480 --> 00:30:50.480
It concerns the natural gas shortage of the 1960s, back in the 1960s.

242
00:30:50.480 --> 00:30:54.480
An economist at the University of Chicago, Edmund Kitsch, had written a study

243
00:30:54.480 --> 00:31:01.480
demonstrating the part that short-sighted federal regulation played in the shortage of natural gas.

244
00:31:01.480 --> 00:31:07.480
And he presented his findings in a public lecture in Washington in 1971.

245
00:31:07.480 --> 00:31:09.480
This is what Coase wrote.

246
00:31:09.480 --> 00:31:15.480
Much of the audience consisted of Washington journalists, members of the staff of congressional committees,

247
00:31:15.480 --> 00:31:17.480
and others with similar jobs.

248
00:31:17.480 --> 00:31:20.480
They displayed little interest in the findings of the study,

249
00:31:20.480 --> 00:31:26.320
Study, but a great deal of interest in discovering who had financed the study.

250
00:31:26.320 --> 00:31:30.760
Many seem to have been convinced that the law and economics program at the University

251
00:31:30.760 --> 00:31:34.440
of Chicago had been bought by the gas industry.

252
00:31:34.440 --> 00:31:38.460
A large part of the audience seemed to live in a simple world in which anyone who thought

253
00:31:38.460 --> 00:31:44.800
prices should rise under certain circumstances was pro-industry, and anyone who wanted prices

254
00:31:44.800 --> 00:31:47.720
to be reduced was pro-consumer.

255
00:31:47.720 --> 00:31:51.000
I could have explained that the essential of Kitsch's argument had been put forward

256
00:31:51.000 --> 00:31:56.520
earlier by Adam Smith, but most of the audience would have assumed that Adam Smith was someone

257
00:31:56.520 --> 00:32:02.800
else in the pay of the American Gas Association.

258
00:32:02.800 --> 00:32:08.640
In this episode, as in what Nozick reported, we see a microcosm of the world habitually

259
00:32:08.640 --> 00:32:12.040
inhabited by anti-market intellectuals.

260
00:32:12.040 --> 00:32:20.040
The continued flourishing of this class remains an enduring puzzle and problem for classical liberals and libertarians.

261
00:32:20.040 --> 00:32:29.040
Now, I don't propose to solve this problem to give you the ultimate solution this afternoon,

262
00:32:29.040 --> 00:32:39.040
but I will suggest the various theories that have been put forward and try to assist them for the ones that seem to be most plausible.

263
00:32:39.040 --> 00:32:51.540
At the 1951 meeting of the Montelloran Society at Beauvaillon, a distinguished panel of scholars discussed the treatment of capitalism by the historians.

264
00:32:51.540 --> 00:32:58.540
Their papers were, and some others, were later published in that book that I mentioned to you, edited by Hayek.

265
00:32:58.540 --> 00:33:06.540
In one paper, Bertrand de Juvenel, whom Joe Stromberg mentioned before, a distinguished French political philosopher,

266
00:33:06.540 --> 00:33:12.260
Describe one of the most striking characteristics of modern intellectuals, their animosity towards

267
00:33:12.260 --> 00:33:13.260
the marketplace.

268
00:33:13.260 --> 00:33:15.740
Why should this be?

269
00:33:15.740 --> 00:33:22.180
The reason cannot lie, as the juvenile argued, in the puritanical disdain for social arrangements

270
00:33:22.180 --> 00:33:27.440
that satisfy the hedonistic demands of selfish individuals, because modern welfare democracy

271
00:33:27.440 --> 00:33:33.980
is also such an arrangement, and is not subject to the antagonism of the intellectuals.

272
00:33:33.980 --> 00:33:43.980
The juvenile claims, somewhat surprising, that the intellectual's hostility to the businessman presents no mystery, as the two have by function wholly different standards.

273
00:33:43.980 --> 00:33:53.980
The businessman's motto is, the customer is always right, the intellectual's task is to preserve the highest standards of his field, even against the weight of popular opinion.

274
00:33:53.980 --> 00:33:59.980
But I don't find this very convincing.

275
00:33:59.980 --> 00:34:19.980
For instance, in democratic welfare states, politicians and bureaucrats also are supposed to serve the public rather than to struggle to preserve standards of excellence, and yet the intellectuals' enmity is not typically directed against democracy, the welfare state, or its leaders and functionaries.

276
00:34:19.980 --> 00:34:34.980
Twenty-one years later, in 1972, there was another panel on intellectuals in the marketplace at the Mont Pelerin Society that kept dealing with the question again and again for obvious reasons.

277
00:34:34.980 --> 00:34:42.980
And R.M. Hartwell, whom I mentioned before, the historian of the Industrial Revolution, spoke on history and ideology.

278
00:34:42.980 --> 00:34:50.980
Hartwell had occasion to remark on the widely held aversion to the economic and political system

279
00:34:50.980 --> 00:34:54.980
which provided the institutional framework for modern economic growth.

280
00:34:54.980 --> 00:35:00.980
As a historian, you naturally stress the crucial role of historical myths

281
00:35:00.980 --> 00:35:08.980
concocted and circulated by academic historians in nursing this aversion.

282
00:35:08.980 --> 00:35:17.980
Hartwell's lecture is particularly noteworthy for drawing attention to the systematic character of the anti-capitalist onslaught

283
00:35:17.980 --> 00:35:24.980
as experienced by the typical educated citizen of a western democracy.

284
00:35:24.980 --> 00:35:36.980
He notes, history is only one element in a battery of self, and consider whether this at all reflects your own educational experience.

285
00:35:36.980 --> 00:35:41.300
History is only one element in a battery of self-reinforcing prejudice against private

286
00:35:41.300 --> 00:35:43.800
property and the market economy.

287
00:35:43.800 --> 00:35:49.540
In literature, economics, philosophy, sociology and other subjects, the student is continually

288
00:35:49.540 --> 00:35:55.180
subjected to data and interpretations that converge on a single point, the viciousness

289
00:35:55.180 --> 00:36:00.020
of private enterprise and the virtuousness of state intervention and state-supported

290
00:36:00.020 --> 00:36:02.580
labor unionism.

291
00:36:02.580 --> 00:36:10.580
and Hartwell observes what schools and universities propagate in formal education many other institutions reinforce.

292
00:36:10.580 --> 00:36:16.580
The churches, the creative arts, the mass media.

293
00:36:16.580 --> 00:36:27.580
And then, some years later, I presented a paper on the same topic at the Montelloran Society.

294
00:36:27.580 --> 00:36:35.220
And I noted to them that the fact that we were coming back to the same old topic, same old question,

295
00:36:35.220 --> 00:36:42.580
does not argue with the futility of doing so, but rather the central importance of the question.

296
00:36:42.580 --> 00:36:48.420
Not us, not most of the people here, but most of the people there,

297
00:36:48.420 --> 00:36:55.280
had lived long enough to understand the truth of Joseph Schumpeter's assertion,

298
00:36:55.280 --> 00:37:06.280
Remember I mentioned Schumpeter, the Austrian, but not the economist from Austria, but not Austrian economist, but still a very fine and valuable thinker,

299
00:37:06.280 --> 00:37:16.280
his assertion that capitalism stands its trial before judges who have the sentence of death in their pockets.

300
00:37:16.280 --> 00:37:24.680
The only thing that changes, Schumpeter wrote, is the indictment, more or less what Bob Nozick

301
00:37:24.680 --> 00:37:30.040
was talking about, that ever-changing indictment is presented over and over and over again

302
00:37:30.040 --> 00:37:36.200
by the intellectuals. In earlier times, they indicted capitalism for the immiseration of

303
00:37:36.200 --> 00:37:43.600
the proletariat, as we noted, inevitable depressions, the disappearance of the middle classes. Then

304
00:37:43.600 --> 00:37:51.600
and a little later for imperialism and the inevitable wars among the imperialist or so-called capitalist powers.

305
00:37:51.600 --> 00:38:00.600
In more recent decades, the indictment again changed, as earlier accusations became too blatantly untenable.

306
00:38:00.600 --> 00:38:06.600
Capitalism was charged with being unable to compete with socialist societies and technological progress.

307
00:38:06.600 --> 00:38:12.600
Believe it or not, you never experience that, most of the people here, but that was the rage,

308
00:38:12.600 --> 00:38:27.600
I went to grad school around 1960. There had just been Sputnik. Statistics showed that in the Soviet Union they were producing three or four times as many engineers a year as we were, so it stood to reason.

309
00:38:27.600 --> 00:38:37.600
And also the figures of capital investment were just enormous. Nobody cared whether the capital was going to be used efficiently or not. The figures of the input were enormous.

310
00:38:37.600 --> 00:38:43.600
So it was inevitable that they were going to, as Khrushchev said, catch up with us and easily surpass us.

311
00:38:43.600 --> 00:38:46.600
So capitalism could not compete with socialism.

312
00:38:46.600 --> 00:38:54.600
Capitalism was accused of promoting automation, leading to catastrophic permanent unemployment in the 1960s.

313
00:38:54.600 --> 00:39:04.600
Capitalism was accused of both creating the consumer society in its piggish affluence

314
00:39:04.600 --> 00:39:21.600
and with proving incapable of extending such pigishness to the underclass with neocolonialism, with oppressing women and racial and even sexual minorities, with spawning and meretricious popular culture, and now as we know with destroying the earth itself.

315
00:39:21.600 --> 00:39:36.600
George Stigler, a famous University of Chicago professor, most of you probably have heard of him, and he was no ideologue, he was no fanatic, as one might say in any sense.

316
00:39:36.600 --> 00:39:49.600
But Stigler noted and remarked, a constant stream of new criticism in his time, such as the problem of homeless families, is being invented, discovered and heavily advertised.

317
00:39:49.600 --> 00:39:55.400
This is a presentation of the state of affairs, of the facts.

318
00:39:55.400 --> 00:39:58.520
Can there be any doubt about this?

319
00:39:58.520 --> 00:40:04.680
The question remains, what is at the root of this ever-changing, never-ending indictment?

320
00:40:04.680 --> 00:40:10.280
What accounts for the intellectual's unremitting hostility to the market economy?

321
00:40:10.280 --> 00:40:19.280
Well, people on our side have tried to give a number of answers to this question.

322
00:40:19.280 --> 00:40:23.360
Hayek was acutely concerned with our problem

323
00:40:23.360 --> 00:40:28.160
since he too was firmly convinced of the importance of the intellectuals.

324
00:40:28.160 --> 00:40:32.640
However, Hayek's view of the intellectuals is flatteringly benign.

325
00:40:32.640 --> 00:40:38.920
Their ideas, he says, are determined by and large by honest convictions and good intentions.

326
00:40:38.920 --> 00:40:41.680
He has an essay called The Intellectuals and Socialism,

327
00:40:41.680 --> 00:40:44.400
one of his famous essays and worth reading.

328
00:40:44.400 --> 00:40:48.900
He does mention in passing the intellectuals' egalitarian bias.

329
00:40:48.900 --> 00:40:55.900
However, his analysis is basically in terms of their scientism.

330
00:40:55.900 --> 00:41:01.900
I don't know if Hayek invented this term. I have a feeling he did.

331
00:41:01.900 --> 00:41:13.700
In any case, he certainly used it, and it means the inappropriate application of the methods of natural science to social scientific affairs.

332
00:41:13.700 --> 00:41:19.620
So he thinks that the intellectuals are basically against the market economy because they have this

333
00:41:19.620 --> 00:41:28.340
scientistic prejudice. Actually, he talks about scientism in one of his books that I consider

334
00:41:28.340 --> 00:41:33.460
one of his best books called The Counter-Revolution of Science, an older book of his.

335
00:41:36.660 --> 00:41:42.500
Thus, in Hayek's view, the chief influence on the intellectuals has been the example of the natural

336
00:41:42.500 --> 00:41:47.060
Social Sciences and their Applications.

337
00:41:47.060 --> 00:41:50.500
Basically his idea is this, as man has come to understand and then control the forces

338
00:41:50.500 --> 00:41:55.980
of nature, intellectuals have grown infatuated with the idea that an analogous mastery of

339
00:41:55.980 --> 00:42:01.460
social forces could produce similar benefits for mankind.

340
00:42:01.460 --> 00:42:07.380
Intellectuals are under the sway of such beliefs as that deliberate control or conscious organization

341
00:42:07.380 --> 00:42:12.660
is also in social affairs always superior to the results of spontaneous processes which

342
00:42:12.660 --> 00:42:16.060
are not directed by a human mind.

343
00:42:16.060 --> 00:42:22.460
Even makes the following astonishing, to me astonishing statement.

344
00:42:22.460 --> 00:42:27.240
That with the application of engineering techniques, the direction of all forms of human activity

345
00:42:27.240 --> 00:42:33.180
according to a single coherent plan should prove to be as successful in society as it

346
00:42:33.180 --> 00:42:39.320
that has been in innumerable engineering tasks is too plausible a conclusion not to seduce

347
00:42:39.320 --> 00:42:45.820
most of those who are elated by the achievements of natural science. It must indeed be admitted

348
00:42:45.820 --> 00:42:51.420
both that it would require powerful arguments to counter the strong presumption in favor

349
00:42:51.420 --> 00:42:59.420
of such a conclusion, that is a conscious overall planning society by a few people according

350
00:42:59.420 --> 00:43:20.180
The scientific argument will not lose its force until it has been conclusively shown

351
00:43:20.180 --> 00:43:25.340
why what has proved so eminently successful in producing advances in so many fields should

352
00:43:25.340 --> 00:43:31.340
should have limits to its usefulness and become positively harmful if extended beyond those limits.

353
00:43:31.340 --> 00:43:35.340
I hope you're able to follow that in general anyway.

354
00:43:35.340 --> 00:43:41.340
For me it is exceedingly difficult to understand what Hayek's reasoning here.

355
00:43:41.340 --> 00:43:46.340
He appears to be saying that because the natural sciences have made great advances

356
00:43:46.340 --> 00:43:51.340
and because innumerable particular engineering projects have succeeded,

357
00:43:51.340 --> 00:44:02.540
It is quite understandable that many intellectuals should conclude that the direction of all forms of human activity according to a single plan will be similarly successful.

358
00:44:02.540 --> 00:44:09.940
But, in the first place, the advances of the natural sciences were not brought about in accordance with an overall central plan.

359
00:44:09.940 --> 00:44:19.740
They were rather the product of many separate, decentralized, but coordinated researchers, coordinated through informed mechanisms,

360
00:44:19.740 --> 00:44:24.780
produced analogously in some respects to the market process, but there wasn't any central

361
00:44:24.780 --> 00:44:31.220
planning in connection with the successes of science to begin with, which is his premise.

362
00:44:31.220 --> 00:44:35.540
Second, from the fact that many particular engineering projects have succeeded, it does

363
00:44:35.540 --> 00:44:41.500
not follow that a single vast engineering project, one subsuming all particular projects,

364
00:44:41.500 --> 00:44:47.980
is likely to succeed, nor does it seem likely that most people will find such a claim plausible.

365
00:44:47.980 --> 00:44:52.780
Why then is it natural or logical or easily comprehensible that intellectuals should reason

366
00:44:52.780 --> 00:44:59.060
from the triumphs of decentralized scientific research and of individual engineering projects

367
00:44:59.060 --> 00:45:10.060
to the success of a plan by the supreme authority undertaking to direct all forms of human activity?

368
00:45:10.060 --> 00:45:14.900
Now it happens that Joseph Schumpeter reviewed Hayek's book The Road to Serfdom when it came

369
00:45:14.900 --> 00:45:22.500
and I think it's appropriate here to recite Schumpeter. He remarked that Hayek was polite

370
00:45:22.500 --> 00:45:28.640
to a fault towards his opponents in that he hardly ever attributed to them anything beyond

371
00:45:28.640 --> 00:45:35.220
intellectual error. But Schumpeter declares not all the points must be made can be made

372
00:45:35.220 --> 00:45:42.280
without speaking more plainly. Schumpeter here implies an important distinction. Civility

373
00:45:42.280 --> 00:45:47.440
Society in debate, including the formal presumption of good faith on the part of one's adversaries

374
00:45:47.440 --> 00:45:52.520
always in order, that's always called for.

375
00:45:52.520 --> 00:45:57.200
But there is also a place for the attempt to explain the attitudes, for instance, of

376
00:45:57.200 --> 00:46:02.600
anti-market intellectuals, a kind of form of sociology of knowledge.

377
00:46:02.600 --> 00:46:09.640
In this endeavor, it may be suggested politeness is not precisely what is most called for.

378
00:46:09.640 --> 00:46:27.700
As regards the positivist intellectuals, as regards the positivist intellectuals who argued

379
00:46:27.700 --> 00:46:33.100
from the successes of natural science to the need for central planning, it may well be

380
00:46:33.100 --> 00:46:39.620
that this false inference was no simple intellectual error, that it was facilitated by their prejudices,

381
00:46:39.620 --> 00:46:43.620
and resentments and perhaps their own will to power.

382
00:46:43.620 --> 00:46:51.620
In any case, Hayek's, I told you he was the head of my dissertation committee and he was a perfect gentleman.

383
00:46:51.620 --> 00:46:57.620
Maybe when he talked about these issues and discussed these problems too much of a gentleman,

384
00:46:57.620 --> 00:47:04.620
sometimes his attitude towards, you know, he dedicated the rote of serfdom to socialists of all parties.

385
00:47:04.620 --> 00:47:12.620
That would be like Ayn Rand dedicating Atlas Shrug to thugs, all the scriptures.

386
00:47:12.620 --> 00:47:17.620
It really strikes me as a little off.

387
00:47:17.620 --> 00:47:24.620
And to tell you truthfully, I've never heard of anybody ever convinced by Hayek's arguments.

388
00:47:24.620 --> 00:47:30.620
I know that some people, some socialists, Trotskyists for instance, were convinced by Mises' arguments

389
00:47:30.620 --> 00:47:39.020
and his very hard-hitting and not-too-polite attitude towards his opponents, but, well, that's the way Hayek was.

390
00:47:39.020 --> 00:47:44.920
But then it leads him to make statements that are very strange.

391
00:47:44.920 --> 00:47:47.520
This is what he says about intellectuals.

392
00:47:47.520 --> 00:48:02.220
Orthodoxy of any kind, any pretense that a system of ideas is final and must be unquestionably accepted as a whole is the one view which of necessity antagonizes all intellectuals, whatever their views on particular issues.

393
00:48:02.220 --> 00:48:04.220
This is an amazing statement.

394
00:48:04.220 --> 00:48:18.220
This is a statement Hayek makes of a category of persons that in the 20th century was notorious for including thousands upon thousands of prominent intellectuals of all countries,

395
00:48:18.220 --> 00:48:30.220
thousands upon thousands of prominent apologists for Soviet communism in all countries, that they opposed any form of orthodoxy, that they had to be convinced in a perfectly logical way.

396
00:48:30.220 --> 00:48:44.220
This is, it seems to me, indeed politeness to a fault. Hayek seemed to think that all intellectuals were sort of like Bertrand Russell, or something like that, like himself.

397
00:48:44.220 --> 00:48:51.220
And there were tens and tens of thousands of intellectuals who supported Stalinism.

398
00:48:51.220 --> 00:48:59.220
There were thousands of intellectuals who supported fascism and national socialism.

399
00:48:59.220 --> 00:49:05.660
A man who was one of the great American poets of the 20th century, Ezra Pound, delivered

400
00:49:05.660 --> 00:49:10.500
radio, happened to be in Italy during the war, delivered radio broadcasts on behalf

401
00:49:10.500 --> 00:49:17.140
of Mussolini and considered himself a friend and a supporter of Mussolini.

402
00:49:17.140 --> 00:49:19.900
And there'd be many other examples of something like that.

403
00:49:19.900 --> 00:49:22.700
So what Hayek is talking about I don't know.

404
00:49:22.700 --> 00:49:29.900
I think that that treating intellectuals with kid gloves is not the way to go.

405
00:49:29.900 --> 00:49:37.020
Well now we come to Schumpeter and his own theory of the intellectual proletariat.

406
00:49:37.020 --> 00:49:43.660
In Charding Hayek, as I quoted above, Schumpeter suggested that he might have learned a useful

407
00:49:43.660 --> 00:49:47.540
lesson from Marx.

408
00:49:47.540 --> 00:50:06.540
Now what this involves is this, Schumpeter had a lifelong engagement with Marxism, mainly as a critic, but like he had some similarities with Marx as well, like Marx he offered a highly pessimistic prognosis for the capitalist system, although for different reasons.

409
00:50:06.540 --> 00:50:12.540
But while Schumpeter holds that the intellectuals will play a key role in capitalism's demise,

410
00:50:12.540 --> 00:50:18.540
he in no way relies on the scenario set forth in the Communist Manifesto.

411
00:50:18.540 --> 00:50:23.540
There, Marx and Engels announced that as the final revolution approaches,

412
00:50:23.540 --> 00:50:31.540
a section of the bourgeois ideologists will go over to the side of the proletariat.

413
00:50:31.540 --> 00:50:40.540
These will be the ideologists, as they say, who have worked their way up to a theoretical understanding of the historical movement as a whole.

414
00:50:40.540 --> 00:50:49.540
By the way, note, these are not the people who are going to go over from the middle class where they were born to the communist movement.

415
00:50:49.540 --> 00:50:57.540
Note that it's not because they understand that communism is just or that it will bring about a better society.

416
00:50:57.540 --> 00:51:02.500
It is that they understand the theoretical movement.

417
00:51:02.500 --> 00:51:05.380
See what's involved there? That's a kind of Hegelianism.

418
00:51:05.380 --> 00:51:10.060
They understand how history is inevitably evolving.

419
00:51:10.060 --> 00:51:15.500
To be on the other side, to go against the current of history, is to be absurd.

420
00:51:15.500 --> 00:51:21.940
Like somebody trying to fly by jumping off a building and waving his arms.

421
00:51:21.940 --> 00:51:26.660
When they see the trend of the historical movement,

422
00:51:26.660 --> 00:51:35.140
On penalty of being absurd and insane, really, they have to support the proletarian cause.

423
00:51:35.140 --> 00:51:38.500
Not out of justice or any idea that communism is superior.

424
00:51:38.500 --> 00:51:41.860
Anyway, that's Marx and Engel.

425
00:51:41.860 --> 00:51:48.900
But this is such a laughably self-serving description that could not appeal to a skeptic

426
00:51:48.900 --> 00:51:50.300
like Schumpeter.

427
00:51:50.300 --> 00:51:55.780
Instead, his Marxism, if you want to call it that, consisted in examining capitalism

428
00:51:55.780 --> 00:52:01.220
Capitalism is a system with certain necessarily attendant sociological traits and exposing

429
00:52:01.220 --> 00:52:05.620
the class interests of the intellectuals within that system.

430
00:52:05.620 --> 00:52:12.620
As Jean-Péter says, compared to previous social orders, capitalism is especially vulnerable

431
00:52:12.620 --> 00:52:14.660
to attack.

432
00:52:14.660 --> 00:52:19.260
Unlike any other type of society, capitalism inevitably and by virtue of the very logic

433
00:52:19.260 --> 00:52:27.740
of its civilization educates and subsidizes a vested interest in social unrest.

434
00:52:27.740 --> 00:52:37.040
In particular, to go on, capitalism brings forth and nurtures a class of secular intellectuals,

435
00:52:37.040 --> 00:52:40.960
not the sort of intellectuals who existed in most other societies, societies who were

436
00:52:40.960 --> 00:52:46.240
connected with their religion, but secular intellectuals who wield the power of the spoken

437
00:52:46.240 --> 00:52:48.240
and the written word.

438
00:52:48.240 --> 00:52:54.240
The capitalist wealth machine makes possible cheap books, pamphlets, newspapers, today

439
00:52:54.240 --> 00:53:00.800
radio, television, the internet, the ever-widening public, and the ever-widening public that

440
00:53:00.800 --> 00:53:05.960
reads them, subsidizes education and literacy.

441
00:53:05.960 --> 00:53:11.480
The freedom of speech and of the press enshrined in liberal constitutions entails also, in

442
00:53:11.480 --> 00:53:17.280
Schumpeter's words, Freedom to Nibble at the Foundations of Capitalist Society.

443
00:53:17.280 --> 00:53:27.640
Let me remind you about Schumpeter.

444
00:53:27.640 --> 00:53:35.040
This analysis is contained in a few pages of his famous book, Capitalism, Socialism

445
00:53:35.040 --> 00:53:38.080
and Democracy.

446
00:53:38.080 --> 00:53:44.240
So, capitalist freedoms entail also what he calls the freedom to nibble at the foundations

447
00:53:44.240 --> 00:53:49.800
of a capitalist society. This is a constant gnawing away that is promoted by the critical

448
00:53:49.800 --> 00:53:58.200
rationalism inherent in capitalist society. Moreover, in contrast to earlier regimes, a

449
00:53:58.200 --> 00:54:04.680
capitalist state finds it difficult to suppress dissident intellectuals. Such a procedure

450
00:54:04.680 --> 00:54:08.820
Major would conflict with the general principle of the rule of law and the limits to the police

451
00:54:08.820 --> 00:54:15.080
power that are dear to the bourgeoisie itself.

452
00:54:15.080 --> 00:54:19.820
The key to the hostility of intellectuals to capitalism, in Schumpeter's view, is the

453
00:54:19.820 --> 00:54:24.980
expansion of education, particularly higher education.

454
00:54:24.980 --> 00:54:31.120
This creates in capitalist countries and you see this in developing countries also, an

455
00:54:31.120 --> 00:54:41.120
An enormous proportion of the youth of the country go on not only through high school, but now through college and university as well.

456
00:54:41.120 --> 00:54:50.120
The aim of the British Labor government is to get every young person into college or university.

457
00:54:50.120 --> 00:54:56.120
And that is almost, as in almost, but more than halfway been reached in the United States.

458
00:54:56.120 --> 00:55:02.000
One of the results of that, of course, is the dumbing down of higher education.

459
00:55:02.000 --> 00:55:08.160
You can't have the whole young population in college and universities and expect colleges

460
00:55:08.160 --> 00:55:11.480
and universities to be the same sort of thing that they've been before.

461
00:55:11.480 --> 00:55:18.520
In many cases, there's this enormous increase in higher education.

462
00:55:18.520 --> 00:55:26.720
Now this creates unemployment or underemployment of the university schooled classes of people.

463
00:55:26.720 --> 00:55:32.800
Many of them become psychically unemployable in manual occupations without necessarily

464
00:55:32.800 --> 00:55:37.200
acquiring employability in say professional work.

465
00:55:37.200 --> 00:55:46.840
That is beneath them now to work as auto mechanics or in pizza parlors and they're not really

466
00:55:46.840 --> 00:55:52.840
Many of them will be very good as lawyers, although that's what they're going to try to get into.

467
00:55:52.840 --> 00:55:56.840
Many of them will get into teaching in the public schools.

468
00:55:56.840 --> 00:56:06.840
A large proportion of my own students are future public school teachers and high school teachers also.

469
00:56:06.840 --> 00:56:15.840
Just as the worst people in med school, according to their grades and so on, become psychiatrists,

470
00:56:15.840 --> 00:56:43.840
The worst people in colleges, according to their grades and so on, become teachers, and this is not to say that they're not good teachers, obviously, but we're talking in terms of averages, but the point is, as Champagne indicates, that they just feel that they're too good to do the sort of thing which in previous generations people in their position would have done.

471
00:56:43.840 --> 00:56:53.840
The tenuous social position of these intellectuals breeds discontent and resentment, which are often rationalized as objective social criticism.

472
00:56:53.840 --> 00:56:55.840
And this is what Schumpeter writes,

473
00:56:55.840 --> 00:57:06.840
This emotional malaise will much more realistically account for hostility to the capitalist order than could the theory itself a rationalization in the psychological sense,

474
00:57:06.840 --> 00:57:12.280
According to which the intellectual's righteous indignation about the wrongs of capitalism

475
00:57:12.280 --> 00:57:16.520
simply represents a logical inference from outrageous facts.

476
00:57:16.520 --> 00:57:24.360
Remember, Nozick talked about this underlying animus, regardless of, and Stigler also, regardless

477
00:57:24.360 --> 00:57:29.640
of what particular accusations are raised and an answer.

478
00:57:29.640 --> 00:57:36.800
And Schumpeter says, ignore those and content yourself with the good answers that you've

479
00:57:36.800 --> 00:57:42.760
given to those accusations and then look to see what's behind them, why this constant

480
00:57:42.760 --> 00:57:46.880
production of attacks on capitalism.

481
00:57:46.880 --> 00:57:51.880
A major merit of Schumpeter's argument is that it elucidates an abiding feature of the

482
00:57:51.880 --> 00:57:57.920
sociology of radicalism and revolution, the hunt for government jobs, which I talked about

483
00:57:57.920 --> 00:58:02.040
in connection with the industrialist group and their analysis.

484
00:58:02.040 --> 00:58:08.840
The interconnection between over-education, a widening reservoir of unemployable intellectuals,

485
00:58:08.840 --> 00:58:14.280
the pressure for bureaucratic positions, and political turmoil was a commonplace among

486
00:58:14.280 --> 00:58:21.200
European observers of the 19th century.

487
00:58:21.200 --> 00:58:25.680
Later revolutionary movements, whether of the right or the left, can be understood to

488
00:58:25.680 --> 00:58:34.080
to a large extent as the ideologically camouflaged raid on the great state employment agency.

489
00:58:34.080 --> 00:58:39.820
This would be the case in the 19th century and I give some sources for that.

490
00:58:39.820 --> 00:58:44.460
From this perspective, we obtain a deeper understanding of the claim that the welfare

491
00:58:44.460 --> 00:58:48.640
state saved capitalism, which maybe you've heard.

492
00:58:48.640 --> 00:58:53.140
What the welfare state has actually accomplished is to furnish a never-ending source of state

493
00:58:53.140 --> 00:58:58.740
jobs for the mainly middle-class products of what is still referred to as university

494
00:58:58.740 --> 00:59:07.180
education without, as in the 19th century, requiring a revolutionary assault.

495
00:59:07.180 --> 00:59:15.600
All of the jobs in the EPA and endless social work of one kind or another, all the other

496
00:59:15.600 --> 00:59:21.980
aspects of the welfare state, well these are jobs now and those who cannot find who are

497
00:59:21.980 --> 00:59:34.380
While there is doubtless a good deal of truth in Schumpeter's identification of the systemic

498
00:59:34.380 --> 00:59:41.740
surplus of intellectuals as a source of anti-capitalism, it also presents certain difficulties, the

499
00:59:41.740 --> 00:59:46.740
most important of which is this. It is not so much the unemployed intellectuals who are

500
00:59:46.740 --> 00:59:54.060
are the ones who are employed. Intellectuals unable to find suitable jobs may well provide

501
00:59:54.060 --> 01:00:02.460
a receptive subculture, as well as occasional cannon fodder for revolutionary movements

502
01:00:02.460 --> 01:00:07.740
among communist anarchists in the late 19th century or some third world countries today.

503
01:00:07.740 --> 01:00:13.020
In Germany, after the First World War, artists and writers frozen out of the avant-garde

504
01:00:13.020 --> 01:00:18.020
and the broad culture of Weimar were prominent among the early national socialists.

505
01:00:18.020 --> 01:00:25.020
But Schumpeter's thesis does not hold for many other cases, probably the historically most significant ones.

506
01:00:25.020 --> 01:00:33.020
Emile Zola and Anatole France, Gerhard Hauptmann and Berto Brecht, H.G. Wells and Bernard Shaw,

507
01:00:33.020 --> 01:00:39.020
John Dewey and Upton Sinclair were scarcely unemployables in the intellectual world.

508
01:00:39.020 --> 01:01:09.020
Maybe the stars of the mass news media in all advanced countries, one could mention news persons in America who earn two million dollars a year or more, such being the savage inequalities of capitalism, are typically, these are people that you see all the time, are typically nibblers at the system of private enterprise, just listen to the tone of their voice

509
01:01:09.020 --> 01:01:39.020
Well, let's turn our attention to Ludwig von Mises.

510
01:01:39.020 --> 01:01:47.020
If some paid a decline to be polite to a fault when it came to anti-market intellectuals,

511
01:01:47.020 --> 01:01:54.020
what are we going to say about Hayek's mentor Ludwig von Mises?

512
01:01:54.020 --> 01:01:59.020
Mises frequently probed the basis of the anti-capitalistic mentality.

513
01:01:59.020 --> 01:02:07.020
Often, and he has a book by that title, that's not his best, often he emphasizes invidious personal motivation,

514
01:02:07.020 --> 01:02:13.020
Resentment and Vitter-Envy as a source of this mentality.

515
01:02:13.020 --> 01:02:19.020
Replacement of the society of status, the older society of status, by a society of contract.

516
01:02:19.020 --> 01:02:25.020
Society of status where whatever you did in life was pretty much determined by the position you were born into.

517
01:02:25.020 --> 01:02:33.020
Society of contract, whatever you do in life is to a very large extent depending on your own efforts.

518
01:02:33.020 --> 01:02:41.860
The replacement of one society by another aggravated feelings of failure and inferiority among those who did not succeed.

519
01:02:41.860 --> 01:02:50.260
With the quality of opportunity and all careers open to talent, lack of financial success became a judgment upon the individual.

520
01:02:50.260 --> 01:02:55.860
This is a burden he attempts to shift by scapegoating the social system.

521
01:02:55.860 --> 01:03:02.160
Intellectuals, according to Mises, share this weakness perhaps in an accentuated form.

522
01:03:02.160 --> 01:03:11.820
On occasion, Mises goes so far as to trace the psychological roots of anti-liberalism to a mental pathology.

523
01:03:11.820 --> 01:03:17.360
The scapegoating of the social system by those unable to cope with the reality of their relative failure in life

524
01:03:17.360 --> 01:03:24.920
is, Mises claims, a mental disorder which psychiatry has so far neglected to classify.

525
01:03:24.920 --> 01:03:29.520
Engaging in a bit of volunteer psychiatric nosology himself,

526
01:03:29.520 --> 01:03:37.920
He ventures to label this condition the Fourier Complex after the early French socialist Charles Fourier.

527
01:03:37.920 --> 01:03:46.720
Psychiatrists, as far as I'm aware of, have not been eager to accept Mises' volunteer work.

528
01:03:46.720 --> 01:03:54.720
Although Mises' focus on envy and resentment is the best known of his attempts to explain this anti-capitalist mentality,

529
01:03:54.720 --> 01:04:01.320
I submit that there is a second and different approach of his that may be more fruitful.

530
01:04:01.320 --> 01:04:07.320
In an early essay entitled The Psychological Roots of the Resistance to Economics,

531
01:04:07.320 --> 01:04:16.620
Mises launches a radical attack on the strand of traditional Western morality that has stigmatized money-making.

532
01:04:16.620 --> 01:04:24.120
Citing a famous work by Roman Cicero as an exemplary text,

533
01:04:24.120 --> 01:04:31.960
Mises identifies the contempt for money-making as deeply ingrained in Western culture.

534
01:04:31.960 --> 01:04:37.920
And this, he says, is the source of the hostility towards capitalists, towards trade, and towards

535
01:04:37.920 --> 01:04:44.720
speculation, which he thinks dominates our whole public life, politics, and the written word.

536
01:04:44.720 --> 01:04:50.480
This contempt, nurtured and sustained through the centuries under changing regimes, is the

537
01:04:50.480 --> 01:04:52.760
natural outgrowth of class morality.

538
01:04:52.760 --> 01:05:01.920
By the way, Mises, as you can imagine, given his views, is very distressed by this contempt

539
01:05:01.920 --> 01:05:10.120
for money-making, for commerce, for merchants, for business people that permeated our civilization

540
01:05:10.120 --> 01:05:14.800
and that permeates our culture, which is one reason that he had such enormous respect for

541
01:05:14.800 --> 01:05:20.440
Ayn Rand's Atlas Shrug when it was published.

542
01:05:20.440 --> 01:05:26.540
Now this, he says, this cluster of values, is the natural outgrowth of the particular

543
01:05:26.540 --> 01:05:31.080
class morality. Specifically, the morality of the classes that are sheltered from the

544
01:05:31.080 --> 01:05:37.520
market by the circumstance that they live from taxes. They don't have to worry about

545
01:05:37.520 --> 01:05:45.520
the market. They don't have to care about speculation, making a profit. In our own day

546
01:05:45.520 --> 01:05:52.120
It is a morality generated, as he says, by priests, bureaucrats, professors and army officers

547
01:05:52.120 --> 01:05:59.220
who look with loathing and scorn on entrepreneurs, capitalists and speculators.

548
01:05:59.220 --> 01:06:07.020
Insight into the prevalence of this anti-market ethic helps explain, as Mises' other envy-based approach does not,

549
01:06:07.020 --> 01:06:13.720
the anti-market attitudes often sound among the economically successful, even in the private sector.

550
01:06:13.720 --> 01:06:18.920
Because as Mises says, no one escapes the power of a dominant ideology.

551
01:06:18.920 --> 01:06:27.920
Thus, entrepreneurs and capitalists themselves are swayed by the moral outlook that damns their activity.

552
01:06:27.920 --> 01:06:39.420
And it's not a rare occurrence that even the business man who made the money,

553
01:06:39.420 --> 01:06:52.300
But, very especially, his sons and daughters turn against the capitalist system, as Mises explains, because of the dominant ideology that they are exposed to.

554
01:06:52.300 --> 01:06:58.020
They suffer from a bad conscience and feelings of inferiority.

555
01:06:58.020 --> 01:07:07.160
As Mises says, this shows itself, among other things, in the support given to socialist movements by millionaires and their sons and daughters.

556
01:07:07.160 --> 01:07:15.360
Well, I have a number of other important points to make about this, about the intellectuals in the marketplace, but let's stop here.

557
01:07:15.360 --> 01:07:22.960
Talked about the Industrial Revolution again, some further points and maybe some comments or questions are left over from this morning,

558
01:07:22.960 --> 01:07:30.360
but now also about this topic that I'm pretty sure you've considered from time to time.

559
01:07:30.360 --> 01:07:37.320
Why is it that the intellectuals, many of the people that you come across, your friends, your peers, your teachers,

560
01:07:37.320 --> 01:07:42.040
why is it that they seem to have this animus against capitalism?

561
01:07:42.040 --> 01:07:46.120
So, any comments or questions about any of the things that have come up?

562
01:07:46.120 --> 01:08:03.120
I think that they believe in what they do, and I think that if we don't do it, then we become in fact against that movement,

563
01:08:03.120 --> 01:08:11.120
but I don't think they even mean what they do, even if they mean it from the heart, they wouldn't know where to go.

564
01:08:11.120 --> 01:08:19.120
Well, no one doubts that they believe it. The question is, why do they believe it?

565
01:08:19.120 --> 01:08:23.120
Because that's what?

566
01:08:23.120 --> 01:08:31.120
Well, that's the chicken and egg thing. Who is it that teaches them that?

567
01:08:31.120 --> 01:08:38.120
And this has been going on for many generations now. Why is it that they have this systematic bias against capitalism?

568
01:08:38.120 --> 01:08:54.120
You've never experienced what Nozick talks about, say you're talking to even your teacher or maybe with some friend of yours and they bring up something about the capitalism and then you answer it and pretty successfully the person even says, okay, maybe you're right about that.

569
01:08:54.120 --> 01:09:01.120
But then immediately brings up something else. Doesn't it suggest that there's a prejudice involved?

570
01:09:01.120 --> 01:09:31.120
I think it's interesting to find out why it started and there are some suggestions of Mises that the whole culture going back a long, long time has been dominated by the ethical

571
01:09:31.120 --> 01:09:50.120
A general outlook of a certain class, basically the clerics you might say, actual religious clerics or secular clerics, a certain class that doesn't have to worry about the market, that lives by taxes or endowments.

572
01:09:50.120 --> 01:10:00.120
In the case of professors, most of my colleagues, I would say, have not thought very deeply about this, and they have a general attitude.

573
01:10:00.120 --> 01:10:07.120
Look, of course you get a check every two weeks. What's the problem? Why can't we have an economic system like that?

574
01:10:07.120 --> 01:10:16.120
That makes a lot of sense. You just get a check from the state of New York every couple of weeks, and that works out fine.

575
01:10:16.120 --> 01:10:33.080
I was wondering if you think that what you just said about the secondary and post-secondary

576
01:10:33.080 --> 01:10:39.080
is against the system in Bismarck's right, and also a comment that puts the answer of

577
01:10:39.080 --> 01:10:43.080
growth in social systems as a consequence of technology.

578
01:10:43.080 --> 01:10:45.080
Nietzsche.

579
01:10:48.080 --> 01:10:52.080
No, Nietzsche was criticizing the educational system.

580
01:11:03.080 --> 01:11:13.080
by normal standards compared to a number of other countries, that socialism was a variant of Christianity.

581
01:11:13.080 --> 01:11:25.080
Many people have suggested on both sides, that is, people who were in favor of socialism said that all that socialism is is practical Christianity, or Christianity brought up to date.

582
01:11:25.080 --> 01:11:30.080
The Sassimonians, as we'll talk tomorrow about, maintain that.

583
01:11:30.080 --> 01:11:37.080
Nietzsche was using it in a negative way, because he disliked both Christianity and socialism.

584
01:11:37.080 --> 01:11:43.080
But I don't think Nietzsche's political views, frankly, are very interesting or important.

585
01:11:43.080 --> 01:11:48.080
There is a passage in the Lusbeck Zarathustra where he talks about the state.

586
01:11:48.080 --> 01:11:57.160
You know, you can have your own seminar sometime at the Mises Institute, and no, what he calls

587
01:11:57.160 --> 01:12:03.400
the state in fact is the coldest of all cold monsters.

588
01:12:03.400 --> 01:12:08.680
And now Mises, Mises works are very valuable, on the other hand they do not contain much

589
01:12:08.680 --> 01:12:09.680
humor.

590
01:12:09.680 --> 01:12:17.760
There is, from time to time he attempts humor, and he quotes this passage from those pictures

591
01:12:17.760 --> 01:12:24.560
of Zarathustra, and he says that the state is neither cold nor warm nor lukewarm, all

592
01:12:24.560 --> 01:12:31.080
the state is is an instrument for certain purposes to destroy people who would break

593
01:12:31.080 --> 01:12:35.280
up society by killing, stealing and so on.

594
01:12:35.280 --> 01:12:40.360
But I didn't laugh either when I first read it.

595
01:12:40.360 --> 01:12:47.560
So Nietzsche does have this statement that some people have pointed out about the state.

596
01:12:47.560 --> 01:12:53.560
I'm not sure what he really meant by that. He disliked the German state of his own time,

597
01:12:53.560 --> 01:13:04.560
the imperial German state, the second right, but I don't know how much politics really

598
01:13:04.560 --> 01:13:11.560
can be gleaned from Nietzsche. Maybe other people do have sources for that. Yeah, Marcus.

599
01:13:11.560 --> 01:13:15.560
A little louder, please.

600
01:13:15.560 --> 01:13:19.560
Why is that?

601
01:13:19.560 --> 01:13:23.560
Because of what?

602
01:13:31.560 --> 01:13:35.560
Yeah. Well, other...

603
01:13:35.560 --> 01:14:04.560
Well, okay. He does talk about ressentiment, which I imagine means basically resentment, as does a German sociologist a few years later, Max Schaehle, more fruitfully I think, but Nietzsche does not mean resentment of the economically successful.

604
01:14:04.560 --> 01:14:06.560
My word is no, sir.

605
01:14:28.560 --> 01:14:30.560
My word is no, sir.

606
01:14:34.560 --> 01:14:41.560
I'm getting a kind of sense of how to approach your contributions.

607
01:14:41.560 --> 01:14:44.560
So let me get close and listen to what you have to say.

608
01:14:44.560 --> 01:14:53.560
Mario Vargas Llosa, the Peruvian writer.

609
01:14:53.560 --> 01:14:55.560
Yes, the Peruvian writer, yes.

610
01:14:55.560 --> 01:14:59.560
of the 50 or 50 right wing intellectuals and people,

611
01:14:59.560 --> 01:15:02.560
whether it's light to switch from left to left, left to left,

612
01:15:02.560 --> 01:15:07.560
and what I was saying is that the intellectual circle

613
01:15:07.560 --> 01:15:10.560
has a very small field of influence in the entire world.

614
01:15:10.560 --> 01:15:14.560
So you want to get in the building to be with that.

615
01:15:14.560 --> 01:15:18.560
If I would have been a right wing or a broad open market,

616
01:15:18.560 --> 01:15:21.560
broad competitive intellectual in those days,

617
01:15:21.560 --> 01:15:23.560
I would have never been known around the world.

618
01:15:23.560 --> 01:15:49.560
Well, I don't know what to say. The problems are so deep. My last lecture I'll talk about

619
01:15:49.560 --> 01:15:55.840
and the Possible Future of Freedom.

620
01:15:55.840 --> 01:16:01.200
How to go about changing things would be very hard to say, but I don't think that working

621
01:16:01.200 --> 01:16:09.000
within the system of government education at any level, including colleges and universities,

622
01:16:09.000 --> 01:16:12.920
is going to help very much.

623
01:16:12.920 --> 01:16:18.920
And actually, one hopeful sign is I can't imagine that the system is going to last much

624
01:16:18.920 --> 01:16:25.080
for Longer, that is the system of standing in front of a group of people, I mean the

625
01:16:25.080 --> 01:16:35.880
system that kids have to go through six hours a day for 15 or 18 years of their lives, sitting

626
01:16:35.880 --> 01:16:41.920
listening to somebody in the front of the class go on and on, for one thing it's extremely

627
01:16:41.920 --> 01:16:48.720
labor intensive and that's why the cost of education keeps going up and up and up, college

628
01:16:48.720 --> 01:16:52.720
Research Education, for instance, and with the modern technology, I cannot see that it's

629
01:16:52.720 --> 01:17:00.720
going to last very long, that alternatives based on the homeschooling will become ever

630
01:17:00.720 --> 01:17:05.720
more easily available to masses and masses of people.

631
01:17:05.720 --> 01:17:08.720
What?

632
01:17:08.720 --> 01:17:11.720
What?

633
01:17:11.720 --> 01:17:14.720
Well, not just the internet.

634
01:17:14.720 --> 01:17:17.720
All of modern technology, you know,

635
01:17:17.720 --> 01:17:20.720
DVDs with CDs

636
01:17:20.720 --> 01:17:23.720
that contain

637
01:17:23.720 --> 01:17:26.720
each one, let's say, 10% of the Library of Congress.

638
01:17:26.720 --> 01:17:29.720
And

639
01:17:29.720 --> 01:17:32.720
well, look, I mean, how long

640
01:17:32.720 --> 01:17:38.720
What's been going on now? A few years? What's it going to be like in 20, 30, 40, 50 years from now?

641
01:17:38.720 --> 01:17:39.720
Yes?

642
01:17:39.720 --> 01:17:47.720
You're asking why...

643
01:17:47.720 --> 01:18:00.720
Yeah. I'm not just asking, everybody asks this. The fact of the matter is that constant critics in every liberal arts department, not in engineering, you know, Hayek is wrong about this.

644
01:18:00.720 --> 01:18:08.720
Not in engineering, not in agricultural science, not in chemistry and biology so much, but in the liberal arts.

645
01:18:08.720 --> 01:18:11.720
They're systematic enemies of the capitalist system.

646
01:18:11.720 --> 01:18:12.720
System.

647
01:18:12.720 --> 01:18:13.720
Q. Isn't it largely responsible for this?

648
01:18:13.720 --> 01:18:14.720
Isn't it so that it's all part of the public administration?

649
01:18:14.720 --> 01:18:15.720
A. Well, you raise an important point.

650
01:18:15.720 --> 01:18:16.720
I wouldn't say it's the only cause, but it certainly helped the socialist cause along.

651
01:18:16.720 --> 01:18:37.080
Well, you raise an important point. I wouldn't say it's the only cause, but it certainly

652
01:18:37.080 --> 01:18:46.440
helped the socialist cause along. If we take an example that I know something about France.

653
01:18:46.440 --> 01:18:54.880
The French public education system is what made the French public, first of all, Republican,

654
01:18:54.880 --> 01:18:59.960
considered the monarchist, talking about the France of the villages and the towns, thousands

655
01:18:59.960 --> 01:19:05.240
and thousands of villages and towns out there, not Paris, made France a Republican, made

656
01:19:05.240 --> 01:19:12.120
it secular, that is, deprived the French of their Catholic traditions, and in time, in

657
01:19:12.120 --> 01:19:19.120
The short amount of time by the early 20th century made a great part of the French public socialist.

658
01:19:19.120 --> 01:19:30.120
The public school teachers were the agents of these ideologies that entered the interstices of the French society.

659
01:19:30.120 --> 01:19:34.120
To an extent, yeah, to an extent.

660
01:19:34.120 --> 01:19:42.120
Less when American public education was under local control, and now with the federalization of education, sky's the limit.

661
01:19:42.120 --> 01:19:58.120
These Republicans remind me of what Benjamin Constant, whom I've mentioned before, said about the reactionaries and the monarchists and the theocrats who are in power.

662
01:19:58.120 --> 01:20:08.120
He said, you're in power and now you're willing to use all the elements of the state to indoctrinate the public and indoctrinate the youth with your ideas.

663
01:20:08.120 --> 01:20:15.120
But once you've set up all those agencies for indoctrination, what do you think is going to happen when the radicals take over?

664
01:20:15.120 --> 01:20:22.120
They're going to use those same methods to indoctrinate, as the Jacobins had, to indoctrinate the public with their ideas.

665
01:20:22.120 --> 01:20:25.120
Why not get rid of those instruments altogether?

666
01:20:25.120 --> 01:20:39.120
And so what the Republican Party is doing in America, nationalizing education, thinking that they're going to be in control, they're going to set up conservative so-called standards and so on, they're not going to be in power forever.

667
01:20:39.120 --> 01:20:48.120
I mean, can you imagine 20 years from now just talking about 9-11 and just going on and on, the same stuff.

668
01:20:48.120 --> 01:20:57.120
The other side is going to come in sooner or later, and they're pretty good at using these instruments to serve their own ideology.

669
01:20:57.120 --> 01:20:59.120
Daniel?

670
01:20:59.120 --> 01:21:07.120
It seems to me that the many companies are trying to justify this, but they also have

671
01:21:07.120 --> 01:21:14.120
this larger and more critical role, with the attention of, for example, financial raising

672
01:21:14.120 --> 01:21:16.120
models and things like that.

673
01:21:16.120 --> 01:21:21.120
I was wondering if you could go into a bit of a general development of the economic, because

674
01:21:21.120 --> 01:21:25.120
in the economic it seems to me that that is a kind of a dangerous one, because it doesn't

675
01:21:25.120 --> 01:21:28.700
the world is back to its constitutional order.

676
01:21:28.700 --> 01:21:36.980
Oh yes, yes I was going to say that the opposition to commerce and moneymaking and so on is one thing

677
01:21:36.980 --> 01:21:42.620
and the opposition, the general opposition to the foundations and values of your society is another thing.

678
01:21:42.620 --> 01:21:53.960
That's a very good point because the second is a more modern phenomenon and I think it is basically traceable to the time of the Enlightenment

679
01:21:53.960 --> 01:22:06.460
Well, one thing that's involved is that the intellectuals were no longer supported by the church and by the nobility, which they had typically been before.

680
01:22:06.460 --> 01:22:18.960
There was now a general public who'd buy their books and they could live by selling their books, so that they were not beholden to the mainstays of society.

681
01:22:18.960 --> 01:22:31.960
And they found in many cases that the public was interested in this adversarial, in this criticism of society, this undermining of society, which is typical of what happened in the Enlightenment.

682
01:22:31.960 --> 01:22:41.960
Of course you could say the liberals were also undermining certain foundations of society, and this is something Schumpeter is pointing to.

683
01:22:41.960 --> 01:22:49.600
The classical liberals started it. Maybe they didn't know that it wasn't going to stop with them.

684
01:22:49.600 --> 01:23:00.000
Maybe they hoped it would stop with them, but it doesn't. It goes on, and then other aspects of society come under attack.

685
01:23:00.000 --> 01:23:06.520
Tocqueville said, okay, the French Revolution did establish certain liberal reforms.

686
01:23:06.520 --> 01:23:12.920
did away with the privileges that attached to what remained a feudalism and the nobility.

687
01:23:12.920 --> 01:23:21.520
However, then what happened was that there was only one privilege perceived by everybody else,

688
01:23:21.520 --> 01:23:23.320
and that was property.

689
01:23:23.320 --> 01:23:25.920
And then property started to come under attack.

690
01:23:25.920 --> 01:23:31.020
The people who thought that they could get rid of all the other privileges or all the other distinctions

691
01:23:31.020 --> 01:23:34.020
and Leave Property, Tocqueville said that was an error.

692
01:23:36.020 --> 01:23:37.020
Dan.

693
01:23:44.020 --> 01:23:45.020
Well, how does that work?

694
01:24:01.020 --> 01:24:28.020
Well, that's an interesting point. If you look on socialism as an attempt to create one vast human family, then you can say that our early experience seems to predispose us to that, because we all grow up and become human beings through the family.

695
01:24:28.020 --> 01:24:35.020
And then, suddenly, to go from the family to a world that's individualized,

696
01:24:35.020 --> 01:24:41.020
from the family where everybody does get according to their need, as much as possible,

697
01:24:41.020 --> 01:24:47.020
to a world where there's a price on everything and you have to pay for everything that you ever get,

698
01:24:47.020 --> 01:24:50.020
that's traumatic.

699
01:24:50.020 --> 01:24:56.020
I don't know how far to go with that, though, or how to assess the validity of that,

700
01:24:56.020 --> 01:25:01.780
Society of that. But it's an interesting idea. And as you say, sociobiology would tell us

701
01:25:01.780 --> 01:25:08.200
that, or it doesn't even have to be sociobiology, it could be the book of Genesis that tells

702
01:25:08.200 --> 01:25:16.200
us that we all come from families, families are natural. And so then the contrast between

703
01:25:16.200 --> 01:25:23.880
the larger individualist and profit-oriented society versus the family, the warm nurturing

704
01:25:23.880 --> 01:25:30.880
in Family, maybe you could say that that's behind some efforts to achieve socialism.

705
01:25:30.880 --> 01:25:33.880
You want to say something about that?

706
01:25:33.880 --> 01:25:40.880
Well, just in response to that, the things I've read about human development in the family

707
01:25:40.880 --> 01:25:45.880
is that we're actually leading the others with jobs because we're the national community

708
01:25:45.880 --> 01:25:47.880
that they found development.

709
01:25:47.880 --> 01:25:51.880
It is because of the family and the identity of the community that we're in that kids find

710
01:26:21.880 --> 01:26:28.880
When they reflect upon certain ideas, like economic economy, it is an application that you need to set with yourself.

711
01:26:28.880 --> 01:26:35.880
But people first begin to notice that, wow, it seems to be a regular concatenation of events and sequences.

712
01:26:35.880 --> 01:26:41.880
When they reflect upon that, the natural answer is to say, how is this designed and planned?

713
01:26:41.880 --> 01:26:50.880
And if people don't go through and learn from the right sources, then it would make sense that they would maybe assume that they were quite behind.

714
01:26:50.880 --> 01:27:15.880
and I think a lot of alienation, like I look at my own family, my father's oldest sister, they all came from a middle class rural family, but she wanted to become an educator.

715
01:27:15.880 --> 01:27:22.880
I've heard that my cousin, you were all taught that hard work was important, even though we had sort of social excuses in the early days,

716
01:27:22.880 --> 01:27:26.880
we were taught that hard work was important, and a lot of my friends showed us that.

717
01:27:26.880 --> 01:27:31.880
But my cousin on the other hand, he's just a little brat in the lecture, he's totally alienated.

718
01:27:31.880 --> 01:27:40.880
Yeah, okay. Listen, don't come 1,500 miles to Auburn, Alabama to badmouth your relatives, okay?

719
01:27:40.880 --> 01:27:44.880
I don't think that's really very nice. You could have just said I knew some persons and people

720
01:27:44.880 --> 01:27:47.880
and such and such.

721
01:27:47.880 --> 01:27:54.880
Well, we're going to, I still have a few things to say about the intellectuals in the marketplace,

722
01:27:54.880 --> 01:27:59.880
which we'll deal with tomorrow morning, and then basically tomorrow I'm going to be dealing with

723
01:27:59.880 --> 01:28:06.880
early and later socialism, the utopian social, Rousseau, the utopian socialists, Marx, and then

724
01:28:06.880 --> 01:28:10.880
the history of Soviet communism. Thank you.