WEBVTT NOTE The Case for Legalizing Capitalism 1 00:00:00.000 --> 00:00:23.160 I have with me today the international man of mystery, Kel Kelly, the author of this 2 00:00:23.160 --> 00:00:24.160 book. 3 00:00:24.160 --> 00:00:28.180 He blasted on the scene earlier this year with his marvelous treatise, which has been 4 00:00:28.180 --> 00:00:34.060 and Selling very well because it's a fantastic introduction to the idea of capitalism. It's 5 00:00:34.060 --> 00:00:38.340 got an aggressive title, the case for legalizing capitalism. 6 00:00:38.340 --> 00:00:40.340 That was the idea. 7 00:00:40.340 --> 00:00:43.580 What was the, yeah, tell me about the goal of writing the book. 8 00:00:43.580 --> 00:00:49.140 Well the goal for the book overall was to take what I had been reading and learning 9 00:00:49.140 --> 00:00:55.280 in large part through the Mises Institute for many years that was more academic oriented 10 00:00:55.280 --> 00:01:25.280 and kind of consolidate all of that into one place for the average person on the street and to put it in layman's terms, because I'm not necessarily that intelligent myself, I wanted it in an easy to understand language where people can understand it and say the most important things, but consolidate it to that level where basically the goal was to have a rebuttal for all anti-capitalistic arguments. 11 00:01:25.280 --> 00:01:30.620 Right. And there's thousands of them and they seem to be multiplying by the day. It's driving 12 00:01:30.620 --> 00:01:34.880 you crazy. You're digging through all this scholarship because you love big books, you 13 00:01:34.880 --> 00:01:39.840 love journal articles and that sort of thing. But you're frustrated that there's nothing 14 00:01:39.840 --> 00:01:45.600 you could really put your fingers on. You could just hand to the average person who's 15 00:01:45.600 --> 00:01:50.240 absorbed this anti-capitalist mentality and say, look, there's another point of view. 16 00:01:50.240 --> 00:01:51.240 Read my book. 17 00:01:51.240 --> 00:01:57.240 My mindset was kind of, I hear anti-capitalistic arguments all day from different people and 18 00:01:57.240 --> 00:02:01.740 I always want to rebuttal and I think back to I read about that, I learned the details, 19 00:02:01.740 --> 00:02:06.380 who wrote about that or what book was that and so I wanted a source where whatever the 20 00:02:06.380 --> 00:02:12.720 topic was, I could have it as a reference, oh you're referring to Wal-Mart as evil, well 21 00:02:12.720 --> 00:02:17.960 here let me flip here and let me show you, here's the arguments that are, does the reply 22 00:02:17.960 --> 00:02:39.680 And you began the book really before the economic meltdown in 2008? 23 00:02:39.680 --> 00:02:46.680 Yes. Well, I began it kind of as it was unfolding in earlier 2008 before the big crisis came 24 00:02:46.680 --> 00:02:49.960 And well, I guess it came in March and then particularly September. 25 00:02:49.960 --> 00:02:56.840 So yes, as far as that goes, it was kind of good timing, but it was unfolding as I was 26 00:02:56.840 --> 00:03:00.440 writing it, which helped because every day I would read, you know, the New York Times 27 00:03:00.440 --> 00:03:05.920 when the first wave hit and I read and I saw George Reisman remarked on the same article 28 00:03:05.920 --> 00:03:11.320 in a paper he wrote that, you know, this is the problem with the lack of regulation, capitalism 29 00:03:11.320 --> 00:03:14.360 caused this, this is why we need regulation. 30 00:03:14.360 --> 00:03:18.200 And so, that was kind of inspiration, as I was writing it, to address these. 31 00:03:18.200 --> 00:03:22.360 Yeah, it's remarkable, isn't it? You know, almost every day in the news, right? I mean, 32 00:03:22.360 --> 00:03:27.040 once you develop an eye for these things, you recognize the anti-capitalistic mentality 33 00:03:27.040 --> 00:03:28.040 everywhere. 34 00:03:28.040 --> 00:03:34.560 Absolutely. It's prevalent, and it's the common notion, and everyone believes that 35 00:03:34.560 --> 00:03:39.480 capitalism can't work, we need help, and so I wanted to show in as many different ways 36 00:03:39.480 --> 00:03:56.720 And by capitalism, of course, you don't mean anything peculiar by the term like, oh, we 37 00:03:56.720 --> 00:04:02.840 should love capitalists versus labor or whatever. You just mean the market economy. And you 38 00:04:02.840 --> 00:04:07.960 have no problem using the term capitalism. It's a provocative term for people. 39 00:04:07.960 --> 00:04:13.560 In the book, I use capitalism and free markets interchangeably, and I probably expand capitalism 40 00:04:13.560 --> 00:04:18.780 more than it usually is to include kind of social ideas also, but really, when I say 41 00:04:18.780 --> 00:04:24.760 capitalism, I'm referring to absolute complete freedom for individuals and businesses to 42 00:04:24.760 --> 00:04:29.560 operate as they want, and as I said, it's also known as free markets, just letting people 43 00:04:29.560 --> 00:04:35.980 be free to produce and buy and sell and trade and act, interact with each other the way 44 00:04:35.980 --> 00:04:50.780 Capitalism is not capitalism at all, right? I mean, quite often you'll hear things like, 45 00:04:52.540 --> 00:04:59.180 well, it's just terrible the way these bailouts, you know, rewarded rich wealthy capitalists, 46 00:04:59.900 --> 00:05:05.740 that's capitalism for you. That's right. That's constantly applied to various things that we 47 00:05:05.740 --> 00:05:13.260 We who know the difference between true free markets and regulated markets, if you say 48 00:05:13.260 --> 00:05:17.740 to people in general, do you support free markets, most of them will say, yes, we do. 49 00:05:17.740 --> 00:05:22.500 Then you start getting to the particulars, well, do you support a minimum wage? 50 00:05:22.500 --> 00:05:25.000 Do you support subsidies to help our poor farmers? 51 00:05:25.000 --> 00:05:27.020 Do you support X, Y, and Z? 52 00:05:27.020 --> 00:05:29.960 They'll say, well, yes, of course, you have to have that. 53 00:05:29.960 --> 00:05:35.720 Or we have to have an FDA because we have to have an AMA so doctors won't cut out 54 00:05:35.720 --> 00:05:44.240 are explained instead of repairing our heart or whatever, but the fact is that is an absence 55 00:05:44.240 --> 00:05:47.760 of free markets, that is regulation, that is government control. 56 00:05:47.760 --> 00:05:53.520 And there's a point that you brought home again and again that the owners of airplanes, 57 00:05:53.520 --> 00:05:56.880 airline companies don't want their planes to crash, the people who make food don't 58 00:05:56.880 --> 00:06:00.880 want to kill you with their food, the doctor doesn't want to cut out your heart instead 59 00:06:00.880 --> 00:06:02.760 of your spleen or whatever, right? 60 00:06:02.760 --> 00:06:11.760 Businesses have all kinds of incentives to do the right thing. They do screw up sometimes, and more often than not, like the recent BP, oil spill. 61 00:06:11.760 --> 00:06:16.760 That's because they had incentives to do what they were doing. In other words, it was regulation. 62 00:06:16.760 --> 00:06:22.760 But accidents can still happen. Even if they were a complete free market oriented company, oil spills will happen. 63 00:06:22.760 --> 00:06:27.760 Right. So it's a reasonable book. I mean, you address people's common concerns. 64 00:06:27.760 --> 00:06:36.760 I try to address every single common concern during any election cycle, whatever the issues are, I try to put them in perspective in this book. 65 00:06:36.760 --> 00:06:43.760 Now, it's not just a defensive free enterprise like you might expect from the Chamber of Commerce or something like that. 66 00:06:43.760 --> 00:06:49.760 You've got a particular Austrian take here, so you do take a tough line in some ways, right? 67 00:06:49.760 --> 00:06:54.760 I mean, you want the end of the FDA, you want the end of the FDIC. 68 00:06:54.760 --> 00:06:58.760 Do you take on the topic of the Federal Reserve and the business cycle? 69 00:06:58.760 --> 00:07:01.760 I take on all the topics, and yes, I'm pretty hardcore with it. 70 00:07:01.760 --> 00:07:07.760 I do state that, yeah, in the beginning I remark, you know, what a real free market would consist of, 71 00:07:07.760 --> 00:07:11.760 and I state, well, okay, I know that most people I'm trying to talk to with this book 72 00:07:11.760 --> 00:07:17.760 will not go for absolute, what would, what they would call anarchy and craziness, 73 00:07:17.760 --> 00:07:22.760 you know, so I say, okay, well, let's assume the government runs the schools 74 00:07:22.760 --> 00:07:28.520 and gives us the roads and bridges and parks and so forth. But the book therefore describes 75 00:07:29.240 --> 00:07:35.960 what's left in the world of free market after that. And so, but yes, so I cover all the 76 00:07:35.960 --> 00:07:43.640 topics and hit them pretty hard, but I try to support them with strong circumstantial evidence, 77 00:07:43.640 --> 00:07:47.800 historical evidence, and logical cause and effect arguments. 78 00:07:47.800 --> 00:07:52.200 Yeah, lots of theory too. In fact, you start the book with a lot of theory. 79 00:07:52.200 --> 00:07:59.000 And not too much, right? You explained what is wealth, what makes wealth, what makes societies 80 00:07:59.800 --> 00:08:05.160 wealthy, how economies grow. And why do you think that background is so important? 81 00:08:06.280 --> 00:08:11.080 Well, I figured to understand, you know, later in the book, I would be saying things like, 82 00:08:12.600 --> 00:08:18.040 you know, we know that this or that regulation can't help or this intervention will only cause 83 00:08:18.040 --> 00:08:24.940 So I have to first start in the beginning with the basics of economics. 84 00:08:24.940 --> 00:08:29.760 So the first section is just that, the basics, labor, capital, wealth. 85 00:08:29.760 --> 00:08:32.900 And so I figured, well, if I'm doing this, I need to put it all in perspective. 86 00:08:32.900 --> 00:08:34.260 What is an economy? 87 00:08:34.260 --> 00:08:35.260 What is wealth? 88 00:08:35.260 --> 00:08:36.260 What is capital? 89 00:08:36.260 --> 00:08:39.660 How do we progress as an economy? 90 00:08:39.660 --> 00:08:41.340 Can we be exploited? 91 00:08:41.340 --> 00:08:42.340 Are profits bad? 92 00:08:42.340 --> 00:08:43.340 Are they good? 93 00:08:43.340 --> 00:08:51.140 Explain how it all works, from labor and investment to trade. I cover all the basics so that we 94 00:08:51.140 --> 00:08:55.780 can then, with all the other topics, apply that knowledge and understand what will help 95 00:08:55.780 --> 00:08:58.700 or what will harm us in terms of these other political topics. 96 00:08:58.700 --> 00:09:03.020 You know what's wonderful about the book? Well, first of all, you nowhere claim originality, 97 00:09:03.020 --> 00:09:07.820 but in some way your presentation is original in the sense that it's popular. You're really 98 00:09:07.820 --> 00:09:12.860 trying to reach… Did you have somebody in mind you were writing it for, a typical man 99 00:09:12.860 --> 00:09:33.860 I did, actually. Yes. Though this book is perfect for any Austrian or any free-market-oriented person, when I was writing it, what I had in mind, or who I had in mind, was my brother-in-law, my aunt, my cousin. I have many socialist friends and family members. 100 00:09:33.860 --> 00:09:37.860 The family reunion, just sitting around the table until it's driving you crazy. 101 00:09:37.860 --> 00:09:44.860 Right, and you get into that argument, or co-workers, or, you know, we run into people constantly on Facebook, especially today. 102 00:09:44.860 --> 00:09:49.860 I mean, I see dialogue constantly, I try to stay out of it, but there are all these arguments. 103 00:09:49.860 --> 00:09:59.860 And so, the idea was to talk to those people and address this mindset and this logic. 104 00:09:59.860 --> 00:10:04.660 And so, you're concerned about XYZ issue. Here's what you think about it. 105 00:10:04.660 --> 00:10:07.860 So, instead of ruining the dinner party or causing a... 106 00:10:07.860 --> 00:10:12.860 Yeah, they won't talk to me about it anymore. They won't get into it. So, now I have to say, look, here's this book. 107 00:10:12.860 --> 00:10:16.860 Go by yourself in private, close the door. You don't have to admit that you've read it. 108 00:10:16.860 --> 00:10:18.860 But here's the book. 109 00:10:18.860 --> 00:10:20.860 When you have time and you have interest, then educate yourself. 110 00:10:20.860 --> 00:10:25.860 Right. But the catch is, will they really be open-minded? 111 00:10:25.860 --> 00:10:29.600 I ask people in the beginning to be open-minded when you read this. At least think of an 112 00:10:29.600 --> 00:10:36.020 alternative point of view. You read your leftist socialist propaganda daily. Okay, sorry, literature, 113 00:10:36.020 --> 00:10:41.700 daily. Just consider a different alternative point of view and read it, be open-minded, 114 00:10:41.700 --> 00:10:48.100 think about it. Do my arguments make sense? Is it logical? Do you have a counter-argument? 115 00:10:48.100 --> 00:10:54.260 Can this possibly be the way the world really works? Could capitalism actually help us? 116 00:10:54.260 --> 00:11:00.860 Could it solve poverty? Could it raise our real wages? Could it prevent financial crises? 117 00:11:00.860 --> 00:11:05.260 Just maybe it could. Let's explore and find out. And that's what that's here to do. 118 00:11:05.260 --> 00:11:09.940 Another wonderful thing about the book is that it has an unrelenting zeal about it, 119 00:11:09.940 --> 00:11:13.860 so it never gets tired. Sometimes when people take on these projects like this, a big project 120 00:11:13.860 --> 00:11:18.620 like, I'm going to explain everything that's wrong with interventionism, and here's my 121 00:11:18.620 --> 00:11:23.820 table of contents, they can get tired as they're writing. It can be too much to take on. But 122 00:11:23.820 --> 00:11:28.780 There's no evidence in this book that you ever got tired. I mean, there's really page after page of, 123 00:11:28.780 --> 00:11:34.380 here we go, you know. I appreciate that. And I was afraid as I was writing it that it was going to be 124 00:11:34.380 --> 00:11:39.740 too big and bulky and cumbersome and people would get tired of it. But I had so much to say. And in 125 00:11:39.740 --> 00:11:44.460 fact, I think what helps it is there are so many different topics that everyone talks about at one 126 00:11:44.460 --> 00:11:49.980 point or another. And it's interesting. And I had so much to say about it. And none of it's repetitive 127 00:11:49.980 --> 00:12:07.980 I don't go on and on with the same point. I try to keep moving, but there's so much to say that I think it stays kind of lively, and I did have somewhat of an attitude right in it, and a small bit of sarcasm or not condescension. 128 00:12:07.980 --> 00:12:26.980 I want to respect others' viewpoints and so forth, but I include some normal street talk or sayings that we would say commonly, but you don't find in academic publications, just to keep it real, as they say. 129 00:12:26.980 --> 00:12:32.060 You know, I did a funny thing when we were publishing that and I sent it off to Proofers. 130 00:12:32.060 --> 00:12:37.460 I picked readers that I knew were not going to be sympathetic to it. 131 00:12:37.460 --> 00:12:38.460 Oh really? 132 00:12:38.460 --> 00:12:39.460 I don't think I mentioned this to you. 133 00:12:39.460 --> 00:12:40.460 No, you didn't. 134 00:12:40.460 --> 00:12:41.460 Yeah. 135 00:12:41.460 --> 00:12:42.460 And three separate readers. 136 00:12:42.460 --> 00:12:44.860 All three came back and said they had changed their minds. 137 00:12:44.860 --> 00:12:45.860 Are you serious? 138 00:12:45.860 --> 00:12:46.860 Yes. 139 00:12:46.860 --> 00:12:47.860 Well, that's interesting. 140 00:12:47.860 --> 00:12:52.300 And I also have, I told you, I have many socialist friends, many more than free market-oriented. 141 00:12:52.300 --> 00:13:22.300 are left-wing oriented. Shockingly, these are people who, and I'm thinking of one who's a neighbor, another who I worked with in a consulting firm, well, I guess those are the main two, they have both said to me, Kel, no, there's another third one, another business colleague, surprisingly, most disproportionate amount of business people are left-wing oriented, as I mentioned in the book, but to the point, these people said, look, I may not agree with you. 142 00:13:22.300 --> 00:13:28.660 But I've got to say you did a fantastic job of presenting an alternative view, and one 143 00:13:28.660 --> 00:13:35.180 in particular who said, you know, many people get offended that if I call them socialist 144 00:13:35.180 --> 00:13:40.620 or they don't like to point out something as being socialist, but this guy, he's from 145 00:13:40.620 --> 00:13:46.100 England, calls himself socialist. He said, look, I was raised socialist, and that's what 146 00:13:46.100 --> 00:13:50.820 I believe in, but I've got to say that the arguments you present are very strong and 147 00:14:20.820 --> 00:14:35.820 They'll say, nah, that's not right, and not even read it, but I'm surprised at how many people are reading it, and are not taking it to heart necessarily, but are affected by it, and rethinking some particular issues. 148 00:14:35.820 --> 00:14:47.820 I have one friend, a neighbor, who's doing research constantly now on the Mises website, because he knows that's kind of the end all be all source, for he'll read the New York Times, and then he'll go to the Mises website and see what we say about it. 149 00:14:47.820 --> 00:14:51.740 about it. And so he's really open-minded, obviously, and he's trying to compare and 150 00:14:51.740 --> 00:14:56.860 contrast and try to arrive at the truth, which is what's important. It's not an ideology. 151 00:14:56.860 --> 00:14:58.740 It's how does the world really work? 152 00:14:58.740 --> 00:15:04.260 And you didn't try to reinvent the wheel here. I mean, you're drawing off all the great writings 153 00:15:04.260 --> 00:15:08.660 of the people you consider to be the great writers in our tradition. So you've got, of 154 00:15:08.660 --> 00:15:12.940 course, Mises throughout here and Rothbard and Riesman. Trigger's very strong in here. 155 00:15:12.940 --> 00:15:22.940 Was there one person you were going back to again and again to find the logic to defend the case? 156 00:15:22.940 --> 00:15:30.940 I think it depends on the topic. Different topics I came across or that I started to address, I thought, who was it? 157 00:15:30.940 --> 00:15:38.940 In some cases it would be de Lorenzo, that's the guy, he's addressed so much of that, or Rothbard, you have to go to Rothbard and that. 158 00:15:38.940 --> 00:16:08.940 So it was really widespread, but I do disproportionately use Riesemann because it's not that I just am that in love with Riesemann, it's just that the more I read his views and his arguments and his economic cause and effect, which is even much different from a lot of the Austrian view, as I said, what I'm trying to arrive at is the truth, not an ideology or whatever, so I find that Riesemann has proven himself 159 00:16:08.940 --> 00:16:11.340 on so many different points. 160 00:16:11.340 --> 00:16:13.100 Especially on the subject of labor, 161 00:16:13.100 --> 00:16:14.700 I noticed you drew on him a lot. 162 00:16:14.700 --> 00:16:17.140 The same way, Tom Woods does the same thing in his writings. 163 00:16:17.140 --> 00:16:19.660 He really finds himself going back to Reisman again and again 164 00:16:19.660 --> 00:16:22.340 on the subject of labor and wages and capital 165 00:16:22.340 --> 00:16:23.180 and their relationship. 166 00:16:23.180 --> 00:16:27.700 And especially profits and interest and inflation. 167 00:16:27.700 --> 00:16:30.620 I mean, Reisman is brilliant on inflation. 168 00:16:30.620 --> 00:16:32.380 We all think we know about inflation 169 00:16:32.380 --> 00:16:34.420 and the cause and effect. 170 00:16:34.420 --> 00:17:04.420 and but he you listen to Riesman an hour on it and there are plenty of audio lectures that you guys have done with Riesman it turns your world upside down yeah even knowing Austrian economics and you listen to Riesman you say wow that's a whole different perspective or a whole different edition yeah and then of course on the environment too you draw on him and block is I did that's right I would say Riesman block and an outsider so to speak Bjorn 171 00:17:04.420 --> 00:17:34.420 The Anti-Gore movie. It's his answer to gores. But as I state in the book, for a lot of these cases, I'm defaulting to their view. I state in the book, it's not that these aren't my ideas. I'm not that bright. I've learned this from other people and I'm simply, I've learned it and I'm incorporating it. But when I use disproportionate amount of references towards one or two people, 172 00:17:34.420 --> 00:17:41.420 And the value out of here is a brother's number of points, but the fact that you're dealing with contemporary issues, always. Most of your examples are the last five years. So you're dealing with things that people have a vague memory of. You have an ability to write, obviously. Everybody tells you that, and it's perfectly clear here. 173 00:18:04.420 --> 00:18:09.700 You write well, and you can speak in a language that everybody understands. You have void jargon, 174 00:18:09.700 --> 00:18:14.980 which is nice. And for those people who want to do more in-depth research, you have all the 175 00:18:14.980 --> 00:18:20.260 bibliography there and all the footnotes that you'd ever need. I do. Well, part of that is 176 00:18:20.260 --> 00:18:25.780 because I was very concerned about using others' materials. I'm not a writer, and I wanted to make 177 00:18:25.780 --> 00:18:31.700 sure to assign credit where it was due. So I wanted to make sure I documented where every single thing 178 00:18:31.700 --> 00:18:36.500 came from. But yes, that leaves you with a lot of sources and a lot of references, which is 179 00:18:36.500 --> 00:18:43.460 extremely important in the war chapter. The war and patriotism chapter, which some have said is 180 00:18:43.460 --> 00:18:47.700 really the most intriguing in the whole book. Well, it is because you don't expect it, I think. 181 00:18:47.700 --> 00:18:54.020 You don't expect it. Very few, even Austrians probably focus the least on historical events 182 00:18:54.020 --> 00:18:57.940 and so forth. But the point is, when you read about these and you learn it, you read Ralph 183 00:18:57.940 --> 00:19:13.940 And so as I state, I know this will be very shocking to people. I don't have the space to really defend and justify it here in the book. But reference the sources. Go and check them out for yourself. See where this information came from. 184 00:19:13.940 --> 00:19:19.380 here in the book, but reference the sources, go and check them out for yourself, see where 185 00:19:19.380 --> 00:19:20.380 this information came from. 186 00:19:20.380 --> 00:19:26.820 Part of the problem too is we tend to separate, I think, economics from foreign policy as 187 00:19:26.820 --> 00:19:31.180 if they're hermetically sealed categories, but it's crazy. 188 00:19:31.180 --> 00:19:32.340 It's all interlinked. 189 00:19:32.340 --> 00:19:33.340 It's all interlinked. 190 00:19:33.340 --> 00:19:34.340 Right. 191 00:19:34.340 --> 00:19:35.340 That's right. 192 00:19:35.340 --> 00:19:37.460 Except for take out the religion aspect of it, the rest is left interlinked. 193 00:19:37.460 --> 00:19:38.460 Yeah. 194 00:19:38.460 --> 00:19:43.660 Well, you've got World War I led to a massive planned society, planned economy in the United 195 00:19:43.660 --> 00:19:49.580 in the United States and the leftovers of that got rolled into the Great Depression and all 196 00:19:49.580 --> 00:19:55.940 the catastrophes of the Great Depression in many ways led to World War II and certainly 197 00:19:55.940 --> 00:20:03.140 in Europe, all the mistakes of the post-World War I planning and you go through all of this. 198 00:20:03.140 --> 00:20:04.660 I do go through it in detail. 199 00:20:04.660 --> 00:20:08.500 I didn't know that I would, but once I get into it, there are so many details that are 200 00:20:08.500 --> 00:20:12.660 important that really reveal the whole story and support it. 201 00:20:12.660 --> 00:20:18.980 So I did go and I made it a full-length chapter on the history of war and covering particularly 202 00:20:18.980 --> 00:20:25.580 the Civil War, World War I, World War II, because as I learned that information and 203 00:20:25.580 --> 00:20:29.980 learned how things really went down, or at least that argument of how it went down if 204 00:20:29.980 --> 00:20:34.420 you don't buy what we're saying, it's very compelling and I thought that story needed 205 00:20:34.420 --> 00:20:37.060 to be told, but the devil is in the details. 206 00:20:37.060 --> 00:20:44.260 You have to understand the different details and the different causes that led up to that. 207 00:20:44.260 --> 00:20:49.220 Right. It's also what makes the book especially compelling. It comes from an independent mind. 208 00:20:51.140 --> 00:20:56.660 The vision you're laying out here is not one of the options given to us by the official political 209 00:20:56.660 --> 00:21:04.020 culture in which you're supposed to favor free markets, but then defend huge military budgets 210 00:21:04.020 --> 00:21:27.740 Free markets are not what you think they are. 211 00:21:27.740 --> 00:21:31.460 You all state that we need free markets, but you don't really support that. 212 00:21:31.460 --> 00:21:35.180 If we had free markets, the world would look very differently. 213 00:21:35.180 --> 00:21:37.180 Your life would be much different. 214 00:21:37.180 --> 00:21:38.640 It would be in much better shape. 215 00:21:38.640 --> 00:21:39.640 You wouldn't have the wars. 216 00:21:39.640 --> 00:21:42.140 You wouldn't have the poverty. 217 00:21:42.140 --> 00:21:46.860 And then, of course, I have to go and explain most people's response to that, which is, 218 00:21:46.860 --> 00:21:52.260 oh, that's just being ideologic and utopian. 219 00:21:52.260 --> 00:21:53.980 That would never exist. 220 00:21:53.980 --> 00:21:58.340 And so I have to go then explain, well, it's not existing because you're preventing it. 221 00:21:58.340 --> 00:22:00.020 It used to exist. 222 00:22:00.020 --> 00:22:04.180 Some parts of this exist in different industries or different countries, but you actively vote 223 00:22:04.180 --> 00:22:11.060 every year to prevent this from existing, and it's not utopian. This is realistic. It has 224 00:22:11.060 --> 00:22:17.180 existed, it worked, but this is what you prevent every time you go and vote, and here's what 225 00:22:17.180 --> 00:22:18.940 would happen if you didn't do that. 226 00:22:18.940 --> 00:22:24.620 Now, in the course of this, you clearly probably gained some insight into the mindset of those 227 00:22:24.620 --> 00:22:51.780 What did you learn about the anti-capitalistic mentality in the course of writing this book 228 00:22:51.780 --> 00:22:53.500 that you might not have known before. 229 00:22:54.540 --> 00:22:55.920 That's a great question. 230 00:22:58.100 --> 00:23:01.620 I think sadly that it's worse than we thought it was 231 00:23:01.620 --> 00:23:04.620 because I remember reading, 232 00:23:04.620 --> 00:23:07.340 when I first got hooked up with the Mises Institute 233 00:23:07.340 --> 00:23:09.760 and was reading different articles and so forth, 234 00:23:09.760 --> 00:23:14.060 I thought at that point, some of the claims were extreme. 235 00:23:14.060 --> 00:23:17.660 I thought, well, okay, I get you're against that, 236 00:23:17.660 --> 00:23:19.340 but I think you're really overdoing it. 237 00:23:19.340 --> 00:23:49.340 I think you're, you're kind of stating that it's more extreme than it is. Well, I've learned that it's not. I've learned that it really is much worse than we realize. And part of it is understanding the difference between free markets and not having free markets, because then you understand that things you thought were free markets are regulation and intervention. And that's all brought about by that anti-capitalistic mentality. And behind that, if you look at the history of how the laws went into 238 00:23:49.340 --> 00:23:55.340 In fact, what the groups were that put them there, you see that they were very anti-capitalistic. 239 00:23:55.340 --> 00:24:00.620 They wanted to prevent that. And those laws and regulations and so forth were put in place 240 00:24:00.620 --> 00:24:08.540 just for their ideology. And so the whole mindset is even worse than I thought it would be. 241 00:24:08.540 --> 00:24:13.460 I suppose in some ways, this is another unique contribution of the book, is that you do understand 242 00:24:13.460 --> 00:24:20.160 And this Misesian idea of the interrelationship between interventions. You have one intervention 243 00:24:20.160 --> 00:24:24.120 one year that creates new problems that leads to another intervention and so on and these 244 00:24:24.120 --> 00:24:29.240 all pile on together. You kind of patiently go through this in sector after sector. 245 00:24:29.240 --> 00:24:36.660 I tried to remind myself to hammer that point in at different places because it's so important. 246 00:24:36.660 --> 00:24:40.260 And going back to the financial crisis taking place during this book, I hit on that, that 247 00:24:40.260 --> 00:24:45.380 Everyone says, oh, this is an example of why we need regulation. Look what's happening out there. 248 00:24:45.380 --> 00:24:50.500 I saw a movie on Friday night called Insider Job that explains the 2008 financial crisis 249 00:24:50.500 --> 00:24:54.900 from the traditional point of view. And of course, the bottom line is we need regulation. 250 00:24:54.900 --> 00:24:56.580 This happened because we didn't have it. 251 00:24:56.580 --> 00:24:59.620 If it's like all the others, it gets some things right, but... 252 00:24:59.620 --> 00:25:02.420 Right. There's some truth. And that's where you say, yeah, that's right. Tell them. But 253 00:25:02.420 --> 00:25:07.700 it really mischaracterizes, misses the point and the rest of its outright propaganda. 254 00:25:07.700 --> 00:25:08.580 Did you see Wall Street? 255 00:25:08.580 --> 00:25:14.180 Yes. The original is one of my favorite movies, actually. 256 00:25:14.180 --> 00:25:16.660 That's a wonderful movie. I mean, the new one. 257 00:25:16.660 --> 00:25:17.860 Yes, I did see the new one. 258 00:25:17.860 --> 00:25:24.340 It does have some of those problems, right? I mean, it captures some truth, but misdiagnoses 259 00:25:24.340 --> 00:25:25.700 things in some way. 260 00:25:25.700 --> 00:25:33.620 Completely. Much more egregiously than the first one. Now, the first one made normal 261 00:25:33.620 --> 00:25:37.700 business practices evil, kind of the equivalent of saying, oh, short selling. You're selling 262 00:25:37.700 --> 00:25:47.740 In the second movie, they turn it into the people that do these kinds of things are so 263 00:25:47.740 --> 00:25:53.240 terrible and evil that they would steal the money from their daughter, leave the country 264 00:25:53.240 --> 00:25:54.620 and never see her again. 265 00:25:54.620 --> 00:25:57.620 And that's kind of what they did in this movie I saw on Friday night. 266 00:25:57.620 --> 00:26:03.860 They have a whole different section on the lives Wall Streeters live. 267 00:26:03.860 --> 00:26:07.140 Their nights are filled with prostitution. 268 00:26:07.140 --> 00:26:13.260 They have prostitutes, they're on drugs. This is who we're dealing with. How that is relevant, 269 00:26:13.260 --> 00:26:15.580 I'm not really sure, to the movie, but they try to make it. 270 00:26:15.580 --> 00:26:18.380 Just to encourage hatred, really. Don't stick, yeah. 271 00:26:18.380 --> 00:26:24.900 But to your original point, the moral of that movie was, we need government to come in and 272 00:26:24.900 --> 00:26:33.280 control this, whereas the problem is, that's what started it to begin with. Having the 273 00:26:33.280 --> 00:26:39.000 The Central Bank having any interaction between the government and the banks, that is regulation. 274 00:26:39.000 --> 00:26:42.800 Controlling the rate of interest, controlling the supply of money, altering that, that is 275 00:26:42.800 --> 00:26:45.700 regulation, whether you call it that or not. 276 00:26:45.700 --> 00:26:50.240 So yes, when that causes the natural problems that it will cause and has caused for 300 277 00:26:50.240 --> 00:26:55.040 years, then we have people saying, as they did leaving the movie, well that just shows 278 00:26:55.040 --> 00:26:56.040 we need more regulation. 279 00:26:56.040 --> 00:27:01.040 But of course, the new regulation creates more problems and bigger crisis and the usual 280 00:27:01.040 --> 00:27:03.200 story we're used to hearing. 281 00:27:03.200 --> 00:27:05.760 Health care is a classic example and you cover that in here. 282 00:27:05.760 --> 00:27:10.160 Right. It gets worse and worse and worse and the next thing is it'll be fully nationalized 283 00:27:10.160 --> 00:27:14.360 and then we'll go to the other industries and do the same thing. 284 00:27:14.360 --> 00:27:18.480 Right. That's right. What's your favorite chapter apart from the war in here? That's 285 00:27:18.480 --> 00:27:22.520 the one that I think probably you've gotten the most comment about, but what's the one 286 00:27:22.520 --> 00:27:27.920 you think is the one that's most rigorously argued or maybe the one that was most difficult 287 00:27:27.920 --> 00:27:29.480 for you? 288 00:27:29.480 --> 00:27:53.480 Well, of course, the most difficult one was the environmentalism, because I'm not a scientist, and I don't claim to be. And so I had to write that in a way where, you know, I'm writing facts and figures and the results of research, but that I haven't done them, but to show that this is at least a counter-argument, this is logical. 289 00:27:53.480 --> 00:28:05.480 But of course it was easy for me to say after that, no matter what the facts and figures, no matter whether there's global warming, no matter whether it's man-made, we should do nothing about it. Here's why. 290 00:28:05.480 --> 00:28:15.480 Because at that point it becomes an economic argument. It becomes about our ability to produce and create goods and services and sustain ourselves, as they say. 291 00:28:15.480 --> 00:28:24.900 and so that was a somewhat of a tough chapter probably the regulation chapter 292 00:28:24.900 --> 00:28:32.520 was in a way my favorite because that's what anti-capitalists default to they 293 00:28:32.520 --> 00:28:37.360 think it all comes down to regulation and regulation only and I was able to 294 00:28:37.360 --> 00:28:43.040 give myriad examples of how regulation does not work and it actually causes the 295 00:29:13.040 --> 00:29:38.040 The industry never says anything about what's behind it. Of course, they were involved half the time in bringing about their regulation, but that was the point of that chapter, to say, look, all these things around you that you complain about, the healthcare is a problem, airlines, the hurricane Katrina, everything, that all came about because of regulation. Regulation doesn't help it, it harms it. 296 00:29:38.040 --> 00:29:43.040 Right, there's a hidden hand in the background and you're going to reveal who it is. That's what you do throughout. 297 00:29:43.040 --> 00:29:47.040 I really enjoyed the last chapter a lot. This is the chapter where you take on various political headlines. 298 00:29:47.040 --> 00:29:50.040 I almost left that out because I was afraid I didn't make it too long. 299 00:29:50.040 --> 00:29:57.040 What was cool about it is that, you know, every day, a person with economic knowledge, and by now you've gotten through ten chapters, 300 00:29:57.040 --> 00:30:03.040 and the reader's pretty boned up on things, if you know economics, you understand the logic of capitalism. 301 00:30:03.040 --> 00:30:07.040 You pick up the newspaper, it drives you crazy. So you read the headline and think, oh, here we go again. 302 00:30:07.040 --> 00:30:13.040 Read the story and you want to write like an op-ed against the bias of the story. Well, 303 00:30:13.040 --> 00:30:18.880 that's more or less what you did. You have like one-page criticisms of these headline 304 00:30:18.880 --> 00:30:25.320 news stories. Well, that idea came from the fact that, well, two reasons, I guess. One, 305 00:30:25.320 --> 00:30:31.780 as I read these headlines day after day after day for years now, I see knowing economics 306 00:30:31.780 --> 00:30:36.040 and knowing economic cause and effect, I see the ridiculousness in it that the average 307 00:30:36.040 --> 00:30:49.040 The average person will not see. The average person will see a headline that says, as happened last year, the US is imposing tariffs or quotas or whatever on Chinese tires. 308 00:30:49.040 --> 00:30:54.040 We've got too many tires coming in at too low prices to help consumers, so we need to stop that. 309 00:30:54.040 --> 00:31:03.040 Most people, because they're stuck in the same kind of mindset that the New York Times feeds them, will say, yes, that's right, we do, 310 00:31:03.040 --> 00:31:10.540 Because those tires, they could hurt our workers. That's it. That's the problem. So we need to stop that. 311 00:31:10.540 --> 00:31:17.740 And so I see how that raises prices for consumers and eventually puts workers out of work, actually. It does the opposite. 312 00:31:17.740 --> 00:31:23.540 So I wanted to take that kind of example and take a lot of those examples. 313 00:31:23.540 --> 00:31:26.540 Now that we've gone through the book, we've learned economic cause and effect. 314 00:31:26.540 --> 00:31:29.640 We've seen circumstantial evidence of how it doesn't work. 315 00:31:29.640 --> 00:31:43.640 Let's take real-world things. Let's just take random headlines. And it was just that. I just pulled random headlines that were around me and say, let's look at this. Let's analyze what it really means now that we understand how the world truly works economically. 316 00:31:43.640 --> 00:31:53.640 Well, it's very satisfying for the reader, you know, because it's all the stuff that I think when I'm reading the newspaper. I'm thinking, oh, I'd love to see somebody address this while you've done it. 317 00:31:53.640 --> 00:32:00.140 It is nice. I just hope that the anti-capitalist who read it will actually get it. 318 00:32:00.140 --> 00:32:11.640 One of the articles in that chapter are one where a German city imposes solar panels on its citizens. 319 00:32:11.640 --> 00:32:13.640 It makes all citizens purchase solar panels. 320 00:32:13.640 --> 00:32:15.640 Yeah, for their own good, right? 321 00:32:15.640 --> 00:32:19.640 For their own good. Lo and behold, it was too expensive for most citizens. 322 00:32:19.640 --> 00:32:22.640 They didn't want to pay that cost, so they complained. 323 00:32:22.640 --> 00:32:30.640 But what they said was, we don't mind you doing this to businesses. We just don't want you to do it to us. 324 00:32:30.640 --> 00:32:38.640 But they don't get that if you do it to business, it harms them, regardless of the morality of it, how unfair it is. 325 00:32:38.640 --> 00:32:44.640 But so, my hope is that people will see something like that after reading the rest of the cause and effect and see, 326 00:32:44.640 --> 00:32:49.640 well, the world doesn't work quite the way I previously thought, but I don't know if they're going to get it or not. 327 00:32:49.640 --> 00:32:53.960 Well, you drive home the point again and again that wealth is not something you should ever 328 00:32:53.960 --> 00:33:01.560 take for granted. It's not somehow given to you by the heavens. In a state of nature, we'd all be 329 00:33:01.560 --> 00:33:06.280 scrounging around eating nuts as they fall from the trees or whatever. So everything you see around 330 00:33:06.280 --> 00:33:15.880 you, everything you love is in a way born of the capitalistic process. And it's created every day 331 00:33:15.880 --> 00:33:23.480 that wealth and that's one thing I try to hammer home when we get into this wealth redistribution 332 00:33:23.480 --> 00:33:29.160 argument which I was engaged in with someone just a couple of days ago and I said what do you think 333 00:33:29.160 --> 00:33:34.040 there's a there's a constant set amount of wealth in the world and it's just a matter of how 334 00:33:34.760 --> 00:33:40.200 how we all grab for it and who can get it and somehow the wealthy always can grab the most 335 00:33:40.760 --> 00:33:45.720 and I said no wealth is created every year when the first caveman picked up the first 336 00:33:45.720 --> 00:34:15.720 The first rock and beat it against another rock or whatever, forged a tool or did something with a wood to create a stick, that was the first wealth we've been producing ever since in the same way basically and so we produce more wealth each year and it's mainly the wealthy that create this stuff for us, these capital goods, these consumer goods and people are paid in accordance with their incomes and so that's why they're wealthy and that helps us in the process, it helps the poorest of the poor 337 00:34:15.720 --> 00:34:35.720 People are born into the world and they take it all for granted because it all seems to be around them, it's given unto them, and find no compelling reason to investigate where it all comes from. 338 00:34:35.720 --> 00:34:45.720 That's right. I could make an argument, well, you know, economics is complicated, it takes time to learn all of this stuff, and you know, I don't take time to learn how my car works, you know, via physics. 339 00:34:45.720 --> 00:34:59.720 But at the same time, you might think that people would, when they're voting on these issues, they're interested in them, they're talking about them, and they're going to take action and vote so that something changes, they should know which way it's going to change. 340 00:34:59.720 --> 00:35:04.280 I suppose that's the irony, isn't it? I mean, if we had a purely free market and a free economy and 341 00:35:04.280 --> 00:35:08.680 not such a heavily politicized society, it probably wouldn't matter in some ways whether the average 342 00:35:08.680 --> 00:35:12.840 person learned economics, right? Or maybe... And that's what I state in the book. I state that 343 00:35:12.840 --> 00:35:18.360 economics is really worthless. If we had a free market, it's worthless because we don't need to 344 00:35:18.360 --> 00:35:23.560 know how businessmen do what they're doing. Look at them. They're out there creating goods and 345 00:35:23.560 --> 00:35:27.960 services for us. They're giving us jobs. They're giving us capital. They're financing our homes. 346 00:35:27.960 --> 00:35:47.520 Who cares how it happens? And really writing the book was a waste of my time. In a bigger picture, it was a waste. I should have been out doing something else instead of spending time doing that. I should have been producing. I did this because we need something like this, I believe. But the point is focusing on economics is who cares. 347 00:35:47.520 --> 00:35:51.760 But when you're living into a dicey situation like we are today, and it is dicey. 348 00:35:51.760 --> 00:36:21.760 Well, that's why I said what economics is today is the study of the effects of intervention in the free market because the government's intervening every day and it has an effect and we need to know what it is and that's what the study of economics is and no academic professor will claim that but if you go and listen to what academic professors are telling you and what they're explaining the fact is they're remarking on intervention that took place where the results are or how the government should intervene in a different way to give different 349 00:36:21.760 --> 00:36:40.760 I would love to see this book assigned in a college class. I could easily see it enlightening most of the students at Auburn University, for example. If you take a class on, I don't know, one of those civics overview classes that everybody has to take, if this were assigned, wouldn't that be something? 350 00:36:40.760 --> 00:36:51.760 I think it could make a big difference if that book or similar ones, if that kind of thinking and that kind of logic was explained in the world, then it would make a big difference. 351 00:36:51.760 --> 00:37:06.760 I was given a lecture at Florida State University one time on inflation and money and the central bank and so forth, and these kids were just in shock of what I was saying. 352 00:37:06.760 --> 00:37:14.760 The Central Bank creates inflation? No, no, no, Mr. Kelly. It's there to stop inflation. That's what its goal is. It wants to stop it. 353 00:37:14.760 --> 00:37:25.760 No one teaches them how it came about to begin with, except to say that workers could ask for higher wages or businesses could raise profits and create inflation, which is impossible. 354 00:37:25.760 --> 00:37:32.760 But not only do they not teach how the world works, they hide how the world really works. So it's terrible. 355 00:37:32.760 --> 00:38:02.760 And that leads me actually to answer a question I really didn't answer of yours. What's my favorite chapter, and I just realized it talking about that, is the morality of capitalism, because separate from what you think economic cause or effect is, you have to look at what the morality is of your actions, and especially considering that that's what the socialists are so big on. All the leftists are about morality. We have to help someone. We have to do the right thing. 356 00:38:02.760 --> 00:38:09.240 is the opposite. Because theft, taking someone's property, giving it to someone else, separate 357 00:38:09.240 --> 00:38:16.400 from the fact that it doesn't even help them economically, it's morally wrong. To have 358 00:38:16.400 --> 00:38:22.040 someone who started a company and go and regulate them and force them to produce this but not 359 00:38:22.040 --> 00:38:27.880 that and penalize them for making too big of a profit in one particular year and threaten 360 00:38:27.880 --> 00:38:34.160 And to nationalize them as our own government has done, that's completely immoral. 361 00:38:34.160 --> 00:38:38.960 You have this nice section here on giving back to society, that every business is somehow 362 00:38:38.960 --> 00:38:43.560 under the obligation to give back, which implies that they've been doing nothing but living 363 00:38:43.560 --> 00:38:46.480 parasitically off everybody. 364 00:38:46.480 --> 00:38:47.480 That's right. 365 00:38:47.480 --> 00:38:52.600 I try to address all these common things I hear through time. 366 00:38:52.600 --> 00:38:57.740 I was encouraged through a work thing, I forget what it's called, teaching school kids economics 367 00:38:57.740 --> 00:39:27.740 and all that. And my CEO said, we have to give back. And I thought right then, that's not giving back, that's giving. And so I addressed this. And I refer to the fact that, you know, when we say we have to give back to society, society is really, who is society? Well, society is supposed to be all of us, but it's really the way you actually use it. Society are those that are net receivers of transfer payments. So we're supposed to give back to them, which 368 00:39:57.740 --> 00:40:04.740 What strikes me actually is that a prime target audience for this book would be capitalists 369 00:40:04.740 --> 00:40:09.700 themselves because they need to develop a greater consciousness of the contribution 370 00:40:09.700 --> 00:40:11.660 that they make to society. 371 00:40:11.660 --> 00:40:14.340 Yes, they have no idea. 372 00:40:14.340 --> 00:40:16.060 It's funny, people always say to me, what about this? 373 00:40:16.060 --> 00:40:17.060 What about that? 374 00:40:17.060 --> 00:40:18.060 I say, read the book. 375 00:40:18.060 --> 00:40:19.060 It's in the book. 376 00:40:19.060 --> 00:40:20.260 Everything's in there, but this is a prime example. 377 00:40:20.260 --> 00:40:21.940 I address that topic. 378 00:40:21.940 --> 00:40:29.540 I explain how Bill Gates and, I can't think of his first name, Bloomberg, they want to 379 00:40:29.540 --> 00:40:30.540 give their money away. 380 00:40:30.540 --> 00:40:32.980 And, you know, Bloomberg is an outright socialist. 381 00:40:32.980 --> 00:40:38.640 Bill Gates is trying to do the right thing with medicine in Africa and all that. 382 00:40:38.640 --> 00:40:41.860 But the point is, I was trying to make the point not that we shouldn't give and help 383 00:40:41.860 --> 00:40:48.020 people, we should, but that businessmen don't understand that keeping that capital and not 384 00:40:48.020 --> 00:40:53.380 It's not just giving it away. It does much more good than doing that. It's just giving 385 00:40:53.380 --> 00:40:58.020 it away. It funds repetitively projects and creates more and more wealth. Once it's given 386 00:40:58.020 --> 00:41:02.060 away, it's gone, it's consumed. So yes, businessmen should understand. 387 00:41:02.060 --> 00:41:06.740 They should read this book. We've always been in need of a book to explain to capitalists 388 00:41:06.740 --> 00:41:12.140 themselves what it is that they're doing good for society because so many of them doubt. 389 00:41:12.140 --> 00:41:17.980 They listen to the news media. They have instincts toward entrepreneurship and never quite understand 390 00:41:17.980 --> 00:41:21.220 understand the rationale and that's okay but when they're under attack like they 391 00:41:21.220 --> 00:41:26.500 are today we need books like this so I'm grateful to you for writing this book 392 00:41:26.500 --> 00:41:30.580 thank you for letting the Mises Institute have the opportunity to publish it and 393 00:41:30.580 --> 00:41:36.420 thank you thank you so much Kelly for visiting with me today it's been a 394 00:41:36.420 --> 00:41:38.420 It's a pleasure, nice to be here.