WEBVTT

NOTE Johan Dewitt: Proto-Public Choice Theorist?

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Let you know how I came across this topic.

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Well, I came across this topic in the late 80s,

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when France was approaching the second, you know,

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the 200th anniversary of the French Revolution.

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On the news, people were always saying how

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France had been the first country in the world

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to have liberty and freedom and democracy.

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And then every now and then you'd hear somebody saying,

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no, no, no, it was England.

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It was the glorious revolution a hundred years before that.

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So I got curious and I started looking into who was the first country to have capitalism

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and democracy and liberty and all the great things that we all love.

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And well, before I gave up, before I gave up looking, because if you start looking into

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that, you start getting lost with the Phoenicians.

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So should we look at the Greeks, should we, you know, before I gave up I found myself

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of having found an area that interests me, and I kept looking into the area, even if

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I had given up uncertainty and absolute in history.

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So I came, in the process though, I came across, I remember that I had studied the United Provinces

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of Holland, and I was like, well, what are the United Provinces of Holland?

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That sounds fairly Republican, that doesn't sound very monarchical.

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And in looking into the subject, well, eventually I wrote a paper in college, a small five-page

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paper.

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And one of the sources that I used was this book by Fyodor de la Courte and Johan de Weid.

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And I'll pass it around if you want to look at it.

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And then here in Oberon I wrote a longer paper specifically on the ideas that are in this

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book and that's what my lecture will come from mostly.

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Let's see, some historical background that might be pertinent and the historical background

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might be a little biased by my personal background.

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As you know, I'm from Spain, and well, around the late 1400s, the issue of marriage politics

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was very much involved between the different kings, and it came to being that different

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monarchs married off so that Charles V of Germany would end up having the rule of Spain,

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The German Empire and some provinces that included the Dutch provinces.

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Charles V was a Dutch person, he felt Dutch, he had Dutch culture, but he became the King

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of Spain.

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And interestingly enough, when he moved to Spain, he tried to increase taxes on Spain.

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And well, the Spaniards rebelled.

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These rebellions take place in the 1520s.

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And when I look into this, I kind of like thinking about these rebellions as early French

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revolutions that failed. So the nobility and the bourgeoisie of Spain rebelled against

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a new king that wanted to impose taxes on them, asking for permission. So we have a

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Dutch king that came to Spain, but we failed. In any case, Charles V's son, Philip II, he

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He became a Spaniard by education, and by the end of the century, he was the king of

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Spain and he ruled over the Dutch provinces, and his rule of these provinces, since he

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wasn't a local, didn't seem such a good idea anymore, and he wanted to do the same thing

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that his daddy had done in Spain, he wanted to increase taxes on the Dutch provinces,

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And he tried to do so, and this time the Dutch people could stand up to a Spanish king, something

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that we Spaniards had failed to do 70 years earlier.

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So in 1579, the Dutch provinces, seven of them declared independence, and of course

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a lot of issues get mixed into this.

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These provinces were 50% Calvinist, political leadership was Protestant, and the King of

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In 1579, they declared independence. In 1584, they came up with their own constitution, which they called the Union of Utrecht, and all that this constitution was, it set up, you might call it a confederacy, across seven provinces of the United Provinces of Holland.

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So, starting from the bottom of society, each city in Holland was ruled by a committee of the local merchants and the local nobles.

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And these committees could send representatives that would form what got called the states of a province, and these states would rule this province.

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And then each of these provinces, each of these states would send some delegates to what got called the States General of the United Provinces of Holland.

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But in theory these states generals could only rule by common agreement of all the parties, of all the provinces,

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and they only had power over the fence, over the conduct of the war against Spain, which lasted for 70, 80 years.

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So, in the meantime, that was the official set up. And they got around, through horse trading they got an unanimous agreement.

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And so far so Republican, what happened however, is that along this Republican framework,

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For some reason, Dutch nationalism had coalesced around a dynastic figure, the Princes of Orange.

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And these republics had decided to create a figure of the stat holder, which is the holder of the state, something like that,

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which by tradition came into the, fell upon the House of Orange Line. And these stat holders

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could have this role and over time they ended up having the right to appoint everyone. So

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the way that the city councils and the provinces got its members wasn't through any type of

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of Democratic Election, it was either through appointment from the state holder or from

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self-selection. When one member died, all the members of the committee would say, well,

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we need a new businessman to take up this place. So the lines were a bit messy. And

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throughout the war, the figure of the state holder as leader of the armies also started

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to Accumulate More and More Power.

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And that's the basic framework on which these writings take place.

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So, let's see.

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What can I tell you?

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If you are wondering, why should we care about these people?

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Is there any authority that tells us that your handiwork matters?

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Well, you can find him in two footnotes in Joseph Schumpeter's History of Economic Analysis,

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if you care.

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And Schumpeter in the footnotes defines the Whits idea as a quasi-system, which to him

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means that, well, if you know the way that the history of economic analysis works, he

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doesn't describe the economic ideas that different people had at different times.

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describes the different additions to ideas. So he says that the ideas of these people

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are very interesting, but they don't add economic analysis. So that book is according to Schumpeter

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should have a great place in a book about the history of economic policy, but it serves

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only a couple of footnotes in his own book. So Schumpeter saw some value in the policy

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recommendations that they put forward. And about my title, public choice, well I will

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say that throughout the book, this author is grounded on the, these ideas are grounded

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on the Tradition of Natural Liberty, and as a matter of fact, also according to Schumpeter,

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one of the first lights of natural liberty and of natural rights, if you don't go back

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to Aristotle, is Hugo Grasius, which is Dutch, and who wrote the basis of what is today international

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law, it seems.

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So also this book we see in that tradition, but in that tradition of natural rights and

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natural liberty, you get the idea that self-interest might be a good thing, but in reading his

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book you see things that resemble public choice.

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Self-interest is a good thing if it takes place within the boundaries of your natural

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is a bad thing if it's taken outside of the boundaries of natural rights.

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In practice, self-interest is a good thing if it works through markets.

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Self-interest is a bad thing if you have the political process taking things away from people.

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And we'll see how that works.

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And, well, since the point of my lecture is not really to convince you that he's right

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or he's wrong because he doesn't have arguments, he has policy recommendations, and the point

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is to say that, look, there were people way back when that held these ideas, I have distributed

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a bunch of handouts so we can work through some of those quotations.

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For instance, in number one, it reads, Holland's interest consists in the freedom of all its

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inhabitants.

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The highest perfection of a political society is that the commonality be left in as great

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a natural liberty for seeking the welfare of their souls and bodies and for the improvement

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of their states as possible.

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A power of using their natural rights and properties for their own safety will create

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an earthly paradise.

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So, you know, these ideas have been around for a long time, and his ideas about natural

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liberty and natural rights do not involve economics only or do not involve social liberties

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only.

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They, as a true libertarian, we want to call him that, they encompass basically everything

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in society.

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So in quote number two, and this is a very old translation so some of the English is a little patchy,

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but it says, the welfare of the inhabitants of Holland cannot be acquired nor kept but by liberty,

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the toleration of all religions, a free bargain right for all strangers, foreigners to move in with us

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and to follow all their traits and occupations wherever without trouble or molestation from their fellow inhabitants

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in respect to any societies, companies, halls, guilds or corporations.

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And a lot of those things mean monopolies in the context.

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And in connection with the political theme, all the things before mentioned are not sufficient

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unless the courts of justice and laws can be constituted and executed

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Another interesting thing about this time period, which I haven't gotten to that yet, but the time period precisely that we will be studying is 1650-1675, is how many historical figures that we all have heard of.

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We all have heard of, lived at this time. Maybe you can pick some quarter of a century

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where you don't know who the king of France was, where you don't know who the king of

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that country was. In this period of time, we all know everyone. It seems to have been

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a time period in which everything was happening. Charles I is decapitated in 1649. Cranwell

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rules from 1649 to 1660, which coincides precisely with this time. Louis XIV is King of France.

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At the beginning of the period, Masarin is in power. At the end of the period, Louis XIV will rule alone.

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And all these figures interact continuously and have a great impact on the life of the Dutch Republic.

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When, let's see, I guess I should skip some stuff, even though I'm not going to have any time.

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Well, I introduced you already to the conflict between the monarchical and the republican aspects of the republic.

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Well, this process went through some ups and downs and in 1650 the process seemed to have come to an end.

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The monarchical forces had completely defeated the republican forces.

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And this happens with William II of Orange.

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And he has put in jail basically every person that wanted to open his mouth.

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Everything is set great for the future, but in something that when Ritz about this period happens very often, he suddenly dies.

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He has everything, he dies of the smallpox. And his son, William III, is still in his mother's womb.

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So, this will give the opportunity for 23 years to have, this will give an opportunity

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to Republican forces to try to have a Republican form of government, and this is what we will

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have between 1650 and 1673, and as you might guess, the period comes to an end when William

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and takes over the range of things. But at the same time that Holland was a republic,

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England was a republic, and Cranwell forces Holland to sign a law saying, we will never

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have an orange as our ruler again. So Holland does it. And then Cranwell dies and his son

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So, Charles II, who had been living in Holland, becomes the King of England, and so, whereas

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England and Holland were great bodies because they were republics, now they are great enemies.

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And the same thing happens with France, and also at this period, everybody wants to eliminate

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of the Republic, and Charles II of England will be the uncle of William III, so everything

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is deeply interconnected, so let's see, once I have said that, let's try to see how other

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There are ways in which public choice appears in his writings, and, well, it's just not

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too hard to find public choice written all over the book, because, let's see, in quote

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Quote number six, you can read, it is contrary, the quote number seven, yet will not the court

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teach who govern in their state neglect to seek themselves and to fill their coffers

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within war and peace, the public is not regarded but for the sake of private interest.

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In other places we can read, it is very evident that most men naturally are inclined by all

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imaginable industry to advance their interests without regard to hand, seal, oath or even

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eternity itself.

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If you can read it in even more partisan terms elsewhere in the book, you can read monarchs

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These books have neither religion nor honor, just interest.

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The book attempts to be, at the same time, general and specific for the case of Holland.

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for the case of Holland. So the attack is in every form concentrated government, but

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particularized in the case of Holland often. Also in reading Dr. Rick Land's book on mercantilism,

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One realizes that, well, at the time period, they didn't have income taxes, they didn't

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have sales taxes, efficient forms of taxation were less available.

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So if the government wanted revenues, it had to get revenues through all kinds of ways.

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And normally the way that it did it was through granting monopolies for different type of

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activities.

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What happened in Holland, though, as we saw, there was a very decentralized power structure and the state holder had some powers but wasn't an absolute ruler.

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So the state holder found that he didn't have the power to give grants, to give monopolies. He couldn't raise revenue in that way.

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So what will end up happening is that the state holder needs to look for other ways to raise revenue.

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And, interestingly enough, the way that they would find to raise revenue is war.

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The war that takes place between 1579 and for 70 years against Spain.

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So the war ends 1650 when the...

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No, the war ends a little before that.

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About the time it came?

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The war ends a little before that, and we'll see later that the war didn't need to last as long as it lasted, at least according to DAX traders.

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So, for this author, it's clear that the continuation of the Spanish war was clearly a matter of

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self-interest for the monarch. In quote number eight, you can read,

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This Netherland is provinces within perpetual war, and the reason of it is very evident.

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The interest of such a lord is often different from that of the common people.

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have they very many persons that depend on them, and are of great power on the government that it goes on.

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So basically, through the pretense that there's a war that needs to be fought,

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the state holder that doesn't have the right to grant monopolies and then obtain revenues

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will convince all the provinces to give it taxes to fight the war and we'll say, we'll

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continually say this war is very important, we need revenues here to fight, to obtain

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this territory, so on and so forth. All throughout the book you have continuous attacks on the

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venality of dynastic kings that want more territory and the argument is almost made

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are probably completely made, that they don't want the territory for glory, they want the

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territory because in obtaining the funds to fight that war, they obtain funds that they

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can divert for their own court and so on and so forth.

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And when they have funds and they pay soldiers and they pay courtiers, all the courtiers and

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all the soldiers become interest groups that will lobby society or the person with the

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and the Power to Repraise Taxes for the Continuation of the War.

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That's in quote number nine.

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You can read, officers, courtiers, idle gentry and soldiery

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knowing that under the worst government they used to fare best,

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they cry out for monarchical government for their private interests to the very heavens.

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Those bloodsuckers of the state and indeed of mankind

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dare to speak of republics with the utmost contempt because they know

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and actually elsewhere throughout the book there are comments about how in republics you have freedom of speech and you can have the opinions that you want and it's almost like a Weimar Germany argument.

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In republics everybody has the right to talk against the republic and we have to live with it because we value freedom.

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Freedom. In monarchies, no value that has any common sense will speak against the monarchy,

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because if they do, they either will get grants taken away from them or simply they will be

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put in jail or killed. And well, in Quote Number 10, simply we are told, I won't bother

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to read it. Well, actually, it's kind of interesting. In Quote Number 10, the patriotism of the

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The Prince of Orange is almost attacked because it says that it makes sense for him to covenant

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with the enemy of this state for a particular profit to obtain as much as he possibly could.

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So it's in his interest to continue wars.

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So even though it seems that Holland had been winning the war for much longer than, I mean,

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Holland had been winning the war for many of the last years of the war and seems that

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Spain was actually imploring for peace, offering all kinds of peace deals, saying, look, we'll

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give you this, we'll give you that, and as it says in quote number 11, those offers were

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as often rejected by the deputies of the Generality at the instigation of the Prince of Orange,

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and in the room our taxes were continually increased.

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So it looks like the monarchical forces in Holland were a party of war that used its

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It's patronage to gain the allegiance of different sectors of society.

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And if you look into the details of the United Provinces of the Netherlands, well, I should

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explain that the United Provinces of the Netherlands were made up of seven provinces, with Holland

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being the largest, and providing 60% of the revenues.

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But they only had technically one vote in the common government.

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Obviously they probably had more influence and some influence related to their size,

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but legally they only had one vote.

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So if you can obtain 60% of the revenues from one party and you want to have tax revenues

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and you want the political process to pass those tax increases, it seems rather simple

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to try to convince the other six provinces to increase taxes and have the province of

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Holland, which was the trading province that did the most trade zones and so forth, the

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other six provinces were mostly rural. If you channel funds from taxation on the province

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of Holland to the other provinces, you will continuously get votes in favor of higher

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taxes. As a matter of fact, it got to ridiculous levels. As you can see in quote number 12,

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and the six other provinces remained in default of payment without being compelled to bring

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in their promised proportions, because our Captain General had rather by such favours

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give the other provinces at his devotion, and especially the deputies of the General

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Army, that by them he might be able perpetually to overvote the province of Holland and make

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them dance to his pie.

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So basically what the dynastic rulers were doing is they were getting the political process

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to increase taxes on the province of Holland, nobody else was paying those taxes, and taxes

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were being diverted there and everybody was happy, except the province of Holland, obviously.

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I think I don't need to explain that this, the writer, the author is from Holland. That's

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probably clear to everyone. Let's see. There are all kinds of details of how public choice

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is going to apply in quote number 14. It presents how tax farming took place. Is everybody familiar

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with the idea of tax farming? Well, it seems that it became, it was perfected into an art

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form. And it was perfected into an art form in a way that profited the state the most

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because the right to farm taxes, well, people had to bid for it. So, obviously, people had

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to pay the government for that right. So, the government was getting the most. It didn't

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even have to have its own tax agency to rely on entrepreneurs to tax people.

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Are they taxing land or business or...?

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I don't know.

246
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It's somewhere in there.

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There are all kinds of numbers.

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It's amazing how much was written on...

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I guess it's Europe.

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If you want to research this topic,

251
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you can take any detour and start looking more deeply into

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William II, William III.

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I mean, this is just the prime minister for 23 years.

254
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and there's unbelievable amounts written, at least four or five biographies there that

255
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we have in the library. So that's pretty amazing. Let's see. So in any case we saw that in 1650

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William II died, the smallpox. So there's a chance for a republican government. One can

257
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look into it and taxes fall and they start to pay the debt and all kinds of policies

258
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that favor trade get put into place. But curiously enough, well, the army starts to be taking

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care of a little less, and well, given that everyone around you is dynastic power interested

260
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in military expansion, those high ideals might have proved to not be such a good idea, and

261
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by 1672, well, Holland has to fight several wars, and in 1672, the French and the English

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These both at the same time attack Holland, and in the process of doing so, well, a mob

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will kill the GWT, and William III will be installed as that holder, and the Midnight

264
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Summer Stream comes to an end. Let's see if I can tell you.

265
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So England and France invade?

266
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They invade, and in the process of the invasion, everybody starts saying that the grid is awful,

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that if we were led by a monarch, this wouldn't happen to us.

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And he becomes, he is killed by a mob, and if you're into gruesome reading, I can entertain

269
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I skipped stuff here and there. Well, this starts where they have already been killed.

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The barters continued to shoot into the dead men, cheered on by the crowd of about a thousand.

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This is about the killing, obviously. Those who looked on with horror heads still. The

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The corpuses were next dragged to the scaffold and hung by the feet.

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What was not planned was what followed.

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In the crowd had been not only burgers, but also the rubble.

275
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For them, the mere killing was not enough.

276
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They ran to the scaffold as soon as the civic guards began the desecration and violation

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of the dangling corpuses.

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They shaved the bodies bare, cut off parts, including the genitals, slaved the bodies

279
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is open and pull out to the hearts and entrails, as if they were slaughtered cattle, the parts

280
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were speared and quails, and then it says there is no parallel to this cannibalism in

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all of that's history, and another interesting detail is I explain how the political leader,

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So far I've been talking about Republican and Monarchical elements. The Republican elements

283
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were for freedom of trade, so on and so forth, equality before the law, but they weren't for

284
00:32:00.720 --> 00:32:09.720
democracy necessarily. As a matter of fact, they despised the rabble, as it says in the

285
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book, and the rabble despised them. So, as a matter of fact, the majority of the people

286
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The majority of the people were in favor of the Prince. The majority of the people saw the Prince as the defender against these rulers.

287
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So it's somewhat hard to place ourselves in this spectrum of what was going on at the time.

288
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If you are for free enterprise and for intellectual freedom, you probably would find yourself sitting with the Republicans.

289
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But at the same time, the picture is somewhat mixed.

290
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Wasn't this period of the Republican government, wasn't that a period of tremendous prosperity?

291
00:32:59.920 --> 00:33:11.480
It was, mostly because people went into dying in wars, yeah, and it was a period of prosperity.

292
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And so, well, the GWT, at some point in the book, it goes into what would be the ideal

293
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form of government, monarchical government, has negative points because of these tendencies

294
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to concentrate power and to try to rent six and so forth, and he presents a few arguments

295
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to give theoretical backing to this.

296
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Thus, for instance, he says in 16,

297
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we shall always find it true in all countries

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governed by a few aristocratic rulers

299
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and provided with but few unrequited animal magistrates

300
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that a great person obtaining their,

301
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any power in the government or militia

302
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will easily draw to its party all rulers and magistrates

303
00:34:00.280 --> 00:34:02.720
by the most considerable and profitable offices

304
00:34:02.720 --> 00:34:04.760
and benefits which it can offer.

305
00:34:04.760 --> 00:34:10.200
Hence, the fewer people that are in government, the easier it is to bribe them.

306
00:34:10.200 --> 00:34:21.800
So along those lines, he will advocate having large assemblies holding power, and this also

307
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is aligned with Eklund's analysis in his Mercantilism book, because 17 is hard to read, but basically

308
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What it says in 17 is that if you have an assembly with a lot of members, then it's

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harder to get, to bribe that assembly. The larger an assembly, the more costly it is

310
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to commit bribery, the less bribery, the efficient optimal quantity of bribery will go down so

311
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we will be better off. Same thing takes place in the courts of justice. Monarchical justice

312
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had few judges. Republican justice adds to the number of judges so that it's harder to

313
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bribe them. That's in quotes 18 and 19. In 19 it says about monarchical justice, they

314
00:35:21.620 --> 00:35:28.620
They publicly sell justice and none that are wrong, they're complained.

315
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Let's see about monopolies. Well, he has a, he covers basically all the arguments that

316
00:35:40.980 --> 00:35:47.980
we have against monopoly. I guess I should try to wrap it up quickly, but.

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00:35:51.620 --> 00:36:00.260
1921, private or peculiar profit is the chief foundation, though it always goes under the

318
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notion of a general advantage society, of all those restrictions and burdens imposed

319
00:36:04.900 --> 00:36:09.900
on the citizens by corporations and guilds, which serve to no other end but to keep good

320
00:36:09.900 --> 00:36:15.740
people out of their cities, and in the meantime to give the members of such corporations,

321
00:36:15.740 --> 00:36:20.420
unions, whatever you want to call it, a lasting opportunity of being enraged by their fellow

322
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inhabitants.

323
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of Selling Their Goods and Manufactures More Expensive to Their Neighbors.

324
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So you know, the basic analysis is already there, and the way that it worked at the time

325
00:36:32.760 --> 00:36:39.060
is if you wanted to sell certain products in a city, you had to leave within the city.

326
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It was illegal for you to move into the city.

327
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Well, the grid is against all that. In quotes number 23, and I guess I'll try to run through

328
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in case you are ever interested in reading this on your own. I'll just tell you what

329
00:37:08.740 --> 00:37:16.460
Question number three is about the issue of whether regulation of the quality of products

330
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is good or whether quality will arise on its own if the market is left alone.

331
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And in 23 and 24, by another author, you basically see that they already realized at the time

332
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that the purpose of regulation for quality is to keep away entry and further, I don't

333
00:37:39.360 --> 00:37:45.740
know how much it goes on today with the FDA, but at the time in 24 in the case of England,

334
00:37:45.740 --> 00:37:51.100
if you had a seal of quality for a product, it basically became a tax because you could

335
00:37:51.100 --> 00:37:57.900
basically purchase those seals of quality without that meaning anything about the product.

336
00:37:57.900 --> 00:38:07.500
And actually, in doing this research, I run across an English person complaining about

337
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England saying, how are we so inefficient in England? This regulation of quality works

338
00:38:12.020 --> 00:38:19.540
so great in the Dutch Republic. The products are of such high quality. We're trying to

339
00:38:19.540 --> 00:38:26.620
impose quality to government, and it's not working. I mean, what are we doing wrong?

340
00:38:26.620 --> 00:38:34.060
The other detail that reminds me is the origin of the word mercantilism seems to have, at

341
00:38:34.060 --> 00:38:39.740
root, when people refer to mercantilists, they were referring to the Dutch merchants

342
00:38:39.740 --> 00:38:42.940
that basically operate on the regime of free markets.

343
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And when Franz and Colbert realized that the Dutch Republic was such a great mercantilist

344
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In this nation, Colbert decides that he is going to beat him at mercantilism and he is going to get the state to help in doing so.

345
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So that's how the word mercantilism becomes neglected. Originally, mercantilism means merchant.

346
00:39:06.780 --> 00:39:12.780
And so mercantilism is a policy to attack mercantilism?

347
00:39:12.780 --> 00:39:21.340
after Colbert, even though Colbert probably didn't mention, who knows.

348
00:39:21.340 --> 00:39:28.220
In quote number 25, basically, this is interesting, it is certainly known that this country cannot

349
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prosper by means of those that are most industrious and ingenious and that such patents or grants

350
00:39:33.300 --> 00:39:38.340
monopolies do not produce the most ablest merchants, but on the other hand, because

351
00:39:38.340 --> 00:39:46.420
to the grantees, think that they need not fear others who are much more ingenious and

352
00:39:46.420 --> 00:39:50.460
industrious than themselves, sell less than their profits, therefore the certain gains

353
00:39:50.460 --> 00:39:55.080
they reap become dull, slow, inactive, and less inquisitive.

354
00:39:55.080 --> 00:39:59.180
So if you have, monopoly has dynamic effects.

355
00:39:59.180 --> 00:40:02.740
People start innovating less and less.

356
00:40:02.740 --> 00:40:10.740
Code No. 26 takes it to the ultimate. It gives an example of fishing in Greenland was monopolized.

357
00:40:10.740 --> 00:40:16.740
The company wasn't making profits. It was closed down. It was obviously not a profitable monopoly.

358
00:40:16.740 --> 00:40:23.740
And then people started going on their own, privately, and it turns out that Greenland is a great place to fish.

359
00:40:23.740 --> 00:40:30.740
So they're still hoping monopolies. They are so bad that they might become this model on their own.

360
00:40:30.740 --> 00:40:47.060
Let's see. Throughout the paper, one of the lines in my paper was that Smith said this,

361
00:40:47.060 --> 00:40:51.620
Schumpeter tells us, other people said those things before. So at some point I was comparing

362
00:40:51.620 --> 00:41:00.700
Smith with him and if one reads Smith, Smith seems to argue that charters and monopolies

363
00:41:00.700 --> 00:41:05.700
This might have been not so bad an idea, but they became corrupted.

364
00:41:05.700 --> 00:41:10.700
Well, the way that I contrast it is that the wit will have none of that.

365
00:41:10.700 --> 00:41:23.700
Charters are not something that may become corrupted, but rather an instrument through which the monarch's self-interest is furthering violation of everyone else's natural rights and liberty.

366
00:41:23.700 --> 00:41:33.100
And if anybody is interested, I think I could find the line in truth later.

367
00:41:33.100 --> 00:41:39.820
I want to always include those.

368
00:41:39.820 --> 00:41:47.460
Quote number 31 talks about the right for everyone to live where they want and to practice

369
00:41:47.460 --> 00:41:52.500
the professions that they might want.

370
00:41:52.500 --> 00:41:59.500
And this is best for everyone. And I don't know if it's in any of these quotes, but he's

371
00:41:59.500 --> 00:42:05.420
basically in favor of international freedom of movement of labor. He says that this will

372
00:42:05.420 --> 00:42:14.420
benefit society, obviously it will benefit the trading class that would hire workers.

373
00:42:14.420 --> 00:42:21.220
And in number 32, he makes an argument about a backward slope in supply of labor. Let's

374
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We see that for want of strangers, foreigners in this country, the peasants must give such

375
00:42:28.020 --> 00:42:33.340
great yearly and day wages to the servants, that they can scarcely live but with great

376
00:42:33.340 --> 00:42:39.380
toil themselves, and the servants live rather in too great a plenty. So if you allow foreigners

377
00:42:39.380 --> 00:42:50.380
to move in, we will not have this problem. So, you know, wages need to reach an international

378
00:42:50.380 --> 00:42:53.100
and Equilibrium or something like that.

379
00:42:53.100 --> 00:42:55.460
Quote number 33 is about incentives.

380
00:42:55.460 --> 00:42:59.660
For he that sits idle in Holland must expect to get nothing

381
00:42:59.660 --> 00:43:01.500
but certain and speedy poverty.

382
00:43:01.500 --> 00:43:04.980
But he that ventures may gain and sometimes find out and meet

383
00:43:04.980 --> 00:43:08.420
with a good fishery manufacturer merchandise of traffic.

384
00:43:08.420 --> 00:43:11.620
And so it goes on.

385
00:43:11.620 --> 00:43:19.780
Quote number 34 recognizes that freedom of labor, somebody

386
00:43:19.780 --> 00:43:24.820
will get hurt, and though this, the entry of foreigners, will be ever detrimental to some

387
00:43:24.820 --> 00:43:29.700
old inhabitants who could have all the profits and berate others of it, and under one pretext

388
00:43:29.700 --> 00:43:35.420
or other exclude them from their trade. It is notorious that old people, who to the prejudice

389
00:43:35.420 --> 00:43:41.180
of the common good, will exclude others, and for that end would have some peculiar favor

390
00:43:41.180 --> 00:43:45.500
from the rulers, beyond the rest, are very pernicious and mischievous inhabitants.

391
00:43:45.500 --> 00:43:48.900
So, rent seeking is bad.

392
00:43:48.900 --> 00:44:04.340
Well, I could go on. He basically presents all the same arguments for international trade.

393
00:44:04.340 --> 00:44:09.340
So I shall open for questions.

394
00:44:09.340 --> 00:44:12.340
Did Groucho come to court?

395
00:44:12.340 --> 00:44:13.340
A bit far.

396
00:44:13.340 --> 00:44:14.340
Let's see.

397
00:44:14.340 --> 00:44:24.340
I have Groucho's book is from 1633.

398
00:44:24.340 --> 00:44:29.340
Where he had his little maps, but it was in his time.

399
00:44:29.340 --> 00:44:30.340
I don't know.

400
00:44:30.340 --> 00:44:42.560
There's a book that's about everyone that influenced, as I explained, the way that the

401
00:44:42.560 --> 00:44:46.320
political process worked is, was through co-optation.

402
00:44:46.320 --> 00:44:50.340
When somebody died, each ruling committee would pick someone else.

403
00:44:50.340 --> 00:44:53.440
These people got chosen from some families.

404
00:44:53.440 --> 00:44:58.120
So the debate was, do we have one prince, or do we have all these families ruling?

405
00:44:58.120 --> 00:45:00.120
Nobody was advocating more democracy.

406
00:45:00.120 --> 00:45:06.040
So one guy outside those families wrote this book, and he was advocating greater democracy.

407
00:45:06.040 --> 00:45:11.760
This book came into the hands of the GWT, and the GWT toned down the parts that he didn't

408
00:45:11.760 --> 00:45:16.440
like, changed things here and there.

409
00:45:16.440 --> 00:45:24.920
But in any case, these are basically not figures in economic thinking, and they had these ideas.

410
00:45:24.920 --> 00:45:26.360
They didn't come up with them.

411
00:45:26.360 --> 00:45:31.820
So these are probably the beliefs that everybody held in Holland at the time, in the merchant

412
00:45:31.820 --> 00:45:32.820
class.

413
00:45:32.820 --> 00:45:33.820
In the merchant class.

414
00:45:33.820 --> 00:45:42.820
Smith was this primary teacher in Carmar, and I thought it was, there was a connection

415
00:45:42.820 --> 00:45:48.000
between Barofius and Carmar, did Barofius ever live in England?

416
00:45:48.000 --> 00:45:55.880
I don't know, but at the time everybody traveled extensively, like this guy, he, I mean, he

417
00:45:55.880 --> 00:46:00.880
He got his law degree, and then his dad sent him traveling around Europe for two years

418
00:46:00.880 --> 00:46:02.440
to become culture.

419
00:46:02.440 --> 00:46:12.880
So he basically met all his enemies personally when he was in his early 20s.

420
00:46:12.880 --> 00:46:18.880
And then later on in life, well, he has memories about all his enemies that he would eventually

421
00:46:18.880 --> 00:46:19.880
fight.

422
00:46:19.880 --> 00:46:24.680
He met Louis XIV when Louis XIV was a little kid, and Louis XIV would eventually cause

423
00:46:24.680 --> 00:46:36.480
So, where was I going? I get lost. Anyhow, he traveled extensively, so it seems that

424
00:46:36.480 --> 00:46:41.840
everybody did. I mean, not everybody, but the culture of people traveled extensively.

425
00:46:41.840 --> 00:47:01.720
According to Schumpeter, Smith's ideas of natural liberty have many sources. Some of

426
00:47:01.720 --> 00:47:18.720
Some of them could be those of Sir George the Child and Davenand and Paul X. Venn. Paul X. Venn is a guy from Sweden, so, you know, the intellectual community was far more international, but it seems to be today, interestingly enough.

427
00:47:18.720 --> 00:47:21.720
What would you like the book to be about?

428
00:47:48.720 --> 00:48:02.240
I mean, as you might have noticed in the quotes, the government is bad because the government

429
00:48:02.240 --> 00:48:07.880
is bad, which if you think that the government is bad, then you agree, but he hasn't put

430
00:48:07.880 --> 00:48:16.240
forward any solid arguments why the government is bad. It's a book of persuasion, it's not

431
00:48:16.240 --> 00:48:17.240
in a Book Theory.

432
00:48:17.240 --> 00:48:24.240
Was it, was it the case that the, the original author was, couldn't publish it?

433
00:48:24.240 --> 00:48:29.640
The, the way that, the, the original published, the original author was a nobody. I mean,

434
00:48:29.640 --> 00:48:37.840
he was a textile person, but he couldn't publish it. So, the book ran into the great's hands

435
00:48:37.840 --> 00:48:45.200
and he was like, oh, this is interesting. So, some way or another, he basically got

436
00:48:45.200 --> 00:48:54.080
copyright rights and the right to, well intellectual property rights are interesting I guess. I

437
00:48:54.080 --> 00:48:59.120
guess at the time if somebody got your book they could copy it and you couldn't get royalties.

438
00:48:59.120 --> 00:49:04.400
So there was no point in publishing a book if you weren't going to make any money off

439
00:49:04.400 --> 00:49:13.360
of it. So what he got out of the grid was a patent for the book. You know all these

440
00:49:13.360 --> 00:49:23.080
These monopolies are weird. It turns out that this type of monopoly might be good. If somebody

441
00:49:23.080 --> 00:49:29.000
sees your book and it doesn't have your patent, then you can go to jail because you didn't

442
00:49:29.000 --> 00:49:37.760
prison, because you didn't pay your due property rights to the guy that wrote it, if transaction

443
00:49:37.760 --> 00:49:53.760
A lot of the quotes that you gave out indicate that these fellows were certainly classical liberals, natural rights theorists, pretty good economists.

444
00:49:53.760 --> 00:50:09.980
But in terms of the title of the talk, was there any concentration on the political aspects

445
00:50:09.980 --> 00:50:17.880
of the republican system in terms of the voting between provinces? Did they concentrate on

446
00:50:17.880 --> 00:50:19.560
that or was that just...

447
00:50:19.560 --> 00:50:23.560
Well, I didn't expect to talk so much about history and background in my talk.

448
00:50:23.560 --> 00:50:28.560
I mean, there's a lot more here, but without giving you the background, nothing makes sense.

449
00:50:28.560 --> 00:50:30.560
So I needed to give you the background.

450
00:50:30.560 --> 00:50:34.560
So it goes into more detail.

451
00:50:34.560 --> 00:50:37.560
I could have spoken much more on how it works.

452
00:50:37.560 --> 00:50:44.560
And the basic idea is that a concentrated form of government, since everybody...

453
00:50:44.560 --> 00:50:48.560
The point is everybody seeks his own self-interest.

454
00:50:48.560 --> 00:50:54.520
We need to create a form of government where the interests of the ruler are tied to the

455
00:50:54.520 --> 00:50:59.520
interests of society. So we need a government by the traders and a government with many

456
00:50:59.520 --> 00:51:07.080
traders so that they cannot be bribed. And if you have a government by a single individual,

457
00:51:07.080 --> 00:51:14.160
that single individual is going to find it profitable to bribe everyone and to seek patronage

458
00:51:14.160 --> 00:51:20.280
and to have and to limit everybody's labor through these taxes and patronage.

459
00:51:20.280 --> 00:51:27.520
So he certainly had the, as you quote mentioned, he certainly had the unifying force of, or

460
00:51:27.520 --> 00:51:29.520
the organizing force of self-interest.

461
00:51:29.520 --> 00:51:36.840
I mean, but the idea is that, the key idea is self-interest is not good, self-interest

462
00:51:36.840 --> 00:51:43.040
within natural rights is good, self-interest outside of natural rights is not good.

463
00:51:43.040 --> 00:51:47.040
There's not one quote, basically, about military service.

464
00:51:47.040 --> 00:51:51.040
What a topic, dear to your heart.

465
00:51:51.040 --> 00:51:55.040
Yeah, the military service was voluntary, curiously enough.

466
00:51:55.040 --> 00:51:59.040
Somebody tried to do it compulsory once, but it didn't work.

467
00:51:59.040 --> 00:52:03.040
So everybody got, we as soldiers, we got paid.

468
00:52:03.040 --> 00:52:07.040
Let's see.

469
00:52:07.040 --> 00:52:29.140
Well, there's one quote where it is basically said that, I mean, it's basically the Declaration

470
00:52:29.140 --> 00:52:37.000
of Independence a few hundred years earlier, is that nobody can tell you, you may die far

471
00:52:37.000 --> 00:52:42.800
from me. And they misuse that. The government cannot do that. And if they misuse that, then

472
00:52:42.800 --> 00:52:47.800
you have the right to rebel against it, against your government.

473
00:52:47.800 --> 00:52:50.800
It's pretty powerful stuff.

474
00:52:50.800 --> 00:52:57.800
I wish I could find it. Is there someone?

475
00:52:57.800 --> 00:53:00.800
Well, that's okay, because we're all in time, right?

476
00:53:00.800 --> 00:53:02.800
I hope you enjoyed it.

477
00:53:02.800 --> 00:53:04.800
Yes, thank you very much. Appreciate it.

478
00:53:07.000 --> 00:53:09.000
Thank you very much.