WEBVTT NOTE The Fall of Communism and the Rise of 21st Century Socialism 1 00:00:00.000 --> 00:00:12.000 Yes, I have quite a bizarre background, I think. I worked for the Soviet government in Moscow, for some kind of an overstatement of my activities. 2 00:00:12.000 --> 00:00:22.000 I was one of the economic advisors to Gorbachev. I wasn't the advisor, I wouldn't take the blame. 3 00:00:22.000 --> 00:00:43.000 And then some kind of window of opportunity opened. I was not prepared to take it, but I immediately, looks like I was still, Soviet trade economist sounds like an oxymoron, but I kind of seized that window and ended up in the United States instead of staying back in beloved Soviet Union. 4 00:00:43.000 --> 00:00:52.000 And so in the United States I found myself working for the second largest bureaucracy of this planet, for the Federal Government in Washington, D.C. 5 00:00:52.000 --> 00:01:01.000 And I was working in a Congressional think tank, which like, I think all government think tanks did a lot of tanking, but not much of the other things. 6 00:01:01.000 --> 00:01:11.200 So then I decided to do what I like to do, and I'm teaching young Americans the ideas 7 00:01:11.200 --> 00:01:18.640 of American Founding Fathers, ideas of liberty, ideas of free markets, free minds. 8 00:01:18.640 --> 00:01:27.480 And definitely, I think the lesson that we can learn from the dismal failure of communism 9 00:01:27.480 --> 00:01:34.520 is a lesson that we should keep in mind. Remembering this millions, tens of millions of people 10 00:01:34.520 --> 00:01:40.520 who were slaughtered just to prove that that non-working system works and it didn't. And 11 00:01:40.520 --> 00:01:47.600 because of that, I think that the best would be for economists to look into economics of 12 00:01:47.600 --> 00:01:53.680 socialism, economics of socialism. The in-depth analysis of economics of socialism was done 13 00:01:53.680 --> 00:02:01.840 by Ludwig von Mises. He was the first Western economist who in 1918 he wrote an essay, Economic 14 00:02:01.840 --> 00:02:08.280 Calculation Under Socialist Commonwealth, and in that short essay he predicted what happened 15 00:02:08.280 --> 00:02:15.240 75 years later. And he was the only one, to the point even that in 1936 Oscar Langer, Polish 16 00:02:15.240 --> 00:02:20.680 socialist economist and central planner, he was saying that we should build, we should 17 00:02:20.680 --> 00:02:27.400 to direct the monument to Ludwig von Mises, because he pointed to the problem of economic calculation, 18 00:02:27.400 --> 00:02:33.400 of economic calculation under communism. And that problem is not solved. That's what Oscar Lange admitted. 19 00:02:33.400 --> 00:02:43.880 Well, Oscar Lange was then murdered by Stalin, but he didn't solve this problem at all, because the whole idea, 20 00:02:43.880 --> 00:02:47.640 The whole idea, I think, was even perpetuated by Lenin himself. 21 00:02:47.640 --> 00:02:56.560 In 1922, he wrote in a letter to Zerzhinsky, he wrote in another that even when the whole world will become communist, 22 00:02:56.560 --> 00:03:01.560 we should keep one little country capitalist to see what prices looks like. 23 00:03:01.560 --> 00:03:08.560 That's why I'm Lenin, I'm Lenin and I'm a student now. 24 00:03:08.560 --> 00:03:14.560 So, from Mises' theory of socialism, there are two patterns of socialism. 25 00:03:14.560 --> 00:03:18.860 There's the Russian pattern. The Russian pattern is that everything is nationalized. 26 00:03:18.860 --> 00:03:26.260 That all means of production are in the hands of the state, in the hands of the socialized economy. 27 00:03:26.260 --> 00:03:33.360 That everything is run like, say, the U.S. Postal Service System. 28 00:03:33.360 --> 00:03:45.120 I would say, everything was run like a financial services system today, or like a health care system would look like very soon. 29 00:03:45.120 --> 00:03:55.760 Well, you have this in Canada already. So I think we are kind of like in between, Russian and the other one, is German pattern. 30 00:03:55.760 --> 00:04:11.760 German pattern of socialism is that, and von Mises also, he kind of explained it from a very interesting perspective, because Marx was Jewish, and Hitler, as you know, he didn't like Jews, to say mildly. 31 00:04:11.760 --> 00:04:23.760 And because of that, the name of Marx was never mentioned in national socialism, under the national socialism doctrine of Hitler and the likes. 32 00:04:23.760 --> 00:04:34.760 And because of that there were some modifications. So today I would say German pattern is very close to the mixed economy we have in the United States already. 33 00:04:34.760 --> 00:04:39.760 It is 100% of the economy is saying today is Russia, the Putin's regime. 34 00:04:39.760 --> 00:04:51.760 And what does this mean? That means that property rights are declared. Property rights are even embedded in the Constitution of a country. 35 00:04:51.760 --> 00:05:01.760 From another hand, having property title today is the same as having property title for wetlands in Canada, for example. 36 00:05:01.760 --> 00:05:08.760 You cannot do anything, you cannot walk on your property without being fined. 37 00:05:08.760 --> 00:05:16.760 So that's the second, the German type of socialism would be without socialization of everything, 38 00:05:16.760 --> 00:05:20.760 How well was central planning from the center of the whole economy? 39 00:05:20.760 --> 00:05:32.760 Because that would be the government who would be telling you how much to produce, for whom, when, how, and whom to fire, whom to hire, everything, especially labor markets. 40 00:05:32.760 --> 00:05:47.160 So both types of the socialism ended up in mass murders and complete destruction of the countries which practiced this type of economic system. 41 00:05:47.160 --> 00:05:53.960 However, having said that, Mises made a very good point that Marxism is not an economic system. 42 00:05:53.960 --> 00:05:59.560 It is just a simple system of management of commands, top-down commands, and that's it. 43 00:05:59.560 --> 00:06:18.840 Union, the most perfect killer state, 61 million people slaughtered for equality. 44 00:06:18.840 --> 00:06:26.840 And that's the numbers from Rudy Rummelt, who is a professor of demographics in University of Hawaii, a very famous American demographer. 45 00:06:26.840 --> 00:06:33.840 Now he is focusing on this demo site, he called it demo site, the gathering of people. 46 00:06:33.840 --> 00:06:40.840 So these deaths, you can see, are just overwhelming. I think they illustrate very well Stalin's point. 47 00:06:40.840 --> 00:06:46.840 He said, the death of one person is a tragedy, the death of millions is a statistic. 48 00:06:46.840 --> 00:06:53.240 So communist China also is the second worst mega-murderer. So communists, according to 49 00:06:54.200 --> 00:07:00.440 Rommel, have murdered 110 million people, nearly two-thirds of the nearly 170 million killed by 50 00:07:00.440 --> 00:07:05.720 all governments in the 20th century. Well, the other 22 million were murdered by Nazis, 51 00:07:05.720 --> 00:07:10.440 by Nazis, which is another form of socialism, so it will be already 132. 52 00:07:10.440 --> 00:07:18.440 So that's way more than the people who were murdered on the battlefields are not counted into that. 53 00:07:18.440 --> 00:07:24.440 That would be people who were murdered in the peace time in the Soviet Union. 54 00:07:24.440 --> 00:07:30.440 I remember myself very well, the time when Gorbachev started this Perestroika thing. 55 00:07:30.440 --> 00:07:39.440 And he ordered all government ministers to appear on television and to take phone calls from the public. 56 00:08:09.440 --> 00:08:21.940 One of the callers, he said, I kind of did some calculations, I think there are 43 million people murdered by your institution, by the KGB. Is that the right number or not? 57 00:08:21.940 --> 00:08:30.940 And Mr. Kruchkov said, well, I don't know much, numbers, whatever, give me a week and I will put it down and I'll find out how many people. 58 00:08:30.940 --> 00:08:53.940 And that was amazing. I remember I spilled my coffee on myself on the surface. And then, sure enough, a week after that, the whole country was glued to TV screens to find out how many skeletons you have in a cupboard. That just was amazing. 59 00:08:53.940 --> 00:09:04.500 And Mr. Khrushchev, he said, well, comrades, the number is about right, but he said it's preposterous to believe that all these people were killed. 60 00:09:04.500 --> 00:09:21.340 Most of them died of natural causes, and sure enough, if you don't feed people, or if you don't clothe them in Siberia, they tend to die of natural causes. 61 00:09:21.340 --> 00:09:34.840 I decided to do a little bit of, as soviets would call it, visual propaganda, because after lunch, speech is usually the most kind of unsuccessful. 62 00:09:34.840 --> 00:09:42.840 People tend to sleep and dream or whatever, so just to keep you awake. 63 00:09:42.840 --> 00:10:11.840 Lenin, I would say today there are a lot of people are saying, well, Marx was right, Lenin was wrong, there is something wrong with Leninism, so if you will read Lenin, you will see he was 100% Marxist, 100% Marxist, the only deviation from Marx was that he was trying to say that the end of the earth or communism would happen in one country, not in the whole world at the same time. 64 00:10:11.840 --> 00:10:17.200 That was the only kind of little deviation from orthodox Marxism. 65 00:10:17.200 --> 00:10:30.840 Lenin, like all Marxists, like all socialists, he hated gold, he believed that gold in the future society, they will make toilet commons out of gold. 66 00:10:30.840 --> 00:10:40.160 because gold was specially designed by nature to be in contact with the human waste because 67 00:10:40.160 --> 00:10:47.760 it is such a bad thing morally and from another hand it is also very good from corrosion point 68 00:10:47.760 --> 00:10:48.760 of view. 69 00:10:48.760 --> 00:10:55.040 And so he probably could do that and he didn't live long enough but he probably could do 70 00:10:55.040 --> 00:11:24.040 Trotsky is kind of a hero for our napalm conservatives in the United States. 71 00:11:24.040 --> 00:11:48.040 in the United States. However Trotsky, if you will look at Trotsky's writings, he was not a humanist. He wrote in his book on revolution that we inherited from Tsar, we inherited very poor human material, that's how he called people, which only can be mended with mass shooting and forced labor. 72 00:11:48.040 --> 00:11:52.540 And that's what his program, my program, was to do that. 73 00:11:52.540 --> 00:11:58.040 And then comes this person who killed more people than all other people combined. 74 00:11:58.040 --> 00:12:04.540 At least one Russian historian, Roy Medved, he did this calculation of who murdered how many. 75 00:12:04.540 --> 00:12:11.040 And so from that perspective, you just start to think, basically now he looks like Boehm. 76 00:12:18.040 --> 00:12:28.040 So this is the map of the extermination camps, extermination camps for people. 77 00:12:28.040 --> 00:12:33.040 Later, this famous dictum is that politics is a form of pest control. 78 00:12:33.040 --> 00:12:37.040 And that's exactly where they were getting rid of pests. 79 00:12:37.040 --> 00:12:41.040 And this is the gulag, gulag, Stalin's empire of prison camps. 80 00:12:41.040 --> 00:12:46.040 At the height of it, every day they had over 20 million inhabitants. 81 00:12:46.040 --> 00:12:59.040 So it was a huge, huge meat grinder for the people of the Soviet Union, for the people from overseas as well, there's a lot of foreigners there as well. 82 00:12:59.040 --> 00:13:03.040 So that's the gulag itself. 83 00:13:03.040 --> 00:13:05.040 Twenty million a day? 84 00:13:05.040 --> 00:13:09.040 No, no, they were all the time populated by this amount. 85 00:13:09.040 --> 00:13:13.040 They were dying of natural causes one by one. 86 00:13:13.040 --> 00:13:43.040 At the height of the murders, they were murdering 12,000 today, in the height of murders, in 1937, and at that time, why do I know, because I did some research on this, because Robert LaFollette, who was the governor of Wisconsin, that's where I'm from, you can recognize this accent, yeah, and the governor of Wisconsin, Robert LaFollette, 87 00:13:43.040 --> 00:13:49.040 Robert LaFollette, he visited Soviet Union in October of 1937, when they were measuring 12,000 a day. 88 00:13:49.040 --> 00:13:55.040 He went back to Madison, Wisconsin, his lads were, our previous speaker got his indoctrination. 89 00:13:55.040 --> 00:14:02.040 And he went back to Madison, Wisconsin, he said, I saw the future and it works. 90 00:14:02.040 --> 00:14:11.040 And so that's, that was amazing for us in back in Soviet Union to see how people coming from the West, 91 00:14:11.040 --> 00:14:22.880 Definitely not KGB agents, but would give praise to such an evil, Clementine Churchill, in 1947, visited Soviet Union. 92 00:14:22.880 --> 00:14:28.560 I don't think she was a KGB person, but Clementine Churchill, you turn back to London, she said, 93 00:14:28.560 --> 00:14:34.160 colonists are lying that they don't have a privileged class, they do, and that is children. 94 00:14:34.160 --> 00:14:45.960 Can you imagine, when the true ruling class was dining and whining her and creating this show, kind of kindergartens made of KGB children, 95 00:14:45.960 --> 00:14:55.160 and she returned back to London and said, nobody pulled her tongue about that, this is a villainous Lithuania, 96 00:14:55.160 --> 00:14:59.160 and so Mary Lou is a frequent traveler to that part of the world. 97 00:14:59.160 --> 00:15:04.920 Now it's a free country, so Baltic states are doing very well from that perspective. 98 00:15:04.920 --> 00:15:10.680 They put, at first they had this, it was called Park of Fallen Foibles, Park of Fallen Foibles. 99 00:15:10.680 --> 00:15:17.960 And I went there in 1995 with my students, and at that time they had a little bridge over Stalin. 100 00:15:17.960 --> 00:15:21.800 And those, and that was a political entrepreneurship at its best. 101 00:15:21.800 --> 00:15:27.720 If you pay five liters, that's about one dollar, then you can go and pee on this time. 102 00:15:29.160 --> 00:15:33.160 Not at any time. 103 00:15:33.160 --> 00:15:39.160 Amazingly enough that my female friends were very upset. 104 00:15:39.160 --> 00:15:43.160 So Stalin was succeeded by another mass murderer. 105 00:15:43.160 --> 00:15:51.160 Not many people know his biography, that he is all covered with blood and minced meat. 106 00:15:51.160 --> 00:16:21.160 and all this kind, this is already, we call that period, the reign of corpses, the reign of corpses in Moscow and the saying was that the working day in Kremlin was stuck with resuscitation and then it's giving away orders and medals and then it's clinical death again and this is my boss, my immediate boss was first Deputy Prime Minister of Soviet Union, who was contended 107 00:16:21.160 --> 00:16:27.480 And he should be blamed for it. And he would all the time return from meetings with Gorbachev 108 00:16:27.480 --> 00:16:33.800 and would say, what is happening behind this birthmark? Because nobody really knew. What 109 00:16:33.800 --> 00:16:38.200 happened actually? Why communism collapsed? Why they couldn't survive another 10,000 years 110 00:16:38.200 --> 00:16:45.720 like was predicted by the CIA? Because they removed fear out of the system, which was 111 00:16:45.720 --> 00:16:50.920 was glued only by fear, there's nothing, no other explanation. You have a command economy, 112 00:16:50.920 --> 00:16:55.240 if you have a, people are being short for not working and if you start, stop shooting 113 00:16:55.240 --> 00:17:00.280 them, that's, everybody would stop working and that's exactly what happened. There was 114 00:17:00.280 --> 00:17:08.080 another joke I remember in Moscow at that time, that CIA agent is in Moscow and is walking 115 00:17:08.080 --> 00:17:13.120 into a shoe store and writing in his notebook, no shoes, going to grocery store, no groceries, 116 00:17:13.120 --> 00:17:20.880 He's going to a pharmacist with no medicines, and there is a KGB guy looking over his shoulder and he said, 117 00:17:20.880 --> 00:17:25.880 You know what? He said, ten years ago you would be shot for doing that. He writes there, no bullets. 118 00:17:25.880 --> 00:17:53.880 That's exactly it. I remember I was working for the Soviet Bank for Foreign Trade at that time, as a chief consultant, and my secretary, her name was Lena, she was a very nice lady, 23 years old, 119 00:17:53.880 --> 00:18:12.680 And I saw her picking up paper clips, putting them into her purse, and I said, Leah, why 120 00:18:12.680 --> 00:18:17.280 are you stealing state property in such strange form, paper clips? 121 00:18:17.280 --> 00:18:19.560 And she said, Yuri, what else can I take from this? 122 00:18:19.560 --> 00:18:21.920 And she used that for her office. 123 00:18:21.920 --> 00:18:22.920 Just show me, I'll take that. 124 00:18:22.920 --> 00:18:30.320 said nothing else to take can you imagine when I'm working and so she was taking 125 00:18:30.320 --> 00:18:35.520 this and I thought and I remember I was looking back to the metro station I was 126 00:18:35.520 --> 00:18:41.640 thinking if people like her or Rizia coming to work or to steal stuff there 127 00:18:41.640 --> 00:18:57.640 I wasn't doing anything at all, work-wise, and just going there to test a few stuff, the regime is doomed, the regime is doomed, and that's what exactly happened. 128 00:18:57.640 --> 00:19:05.640 Let me say to Gorbachev, all the time he like, kind of like a strange parrot, he would repeat on and on and on that he's for socialist choice of people, 129 00:19:05.640 --> 00:19:12.080 that we should not do away with capitalism, we should reform social, social with human 130 00:19:12.080 --> 00:19:20.040 faith, like that sounds like a real oxymoron, and we had an economist, also a confidant, 131 00:19:20.040 --> 00:19:24.200 Igor Bacheval, Avila Gandigyan, a good friend of mine, he was the biggest, I would call 132 00:19:24.200 --> 00:19:35.120 him, the biggest economist in the world, he was, I think, like, 600 pounds, and he, yes, 133 00:19:35.120 --> 00:19:41.120 One meeting he said, and Gorbachev was saying, like, we should have a plan, like, at last. 134 00:19:41.120 --> 00:19:46.120 His point was that planned economy didn't work because we didn't have a good plan. 135 00:19:46.120 --> 00:19:53.120 And all the time we would fail to make a good plan. So if we were at last, we would make a good plan. Then everything would work. 136 00:19:53.120 --> 00:19:56.120 And he said, Abel, what is your plan? 137 00:19:56.120 --> 00:20:02.120 And Abel didn't realize, this is the big economist, didn't realize what he's talking about. 138 00:20:02.120 --> 00:20:05.120 Probably he was daydreaming about food or something. 139 00:20:05.120 --> 00:20:17.120 And he said, my plan would be to build a Swedish model in Soviet Union, Swedish model. 140 00:20:17.120 --> 00:20:23.120 And he worked with him like he's crazy. He said, where you will get all the Swedes? 141 00:20:23.120 --> 00:20:43.120 But why am I talking about that? Not just only to keep you awake, but mostly to illustrate the intellectual depths of discussions of reforming socialism. 142 00:20:43.120 --> 00:21:12.120 Now it was Mr. Yeltsin, I had a misfortune to work with him for half a year, he was a tough guy, he had a chance in 1991, at that time, look how popular he was, because he was, I cannot forgive myself, I wrote an article for Washington Times that we have another Thomas Jefferson in Russia. 143 00:21:12.120 --> 00:21:29.120 However, this Thomas Jefferson, Russian Thomas Jefferson, he instead of capitalizing on this enormous victory, when he was extremely popular to proceed with reforms, he disappeared for three months, presumably writing a book, which turned out he never read. 144 00:21:29.120 --> 00:21:42.120 And I was watching, I'm not making it up, I was watching a TV press conference with Mr. Yeltsin, and one lady, she said, 145 00:21:42.120 --> 00:21:49.120 Well, you were in Sverdlovsk in 1956 doing this and that. He said, never been there, never did that. 146 00:21:49.120 --> 00:21:59.120 and she said that they sent patients six of your book. He said, oh really? Can you imagine? 147 00:21:59.120 --> 00:22:06.120 He was probably consuming his favorite beverages for three months in a row. 148 00:22:06.120 --> 00:22:12.120 So now we have another civil society back in Moscow. 149 00:22:12.120 --> 00:22:23.120 I wrote an article, my kind of congratulatory article for Mr. Putin, which was the last article published in Russia. 150 00:22:23.120 --> 00:22:30.120 And the title of article was translated from Russian, would be Meat, Booting for Meatgrinder. 151 00:22:30.120 --> 00:22:40.120 And I think that's exactly what they did, because we know that Mr. Putin is a career KGB officer, he represents, proudly represents that very institution. 152 00:22:40.120 --> 00:23:04.000 I have my own person in Kremlin, a sleeping cell, who is a lawyer for Kremlin, and a very 153 00:23:04.000 --> 00:23:07.000 nice and joyous Jewish personality. 154 00:23:07.000 --> 00:23:14.120 And I called her and said, what, why, why, why Medvedev? I mean, first, I called her 155 00:23:14.120 --> 00:23:20.320 and said, what do you think about elections? That was February, March, where he was elected. 156 00:23:20.320 --> 00:23:28.120 She said, huh, I don't like this guy, McCain. I said, no, no, your elections. She said, 157 00:23:28.120 --> 00:23:34.560 yes, we do have elections, but he was already elected because we have only one elector and 158 00:23:34.560 --> 00:23:42.120 And already that elector already elected Mr. Medvedev, but I said, why the elector elected 159 00:23:42.120 --> 00:23:43.120 Mr. Medvedev? 160 00:23:43.120 --> 00:23:49.600 Nobody knew him or what not, and she said, come on, you've kind of completely lost your 161 00:23:49.600 --> 00:23:56.040 ties with your motherland because he's shorter, and I said, what do you mean by shorter? 162 00:23:56.040 --> 00:24:03.760 She said, that's the only person in government who was shorter than Mr. Putin, and I said, 163 00:24:03.760 --> 00:24:09.760 She said nothing wrong to be short, unless you don't like it. 164 00:24:09.760 --> 00:24:17.760 And Mr. Putin, and I really, I never saw this, I mean, I trust her because she's a very trustworthy person. 165 00:24:17.760 --> 00:24:24.760 Mr. Putin, she said, has very high heels, very high heels, like a very well-known French Emperor. 166 00:24:24.760 --> 00:24:44.760 and so he is up and Mr. Medvedev looks like got even higher heels and that's a Russian CDM, a president. 167 00:24:44.760 --> 00:24:52.760 All right, so there you have this roller, yes, you can only, if you're taking pictures of this great leader, 168 00:24:52.760 --> 00:25:07.760 You can only do it from below, so they are powering over you. If you take them like that, or like that, then your camera can be destroyed, as well as you, I think. 169 00:25:07.760 --> 00:25:17.760 The guy to the left, yes, I think I talked to him on a Sunday today, that life expectancy drops suddenly. 170 00:25:20.760 --> 00:25:26.760 122 journalists, 122 journalists on his watch were murdered. 171 00:25:26.760 --> 00:25:32.760 And the only common thing, and they worked for different newspapers and magazines and whatever, all over Russia, 172 00:25:32.760 --> 00:25:41.760 The only common thing is that they didn't want him, they want number one, and second common denominator is that none of these murders were ever solved. 173 00:25:41.760 --> 00:25:53.760 So that's that kind of... I knew the guy who was, maybe you remember Mr. Litvinenko, who was murdered in London, in London, yes. 174 00:25:53.760 --> 00:26:04.760 And I'm doing seminars for US military and US intelligence community, which is not very intelligent, I think, but thriving community. 175 00:26:04.760 --> 00:26:19.760 And one lady from NSA, which is not agency, and she said, come on, she said, why Putin would kill him? Why Putin would kill him? 176 00:26:19.760 --> 00:26:23.760 He was debriefed already 10,000 times. He doesn't know anything anymore. 177 00:26:23.760 --> 00:26:28.760 So why would Putin, yeah, maybe Putin would work for NSA, he wouldn't kill him. 178 00:26:28.760 --> 00:26:33.760 But because he doesn't, he killed him right away. 179 00:26:33.760 --> 00:26:37.760 And I can see him looking at a menu of poisons in Gramian 180 00:26:37.760 --> 00:26:40.760 and picking up the most exorbitant and the most expensive one. 181 00:26:40.760 --> 00:26:46.760 It's about $100,000 worth, the necessary amount to kill a person. 182 00:26:46.760 --> 00:27:15.760 $100,000 worth, it's very extremely expensive, only governments can have it up, it's kind of, again, I'm not for immediate human right to own Polonium 21, but still that's, and I can see why, I mean, because, can you imagine, he wrote a book about Putin, how Putin was blowing up Mother Russia, I think the title of the book is, and that was, that was just 250 pages solicitation for a point, 183 00:27:15.760 --> 00:27:33.760 So, Poisons from Kremlin, and because also he lived in Norwich, London, a nice house, driving green, racing green Jaguar, I'm quoting Putin, not anybody else, 184 00:27:33.760 --> 00:28:02.760 So turning back to economics. What is the success and what is the failure? It's economic freedom, it's economic freedom. That's what Austrian economics is teaching us. 185 00:28:02.760 --> 00:28:10.760 Public choice is very close to the same understanding of the role of government in the economy. 186 00:28:10.760 --> 00:28:18.760 And my good friend, Jim Wartley, he compiles every year, every year. 187 00:28:18.760 --> 00:28:27.760 He was with the Institute here in Canada, in Vancouver, and he is making up this map, 188 00:28:27.760 --> 00:28:37.760 Which is telling us what countries are free, what countries are mostly free, and what countries are repressed. 189 00:28:37.760 --> 00:28:44.760 So you can see that we are, some mistakes are depicted in blue, that means free. 190 00:28:44.760 --> 00:28:52.760 Free Canada is depicted mostly free, it's a matter of taste I think. 191 00:28:52.760 --> 00:29:03.760 Then I have countries which are unfree, unfree, that's yellow, and which are repressed, and that would be in red, that would be in red. 192 00:29:03.760 --> 00:29:15.760 So that's China is unfree. Yeah, I think it's unfree. 193 00:29:15.760 --> 00:29:22.760 And nobody knows about this one, so that they are on the white list. 194 00:29:22.760 --> 00:29:29.880 So that's, you can see that when they have criteria, what is that, property rights, taxes, 195 00:29:29.880 --> 00:29:35.480 the share of government and GDP, not a very important indicators, important indicators. 196 00:29:35.480 --> 00:29:41.440 And what's amazing is, is a very strong correlation between economic freedom and income, and income. 197 00:29:41.440 --> 00:29:51.440 If you look at the three countries, they have the highest income. This is 2002. Now it's even more explicit, this correlation is. 198 00:29:51.440 --> 00:30:00.440 So mostly free, we already have almost 50% of the income of the three countries, and mostly I'm free. 199 00:30:00.440 --> 00:30:08.440 Why the press are doing so well in comparison with mostly I'm free? Because most of them are oil producing countries. 200 00:30:08.440 --> 00:30:20.440 So it's something which is called purest of natural resources or paradox of plenty, paradox of plenty, when the countries which are endowed by natural resources are doing worse than others. 201 00:30:20.440 --> 00:30:26.440 And people couldn't however explain why say Canada is doing relatively alright or United States or Australia. 202 00:30:26.440 --> 00:30:36.440 And the answer is flying in the air because of property rights, because it's not Canadian government which owns natural resources in Canada, 203 00:30:36.440 --> 00:30:46.440 It's not U.S. government which owns, but it's Russian government which owns natural resources in Russia, Brazilian government, or Venezuelan, or Nigerian. 204 00:30:46.440 --> 00:30:58.440 So you can see that countries, because what paradox of plenty is, that countries with a lot of natural resources are doing much less successfully economically. 205 00:30:58.440 --> 00:31:22.440 In most cases, the poorest countries in the world, if you look at countries like Angola, Nigeria, or many Middle Eastern countries, or Central Asian countries, or Russia itself, you will see that GDP per capita is very low, much lower than in countries with no natural resources, but with economic freedom. 206 00:31:52.440 --> 00:32:00.440 You can compare these ways, and you can compare who achieved what, and you would see such a disparity. 207 00:32:00.440 --> 00:32:06.440 Under colonialism, I would say, it's very difficult to say what was real GDP at that time. 208 00:32:06.440 --> 00:32:11.440 Because I didn't have anything else to do while working, so called, for Kremlin. 209 00:32:11.440 --> 00:32:14.440 I was recalculating GDP. 210 00:32:14.440 --> 00:32:21.160 which was a which I came to some some results which proved to be sensational when I defected 211 00:32:21.160 --> 00:32:27.000 to the United States because on the way I beefed by all intelligence services of the world and my 212 00:32:27.000 --> 00:32:34.200 point was that that Soviet GDP is between three and four percent of the US GDP that's what my 213 00:32:34.200 --> 00:32:42.960 numbers were and and so then and then when I already was lived in Washington DC I was called 214 00:32:42.960 --> 00:32:51.960 I got a call from Pentagon, and at that time Dick Cheney was not Vice President, but he was Secretary of Defense, if you remember, and Bush Senior. 215 00:32:51.960 --> 00:32:58.960 And I got a call from his office that if possible that the Secretary would like to meet with me. 216 00:32:58.960 --> 00:33:09.960 And I was very surprised, so I arrived at Pentagon, and Mr. Cheney, he said, well, he had kind of a folder, probably my folder or whatever, 217 00:33:09.960 --> 00:33:27.320 I said, yes, Mr. Secretary, it is in between three and four. 218 00:33:27.320 --> 00:33:39.760 And I'm probably the only person in the world, maybe besides his wife, who likes Dick Cheney, 219 00:33:39.760 --> 00:33:54.520 because he said, sweet. His response was, sweet. Well, otherwise I don't like him, actually. 220 00:33:54.520 --> 00:33:59.520 But what I am saying is that nobody knew what the real GDP is, what the real numbers are. 221 00:33:59.520 --> 00:34:04.520 And some people were making some intelligent guesses about this. 222 00:34:04.520 --> 00:34:09.520 And that was impossible, because the CIA believed that the Soviets knew the true number, 223 00:34:09.520 --> 00:34:14.520 but then they multiplied it on some secret quotient, and then we should send a James Bond assignment 224 00:34:14.520 --> 00:34:20.520 and find out what this quotient is divided and have great statistics at hand. 225 00:34:20.520 --> 00:34:35.320 This statistics was, my first job was with the Department of Labor of Soviet Union, and my boss, I remember, that was first, he was kind of teaching me life, he was secretary of labor, and he would say, 226 00:34:35.320 --> 00:34:49.720 well, if you don't have primary statistics, you cannot have a result in statistics, that if you don't have primary reporting, I mean, if you don't care to ask how many, wherever people are working, 227 00:34:49.720 --> 00:34:53.560 in this field, or that field, or that enterprise. 228 00:34:53.560 --> 00:35:01.720 Then, definitely, he said the relevance of the sum of the unknown is relevant. 229 00:35:01.720 --> 00:35:06.200 But you can get it easy. He said, just stare at the ceiling, 230 00:35:06.200 --> 00:35:08.920 and then if you stare long enough, you see numbers. 231 00:35:08.920 --> 00:35:14.120 You just take them down, go to your boss, and he'll correct them. 232 00:35:14.120 --> 00:35:16.280 That's how statistics is made. 233 00:35:16.280 --> 00:35:26.280 And I remember I was, because I'm taking students to Cuba all the time, almost every year. 234 00:35:26.280 --> 00:35:33.280 I was taking until recently. Now we have this imbecile government we have in Washington. 235 00:35:33.280 --> 00:35:39.280 They decided that people are abused short-term. You know that American citizens cannot go to Cuba. 236 00:35:39.280 --> 00:35:54.280 in Cuba. There is another restraint on our liberty to do things. So, we cannot go to Cuba. However, you can get a license, if you wish, to go there for educational purposes. If you want to study communism, then you can go to Cuba. 237 00:35:54.280 --> 00:36:03.280 To get this license, she would give a call and the lady said, I will fax it to you, just spell your name correctly. 238 00:36:03.280 --> 00:36:16.280 And so I got this license and I got my students. And many of these students are children of the 1960s guys. 239 00:36:16.280 --> 00:36:45.280 and many of them are being sent by their parents to Cuba, just like pilgrims, right, to kiss the land and to bring pictures of Fidel, and what not, and I met with some of them and they said, well, the reason is that Cuba is doing better than anybody else, it's very low infant mortality rate, very low infant mortality rate. 240 00:36:45.280 --> 00:36:56.640 Clinton's economic advisor, Bora Tyson, came up with a book praising Cuban Communism, saying 241 00:36:56.640 --> 00:37:01.600 that they achieved the lowest intermetallic rate. That book was published in 1986, and 242 00:37:01.600 --> 00:37:09.040 I read it in Moscow as part of my duties to read all the coming from the West. So I was 243 00:37:09.040 --> 00:37:15.840 I was surprised by that, and I asked a Cuban I knew, who was representative of Cuba in Comicon, 244 00:37:15.840 --> 00:37:21.040 that was Council of Mutual Economic Assistance, Council for Mutual Economic Destruction. 245 00:37:21.040 --> 00:37:30.040 And I said to him, Carlos, how do you make up statistics about infant mortality? 246 00:37:30.040 --> 00:37:33.040 And he said, we never make up anything. 247 00:37:33.040 --> 00:37:37.040 I said, how do you fix that? 248 00:37:37.040 --> 00:38:07.040 I said, what do you mean, make? He said, well, it's a very simple device. They register children who are already at least six months old. Infect mortality is mortality of infants within the first year of the life. And most infants die within the first week of their life, who are doomed to die, right? So the departed are departed outside of statistics, and the others are factored in along with them. 249 00:38:07.040 --> 00:38:16.840 And now, however, in Cuba of today, I think that they gave up this as well, because everything 250 00:38:16.840 --> 00:38:22.120 has fallen apart to the point, I don't think it reached anybody for anything. 251 00:38:22.120 --> 00:38:26.320 It's such a sad place to be. 252 00:38:26.320 --> 00:38:35.720 Now the point is, the point is, of the people in Washington, that you can only go to Cuba 253 00:38:35.720 --> 00:38:45.720 for a longer time, because Colin Powell did a report on educational exchanges with Cuba of the U.S. citizens, 254 00:38:45.720 --> 00:38:52.720 and that many of them, instead of studying them, meaning socialism or whatever you can study there, 255 00:38:52.720 --> 00:39:01.720 that they, instead of that, they're swimming and snorkeling and scuba diving, even to the point that I thought I had an MPI agent with my group, 256 00:39:01.720 --> 00:39:10.280 And so, the idea now is that if you want to go to study at UBA, it should be at least 257 00:39:10.280 --> 00:39:13.480 semester long, semester long kind of stay. 258 00:39:13.480 --> 00:39:21.600 And I would say I would prefer maybe probably a Waterloo Regional Jail for a semester, the 259 00:39:21.600 --> 00:39:22.600 Island of Freedom. 260 00:39:22.600 --> 00:39:29.880 It's really, really, really, really sad, really sad what happened over there. 261 00:39:29.880 --> 00:39:36.560 So this is like an European perspective, you can see that some post-communist countries. 262 00:39:36.560 --> 00:39:43.000 So returning back to that 3 to 4%, I think that incomes of people were about $2,000 per 263 00:39:43.000 --> 00:39:47.960 year at the end of communists, about that time. 264 00:39:47.960 --> 00:39:56.520 I think that the Soviet economy, size-wise, was at that time a little bit smaller than 265 00:39:56.520 --> 00:40:01.600 on the economy of the state of Illinois and a little bit bigger than the state of Georgia. 266 00:40:01.600 --> 00:40:03.720 So kind of like in between. 267 00:40:03.720 --> 00:40:09.200 And that brings us the per capita income for about 2000. 268 00:40:09.200 --> 00:40:11.080 So it was more or less 2000. 269 00:40:11.080 --> 00:40:15.880 There were kind of regional discrepancies of plus minus 30 percent. 270 00:40:15.880 --> 00:40:20.360 For example, in Central Asia, people live poorer, say minus 30 percent. 271 00:40:20.360 --> 00:40:25.720 And kind of like Belarus, which was a stock performer under communism, they did much better 272 00:40:25.720 --> 00:40:32.600 and then in Central Asia or on the average, also about 25-30 percent. 273 00:40:32.600 --> 00:40:36.280 But now you can see there is a country like Estonia which is target former, they right 274 00:40:36.280 --> 00:40:42.200 now have GDP per capita $22,000, so it's almost like in England. 275 00:40:42.200 --> 00:40:50.400 Then you have all these countries, Lithuania, and Russia is number 143, I think it was over 276 00:40:50.400 --> 00:40:51.400 here, 131. 277 00:41:21.400 --> 00:41:29.400 He was a good poet. He wrote like seven volumes. That's why people elected him president. They thought he was a good poet, so they can't report him. 278 00:41:29.400 --> 00:41:38.400 Instead, he began to murder people. There was no tomorrow. And he came up with a lot of very extravagant kind of things. 279 00:41:38.400 --> 00:41:47.400 For example, he built a monument. His mother died. On this occasion, he built a gilded monument for his mother, 32 meters high, 280 00:41:47.400 --> 00:41:57.000 standing before the presidential palace, like this, and so every morning he goes there and waves her, and she is kind of standing right there. 281 00:41:57.000 --> 00:42:02.500 Then he was 62 recently, and he gave 100 dollars to everybody who is 62. 282 00:42:02.500 --> 00:42:12.400 It was very, very interesting, the distribution of income scheme, and I'm afraid they will learn about that in Washington, and... 283 00:42:12.400 --> 00:42:39.400 I would like to quote pioneer of Austrian School of Economics in Russia, Mr. Bogdanov, who I think probably was the only, they all the time say that Stalin and Lenin, they killed 61 million innocent people. 284 00:42:39.400 --> 00:42:44.200 Well, Bogdanov was one of them, but he was not innocent, because he said that, you can see. 285 00:42:44.200 --> 00:42:49.000 He said, government, whether communist or not, is above all, is a special form of social consumption, 286 00:42:49.000 --> 00:42:53.600 authoritarian regulatory organization of mass parasitism and destruction. 287 00:42:53.600 --> 00:42:57.200 It's a matter of degree rather than principle. 288 00:42:57.200 --> 00:43:02.400 Now, I think he was absolutely right about that, and especially if you will look, 289 00:43:02.400 --> 00:43:07.700 not on Belarus, but about Bolsheviks in Washington we have right now, 290 00:43:07.700 --> 00:43:20.700 Alan Greenspan was co-author of Ayn Rand. In 1966 they published a book together, Capitalism and the Unknown Ideal. 291 00:43:20.700 --> 00:43:25.700 In that book he had a wonderful chapter on gold standard and economic freedom. 292 00:43:25.700 --> 00:43:35.700 In that chapter he was saying that economic freedom is the basis for human freedom and gold standard is the basis for economic freedom. 293 00:43:35.700 --> 00:43:53.700 Freedom. And then, sure enough, now he is being treated like dirt, not because what he did as chief inflationist of the United States, not because he was a central planner, but because of what he wrote for Iran at that time, at that time. 294 00:43:53.700 --> 00:44:00.260 And that was kind of a funny episode. I even wrote about that on Ludwig von Mises' website. 295 00:44:00.260 --> 00:44:04.980 And I got a phone call at two o'clock in the morning from Moscow. 296 00:44:04.980 --> 00:44:10.900 There was a guy whom I know. He was former general of the Soviet army. 297 00:44:10.900 --> 00:44:15.380 And he was a general medical corps general. 298 00:44:15.380 --> 00:44:21.060 And they would all the time present him and all because he was the only Jewish general. 299 00:44:21.060 --> 00:44:30.060 And so he was everywhere, right? And they would remove his medical chevrons, so huge chevrons, the general. 300 00:44:30.060 --> 00:44:37.060 And so he quit when Soviet Union collapsed, and now he is a huge pharmaceutical kind of tycoon. 301 00:44:37.060 --> 00:44:42.060 And he called me, he forgot about time difference between US and Russia. 302 00:44:42.060 --> 00:44:49.060 I think he was just drunk or eating his pharmaceuticals or whatever. 303 00:44:49.060 --> 00:44:59.060 So he called me and he said, I see two Jews are being filmed in the United States. One is interrogating another. 304 00:44:59.060 --> 00:45:05.060 And he said, what's the name of them? He said, Greenspan is one. The other one I don't remember. 305 00:45:05.060 --> 00:45:12.060 The other one is Wachsman. Wachsman was the chairman of the Congressional Oversight Committee on Government. 306 00:45:12.060 --> 00:45:22.060 And Mooksman was attacking Greenspan for his free market background. 307 00:45:22.060 --> 00:45:32.060 He was saying that all the power conflicted in the United States economy is the product of the free market ideas implanted into his head. 308 00:45:32.060 --> 00:45:56.060 Can you imagine that? And, sure enough, Greenspan, he was just, I have a good friend, his name is Andrew Napolitano, Judge Napolitano, if you know him, yeah, if you don't, buy his book, his great book, The Nation of Sheep, The Nation of Sheep, yeah, he called my compatriots sheepo, sheepo. 309 00:45:56.060 --> 00:46:15.060 And so, in the most beautiful sheepish tradition, Mr. Greenspan said, yes, I was wrong, complete and everything, yeah, it's about time for me, he said, to reconsider my world, my lifelong beliefs, yeah, so he's 82, so it's about time to reconsider. 310 00:46:15.060 --> 00:46:31.060 And so his point was that the free market didn't work, and my ideological insanity led to all this crisis, which was kind of shivering, and so forth. 311 00:46:31.060 --> 00:46:44.060 And he is there, and Mr. Greenspan, he was the one who would usually come on the Capitol Hill like he's our own consul. 312 00:46:44.060 --> 00:46:51.260 He would, everybody would just stand up immediately. They were praising Volker. Volker was packing 313 00:46:51.260 --> 00:46:58.140 these awful cigars on everybody. And this one, however, he looked very academic and everybody 314 00:46:58.140 --> 00:47:05.340 just loved him enormously. And another central planner and regulator, Mark Hayne, I put it 315 00:47:05.340 --> 00:47:12.980 down just because otherwise people would think I'm making it up. Because Mark Hayne said 316 00:47:12.980 --> 00:47:22.980 If he would be president, then he would appoint Greenspan, even if he's dead, to be chairman of some committee on taxes, yes, on tax code. 317 00:47:22.980 --> 00:47:26.980 And so he is alive, doesn't matter at all, can you imagine? 318 00:47:26.980 --> 00:47:32.980 If he's dead, just prop him up, put some dark glass on him, and like we can read, there he is. 319 00:47:32.980 --> 00:47:34.980 That's another sales pitch. 320 00:47:34.980 --> 00:47:57.980 Even Khrushchev, you remember that fat joker we had in Soviet Union, even he never thought of giving post-mortem appointments to Lenin or Stalin, at least that guys were well-preserved in the mausoleums. 321 00:48:04.980 --> 00:48:12.060 And this one, we can skip this. Yeah, well, I mean that Keynes is also, can you imagine that even Keynes understood that? 322 00:48:12.060 --> 00:48:18.420 Even Keynes understood that. However, there's the same Keynes which wrote this. 323 00:48:18.420 --> 00:48:31.300 Well, the only course open to me is to be by knowing Bolshevik. And as I lie in bed in the morning, I reflect with a good deal of satisfaction that because our rulers are so incompetent as they are mad and wicked, 324 00:48:31.300 --> 00:48:36.300 Our particular era of particular kind of civilization is very nearly over. 325 00:48:36.300 --> 00:48:44.300 So, that's Mr. Keynes, that's, that was, that was added for, against past positions. 326 00:48:44.300 --> 00:48:52.300 And sure enough, that's a disciple of Keynes, who won the Nobel Prize in Economic Science. 327 00:48:52.300 --> 00:48:57.300 Yes. So, Mr. Krugman, Paul Krugman, Paul Krugman, yeah. 328 00:48:57.300 --> 00:49:00.300 He looks like a member of the Bolshevik government. 329 00:49:00.300 --> 00:49:03.300 Well, maybe he deserves it. 330 00:49:03.300 --> 00:49:08.300 I mean, if Elgor got one, or Yasser Arafat, then he should get one. 331 00:49:08.300 --> 00:49:22.300 Well, on this cheerful note, I would be happy to discuss whatever questions you have or comments. 332 00:49:22.300 --> 00:49:24.300 Thank you very much.