WEBVTT NOTE A Libertarian Gallop Through American History 1 00:00:00.000 --> 00:00:04.400 Ladies and gentlemen, thanks for being here. 2 00:00:04.400 --> 00:00:09.200 Unfortunately, Mark has now ruined things for me because he's given money away to people. 3 00:00:09.200 --> 00:00:12.000 I'm standing up here going, well, you know, I've got a couple of bucks in here, 4 00:00:12.000 --> 00:00:15.200 but I don't have any real rationale for giving it out. 5 00:00:15.200 --> 00:00:18.400 Kind of a shame. 6 00:00:18.400 --> 00:00:24.700 Yes, it's true that I had a New York Times bestseller a couple of years ago. 7 00:00:24.700 --> 00:00:29.000 By some interesting happenstance, it just so happens that I have a copy right up here. 8 00:00:29.000 --> 00:00:33.380 sort of fell into my hands so you might have noticed it in the bookstore it's 9 00:00:33.380 --> 00:00:38.420 the politically incorrect guide to American history and if there's one thing 10 00:00:38.420 --> 00:00:42.300 more satisfying than having a New York Times bestseller it's having a New York 11 00:00:42.300 --> 00:00:46.560 Times bestseller that the New York Times hates you know so that every week they 12 00:00:46.560 --> 00:00:50.360 have to put this thing on the list it's driving them crazy so that was that was 13 00:00:50.360 --> 00:00:57.440 particularly satisfying and it was and it was free publicity because also in 14 00:00:57.440 --> 00:01:01.440 In addition to putting on the list the New York Times specifically on their editorial page 15 00:01:01.440 --> 00:01:04.440 denounced me and the book as being very dangerous 16 00:01:04.440 --> 00:01:07.440 because I was puncturing a lot of the conventional wisdom 17 00:01:07.440 --> 00:01:10.440 and of course my sales zoomed after they did that. 18 00:01:10.440 --> 00:01:14.440 People thought, well obviously we have to buy this instantly. 19 00:01:14.440 --> 00:01:16.440 So, you know, that was wonderful. 20 00:01:16.440 --> 00:01:19.440 So I actually have another American history book coming out in the spring 21 00:01:19.440 --> 00:01:22.440 and I suspect the Times will ignore it altogether. 22 00:01:22.440 --> 00:01:24.440 You know, fair enough. 23 00:01:24.440 --> 00:01:26.440 You know, why give me free publicity? 24 00:01:26.440 --> 00:01:31.440 Well, I'm very glad, particularly, that you folks are homeschooling families. 25 00:01:31.440 --> 00:01:36.440 I myself, I was telling some of you at lunch, I'm the father of three young girls. 26 00:01:36.440 --> 00:01:39.440 The oldest is three. 27 00:01:39.440 --> 00:01:42.440 Oh, my goodness, even homeschooling families are murmuring. 28 00:01:42.440 --> 00:01:45.440 How can you do this? 29 00:01:45.440 --> 00:01:47.440 For a while we had three under three. 30 00:01:47.440 --> 00:01:49.440 My goodness gracious. 31 00:01:49.440 --> 00:01:51.440 Yeah, that's right. 32 00:01:51.440 --> 00:01:55.440 A few of us from the Institute were in New York City for an event a couple of weeks ago 33 00:01:55.440 --> 00:02:08.440 I started off by telling people that last year, one of the times I saw Hans Hoppe, who was an affiliated senior fellow here at the Institute, I saw him and he was saying to me, 34 00:02:08.440 --> 00:02:16.440 Well, isn't it interesting? I see you have a new book. Congratulations. And I said, Well, not only do we have a new book, we also, even happier, we have a new baby. 35 00:02:16.440 --> 00:02:22.440 And he said, Oh, congratulations and everything. Because I'd had a number of books come out one after the other. 36 00:02:22.440 --> 00:02:26.440 so I said it seems like we're doing like for every book we're having a baby every 37 00:02:26.440 --> 00:02:30.760 baby we're doing a book and he said he's German he said well I don't think you 38 00:02:30.760 --> 00:02:36.560 can keep up that pace but yet I'm not entirely sure is he talking about books 39 00:02:36.560 --> 00:02:43.920 or babies well in the brief brief time I have you folks here today as by the way 40 00:02:43.920 --> 00:02:47.400 just force of habit I'm looking down at notes that aren't even here I'm used to 41 00:02:47.400 --> 00:02:50.480 being in the classroom there aren't any notes here it's all it's all up in my 42 00:02:50.480 --> 00:02:59.480 What I'd like to do is, given that we probably can't cover all of American history in 45 minutes, let's say, 43 00:02:59.480 --> 00:03:05.480 instead, what I'd like to do is sort of gallop through some highlights or some areas of importance, 44 00:03:05.480 --> 00:03:15.480 or in particular areas in which the material is simply not covered in the typical American history classroom and even in college. 45 00:03:15.480 --> 00:03:19.480 Not that it's covered badly or you get a lot of lies about it. 46 00:03:19.480 --> 00:03:25.720 It's just not covered at all, it's like left out, you can hear crickets in the background, nothing, not mentioned. 47 00:03:25.720 --> 00:03:32.160 Because oftentimes the worst bias in the coverage of American history does not involve outright falsehoods. 48 00:03:32.160 --> 00:03:39.960 Sometimes it does, but mostly it involves the selection of topics, what items are brought up, what items are excluded. 49 00:03:39.960 --> 00:03:46.960 And I think by and large, by the way, that's also true for the much trumpeted media bias that we hear a lot about. 50 00:03:46.960 --> 00:03:52.360 It's not even necessarily that the media is feeding us lies, although, of course, naturally, they are. 51 00:03:52.360 --> 00:03:55.460 But it's also, what are they not feeding us? What are the stories they don't tell? 52 00:03:55.460 --> 00:03:59.260 Okay, so I want to tell a few of these types of stories from American history 53 00:03:59.260 --> 00:04:04.260 to inoculate you against, you know, what you're going to be up against when you head to college. 54 00:04:04.260 --> 00:04:07.660 Now, since you're all homeschooling folks, you all know this. 55 00:04:07.660 --> 00:04:13.760 You all know that out there, frankly, is a kind of hostile educational establishment 56 00:04:13.760 --> 00:04:22.760 That is not all together reliable in areas like American history, so you already know that you better know your stuff because you're not going to be taught it by these people. 57 00:04:22.760 --> 00:04:31.760 What's even more fun is when you really know your stuff and you go into that college classroom and your professor finds out that you really know your stuff, but be careful about how you do that. 58 00:04:31.760 --> 00:04:41.760 You don't want to get an F for no good reason, you know, just antagonizing them, but it's good enough to know in your own heart that this guy is, I don't want to say a bad word, 59 00:04:41.760 --> 00:04:45.760 This guy is a falsehood artist, we'll say, whereas I know the truth. 60 00:04:45.760 --> 00:04:49.760 That's very satisfying, and I want to help to move you in that direction. 61 00:04:49.760 --> 00:04:55.760 One of the benefits of my book, if I may put it that way, is that it has a bibliography at the end 62 00:04:55.760 --> 00:04:58.760 that refers you to books that I consider to be reliable. 63 00:04:58.760 --> 00:05:01.760 There are a zillion books out there. How do you know which ones to read? 64 00:05:01.760 --> 00:05:06.760 In fact, two years ago, they did a study. They found out that in the year 2004, 65 00:05:06.760 --> 00:05:12.760 How many books were published? 195,000 books were published in that one year. 66 00:05:12.760 --> 00:05:20.760 195,000 brand new books. How can you possibly sift through them all and know which ones are reliable or worthwhile? 67 00:05:20.760 --> 00:05:26.760 That's up 70% from just 10 years ago. So books are coming out like mad. How do you sift your way through? 68 00:05:26.760 --> 00:05:32.760 So I've got that, and then throughout the text I have these little boxes that say, a book you're not supposed to read. 69 00:05:32.760 --> 00:05:37.760 A book that the establishment would rather that you not read, so it helps to direct you in your research. 70 00:05:37.760 --> 00:05:44.760 Well, the first of the several topics I'd like to try to get to takes us back over 200 years. 71 00:05:44.760 --> 00:05:50.760 And it takes us back to an incident that, to my knowledge, has never been commemorated by the U.S. government. 72 00:05:50.760 --> 00:05:55.760 We get a lot of commemorations, let's say, of a war ending. 73 00:05:55.760 --> 00:06:00.760 It's victory over Europe in 1945. People want to commemorate that. 74 00:06:00.760 --> 00:06:02.760 or the bombing of Pearl Harbor. 75 00:06:02.760 --> 00:06:06.760 People want to remember that because of all those people who died in that attack. 76 00:06:06.760 --> 00:06:09.760 But there are some events that are simply never commemorated. 77 00:06:09.760 --> 00:06:13.760 And one of them involves something that Thomas Jefferson did in 1798. 78 00:06:13.760 --> 00:06:15.760 It's never been commemorated. 79 00:06:15.760 --> 00:06:19.760 And my suspicion is because the government is afraid if they commemorate this, 80 00:06:19.760 --> 00:06:21.760 they might be giving us some ideas. 81 00:06:21.760 --> 00:06:23.760 What was Thomas Jefferson up to in 1798? 82 00:06:23.760 --> 00:06:26.760 Well, Jefferson was the vice president, 83 00:06:26.760 --> 00:06:32.880 which is not a particularly powerful office or it I suppose it can be I think 84 00:06:32.880 --> 00:06:36.420 Dick Cheney has made it more powerful than it has been but for Thomas Jefferson 85 00:06:36.420 --> 00:06:40.440 there was really not much to do all day well it so happens that in that year 86 00:06:40.440 --> 00:06:46.440 because the US was sort of and sort of not at war with France in fact it was so 87 00:06:46.440 --> 00:06:49.960 sort of and sort of not at war with France that the war is known as the 88 00:06:49.960 --> 00:06:53.680 quasi war with France we can't even make up our minds are we at war with France 89 00:06:53.680 --> 00:07:06.680 The President John Adams would be found in public with a sword by his side as an indication of the fact that we are on a kind of a military footing. 90 00:07:06.680 --> 00:07:19.680 And the Congress in 1798 passed a series of laws and one of them, in effect, made it a criminal offense to criticize the U.S. government too harshly. 91 00:07:19.680 --> 00:07:25.680 You could actually be thrown in jail or fined for saying unkind words. 92 00:07:25.680 --> 00:07:30.680 For example, there was one poor soul who just simply said offhandedly, 93 00:07:30.680 --> 00:07:38.680 I hope the presidential saluting cannon fires a cannonball right into the behind of President John Adams. 94 00:07:38.680 --> 00:07:42.680 And that guy was fined $100 because you're not allowed to do that. 95 00:07:42.680 --> 00:07:46.680 There were newspaper editors who found themselves being sent to jail 96 00:07:46.680 --> 00:07:50.400 Because they said unkind things about the US government. 97 00:07:50.400 --> 00:07:52.840 Well, what's interesting about all this is, for one thing, 98 00:07:52.860 --> 00:07:56.040 is that at that time there were two political parties. 99 00:07:56.040 --> 00:08:00.000 There were the Federalists, John Adams was a Federalist, 100 00:08:00.000 --> 00:08:01.880 and there were the Republicans, 101 00:08:01.900 --> 00:08:03.760 not the same Republicans as today, 102 00:08:03.760 --> 00:08:05.840 Thomas Jefferson belonged to that party, 103 00:08:05.840 --> 00:08:08.680 and it's interesting that when you read this law, 104 00:08:08.680 --> 00:08:11.280 the law is obviously designed to make it illegal 105 00:08:11.280 --> 00:08:13.160 to criticize the Federalist Party 106 00:08:13.180 --> 00:08:15.520 because it says you can't criticize the President, 107 00:08:15.520 --> 00:08:22.520 He belongs to the Federalists, criticized the Congress, which has preponderance of Federalists, and it goes on and on. 108 00:08:22.520 --> 00:08:25.520 But it doesn't say anything about the Vice President, who happened to be a Republican. 109 00:08:25.520 --> 00:08:28.520 You can say anything you want to about him, no law against that. 110 00:08:28.520 --> 00:08:32.520 So it's a little bit obvious that this was aimed at Jefferson's party. 111 00:08:32.520 --> 00:08:36.520 Jefferson didn't take too kindly to this, and Jefferson thought, what do we do? 112 00:08:36.520 --> 00:08:40.520 The Federal Government is obviously violating the freedom of speech here. 113 00:08:40.520 --> 00:08:44.520 You should be able to wish that cannonball thing and not have to pay a fine. 114 00:08:44.520 --> 00:08:49.520 to pay a fine. So what do we do? And Jefferson, it's interesting what he did not do. He did 115 00:08:49.520 --> 00:08:53.320 not say, well, it was fun having a free society for ten years, but I guess we may as well 116 00:08:53.320 --> 00:08:57.760 give up on it, or this constitution worked out okay for a while, but I guess it's going 117 00:08:57.760 --> 00:09:01.440 into the can. He didn't do anything like that. He didn't say we should just give in or we 118 00:09:01.440 --> 00:09:05.720 should forget about it. He said we need to fight against this. But how do we fight against 119 00:09:05.720 --> 00:09:10.040 this? Do we wait two years for another presidential election? In two years, we might all be in 120 00:09:10.040 --> 00:09:15.040 in jail, you know, how we can't wait two years. What do we do? Do we all sign petitions to 121 00:09:15.040 --> 00:09:19.800 the government? Oh, please, please take this terrible law away. That's pathetic, you know, 122 00:09:19.800 --> 00:09:22.920 nothing's going to come of that. What other things can we do? So we think of all the different 123 00:09:22.920 --> 00:09:27.120 things we could do. And he didn't say, by the way, let's go to the Supreme Court and 124 00:09:27.120 --> 00:09:31.720 see what they say. Because number one, the Supreme Court is full of people who have been 125 00:09:31.720 --> 00:09:36.240 appointed by the Federalist Party. So they favor this. So the Supreme Court is not any 126 00:09:36.240 --> 00:09:52.240 Also, Jefferson didn't like this idea that we should go to the Supreme Court and that the Supreme Court is made up of these demigods who are all-knowing and who have their black robes and they go into some closed room and they decide what our Constitution means and then they come out and tell us. 127 00:09:52.240 --> 00:09:56.240 He thought that was very dangerous. He didn't want the Supreme Court to have that kind of power. 128 00:09:56.240 --> 00:10:01.240 So what did he decide to do instead? Jefferson proposed an extremely radical-sounding solution. 129 00:10:01.240 --> 00:10:15.240 Jefferson said that each state of the United States should have the power to be able to decide if it believed the U.S. government had violated the Constitution, had done something that clearly was not allowed under the Constitution. 130 00:10:15.240 --> 00:10:23.240 The state should have the right not only to say that that had happened, but the state should also have the right to say, we are not going to enforce that law. 131 00:10:23.240 --> 00:10:29.240 We're not going to enforce your anti-free speech law in this state, in Virginia or in Kentucky. 132 00:10:29.240 --> 00:10:34.240 We're not going to enforce it there. That was the proposal that Jefferson developed. 133 00:10:34.240 --> 00:10:39.240 And he said, now this may sound crazy, you know, I mean this may sound crazy that every state could have the power 134 00:10:39.240 --> 00:10:43.240 to say to the federal government, we're not going to enforce your stinking law. 135 00:10:43.240 --> 00:10:48.240 But Jefferson's answer was, well, what better solution do you have? What other solution is there? 136 00:10:48.240 --> 00:10:53.240 There really isn't any other solution. If we don't do this, we're just going to encourage the federal government to do more things 137 00:10:53.240 --> 00:10:58.240 if we don't act right now. So that was Jefferson's solution. It was called nullification. 138 00:10:58.240 --> 00:11:04.240 If the federal government comes up with a rotten law that violates the Constitution, we nullify it in each of the states. 139 00:11:04.240 --> 00:11:06.240 Each state gets to decide if it wants to nullify it. 140 00:11:06.240 --> 00:11:11.240 Because Jefferson says, look, we've got two parties here. We've got the federal government and we've got the states. 141 00:11:11.240 --> 00:11:17.240 And we can't say that the Constitution can be interpreted only by the federal government and not by the states. 142 00:11:17.240 --> 00:11:24.240 Because nobody would ever enter into a contract where only the other side gets to interpret what it means. 143 00:11:24.240 --> 00:11:26.600 I would not go up to Mark Thornton and say, 144 00:11:26.600 --> 00:11:29.720 Mark, I'm going to give you 10 bucks to mow my lawn. 145 00:11:29.720 --> 00:11:32.720 But only you get to interpret what that means. 146 00:11:32.720 --> 00:11:35.240 Because that may mean that 30 years down the line, 147 00:11:35.240 --> 00:11:37.040 he still hasn't mowed my lawn. 148 00:11:37.040 --> 00:11:39.400 And he could come up to me and say, well, my understanding was 149 00:11:39.400 --> 00:11:42.040 that in 50 years' time, I mow your lawn. 150 00:11:42.040 --> 00:11:44.360 And you give me the 10 bucks now. 151 00:11:44.360 --> 00:11:46.360 And I would probably say, well, that's not the way I 152 00:11:46.360 --> 00:11:47.440 interpreted it. 153 00:11:47.440 --> 00:11:49.640 But suppose only I could interpret it. 154 00:11:49.640 --> 00:11:52.520 Maybe my view would be Thornton mows my lawn now, 155 00:11:52.520 --> 00:11:54.160 and I pay him in 50 years. 156 00:11:54.160 --> 00:11:58.480 I mean, what happens when only one side gets to interpret what a contract means, you're 157 00:11:58.480 --> 00:12:01.800 going to interpret that contract in a way that benefits you. 158 00:12:01.800 --> 00:12:04.660 And Jefferson said the same thing would go for the Federal Government. 159 00:12:04.660 --> 00:12:08.320 If only they get to interpret the Constitution, well, what a surprise. 160 00:12:08.320 --> 00:12:11.360 They're going to interpret it to mean the Federal Government gets to do whatever it 161 00:12:11.360 --> 00:12:12.360 wants. 162 00:12:12.360 --> 00:12:17.240 If the states can't stand up and resist that, well, we have no right to be surprised when, 163 00:12:17.240 --> 00:12:22.480 over time, the Federal Government gets all the power and the states are destroyed. 164 00:12:22.480 --> 00:12:30.540 So Jefferson and James Madison together anonymously drafted a couple of documents, the Virginia 165 00:12:30.540 --> 00:12:36.200 and Kentucky resolutions of 1798. Virginia and Kentucky in their state legislatures passed 166 00:12:36.200 --> 00:12:42.240 these documents that declared that not only do we protest this anti-free speech law, but 167 00:12:42.240 --> 00:12:46.680 we also say that the states can resist it. They can say we absolutely refuse to obey 168 00:12:46.680 --> 00:12:50.640 this because it violates the Constitution. And if it violates the Constitution then it 169 00:12:50.640 --> 00:12:53.360 is no law at all. 170 00:12:53.360 --> 00:12:59.160 Now when I started this little discussion, I noted that these documents that basically 171 00:12:59.160 --> 00:13:01.400 said the states can resist. 172 00:13:01.400 --> 00:13:03.480 These documents have never been commemorated. 173 00:13:03.480 --> 00:13:08.280 In 1998, did Bill Clinton say, hey everybody, let's all get together and commemorate the 174 00:13:08.280 --> 00:13:11.200 200th anniversary of the Virginia and Kentucky resolutions. 175 00:13:11.200 --> 00:13:15.200 He would have died a thousand deaths before doing such a thing. 176 00:13:15.200 --> 00:13:18.140 Because then people might think, well, gee, can we do that now? 177 00:13:18.140 --> 00:13:19.140 Can we do that now? 178 00:13:19.140 --> 00:13:20.140 We don't want anybody thinking that. 179 00:13:20.140 --> 00:13:22.700 No, heavens no, we can't have that come up again. 180 00:13:22.700 --> 00:13:27.940 So therefore, this episode is either passed over or barely mentioned or misinterpreted 181 00:13:27.940 --> 00:13:31.140 or whatever, but it was an essential idea. 182 00:13:31.140 --> 00:13:36.500 In fact, it was so essential that for decades after that, people referred to these ideas 183 00:13:36.500 --> 00:13:41.860 as the principles of 98, referring to the year 1798, the idea that the federal government 184 00:13:41.860 --> 00:13:48.580 has only a few powers that the states gave to it, and then any other powers rest with 185 00:13:48.580 --> 00:13:49.740 the states. 186 00:13:49.740 --> 00:13:53.740 If the states believe the federal government has gone beyond what it's allowed to do, 187 00:13:53.740 --> 00:13:56.920 then those states can refuse to obey those laws. 188 00:13:56.920 --> 00:14:01.460 That became known as the Principles of 98, and they remained alive for years and years 189 00:14:01.460 --> 00:14:02.900 after that. 190 00:14:02.900 --> 00:14:07.420 The New England states referred to the Principles of 98 over and over and over again. 191 00:14:07.420 --> 00:14:12.360 So this is a major part of American history and a central building block in the tradition 192 00:14:12.360 --> 00:14:15.300 of American liberty that has just been totally forgotten. 193 00:14:15.300 --> 00:14:16.820 How often is this brought up? 194 00:14:16.820 --> 00:14:17.820 Never. 195 00:14:17.820 --> 00:14:18.820 What a surprise. 196 00:14:18.820 --> 00:14:26.820 All things to leave out or to glide over quickly, it's pretty revealing that this was one of the ones that you just don't ever hear about. 197 00:14:26.820 --> 00:14:32.820 Or another area, I remember, good grief, I remember when I was in high school, I remember reading the textbooks I was being given in high school, 198 00:14:32.820 --> 00:14:37.820 and I remember thinking, there is something rotten in here. There is something that is just not right. 199 00:14:37.820 --> 00:14:42.820 And in particular, I remember the way big business was treated. 200 00:14:42.820 --> 00:14:47.260 Now, you can't make any blanket statements about big business, because sometimes businessmen 201 00:14:47.260 --> 00:14:52.020 are wicked and should be behind bars. There's no question about that. They have all the 202 00:14:52.020 --> 00:14:56.060 same moral foibles the rest of us have. But at the same time, you also can't go to the 203 00:14:56.060 --> 00:15:01.840 other extreme and say, all businessmen are evil. They're all evil. All they do all day 204 00:15:01.840 --> 00:15:08.380 is exploit people. And because of big business, if big business had their way, we'd all be 205 00:15:38.380 --> 00:15:49.380 There isn't a textbook out there that teaches you anything different. You get the same all the businessmen were wicked. 206 00:15:49.380 --> 00:15:57.380 Well, what I've tried to suggest in my book and in some of my other work is that, in fact, if it weren't for big business in the 19th century, 207 00:15:57.380 --> 00:16:02.380 which is the time when supposedly everybody was being exploited by the businessmen and all that, 208 00:16:02.380 --> 00:16:07.380 people would have been living much, much more miserable lives than they actually were living. 209 00:16:07.380 --> 00:16:11.380 Because, for instance, if you think of the guy who has been most demonized of all, 210 00:16:11.380 --> 00:16:15.380 the guy who they may as well draw horns on his head in the textbook, 211 00:16:15.380 --> 00:16:20.380 would be John D. Rockefeller, the great oil giant, who was involved in refining oil. 212 00:16:20.380 --> 00:16:24.380 Now, it's important to remember, by the way, that, you know, oil, you pump it from the ground, 213 00:16:24.380 --> 00:16:26.380 and then you refine it, and then you use it. 214 00:16:26.380 --> 00:16:30.380 Well, initially, people didn't know you could really use this black stuff coming up from the ground. 215 00:16:30.380 --> 00:16:35.380 It was just a big nuisance. If you were a farmer, and you had oil underneath your property, 216 00:16:35.380 --> 00:16:37.380 The Theory of Money and Credit 217 00:17:05.380 --> 00:17:09.380 That's what happens, that people figured out this black stuff that seems like it's just annoying 218 00:17:09.380 --> 00:17:15.380 has a very important use and in the mid-19th century it was discovered you can actually pump it up from the ground. 219 00:17:15.380 --> 00:17:20.380 You don't have to wait for it to just bubble to the surface and then try to scoop it up, you can pump it from the ground. 220 00:17:20.380 --> 00:17:25.380 Well, this changes the landscape because now you can make this into kerosene 221 00:17:25.380 --> 00:17:31.380 and instead of having to light your home using whale oil as an illuminant, you can use kerosene. 222 00:17:31.380 --> 00:17:36.380 Whale oil costs like 500 zillion dollars an ounce. That's an approximation. 223 00:17:36.380 --> 00:17:40.380 It's not an exact statistic, but it's extremely expensive. 224 00:17:40.380 --> 00:17:45.380 Most people can't afford whale oil. Whales aren't that happy that people are using whale oil either. 225 00:17:45.380 --> 00:17:51.380 But if you don't have to use whale oil anymore because you've got cheap black stuff coming out of the ground, that's in advance. 226 00:17:51.380 --> 00:17:55.380 And so John D. Rockefeller got involved in the refining of oil. 227 00:17:55.380 --> 00:17:59.380 You take the crude oil from the ground, you refine it and make it into kerosene. 228 00:17:59.380 --> 00:18:06.380 Well, the interesting thing about Rockefeller is sort of two-fold. First, when Rockefeller first got started in this, kerosene was a dollar a gallon. 229 00:18:06.380 --> 00:18:15.380 By the time Rockefeller was done, it was ten cents a gallon. Now imagine something, in our day, nothing really other than computers seems to go down in price. 230 00:18:15.380 --> 00:18:21.380 Imagine something going down by that many percentage points in price, and something that's so essential. 231 00:18:21.380 --> 00:18:28.380 You don't have to go to bed early anymore because you can't afford the whale oil to light your home. You can actually stay up late at night. 232 00:18:28.380 --> 00:18:35.380 Great. Wonderful. I'm sure parents are thrilled at that. My kids can stay up even later than before. Great. 233 00:18:35.380 --> 00:18:41.380 But that is an advance in people's lives. They have a much higher standard of living as a result of this. 234 00:18:41.380 --> 00:18:46.380 They can get these things for much cheaper. Secondly is that Rockefeller was a stickler for efficiency. 235 00:18:46.380 --> 00:18:50.380 He hated wasting things or throwing things away. 236 00:18:50.380 --> 00:18:55.380 Now, I know we all know people who just don't throw anything away and that's not very efficient at all. 237 00:18:55.380 --> 00:18:57.380 The Theory of Money and Credit 238 00:19:25.380 --> 00:19:31.380 And that's amazing. This is not some guy to be despised and hated and draw horns in his head. 239 00:19:31.380 --> 00:19:35.380 I mean, we should reward that guy. I mean, yeah, he became rich. Well, he should. 240 00:19:35.380 --> 00:19:39.380 If he can figure out 300 things to do with guck, I'll give him a couple of bucks too. 241 00:19:39.380 --> 00:19:42.380 So this is an important advance. But instead, what do you read in the textbooks? 242 00:19:42.380 --> 00:19:49.380 Oh, he's vicious and terrible. But what you don't hear about is, well, did oil get cheaper or did it get more expensive? 243 00:19:49.380 --> 00:19:51.380 It got much cheaper. 244 00:19:51.380 --> 00:19:57.380 Now, it's true that the Rockefeller Foundation has done a lot of rotten things, that's a separate matter. 245 00:19:57.380 --> 00:20:02.380 The point is that as an entrepreneur, Rockefeller did great work for the average person. 246 00:20:02.380 --> 00:20:07.380 Or then you have Andrew Carnegie, he was involved in steel production. 247 00:20:07.380 --> 00:20:13.380 Every other thing in a modern economy is either made out of steel or requires steel in order to make it. 248 00:20:13.380 --> 00:20:19.380 So if you can cut the price of steel, you can make everything in the whole economy cheaper. 249 00:20:19.380 --> 00:20:27.380 The government can make you better off by robbing your neighbor and giving you the money, but that doesn't make your neighbor better off. 250 00:20:27.380 --> 00:20:31.380 But if I can make everything you and your neighbor buy cheaper, that helps everybody. 251 00:20:31.380 --> 00:20:39.380 Carnegie was able to do that. He was so efficient that in his homestead plant in Pennsylvania with 4,000 men, 252 00:20:39.380 --> 00:20:48.380 he could produce three times the steel they were producing at the greatest European factory with 15,000 men. 253 00:20:48.380 --> 00:20:57.380 The price of steel rails over the course of about a quarter century declined about 90 percent. 254 00:20:57.380 --> 00:21:00.380 Again, almost like the reduction in the price of kerosene. 255 00:21:00.380 --> 00:21:06.380 An amazing advance. So that means not only is steel cheaper, but now everything that requires steel is cheaper. 256 00:21:06.380 --> 00:21:11.380 Now, do we see in the textbooks people saying, wow, that's wonderful that Carnegie did this. 257 00:21:11.380 --> 00:21:14.380 No, Carnegie's terrible and greedy and wicked and evil. 258 00:21:14.380 --> 00:21:18.380 Well, okay, maybe you feel that way, but that's not a very useful historical statement. 259 00:21:18.380 --> 00:21:20.380 I mean, what did the guy do? Why don't you tell me that? 260 00:21:20.380 --> 00:21:22.380 You don't typically get that in the books. 261 00:21:22.380 --> 00:21:24.380 Here's what you do get, okay? 262 00:21:24.380 --> 00:21:27.380 Typically, you get this. 263 00:21:27.380 --> 00:21:31.380 You get this argument that big business, and here's your term for the day. 264 00:21:31.380 --> 00:21:36.380 Big business, we are told, engages in something called predatory pricing. 265 00:21:36.380 --> 00:21:39.380 Ooh, ooh, what does that mean? 266 00:21:39.380 --> 00:21:48.380 Well, that means that supposedly big business has the power to, let's say, let's say it's me and Dick Clark's here in the room. 267 00:21:48.380 --> 00:21:50.380 We have a guy here named Dick Clark, okay? 268 00:21:50.380 --> 00:21:54.380 I'll leave all the jokes, American bandstand jokes out of this. It's not fair. 269 00:21:54.380 --> 00:21:58.380 And the young students don't even know what I'm talking about. Anyway, fair enough. 270 00:21:58.380 --> 00:22:03.380 But suppose I'm competing with Dick Clark. The idea is that if I'm a gigantic business, 271 00:22:03.380 --> 00:22:09.800 Business, I can charge such low prices that my smaller competitor, Dick Clark, and Dick 272 00:22:09.800 --> 00:22:14.600 Clark is like three feet taller than I am, my smaller competitor, Dick Clark, can't possibly 273 00:22:14.600 --> 00:22:20.140 match my prices, so I drive him out of business. The idea of predatory pricing is that I price 274 00:22:20.140 --> 00:22:24.420 my goods so low, nobody else can price them that low, they all go out of business, everybody 275 00:22:24.420 --> 00:22:29.740 buys from me, but then when all my competitors are out of business, then I jack the prices 276 00:22:29.740 --> 00:22:31.740 is back up because where are people going to go? 277 00:22:31.740 --> 00:22:34.740 Okay, so it's sort of the principle of why it is if you go to the movies. 278 00:22:34.740 --> 00:22:37.740 I don't know why these days you would, but let's say you go to the movies. 279 00:22:37.740 --> 00:22:40.740 You notice that the small drink is like $8.75. 280 00:22:40.740 --> 00:22:41.740 Like, why is that? 281 00:22:41.740 --> 00:22:44.740 Well, pretty much because where else are you going to go? 282 00:22:44.740 --> 00:22:46.740 You can't smuggle drinks into the theater, 283 00:22:46.740 --> 00:22:49.740 and you don't have to tell me stories about I smuggled a beer. 284 00:22:49.740 --> 00:22:52.740 Yes, I know you can do it, but you're not allowed to do it. 285 00:22:52.740 --> 00:22:55.740 The point is there's nowhere else for you to go. 286 00:22:55.740 --> 00:22:57.740 Well, that's the idea of predatory pricing. 287 00:22:57.740 --> 00:23:05.740 The big business drives all the competitors out, raises the prices, there's nowhere else for you to go, got to buy from him, and then he makes all these great profits. 288 00:23:05.740 --> 00:23:12.740 Now, a lot of us sort of think, well, you know, that is what happens. Big business can do that, drives all its competitors out and then raises its price. 289 00:23:12.740 --> 00:23:19.740 The problem is, you almost cannot find any examples of this. This is one of the problems with the theory, is there don't seem to be any actual real-life examples. 290 00:23:19.740 --> 00:23:26.740 We've seen examples of businesses who lower their prices, but we don't really see examples of them raising their prices back up. 291 00:23:26.740 --> 00:23:30.740 If Walmart tried to raise their prices back up, everybody would just go to Target. 292 00:23:30.740 --> 00:23:36.740 Or they'd go to Kmart, or they'd order from Amazon. It's too difficult to do this. 293 00:23:36.740 --> 00:23:41.740 And even if you do manage to drive all your competitors out, new ones will pop up. 294 00:23:41.740 --> 00:23:43.740 If you start raising your prices again, new ones will pop up. 295 00:23:43.740 --> 00:23:46.740 So economists these days no longer believe in this. 296 00:23:46.740 --> 00:23:49.740 The general public believes in it because that's what we're told all the time. 297 00:23:49.740 --> 00:23:53.740 Big business wickedly drives everybody out of business by charging low prices. 298 00:23:53.740 --> 00:24:10.740 I want to give you a cutesy little story to show what happens when you try this practice of charging really, really low prices to drive out your competitors and then you get to raise your prices back up again. 299 00:24:10.740 --> 00:24:16.740 One of my favorite stories from American business history, which I do include in the book, involves Herbert Dow. 300 00:24:16.740 --> 00:24:21.340 Tao, the name may ring a bell, he ran the Tao Chemical Company. He's dead now. He would 301 00:24:21.340 --> 00:24:27.260 be like 187 today or something. But he founded Tao Chemical around the turn of the century, 302 00:24:27.260 --> 00:24:33.260 into the 20th century. And he's a great chemical genius. And he was a really, really hard worker. 303 00:24:33.260 --> 00:24:38.420 I mean, really hard worker. He would work 18 hours a day and then sleep at his chemical 304 00:24:38.420 --> 00:24:43.460 factory and then start up his day again. Now, sure, it meant he grew like a second head 305 00:24:43.460 --> 00:24:50.460 The Theory of Money and Credit 306 00:25:13.460 --> 00:25:15.720 U.S. for After a while, he get a little bored with it. 307 00:25:15.720 --> 00:25:17.360 Where else can I sell Bromine? 308 00:25:17.360 --> 00:25:18.880 So he thinks how about Europe. 309 00:25:18.880 --> 00:25:20.760 I'll sell chemicals in Europe. 310 00:25:20.760 --> 00:25:22.040 No problem, right? 311 00:25:22.040 --> 00:25:23.940 Except if you try to sell chemicals in Europe, 312 00:25:23.940 --> 00:25:27.680 there's a group of German chemical sellers 313 00:25:27.680 --> 00:25:30.780 who don't want anybody else selling in Europe. 314 00:25:30.780 --> 00:25:33.160 So when Herbert Dauss shows up in Europe and says, hey, 315 00:25:33.160 --> 00:25:37.100 got cheap Bromine for everybody, this cartel of German producers 316 00:25:37.100 --> 00:25:39.360 knocks on his door and says, oh no you do not. 317 00:25:39.360 --> 00:25:41.040 You don't sell anything in Europe. 318 00:25:41.040 --> 00:25:42.120 We're the German cartel. 319 00:25:42.120 --> 00:25:45.120 When we sell the chemicals in Europe, you're not going to sell anything. 320 00:25:45.120 --> 00:25:48.120 And he said, well, you know, there's no law against it. 321 00:25:48.120 --> 00:25:50.120 I'm going to sell my chemicals here. 322 00:25:50.120 --> 00:25:52.120 And so the Germans got really upset. 323 00:25:52.120 --> 00:25:55.120 Who does this American upstart think he is? 324 00:25:55.120 --> 00:25:59.120 Well, they were selling bromine for 49 cents a pound. 325 00:25:59.120 --> 00:26:01.120 Herbert Dow is selling it for 36 cents. 326 00:26:01.120 --> 00:26:04.120 So, of course, everybody's buying from him and nobody's buying from this German cartel. 327 00:26:04.120 --> 00:26:07.120 They're going crazy. What are we going to do to this guy? 328 00:26:07.120 --> 00:26:10.120 So they think, we'll destroy him. 329 00:26:10.120 --> 00:26:16.120 The Germans will sell bromine in the U.S. at a price he can't possibly match, and that'll drive him out of business. 330 00:26:16.120 --> 00:26:18.120 So they were going to try predatory pricing. 331 00:26:18.120 --> 00:26:26.120 So the German cartel starts selling bromine right in Herbert Dow's backyard in the U.S. for 27 cents a pound. 332 00:26:26.120 --> 00:26:31.120 So what's Herbert Dow going to do? He can't possibly match that price. 333 00:26:31.120 --> 00:26:35.120 Well, he's clever. He's one of the cleverest businessmen you've ever seen. 334 00:26:35.120 --> 00:26:42.920 What he does is he has his purchasing agent go buy up tons and tons of this bromine at 27 cents a pound in the U.S. 335 00:26:42.920 --> 00:26:47.920 And then he goes to Europe and sells it again at lower than 49. 336 00:26:47.920 --> 00:26:55.220 And so the Germans don't know what's going on, but they're saying, man, there's a huge demand in the U.S. for bromine, much bigger than we thought. 337 00:26:55.220 --> 00:27:00.320 How can we possibly keep up with this? So he's still going just fine. He's just buying it up at their price. 338 00:27:00.320 --> 00:27:03.120 So as time goes on, they lower it to 15 cents. 339 00:27:03.120 --> 00:27:07.620 We'll drive this guy out of business, we'll sell it at 15 cents a pound in the U.S. 340 00:27:07.620 --> 00:27:10.720 So he just keeps buying it up at their price and selling it in Europe. 341 00:27:10.720 --> 00:27:12.420 And the thing is that they're making losses. 342 00:27:12.420 --> 00:27:17.220 When they're selling bromine at 15 cents a pound, these Germans, they're making losses. 343 00:27:17.220 --> 00:27:21.820 They want to make up those losses selling at 49 cents a pound in Europe, but he won't let them. 344 00:27:21.820 --> 00:27:24.120 He keeps buying it up and selling it cheaply in Europe. 345 00:27:24.120 --> 00:27:26.820 So finally they reduce it to 10 and a half cents a pound. 346 00:27:26.820 --> 00:27:28.720 I mean, this is going to kill them. 347 00:27:28.720 --> 00:27:34.240 And finally, 1908, he gets another knock on his door. 348 00:27:34.240 --> 00:27:37.400 Not nearly as brusque as that first knock. 349 00:27:37.400 --> 00:27:42.800 And so finally, they say to him, well, how about this? 350 00:27:42.800 --> 00:27:48.800 How about we sell bromine in Germany, you sell in the United States, 351 00:27:48.800 --> 00:27:51.120 but the rest of Europe is open to free competition. 352 00:27:51.120 --> 00:27:53.160 What do you say to that? And he said, OK. 353 00:27:53.160 --> 00:27:56.520 And so by just sticking to his guns, 354 00:27:56.520 --> 00:28:02.600 Herbert Dow totally defeated this predatory pricing attempt and became quite wealthy in 355 00:28:02.600 --> 00:28:03.600 the process. 356 00:28:03.600 --> 00:28:10.040 He did very well and established, in effect, a free market in chemicals for the future. 357 00:28:10.040 --> 00:28:13.840 So I think that's kind of an interesting story, but where's Herbert Dow in the curriculum? 358 00:28:13.840 --> 00:28:14.840 You know, why is he not mentioned? 359 00:28:14.840 --> 00:28:16.760 He's a great man, Herbert Dow. 360 00:28:16.760 --> 00:28:19.120 We should be proud of him as Americans. 361 00:28:19.120 --> 00:28:22.880 All right, let me just pause here for a second. 362 00:28:22.880 --> 00:28:25.520 I mean, I get so worked up when I'm talking about bromine. 363 00:28:25.520 --> 00:28:32.520 The Theory of Money and Credit 364 00:28:55.520 --> 00:28:57.520 I want to say something about is the Great Depression. 365 00:28:57.520 --> 00:29:01.520 Now, some of you will be able to talk to people in your own families 366 00:29:01.520 --> 00:29:05.520 who lived through the Great Depression, who lived through the 1930s 367 00:29:05.520 --> 00:29:11.520 when the economy just absolutely tanked, when millions of people were out of work. 368 00:29:11.520 --> 00:29:15.520 They did some study that said that if you took all the people who were out of work 369 00:29:15.520 --> 00:29:20.520 at the height of the Depression and you lined them up from New York to Los Angeles 370 00:29:20.520 --> 00:29:30.520 I don't know how you'd have the time to calculate something like that, but the point is a huge number of people had no job whatsoever, and prospects were very bad. 371 00:29:30.520 --> 00:29:38.520 Businesses were doing badly, profits were negative, investment was negative. That seems odd. How could you invest a negative amount of money? 372 00:29:38.520 --> 00:29:42.520 How could you invest a negative amount of money? 373 00:29:42.520 --> 00:29:45.520 Hello, I'd like to invest negative twenty dollars. 374 00:29:45.520 --> 00:29:50.520 What that means is that equipment was wearing out faster than it could be replaced in the thirties. 375 00:29:50.520 --> 00:29:52.520 So absolute disaster. 376 00:29:52.520 --> 00:29:54.520 And so you hear horror stories. 377 00:29:54.520 --> 00:29:55.520 I mean, I've heard them. 378 00:29:55.520 --> 00:29:57.520 People eating ketchup sandwiches. 379 00:29:57.520 --> 00:29:59.520 People would come over to my grandparents' house. 380 00:29:59.520 --> 00:30:01.520 They'd have a head of lettuce and a tomato. 381 00:30:01.520 --> 00:30:02.520 And they'd get it divided up. 382 00:30:02.520 --> 00:30:05.520 This is not a pleasant time to live. 383 00:30:05.520 --> 00:30:10.560 When you read about this in the textbooks, what you get is this, well, the evil free 384 00:30:10.560 --> 00:30:16.240 market caused the depression and then everybody suffered. Well, that issue I'm leaving aside 385 00:30:16.240 --> 00:30:20.300 because that's a complicated issue involving the business cycle. But suffice it to say 386 00:30:20.300 --> 00:30:25.320 that's not the case. The free market did not cause the depression. The Federal Reserve 387 00:30:25.320 --> 00:30:29.220 system caused the depression as Rothbard showed in his book, America's Great Depression. What 388 00:30:29.220 --> 00:30:34.400 I want to look at is not what caused the depression, but why did it go on for so long, year after 389 00:30:34.400 --> 00:30:39.000 year after year after year. I mean, you know, everybody in this room has lived through some 390 00:30:39.000 --> 00:30:43.200 sort of difficult times, but you know, then you see a little bit of a recovery and things 391 00:30:43.200 --> 00:30:49.240 sort of go on. But you don't see year after year after year after year of just no expansion, 392 00:30:49.240 --> 00:30:55.320 no growth, unemployment 25% or more. You don't see this. So what was going on in the 30s? 393 00:30:55.320 --> 00:31:00.680 What made it go on for so long? And what is so odd to me is that you pick up, I remember 394 00:31:00.680 --> 00:31:08.680 Any textbook that I read in high school, or any one you pick up now, they will all say that thanks to the U.S. government, we got out of the depression. 395 00:31:08.680 --> 00:31:16.680 Well, let's see. During the entire 1930s, the average rate of unemployment was 18%. 396 00:31:16.680 --> 00:31:21.680 Now, today, if you have 5% or 6% unemployment, people are saying, well, this is terrible, it's a disaster. 397 00:31:21.680 --> 00:31:25.680 Well, maybe 6% will say it would be really, really bad. 7% would be catastrophic. 398 00:31:25.680 --> 00:31:35.680 18% on average during the 30s, and I'm being told that the government got us out of the depression, well they took their time about it, if that's what you're telling me, that they got us out of the depression. 399 00:31:35.680 --> 00:31:39.680 Let me just give you one example of the type of policy that was introduced in the depression. 400 00:31:39.680 --> 00:31:46.680 This is by people with brains, people with a beating heart and a pulse, devised this policy. 401 00:31:46.680 --> 00:31:51.680 It was decided during the depression that the farmers were doing badly. 402 00:31:51.680 --> 00:31:56.680 Well, that's true, because the farmers are human beings and all human beings were doing badly. 403 00:31:56.680 --> 00:31:59.680 So, of course, the farmers being one subset were doing badly. 404 00:31:59.680 --> 00:32:02.680 So we want to help the farmers. So what are we going to do to help the farmers? 405 00:32:02.680 --> 00:32:06.680 Are we going to try to reduce the tax burden on them? What are we going to do? 406 00:32:06.680 --> 00:32:14.680 No, here's what we're going to do. Suppose you're a farmer. Let's just say suppose you produce cotton. 407 00:32:14.680 --> 00:32:20.680 Let's say you produce cotton. And let's say all the cotton in the United States was destroyed 408 00:32:20.680 --> 00:32:27.680 The US government decided to destroy 10 million acres of cotton and plow it under and destroy it, so that the remaining cotton will be more expensive than the rest of the cotton. 409 00:32:50.680 --> 00:32:54.680 And the farmers will get more for it, they can charge more. 410 00:32:54.680 --> 00:32:58.680 Or pork prices, you know, we want, pork prices are pretty low right now. 411 00:32:58.680 --> 00:33:01.680 That's not good for farmers who are raising pigs. 412 00:33:01.680 --> 00:33:06.680 So let's kill six million pigs, then there'll be fewer pigs, less pork, 413 00:33:06.680 --> 00:33:10.680 the pork will be more expensive and the farmers will do better. 414 00:33:10.680 --> 00:33:17.680 Now that's, you don't need to have any economic education to see that that's really a bad thing. 415 00:33:17.680 --> 00:33:22.680 to destroy 10 million acres of cotton or 6 million pigs. 416 00:33:22.680 --> 00:33:25.680 In the 1930s, people are eating ketchup sandwiches, remember that? 417 00:33:25.680 --> 00:33:28.680 They're eating a head of lettuce and they're passing it around. 418 00:33:28.680 --> 00:33:31.680 They're eating a head of lettuce for dinner. 419 00:33:31.680 --> 00:33:35.680 And you're going to make pork more expensive by killing 6 million pigs. 420 00:33:35.680 --> 00:33:37.680 That might offend some people. 421 00:33:37.680 --> 00:33:40.680 But instead, we've got to make the farmers richer. 422 00:33:40.680 --> 00:33:42.680 Well, you might make the farmers slightly richer, 423 00:33:42.680 --> 00:33:44.680 but you know what you're not going to make richer? 424 00:33:44.680 --> 00:33:45.680 Everybody who eats. 425 00:33:45.680 --> 00:33:49.680 Everybody who eats will be made worse off because the supply is less. 426 00:33:49.680 --> 00:33:53.680 Or anybody who wears clothing is going to be pretty much at a disadvantage 427 00:33:53.680 --> 00:33:57.680 when 10 million acres of cotton are completely destroyed. 428 00:33:57.680 --> 00:34:01.680 But that was the genius program that was developed in 1933, 429 00:34:01.680 --> 00:34:03.680 which is going to start destroying things. 430 00:34:03.680 --> 00:34:05.680 And that will make the farmers wealthier. 431 00:34:05.680 --> 00:34:08.680 As I show in my book, it didn't even make the farmers wealthier for other reasons. 432 00:34:08.680 --> 00:34:11.680 But it made everybody else poor. It just destroyed things. 433 00:34:11.680 --> 00:34:13.680 Could you possibly imagine somebody saying, 434 00:34:13.680 --> 00:34:17.680 I have a way to make you richer. Everything that's in your bedroom, I'm going to destroy it. 435 00:34:17.680 --> 00:34:21.680 I mean, like, you would never say, well, that's a great idea. I think that's what we should do. 436 00:34:21.680 --> 00:34:24.680 Let's just start destroying things. Like, why would you do that? 437 00:34:24.680 --> 00:34:29.680 Well, eventually, the federal government decided that this is not very good public relations. 438 00:34:29.680 --> 00:34:32.680 It looks kind of bad when we're slaughtering all these pigs. 439 00:34:32.680 --> 00:34:36.680 I mean, some people find that a little bit, well, kind of spooky, actually, 440 00:34:36.680 --> 00:34:38.680 that you're going to slaughter six million pigs. 441 00:34:38.680 --> 00:34:42.680 So what they would do is, after the 1933, the federal government had this policy where 442 00:34:42.680 --> 00:34:50.680 What we'll do is, we'll just pay the farmers not to grow the stuff in the first place so we don't have to go to the trouble of destroying it. 443 00:34:50.680 --> 00:34:54.680 So the new policy became, we'll pay the farmers not to produce. 444 00:34:54.680 --> 00:34:57.680 So we'll pay you to sit there like a bum, pretty much. 445 00:34:57.680 --> 00:35:02.680 We'll pay you to sit there, or we'll pay you to produce only one third of what you can produce. 446 00:35:02.680 --> 00:35:07.680 And that way we'll have less stuff, and it'll be more expensive, and that'll be good for the farmers. 447 00:35:07.680 --> 00:35:11.680 Yes, good for the farmers, but not good for anybody who buys those things. 448 00:35:11.680 --> 00:35:16.680 And also, suppose you're a farm worker. What you do for a living is you work on a farm. 449 00:35:16.680 --> 00:35:19.680 And now the federal government says, we're not going to farm nearly as much. 450 00:35:19.680 --> 00:35:24.680 We're going to cut out two-thirds of the farming, let's say, or half, or whatever. 451 00:35:24.680 --> 00:35:26.680 What is there for you to do anymore? Not much. 452 00:35:26.680 --> 00:35:30.680 So it turns out that two million farm workers were thrown out of work by this, 453 00:35:30.680 --> 00:35:33.680 because what is there for them to do if people are cutting back on farming? 454 00:35:33.680 --> 00:35:40.680 So it's a complete disaster, but yet something like this program continues in existence to this day. 455 00:35:40.680 --> 00:35:43.680 Typically, every year, if you're wondering, you say to yourself, 456 00:35:43.680 --> 00:35:45.680 boy, orange juice is kind of expensive, isn't it? 457 00:35:45.680 --> 00:35:47.680 You know, like, you always have to wait for... 458 00:35:47.680 --> 00:35:51.680 I mean, if you're like me, you only buy whatever orange juice is on sale that week, right? 459 00:35:51.680 --> 00:35:55.680 Like, I would never dream of buying Tropicana at the normal price. 460 00:35:55.680 --> 00:36:01.680 Whatever's on sale, if it's Joe's orange juice, I don't even know who Joe is, I'll take it, okay? 461 00:36:01.680 --> 00:36:03.680 Orange juice is a little expensive. 462 00:36:03.680 --> 00:36:08.680 One of the reasons orange juice is expensive is that it's the legacy of these programs from the 30s, 463 00:36:08.680 --> 00:36:17.680 is that every year 40% of all the oranges grown are either destroyed or fed to livestock or otherwise gotten rid of. 464 00:36:17.680 --> 00:36:23.680 So therefore the remaining 60% of the oranges will be more expensive and the orange growers will do better. 465 00:36:23.680 --> 00:36:26.680 But anybody who enjoys orange juice does worse. 466 00:36:26.680 --> 00:36:33.680 There are programs like this all over the economy and we have the geniuses from the 1930s to thank for this 467 00:36:33.680 --> 00:36:36.680 and that was supposedly to lift the country out of the Great Depression. 468 00:36:36.680 --> 00:36:43.680 Depression, that didn't actually work. They ended up finding out that destruction and producing less does not make you richer. 469 00:36:43.680 --> 00:36:49.680 But it took a long time for that to come out. Now, there's much more that can be said about that. 470 00:36:49.680 --> 00:36:54.680 But that's, I think, the easiest program to see through, that it's probably not going to bring you prosperity. 471 00:36:54.680 --> 00:37:02.680 Well, what I've said to you today in this brief time are examples of the sort of thing you're never going to hear about. 472 00:37:02.680 --> 00:37:05.680 If you go off to college, you are never going to hear about this stuff. 473 00:37:05.680 --> 00:37:11.680 Or you'll hear about it in one little sentence while the professor is taking a drink of coffee and he's speaking into his mug. 474 00:37:11.680 --> 00:37:14.680 Like, you won't hear it. So why won't you hear it? 475 00:37:14.680 --> 00:37:16.680 Because there's an agenda at work here. 476 00:37:16.680 --> 00:37:23.680 People who teach history typically, well, not typically, I don't want to besmirch them all, but a good many of them have an agenda. 477 00:37:23.680 --> 00:37:31.680 They want you to leave that history class thinking a certain way, thinking that the government is the great savior full of wonderful people pursuing justice 478 00:37:31.680 --> 00:37:36.080 and Justice, and anybody not in the government is wicked, evil and an exploiter. 479 00:37:36.080 --> 00:37:38.280 They want you to basically leave thinking that. 480 00:37:38.280 --> 00:37:40.680 So they're going to teach you history that makes you think that. 481 00:37:40.680 --> 00:37:42.380 Unfortunately, it's not true. 482 00:37:42.380 --> 00:37:44.880 So it's very important to arm yourself against this 483 00:37:44.880 --> 00:37:49.680 so you don't become another one of these robotic idiots who just repeats myths all the time. 484 00:37:49.680 --> 00:37:52.880 You can actually be one of the intelligent people in the world. 485 00:37:52.880 --> 00:37:56.480 And I'm happy to say that even though it's not anywhere near a majority of people 486 00:37:56.480 --> 00:37:58.080 who are being home-schooled right now, 487 00:37:58.080 --> 00:38:07.080 Still, I believe, because of the appalling ignorance of the typical high school graduate in the public government schools, 488 00:38:07.080 --> 00:38:15.080 disproportionately the educated people in this country, 20 years from now, will disproportionately, way out of proportion to their numbers, have come from homeschooling families. 489 00:38:15.080 --> 00:38:20.080 So, very good. I'm very glad you're all doing this and in a couple of years I'll be joining you myself. 490 00:38:20.080 --> 00:38:22.080 Thank you all for your kind attention. 491 00:38:29.080 --> 00:38:31.080 So, shall I invite some questions? 492 00:38:31.080 --> 00:38:33.080 Yes? 493 00:38:33.080 --> 00:38:35.080 Oh, thanks. 494 00:38:37.080 --> 00:38:39.080 Now see, I choke under these circumstances. 495 00:38:39.080 --> 00:38:41.080 I mean, if I'm talking about history, I can be funny. 496 00:38:41.080 --> 00:38:44.080 But if I'm trying to be funny, I'm afraid all I do is talk about history. 497 00:38:44.080 --> 00:38:48.080 You know, it would just be, the War of 1812 was, and people would be throwing things. 498 00:38:48.080 --> 00:39:06.080 I have to say, the cotton restriction stuff, it gave my father a job. He got to work for the government, go around, and report if people were growing cotton and not supposed to be. 499 00:39:06.080 --> 00:39:25.080 I would bet some people would be telling him to get off their property, but in fact though, that goes to show Mark Thornton's point that you can't look at a program just in terms of its short-term effects. 500 00:39:25.080 --> 00:39:29.080 Yes, that did employ some people doing that, but what did it do to the whole rest of it? 501 00:39:29.080 --> 00:39:40.080 Okay. And in fact, Ralph Cramden met Alice at the WPA. She was handing out the shovels, if I remember the honeymoon is correct. 502 00:39:40.080 --> 00:39:46.080 Okay. But, you know, that's just a side effect of these programs. Anything else? 503 00:39:46.080 --> 00:40:02.080 I've heard about the railroad, how much more efficient the railroad is to take freight across the country and impose some of the trucking thing. What are the subsidies that are still working and laws that are still in balance in that? 504 00:40:16.080 --> 00:40:21.280 from the Federal Government, but they were special favors that tended to distort the 505 00:40:21.280 --> 00:40:25.760 way the railroads put their tracks down, because you would get more goodies from the Federal 506 00:40:25.760 --> 00:40:31.160 Government the more track you put down. So instead of thinking, well, I have to really 507 00:40:31.160 --> 00:40:36.240 watch my money and just develop the straightest track, if you're going to get more goodies 508 00:40:36.240 --> 00:40:40.120 the more track you put down, you're going to go like this, right? In fact, the Southern 509 00:40:40.120 --> 00:40:44.440 State Parkway in New York, if you take the Southern State Parkway, the whole ride is 510 00:41:14.440 --> 00:41:19.360 Paul. He had a railroad going from St. Paul to Seattle. It took no government aid at all. 511 00:41:19.360 --> 00:41:24.560 And when 1893 came and most of the other railroads went bankrupt, he turned a profit because 512 00:41:24.560 --> 00:41:30.340 he had a super efficient road and he paid for the right of way. He actually negotiated 513 00:41:30.340 --> 00:41:33.920 with various Indian tribes. He came in contact with... He didn't just say, well, there are 514 00:41:33.920 --> 00:41:38.320 Indian tribes in the way. I'll just exterminate everybody. Instead, he said, well, you know, 515 00:41:38.320 --> 00:41:42.240 here's this and that and he arranged it and he ended up having one of the best, cheapest, 516 00:41:42.240 --> 00:41:52.240 How did you become interested in what you do? 517 00:42:12.240 --> 00:42:15.240 What kind of a... what's the matter with somebody like that? 518 00:42:15.240 --> 00:42:17.240 But I became interested in... 519 00:42:17.240 --> 00:42:19.240 I went to Harvard, undergrad, 520 00:42:19.240 --> 00:42:21.240 and I found that all the other math majors, 521 00:42:21.240 --> 00:42:23.240 all they did all day was math. 522 00:42:23.240 --> 00:42:25.240 So even when they weren't doing schoolwork, 523 00:42:25.240 --> 00:42:28.240 they'd be reading books on number theory or this or that. 524 00:42:28.240 --> 00:42:30.240 But in my spare time, I wanted to read history, 525 00:42:30.240 --> 00:42:32.240 and I thought, how am I going to keep up with people 526 00:42:32.240 --> 00:42:34.240 who all they do is math? 527 00:42:34.240 --> 00:42:36.240 Plus, this is just not normal, right? 528 00:42:36.240 --> 00:42:38.240 I mean, shouldn't you have another interest? 529 00:42:38.240 --> 00:42:40.240 Well, then also, on my way to dinner, 530 00:42:40.240 --> 00:42:50.240 On my way to dinner, every single night, I would come in contact with this, there was a group of communists who would stand there selling the workers' vanguard newspaper. 531 00:42:50.240 --> 00:42:56.240 And they were denouncing this and that U.S. policy, and they were talking about the need for the communist revolution. 532 00:42:56.240 --> 00:43:01.240 And I thought, my gosh, don't these people know about the tens of millions of people who were killed by communism? 533 00:43:01.240 --> 00:43:06.240 I mean, so this little naive kid, I would actually stop and say to them, what's the matter with you, you savages? 534 00:43:06.240 --> 00:43:13.140 Savages. I mean, people like this have killed millions of people. You want to bring this to America? And they'd be denouncing me as some, you know, whatever, 535 00:43:13.860 --> 00:43:22.280 U.S., you know, lackey or whatever. And so, when you live in Cambridge, Massachusetts, and you're not in normal America for a long time, 536 00:43:22.280 --> 00:43:29.360 it seemed to me like we are on the verge of a socialist revolution in this country. Because, I mean, you see communist newspapers everywhere. 537 00:43:29.360 --> 00:43:31.360 I had to buy my textbooks. 538 00:43:31.360 --> 00:43:35.360 and for one course I had to buy my books at a store called Revolution Books 539 00:43:35.360 --> 00:43:40.360 and you go in there and they've got pictures of Stalin and Mao, you know, 540 00:43:40.360 --> 00:43:45.360 between them, you know, again tens of millions of deaths they're responsible for 541 00:43:45.360 --> 00:43:49.360 and they got their pictures up on the wall and I'm supposed to go and buy books there 542 00:43:49.360 --> 00:43:53.360 so remember I walked in there and I walked out and said I don't care how long it takes me 543 00:43:53.360 --> 00:43:57.360 I'll go around this whole city buying these books, I'm not giving my money to these people 544 00:43:57.360 --> 00:44:02.860 I had this distorted view that, my gosh, the whole country is being swept away by communist propaganda. 545 00:44:02.860 --> 00:44:06.360 No, it's just like this one street in this one city. 546 00:44:06.360 --> 00:44:14.360 But it made me think, man, I better throw all my resources, all my intellectual talents, whatever, to save this country from this. 547 00:44:14.360 --> 00:44:18.360 So I began to start reading more and more and more about communism and this and that. 548 00:44:18.360 --> 00:44:24.360 And then before I knew it, I said to myself, this is what I want to devote my life to, is a study of ideas, a study of history. 549 00:44:24.360 --> 00:44:29.360 And I'm going to miss doing math, but I feel like, you know, here I could do something that really interests me 550 00:44:29.360 --> 00:44:32.360 and that I feel like is doing something that's worthwhile for society. 551 00:44:32.360 --> 00:44:38.360 Math is worthwhile in its own way, it's true, but I just felt it to be much more compelling and important at this moment 552 00:44:38.360 --> 00:44:40.360 for me to learn history so I can go after these guys. 553 00:44:40.360 --> 00:44:45.360 And then when I realized the communists weren't really a big threat in America at this point, 554 00:44:45.360 --> 00:44:50.360 nevertheless there is no shortage of people though who need some sort of historical enlightening, 555 00:44:50.360 --> 00:44:52.360 so the knowledge did not go to waste. 556 00:44:52.360 --> 00:44:59.360 How did you become a writer? Just because if you're interested in it, it just flowed out of you naturally? 557 00:45:22.360 --> 00:45:24.020 I emailed him one day and I said, 558 00:45:24.020 --> 00:45:26.020 hey, I don't know why I was telling him this, 559 00:45:26.020 --> 00:45:29.800 I made 15 bucks today participating in a psychology experiment 560 00:45:29.800 --> 00:45:31.640 in the Harvard psychology department. 561 00:45:31.640 --> 00:45:33.680 That's how we all made our spending money. 562 00:45:33.680 --> 00:45:36.200 It would be like a thing to test your memory 563 00:45:36.200 --> 00:45:37.560 under certain conditions, whatever. 564 00:45:37.560 --> 00:45:41.040 And you'd walk out with five bucks, seven bucks, 10 bucks. 565 00:45:41.040 --> 00:45:42.760 And Jeff was saying, well, I can't believe 566 00:45:42.760 --> 00:45:45.400 you're wasting an hour or two hours or whatever 567 00:45:45.400 --> 00:45:48.400 making this money when you could spend a few hours 568 00:45:48.400 --> 00:45:50.760 writing an article and make 150 bucks or something. 569 00:45:50.760 --> 00:45:57.760 I thought, me? Write an article? And then like a whole new world opened up, you know, like just a whole new world. 570 00:45:57.760 --> 00:46:03.760 And so from that point on, and then the more you write, you know, the more easily it comes and that sort of thing. 571 00:46:03.760 --> 00:46:08.760 So it was just him telling me, stating the obvious, why don't you start writing? And I thought, okay. 572 00:46:08.760 --> 00:46:13.760 And then before you know it, and by the way, the best advice in terms of becoming a good writer 573 00:46:13.760 --> 00:46:18.760 is to read people who know how to write. Read good writing. 574 00:46:18.760 --> 00:46:21.960 and then when you write your sentence then you sit back and say 575 00:46:21.960 --> 00:46:26.240 like let's suppose you're reading H.L. Mencken, who's a great writer 576 00:46:26.240 --> 00:46:29.000 then you go and write your own essay on whatever topic 577 00:46:29.000 --> 00:46:31.180 and then you step back and say 578 00:46:31.180 --> 00:46:34.580 Mencken would rather die than write this terrible sentence and then you 579 00:46:34.580 --> 00:46:36.200 whatever and until it 580 00:46:36.200 --> 00:46:38.380 you don't have to write exactly the way he did but 581 00:46:38.380 --> 00:46:40.980 it makes you be much more self-critical you think my gosh 582 00:46:40.980 --> 00:46:44.740 the elegant beautiful sentences that so-and-so writes you know 583 00:46:44.740 --> 00:46:48.220 you know my stuff doesn't match up to that but at least it gives you something to shoot for 584 00:46:48.220 --> 00:46:53.900 I found that most of the students I had, not most, almost every single one, were extremely 585 00:46:53.900 --> 00:46:59.020 bad writers. Not just that the prose didn't flow very well or they chose the wrong word 586 00:46:59.020 --> 00:47:04.260 all the time or it was awkward, but they couldn't organize their thoughts. I feel like the home 587 00:47:04.260 --> 00:47:08.860 school people, there's much more emphasis on this, but organizing your thoughts, thinking 588 00:47:08.860 --> 00:47:13.400 rationally, developing what is it that you want to say and then learning how to support 589 00:47:13.400 --> 00:47:17.380 what you want to say and then drawing a sensible conclusion. This is like, I may as well be 590 00:47:17.380 --> 00:47:24.380 Do you have a publicist? Or did you do it yourself? How did you get to the New York? 591 00:47:47.380 --> 00:47:54.380 I did a PhD dissertation at Columbia, and then I expanded it, and they really liked it, and so it became a book, and it was wonderful. 592 00:47:54.380 --> 00:47:59.380 But those are going to be small selling books, because it's really a very specialized kind of study. 593 00:47:59.380 --> 00:48:02.380 But then this thing, this just fell into my lap. 594 00:48:02.380 --> 00:48:08.380 Regnery Publishing, which has been around since 1947, publishing conservative libertarian books, 595 00:48:08.380 --> 00:48:13.380 they called up and said, we want to write a book, we want somebody to write a book with this title, 596 00:48:13.380 --> 00:48:15.380 The Politically Incorrect Guide to American History 597 00:48:15.380 --> 00:48:17.380 Are you interested in doing it? 598 00:48:17.380 --> 00:48:20.380 And I thought about it and I said yes. 599 00:48:20.380 --> 00:48:23.380 And I almost said no. What a stupid decision that would have been. 600 00:48:23.380 --> 00:48:25.380 You know, this has opened so many doors for me. 601 00:48:25.380 --> 00:48:30.380 I mean, it would have been like those record producers who told the Beatles, 602 00:48:30.380 --> 00:48:33.380 well, groups with guitars are on their way out so we're not going to sign you 603 00:48:33.380 --> 00:48:35.380 and then they go on and make a zillion dollars. 604 00:48:35.380 --> 00:48:37.380 Well, it was this sort of thing. I almost didn't. 605 00:48:37.380 --> 00:48:40.380 Because I thought, when would I find the time? Well, I found the time. 606 00:48:40.380 --> 00:48:45.380 So they came up with the idea, and Regnery has got a tremendous marketing arm behind them. 607 00:48:45.380 --> 00:48:49.380 So they can get out there and publicize your book. They can get you on TV, on the radio. 608 00:48:49.380 --> 00:48:52.380 They can line up, speak and engage. Well, I usually do that. 609 00:48:52.380 --> 00:48:56.380 But the point is that there are a lot of opportunities that came from the fact that this is a big publisher. 610 00:48:56.380 --> 00:49:02.380 Because again, how do you get your book to stand out from 194,999 other ones? 611 00:49:02.380 --> 00:49:04.380 Very, very difficult. 612 00:49:04.380 --> 00:49:09.380 So thankfully, next spring, my book is coming out from Crown Forum, which is a division of Random House. 613 00:49:09.380 --> 00:49:14.380 and so we're hopeful that we'll be able to get the word out about that one. 614 00:49:14.380 --> 00:49:19.380 But that's basically the key is having a publisher behind you who is committed to the project. 615 00:49:19.380 --> 00:49:24.380 And another thing is that Regnery only puts out about 15 books a year. 616 00:49:24.380 --> 00:49:29.380 So they're very careful about what they choose and then they throw themselves behind each one. 617 00:49:29.380 --> 00:49:33.380 Now I have friends who have published for Doubleday and other major publishers, 618 00:49:33.380 --> 00:49:38.380 but Doubleday will put out 3,000 books in a year and they'll pick which ones they really want to push. 619 00:49:38.380 --> 00:50:01.380 Did they book your engagements? You said you did a lot of that yourself. 620 00:50:01.380 --> 00:50:09.380 Now, how has the word liberal come to the transformation it's gone through in the last 100 years, a couple of years? 621 00:50:31.380 --> 00:50:37.220 from Harlem was where Columbia was. That was my representative in the house. Yikes. Like, 622 00:50:37.220 --> 00:50:43.100 how did this happen? How did we degenerate to this point? And it's not an easy question 623 00:50:43.100 --> 00:50:47.620 to answer, but part of the answer goes like this. Some of the people who used to be classical 624 00:50:47.620 --> 00:50:53.300 liberals believed that if you take away all these government advantages for big business 625 00:50:53.300 --> 00:50:57.900 and whatever, take away all the government privilege, that will help the poorest, which 626 00:50:57.900 --> 00:51:10.400 which it did. But there were some who thought that it would also, it would lift the status of the poor really, really high, that the only thing preventing total equality in the country was that government was favoring the wealthy and powerful. 627 00:51:10.400 --> 00:51:22.400 We take that favor away, we have the government be totally neutral, everybody will be equal. Well then, some liberals got impatient with that and thought, well, now we've pretty much stripped the government down and yet there's still inequality. 628 00:51:22.400 --> 00:51:27.400 So I guess we now need the government to actively intervene and bring about equality. So I think that's part of the evolution. 629 00:51:29.400 --> 00:51:31.400 Okay, anything else? 630 00:51:32.400 --> 00:51:37.400 Well, it's been a real pleasure. I was very glad to meet you all and I hope you enjoyed it today. Thank you very much.