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NOTE Introduction to Libertarianism II

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Welcome to the second session of Introduction to Libertarianism, where I go over Defending the Undefendable.

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Could we please start with a moment of silence, as is our usual practice?

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Okay, before I get into it, I thought I'd do some housekeeping notes and points and stuff like that.

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First of all, anything about anything.

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Well, it has to do with libertarianism or economics, but it doesn't have to be on the same subject,

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like if I give a talk on the minimum wage and you want to ask about intellectual property, that's fine.

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Anything goes.

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Secondly, I greatly apologize for calling Chad Parrish a sissy.

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I have to realize that the man behind the camera can make me look good or bad.

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So, Chad, you the man.

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I'm very grateful to John Sophocles for giving me a quote from James Buchanan on the Card-Kruger business.

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It is printed not in the American Economic Review, which is the top journal,

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but the Australian Economic Review, which is not up there.

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But in any case, and this comes from the New York Times, no, sorry, the Wall Street Journal.

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And the quote is, quote, just as no self-respecting physicist would claim that water runs uphill,

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no self-respecting economist would claim that increases age, increase employment.

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Such a claim, if seriously advanced, becomes equivalent to a denial that there is even minimum scientific content in economics

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and that, in consequence, economists can do nothing but write as advocates for ideological interests.

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Fortunately, only a handful of economists are willing to throw over the teaching of two centuries.

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We have not yet become a bevy of camp-following whores."

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Well, you know, I've criticized Buchanan, but I tell you, heed a man here.

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That is utterly and totally magnificent.

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No belt ties here.

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Yes, this is hot stuff.

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It's interesting that Clinton, President Clinton,

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when he was president, cited Cardin Kruger's proof

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that we should raise the minimum wage law, which probably

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got all right-thinking economists even more on edge.

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And by right-thinking economists,

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I'm not just limiting to Austrians.

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Well, no, I guess I am limiting to Austrians.

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But I'm now including Becker, and Welch, and Hammer, Nash, and all those other guys as Austrians, because they really came out with fire in their eye about this.

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There's an interesting story behind the Australian or the American Economic Review.

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And there's a magnificent article by Dan Klein and a guy named Chang, I forget his first name, in Dan Klein's new journal,

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where he makes the point that the reason that Harvard and Yale are such great places

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and their econ departments are so great is because they publish in the JPE and the AER.

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And the reason the AER and the JPE are so great is because people from Princeton, Yale and Harvard publish in them.

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And it's sort of incestuous kind of a relationship.

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It's the point, a well-known point that the American Economic Association was started by a bunch of German socialists in 1898 or so.

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and they haven't changed their spots too much.

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Okay, so that's one bit of housekeeping that I wanted to get through.

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The other bit of housekeeping I want to get through is Dan McCarthy raised the magnificent point about blackmail.

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Later on, he said, you know, he hoped that it didn't come across as hostile or anything.

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And, you know, I assured him it didn't.

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And even if it did, it's okay.

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Because what we're involved in here is to try to get at the truth.

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And the only way to get at the truth is to have at me.

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And I won't be hurt.

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You know, I've made mistakes before, and I will again.

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And I want to hear it from you so that I can improve.

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And together, we will have more knowledge than individuals alone,

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as shown by cooperation and all.

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In any case, if I understand Dan's criticism, it is, if I can put words in his mouth,

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Well, you know, this blackmail stuff that you gave us is all as part of libertarian theory.

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However, it will actually increase the murder rate.

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Because if blackmail is illegal and people don't blackmail or fewer people blackmail,

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then if you see a murderer doing his to the forces of law and order,

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whereas if blackmail is legal and you're more likely to engage in blackmail,

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you'll blackmail him and he'll get away with murder.

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Well, first of all, if he gets away with murder and he's under the thumb of a blackmailer,

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he's not really getting away with it, because while hands of a blackmailer are then in a gossip,

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but it's much better not to have your secret out in the first place,

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because the blackmailer can exert certain things on you that you don't want.

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You can almost into a veritable slave, depending upon the bargaining situation.

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Now, my answer to Dan this time yesterday was, well, rule versus act utilitarianism, it's true that in this case, maybe the act would increase the murder rate, but if we follow the rule of libertarianism, you know, have less murder.

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I should have had more answers and I have thought up of some in the interim. One of them is this business of the eyes on the street.

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Now, Jane Jacobs had a magnificent public housing.

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I'm seeming to get off the point, but I'll bring it back in a second.

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Death and life of great American cities.

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What she showed is that it's much more difficult to live in a public housing area

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than in the tenements that the public housing replaced,

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because the people who promulgately have this deep and abiding hatred

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Providing Hatred for All Matters commercial, and you'll notice that in no public housing project is there ever any stores at the first floor, whereas in the tenements in ordinary commerce, real estate, there are stores all over the place.

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What's so good about stores? What's so good about stores is that people go in and out of them, and they hang out in front of them.

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Little old ladies on the fifth or tenth or fifteenth floor look down, they have the eyes on the street, and they're ready to gossip, oh, it's with that girl, it shouldn't be, and I'm going to tell this one.

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and, you know, they're sort of the gossip people.

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So when you have a lot of eyes on the street,

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criminals being shy individuals who don't like to do their business

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in the glare of publicity, don't commit crimes there,

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whereas in public housing they do.

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Okay, well, what has this got to do with blackmail?

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Well, there'll be more eyes on the street looking out for murderers.

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If blackmail is legal, a lot more people will engage in blackmail

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And they'll look for murderers to pounce on them, which will reduce empirical claim.

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In other words, I'm not denying that Dan's point is correct. I'm just saying here's another point.

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And here's a third point. The third point is that right now, there's a equilibrium, if you will, or a choice, criminal behavior to do it individually or to do it in a group.

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Each has its advantages.

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The advantage of the group is the specialization division of labor,

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which works for criminal behavior as well as anything else.

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You know, one guy is the dynamite man.

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One guy is the best driver, and he could be the getaway driver.

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Another guy has got the best aim, so he could shoot best.

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And you have cooperation among criminal people.

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However, if blackmail is legal, people engage in more blackmail, et cetera,

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than they would otherwise.

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The advantage of labor and specialization and comparative advantage of criminal gang members atrophies because they can later blackmail each other.

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And if they blackmail each other, then the net profits from the enterprise are reduced and there'll be less cooperation.

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And if murder, as I suspect, like anything else, benefits from the division of labor, they'll now be less of a division of labor.

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So here are two empirical points, and it's an empirical issue.

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I don't swear that my two or three effects are stronger than his one effect.

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His one effect might outweigh all three of mine,

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but I'm trying to list all the effects, and if anyone can think of any others,

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it seems like a great paper in here somewhere that could be written.

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But mainly I'm concerned with libertarian theory.

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You know, I have in the back of my pocket or the back of my mind the idea that whatever is just according to libertarian theory will also be

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Utilitarian in the sense of reducing murder, but I can't prove empirical

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things, whereas the logic of liberty is more praxeological and you can deduce

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things and be sure of them in a way that you can't be sure of empirical things and

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I guess that's just the nature of the beast. Okay, I think I've now covered the

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housekeeping details that came up from the past and now I'm ready to get back

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I'm going to go back into Defending the Underpart 2, and the next character to take up with you is the guy who yells fire in a crowded theater, and I have a soft spot in my heart for him because, you know, he's great.

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The reason I was led to write this chapter

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was to combat what Oliver Wendell Holmes,

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a Supreme Court judge, said.

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He said, quote, free speech is not absolute.

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There are exceptions.

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You can't, I'm putting in falsely,

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yell fire in a crowded theater, unquote.

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Well, first of all, I'm not an absolutist on verbal utterances.

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There are certain verbal utterances

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that I think are illegitimate.

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For example, if you don't give me your money,

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I'll blow you up.

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Or if you don't give me money, I'll kidnap your kids.

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That's a threat.

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And there's no physical invasion there.

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I didn't do anything.

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I just spoke.

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I've got my hands behind my back.

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I'm not physically threatening anyone,

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but I now say that if you don't do this,

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I'll use violence against you.

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That itself would be illegal as I see it

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under a libertarian legal code.

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However, what he's got in mind here

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is not that at all, it's not making threats, it's, you know, this is the answering wedge and if free speech is not absolute then we have all sorts of truncations and limitations on free speech and before you know it there's very little free speech, like a recent one is this hate legislation, like if you say that Jews are sneaky or blacks are inferior or women are no good or whatever, you can be accused of a hate crime without even doing anything and in addition if you

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If you commit a crime, the punishment is higher if it's a racially motivated or a hate crime or anything like that.

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But all crime seems to be hateful and I don't see why they should punish you additionally for the thoughts in your head as opposed to your actions.

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This is different than motivations.

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The difference between an accident and a purposeful crime is an important one.

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So it's not just thoughts in your head, or there's a difference between thoughts in your head, motivation, and thoughts in your head, whether you hate. Hate is irrelevant, motivation is not.

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Okay, so in order to combat that, I asked myself, is there any place where you could yell, fire in a crowded theater, and everyone would see that this is reasonable?

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Well, not everyone, but these people of our ilk might see this as reasonable. And what I came up with was the SM Club, sadomasochistic club.

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Now, you sadomasochist out there, and don't deny it, I know who you are.

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What you get off on is whippings and stuff like that.

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But my kind of sadomasochism is we don't go for whippings and manglings or whatever.

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What we do is we yell fire and then we all crush in a delirious crowd, you know, togetherness.

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You see, they're laughing at me. We're misunderstood.

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If you haven't tried it, don't knock it.

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So why then in the ordinary theater don't we have rushes at the exit?

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The reason is it's a violation of property rights or implicit contract.

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When the movie theater sells you a ticket, they're implicitly, and I think correctly, implicitly saying,

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you know, sit there and shut up and watch the movie and don't make a pest of yourself.

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And if there's no fire, don't be yelling fire.

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So the reason we don't want to have people yelling far in a crowded theater is not because free speech isn't absolute, it's rather because it's a violation of property rights.

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Look, you have a right to say 2 plus 2 is 4 and to recite the sonnets of Shakespeare, but not in my house at 3 in the morning if I don't want you there.

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And if Dan breaks into my house as he wants to do and starts reciting stuff at 3 in the morning in the living room,

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And if I kick him out, it's not that I violated his free speech rights, it's that he's violating my property rights.

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So free speech rights are part and parcel of property rights, as are most things.

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Yeah.

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Today's situation arises where you're not on a specific someone's land or anything,

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just two people talking, one person says to the other,

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Some third party, who I'm not in control of, is going to kill you unless you put money at his plate.

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How does that interact with the libertarian?

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Well, for a libertarian, it's really hard to analyze the question when you say,

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well, they're not standing on any property.

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What I'm saying is that they're not.

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Because everyone in the libertarian society, all property is privately owned,

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and a lot of the analytic framework of the libertarian is,

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Well, whoever's property is can decide within certain limits what can be said.

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Now, putting that aside for the moment, if you just report that, you know, Mr. C said that unless you put money here,

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I don't know, it sort of begs or based on the interpretation, is it a threat? Is it a veiled threat?

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You'd have to know the context. This is a tough one, maybe a gray area.

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But the way that the libertarian analyzes questions is,

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aha, it has to occur on someone's property, whose property is it?

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For example, Rothbard, when he analyzes the lifeboat situation,

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the first question is, who owns the lifeboat?

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Which sort of cuts to the chase, whereas the way Rand does it,

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the lifeboat is sort of, well, you just can't say.

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It's an emergency situation, so all bets are off.

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And I take the Rothbardian line on this.

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Let me talk a little bit about, since we're talking about sadomasochistic theater,

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let me talk about another institution, another favorite institution of mine, which I call Murder Park.

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Now, Murder Park is a stadium with walls 20 feet thick, and when you come into the park, you pay your $100 or whatever it is,

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and you're given a pistol with six bullets, and you're told you can shoot anyone else in the park,

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Park, because everyone is there on the same basis.

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But there are rules.

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There are rules everywhere.

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Every 50 minutes, a bell rings, and they

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cart out the dead bodies, and they give new ammunition.

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And you're not allowed to shoot them because the employees go

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and do this.

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And then you have at it again.

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Now, would such a thing be legitimate?

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Well, yeah, because you're not invading any innocent people.

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Everyone who is there is there with the understanding

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that you can be killed.

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I really shouldn't call it murder park.

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There's no murders take place in it.

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Justified killings, right?

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Because everyone is there based on agreement.

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And the murder park or killing park or death park

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is a good analytic tool to see how far libertarianism

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can go in various directions.

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And I'll be making more use of this as the week goes on.

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Another point about free speech is the Nazi march in Skokie, Skokie, Illinois, I think it is, where there are a lot of elderly Jewish people who weren't too happy with the Nazis marching around.

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The problem there, to get back to the point that Prem made, is that it was on a public street.

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And for public streets, the analytic framework of the libertarian, it's hard to employ.

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Well, you know, the Nazis, they're just marching. They're not using violence.

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They're just doing their goose step. You'll remember my attempt to convert these young Nazis, which didn't work, but what the heck.

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The problem was that it was a public street. If it was a private street, then the owner would determine it.

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And maybe the people would boycott him or something if they didn't like his decision.

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But the reason we have debates and squabbles over free speech is because of the lack of private property.

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Another example is leafletting in a mall, you know, a shopping mall.

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Somebody there leafletting, come to the Mises Institute or come to the Catholic Church or whatever it is, it doesn't matter.

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Well, should they be allowed to?

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And the courts have said, yes, free speech rights, you know, you should be able to leaflet.

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You can't leaflet in my house without my permission.

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The shopping mall is private property.

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Now, what they say is that it's open to the public,

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but it's not really open to the public.

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It's only open to the public that they want there.

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And if they don't want leafletters,

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then they shouldn't have to have leafletters.

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And if they don't want women or men or blacks or Jews

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or bald people or hairy people or whatever it is,

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They should be able to prohibit anyone from entering there, because we have part and parcel of the libertarian laws, the freedom of association.

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You should only associate with people that you want to.

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And don't worry about people who are discriminated against, because when they're discriminated against, other people will make profits by serving them.

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In my own case I happen to be Jewish and you know there used to be signs no dogs or Jews allowed here and the answer is well we're not welcome there we don't have to go there someone else will set up a place where we can go whether they're Jewish or not it doesn't matter because we'll be willing to pay more now because we can't we don't have much choice so you can make more money and the guys who service the minority group can make extra profit and drive out the discriminators so the economics of discrimination

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Discrimination is such that he who discriminates is likely to lose money.

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John?

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Okay, the next one is the dishonest cop.

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And this only applies in the cases of unjust law.

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And it also applies in North Korea and Cuba.

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And it doesn't apply in the US or Canada or any country that I'm likely to visit.

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And it applies if the law is unjust.

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Take the Nazi concentration camp guard or the vice squad member who is penalizing people

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for sexual acts against adults, pornography or prostitution.

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There are four things that can happen.

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The first one is an outright violation of the law, let the victimless criminal go.

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The cop should turn a blind eye on it.

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There's a friend of mine, a lawyer in Phoenix, he was offered a judgeship.

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And it was a problem for him, because he knew that he would have drug cases and sex cases, and he's a staunch libertarian.

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And so what should he do? Should he take the job and then what? Let all victimless criminals go?

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Well, that's one possibility. Of course, he'd be fired pretty quickly.

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Another one is take the job and let half the victimless criminals go and put the other criminals in jail on the ground that better him than anyone else who's putting them all in jail.

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These are problems, real life problems that real life individuals have to face because of their philosophy.

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Or should he write a letter saying, I'll take the judgeship, but just give me rape cases or contract cases, don't give me any victimless crime cases.

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That's what he decided to do.

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And the judge said thanks, but no thanks.

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So he didn't have that problem.

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are real-life problems that people have who have our philosophy.

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Okay, so the best thing to do is to let the criminal go.

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He isn't, of any libertarian, even though he's guilty of a crime on the books, the crime on the books is wrong.

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So let the drew out of the concentration camp.

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Let the pornographer go free.

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Let the drug dealer go free. They are not guilty of a crime.

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And the libertarian law is above man-made law.

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Second best is to accept a bribe to free the person.

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Better to let him go with a bribe than to put him in jail.

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Because if he bribes, then he values his freedom more than the cost of the bribe,

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so there's mutual benefit.

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Third is to demand a bribe, namely extortion,

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because you're now demanding payment for something you have no right to do,

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because the only right you have is to let him go.

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But better to extort a bribe and let him go

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And the worst thing is to uphold the law, namely put him in jail.

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That's my analysis of the dishonest cop.

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While I'm on the subject of dishonest cops, I'd like to broach the subject of the proper relationship of the libertarian and the state.

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It's an interesting question that's sort of peripheral, but not unrelated to this issue.

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How should we deal with the state?

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Should we be pure and not use the government roads?

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How did you people get here? Did you use the government roads?

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Well, are you not libertarians?

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I don't think so.

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I think that we have a right to use the roads.

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Not because we paid for them, or rather not just because we paid for them,

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because if I came down from Mars, and I never paid taxes before this,

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and I wanted to use the government road, I don't think I'd be guilty of stealing.

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My source for this is my man, Ragnar Danishkold, from Atlas Shrugged.

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Remember what good old Ragnar did?

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He would, I was going to say steal, but you can't steal from a thief.

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He would liberate or take government that is illegitimate government,

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not like the U.S. or Canada or any other country I'm going to visit.

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But, you know, illegitimate, we're always assuming illegitimate governments

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because a legitimate government like the U.S. or Canada or any other place I could visit,

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This doesn't apply. Don't ask why not.

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So the point is, certainly the fact that you and your parents have paid taxes for this justify you doing it,

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but even if they didn't, even if you just came from Mars or from Antarctica or somewhere,

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you could still use government roads because they stole it.

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And stolen property is not legitimate property. You can't steal from a thief.

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You can only steal from the rightful owner.

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What about some libertarians, what they do is every time they see a cop, they go,

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and they call him a pig.

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And they refuse to pay their income taxes.

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Well, you know, part of me understands this.

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I think only a libertarian could understand that.

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But I think it's very foolish.

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They've got more guns, they're bigger and stronger.

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Our comparative advantage is not bearding them in their den, not going like this, haha, you're the state, you're evil.

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Rather, it is changing the direction in which the sword is pointed or in which way the gun is pointed.

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Because we're intellectuals here, we're making an intellectual case against the state.

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We're writing, we're speaking, we're writing letters to the editor, we're writing articles, we're writing books, we're making speeches.

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Which is, we're trying to convince the hearts and minds of the people about the libertarian code.

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It's very foolish to engage in stuff which can't work.

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Even though I suppose we can appreciate it as few others can, but I think it's very unwise to engage in things like that.

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Let me talk a little bit about the libertarian Nuremberg trials.

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That is, one of these days we're going to win, and we might have trials for people who are guilty of things, like, say, perpetrating the minimum wage.

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Now look, if I told you that a private individual acted in such a way as to unemployed vast numbers of young people and lead them to lives of crime and then they were real victims, wouldn't you think he's guilty of something?

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of something? I would. I got into a big debate in the web, the Hayek list. I said,

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well, you know, I was giving an example of how out of step I was with my

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colleagues at the time I got my PhD. I remember one of my professors there

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saying, talking about the minimum wage, and then I said, well, you know, we should

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get rid of the minimum wage. They said, no, no, no, no, wage and let, keep it flat and

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let the inflation reduce the real value of it, because the real value of the

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The minimum wage is the minimum wage divided by a price index, and as the price index rises, the fraction falls.

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And I said, the hell with that.

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Not only should we get rid of it and sow salt where once it stood, but we should put the people in jail.

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The guy looked at me as if I, you know, a viper in my bosom, you know, where did this guy come from?

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Sort of how out of step I was from my professors.

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Well, I think there's a case here

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for a libertarian Nuremberg trial.

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Now, of course, any Nuremberg-type trial,

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you have to first deal with ex post facto law.

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Ex post facto means declaring stuff illegal

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that was legal yesterday.

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And there's a song about a blue tie.

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Suppose they pass the law saying,

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anyone who ever wore a blue tie goes to jail.

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Even though I'm not wearing one tomorrow,

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I can go to jail for today's activity.

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So ex post facto law has a bad press, properly so, because it's used by tyrants, but it can also be used by libertarians, as it was by the Nuremberg trial against the Nazis.

334
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The Nazi defense was perfectly legal, not only legal, it was a virtue to put Jews in jail and gypsies and homosexuals because they're vermin, and we have to free the populace from vermin, so what are you getting on our case for?

335
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And what the U.S. Nuremberg people said, and I think properly so, is that there's a higher law than Nazi law, and the higher law says you don't do that because human beings, they're not vermin.

336
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It's just an empirical dispute. And I say similarly that there's a higher law than the present law in North Korea, Cuba, and just like that.

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And when and if we win, we will have a trial. We don't have to have a trial. We could have a truth and justice.

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Justice and what do they do in South Africa? Truth and Reconciliation. We don't have to have a Nuremberg Trump but we'd be justified in having it and whether we have it or not might depend upon empirical issues like if we had it the whole thing would blow up and we'd be back to tyranny or we'd all die in a bomb attack or something. Maybe we shouldn't have it, I'm not saying we should, but I'm saying if we did, how would it work? Because I think it also sheds light on a whole host of problems.

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Well, the way I see it, the way I see it is we have to make a chart. I'm big into charts.

340
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And we have the top with the leaders, and over here we have the bottom with the followers.

341
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So this would be the leaders. And over here we have things that are okay, would be done in a free society.

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In a free society, compatible with a free society, and over here we have things that are pure evil, and over here we have some sort of moderate kind of a thing, okay?

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So for example, okay in a free society would be things like libraries and museums and schools and roads, all of which would be done in a free society.

344
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So, let's put library and education, things like that, and the pure evil would be concentration camps, where there's murder and torture,

345
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and in the middle there'd be things like the Fed, and I don't know, what else would be quasi-evil, but not really as bad as a concentration camp, I don't know.

346
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Office, FDA, yeah, they're killing lots of people, but not directly.

347
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They're killing them either by allowing things like thalidomide or not allowing things that will save people's lives.

348
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So the FDA is a real good one.

349
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It's not really a concentration camp, but it's not a library either.

350
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Okay, so we have a box here, with lots of categories, and lots of people who are leaders or followers.

351
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And now, who do we put in jail? Well, I think we put in jail anyone, maybe a boy.

352
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In other words, the guy who's washing out the bathrooms in the concentration camp goes to jail.

353
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He doesn't get executed, but he goes to jail.

354
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The leaders of it all, you know, we get them good.

355
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The leaders of this stuff may be not be executed, serious penalties for them,

356
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and the followers go free, and the followers here,

357
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but even they have the museum or something, guilty of something.

358
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Well, now where's the minimum wage?

359
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I guess the minimum wage is somewhere in here.

360
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It's not really death, but some people do die as a result of it.

361
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So I would say that the top people in charge of the minimum wage,

362
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not the secretary in the labor department,

363
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but the chief or the second-in-command or something like that.

364
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So I'm not saying where I put the line,

365
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but I'm saying that the line slopes downward,

366
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sort of like a demand curve if you put it that way.

367
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Okay, enough on the discop and our relationship with the government.

368
00:32:23.500 --> 00:32:30.500
Let's talk about the litterer now.

369
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I have this cousin in law, I don't know what it is, cousin, my wife's cousin, a very sincere guy.

370
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And we were standing in the Chesapeake Bay,

371
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and he was telling me about how stupid and evil people drop trash into the water,

372
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especially like cans of coke, and this is bad because it hurts the fish.

373
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I couldn't help myself, I just flipped it over.

374
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Why did I do that?

375
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My life was a little tipped off. I probably shouldn't have done that.

376
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But what was I doing? What was I protesting?

377
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Well, what I was protesting really was that there's something a lot more harmful to fish than cans of coke that hurt them in some way.

378
00:33:25.500 --> 00:33:29.500
And what it is that's much more harmful to fish and to the survival of fish...

379
00:33:29.500 --> 00:33:32.500
Who's the young gal who's in environmentalism?

380
00:33:33.500 --> 00:33:34.500
Oh, there you are.

381
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What's much more harmful to them is the tragedy of the commons.

382
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And the tragedy of the commons leads to overfishing and possibly to the end of the species. Species extinct.

383
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What's with this tragedy of the commons?

384
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If I gave you each a can of ______ with a straw, and unbeknownst to you, in the straw was a monitoring device to rate how fast you're slurping it up.

385
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Probably it's an hour, hour and a half lecture, you know, you'd sip it slowly so you make it last at least till the break and then you can get another one.

386
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but now suppose I did it in a different way I gave a big bowl of coke in the

387
00:34:10.340 --> 00:34:13.420
middle of the room and everyone got a long straw and let's suppose we could

388
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abstract from the problems of germs you know sucking in each other's coke or

389
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whatever just put that to one side and again we put a monitor to see how fast

390
00:34:25.540 --> 00:34:30.100
you'd suck it up what would be the difference in the rate obviously here

391
00:34:30.100 --> 00:34:32.940
you'd be sucking it up faster because you're afraid someone else will get it

392
00:34:32.940 --> 00:34:50.940
The reason that the, well, I'm sort of getting into my environmental lecture, so I don't want to get into it too heavily now, but the tragedy of the commons is a much more dangerous thing for fish than some can of coke.

393
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How do you get rid of the can? How do you get rid of the can? How do you get rid of the tragedy of the commons?

394
00:34:54.940 --> 00:34:58.940
The way you get rid of the tragedy of the commons is by privatizing the ocean.

395
00:34:58.940 --> 00:35:08.940
Now, in most places where I say that, there's horror. How dare you, you know, the ocean should be the common heritage of all mankind, says the UN or something.

396
00:35:08.940 --> 00:35:13.940
But in this audience, I get away with anything, practically.

397
00:35:13.940 --> 00:35:22.940
Well, the only way that we're going to get rid of the tragedy of the commons is to privatize the ocean, and I was doing my bit of privatization. I was homesteading it.

398
00:35:22.940 --> 00:35:37.940
It wasn't much, you know, I think Nozick said if you pour, what is it, ketchup into the ocean, do you own, because the ketchup will then spread out, do you own the whole ocean, or just waste your ketchup or something, or some tomato juice.

399
00:35:37.940 --> 00:35:46.940
Well, maybe I was wasting my can of Coke, and maybe I'm not the owner of the Chesapeake Bay, but that was my protest. I was littering.

400
00:35:46.940 --> 00:35:58.940
Now, of course, I would never litter on US highways or anything like that, but if I were riding in a North Korean highway and I littered, well, I'm protesting public property.

401
00:35:58.940 --> 00:36:07.940
It shouldn't be a government highway. Government highways kill 40,000 people a year. Government highways are highly problematic.

402
00:36:07.940 --> 00:36:16.940
We should have private highways, and notice that littering only occurs on public property.

403
00:36:16.940 --> 00:36:27.940
You litter here, and at the end of the day, you know, there'll be some peanut shell or some cough drop, courtesy of me, cough drop wrapper.

404
00:36:27.940 --> 00:36:32.940
It's not litter. It's internalized.

405
00:36:32.940 --> 00:36:39.940
You know, there's that big football field when they have a game after the game and 50, 80,000 people leave.

406
00:36:39.940 --> 00:36:43.940
There's stuff there. But it's not called litter because it's private.

407
00:36:43.940 --> 00:36:49.940
You can only litter on public property. Well, we shouldn't have public property.

408
00:36:49.940 --> 00:36:54.940
That's the way to end litter. If you don't want litter, let's get rid of public property.

409
00:36:54.940 --> 00:37:00.940
As long as we've got public property, this is a protest against public property and it's a legitimate protest.

410
00:37:00.940 --> 00:37:16.940
Okay, it's one thing to litter a can of Coke or, I don't know, a cellophane wrapper, how about littering with, as unfortunately is now happening, only sometimes the bombs are attached when I'm not.

411
00:37:16.940 --> 00:37:26.940
I would say that there's a continuum, a gray area between what you can litter and obviously you shouldn't be littering bombs because now you're hurting innocent people.

412
00:37:26.940 --> 00:37:55.940
Okay, the pimp in, not in Las Vegas, but in every other county of Nevada beside Las Vegas, prostitution is legal, and they have pimps, and all of a sudden the pimps aren't legal, they're illegal.

413
00:37:55.940 --> 00:38:02.100
And all of a sudden the pimps aren't creating violence anymore than people who sell wine

414
00:38:02.100 --> 00:38:10.560
or beer or liquor nowadays are committing violence even though they were when alcohol was prohibited.

415
00:38:10.560 --> 00:38:16.340
The genesis of the evil pimp is the fact that prostitution is illegal.

416
00:38:16.340 --> 00:38:22.800
If it's legal as it is in Las Vegas, in Nevada outside of Las Vegas and in several European

417
00:38:22.800 --> 00:38:24.880
Cities, where they have red light districts.

418
00:38:24.880 --> 00:38:30.080
All of a sudden, the business is run in a rational way.

419
00:38:30.080 --> 00:38:32.320
No one's being beaten up.

420
00:38:32.320 --> 00:38:33.920
There are cleanliness tests.

421
00:38:33.920 --> 00:38:36.320
Not the FDA, but private people make sure

422
00:38:36.320 --> 00:38:38.720
that the girls or the boys, because you

423
00:38:38.720 --> 00:38:41.560
can have all sorts of combinations

424
00:38:41.560 --> 00:38:44.480
and permutations here.

425
00:38:44.480 --> 00:38:48.640
But the sex trees, as they say, are now clean and well cared

426
00:38:48.640 --> 00:38:52.080
for, and the madams or the pimps are just like movie star agents

427
00:38:52.080 --> 00:38:56.480
or both, you know, professional ball players have agent

428
00:38:56.480 --> 00:38:59.180
and if it was illegal they would beat them up probably

429
00:38:59.180 --> 00:39:03.680
but happily basketball and football and baseball are now legal activities

430
00:39:03.680 --> 00:39:06.280
so you don't have this, you don't have this problem

431
00:39:06.280 --> 00:39:10.380
but if we prohibited it, look, if we prohibited chocolate tomorrow

432
00:39:10.380 --> 00:39:11.880
there'd be wars on street corners

433
00:39:11.880 --> 00:39:13.380
so what do you mean there's a street corner?

434
00:39:13.380 --> 00:39:16.580
I'm eating chocolate here, you know, and I'll shoot you

435
00:39:16.580 --> 00:39:19.580
so it's got nothing to do with the specific thing

436
00:39:19.580 --> 00:39:36.580
I mean, chocolate is innocuous now, but wine is innocuous now, but when wine was prohibited, then we're killed over it, as they are now over drugs.

437
00:39:36.580 --> 00:39:50.660
The slumlord, usually in the inner cities, they're not ghettos, they're the inner cities, ghettos,

438
00:39:50.660 --> 00:39:54.500
the only ghettos that I know of are Jewish ghettos in Germany.

439
00:39:54.500 --> 00:39:58.700
A ghetto is a place where you're compelled to live and you can't live elsewhere.

440
00:39:58.700 --> 00:40:04.020
There are no ghettos in the United States, blacks or whoever you think is in the ghetto,

441
00:40:04.020 --> 00:40:06.820
It's legal for them to move out.

442
00:40:06.820 --> 00:40:10.660
They might not be able to afford it, but that's the definition.

443
00:40:10.660 --> 00:40:13.700
When they have parades in the inner city,

444
00:40:13.700 --> 00:40:16.500
the slum lord is usually, there's a picture of the slum lord

445
00:40:16.500 --> 00:40:19.780
and everyone throws a rock at him,

446
00:40:19.780 --> 00:40:21.500
because the slum lord's got rats

447
00:40:21.500 --> 00:40:27.580
and lower class surroundings and all.

448
00:40:27.580 --> 00:40:32.380
Let me ask, the people that are in those slums,

449
00:40:32.380 --> 00:40:35.340
Is the slumlord their benefactor or not?

450
00:40:35.340 --> 00:40:36.620
Obviously he's their benefactor

451
00:40:36.620 --> 00:40:39.820
because if they had a better option, they would take it.

452
00:40:39.820 --> 00:40:42.940
It's very similar to the Kathie Lee Gifford sweatshop

453
00:40:42.940 --> 00:40:46.580
where she's employing people and paying them low wages,

454
00:40:46.580 --> 00:40:48.380
but that's their best option.

455
00:40:48.380 --> 00:40:50.820
If you take that away from them, they have a worse option.

456
00:40:50.820 --> 00:40:54.020
If you take the slums away, they have a worse option.

457
00:40:54.020 --> 00:40:55.820
The slumlord is a benefactor.

458
00:40:57.940 --> 00:40:59.260
So what do they do?

459
00:40:59.260 --> 00:41:00.380
They have rent control

460
00:41:00.380 --> 00:41:02.380
Because we've got to control the slumlord.

461
00:41:02.380 --> 00:41:10.220
And the latest twist on this is what they do is the courts find the slumlord guilty of slumlording.

462
00:41:10.220 --> 00:41:11.940
And you know what the penalty is?

463
00:41:11.940 --> 00:41:16.140
Got to spend a month living in the slum, right in the middle of all the tenants.

464
00:41:16.140 --> 00:41:18.100
And he gets beaten up.

465
00:41:18.100 --> 00:41:28.980
Now, what do you think happens to the supply curve of housing when we institute this wondrous thing?

466
00:41:28.980 --> 00:41:31.040
Okay, so here's the supply curve of housing.

467
00:41:31.040 --> 00:41:32.560
There's the demand curve of housing.

468
00:41:32.560 --> 00:41:36.700
Here's rent and here's the quantity of housing.

469
00:41:36.700 --> 00:41:39.020
And now we institute this new plan

470
00:41:39.020 --> 00:41:42.420
that anyone who gets caught with substandard whatever

471
00:41:42.420 --> 00:41:43.860
has to live there for a month.

472
00:41:43.860 --> 00:41:46.240
Well, obviously the supply curve

473
00:41:46.240 --> 00:41:47.940
and the price of housing rises.

474
00:41:49.220 --> 00:41:50.220
So how is this hard?

475
00:41:51.880 --> 00:41:52.720
It's not.

476
00:41:54.380 --> 00:41:58.340
I go so far as to say, not that I advocate this,

477
00:41:58.340 --> 00:42:05.660
But if you really want to help the poor in their housing needs,

478
00:42:05.660 --> 00:42:10.940
what you should do is have price controls over everything else except housing.

479
00:42:10.940 --> 00:42:16.540
You see, if you had price controls over tables and wristwatches and ties and shirts,

480
00:42:16.540 --> 00:42:20.860
but not housing, money would leave all those other areas and push into housing,

481
00:42:20.860 --> 00:42:25.020
and the supply curve of housing would shift to the right, and housing would be cheaper.

482
00:42:25.020 --> 00:42:33.620
So bad is rent control that the very opposite of rent control, namely controlling everything else but rental housing, would be better for tenants.

483
00:42:33.620 --> 00:42:41.020
Now, obviously, I'm not advocating, but I'm just trying to say in a very dramatic way how bad it is.

484
00:42:41.020 --> 00:42:48.820
Because right now, suppose Aunt Tilly leaves you a million dollars and you can invest in any area you want.

485
00:42:48.820 --> 00:42:52.820
Well, the money will tend to go where the profits are the highest.

486
00:42:52.820 --> 00:43:07.220
And now I tell you, but there's one area that if you invest, the government will be after you with price controls and rent controls and inspections and you'll have to go to jail or live in these bad places.

487
00:43:07.220 --> 00:43:17.820
What you're really saying is you're putting a light or a stop sign or a yellow light or a red light in front of residential rental housing and you're saying, invest anywhere else, leave this area.

488
00:43:17.820 --> 00:43:23.320
Well, if you leave this area, the supply of it is less, and then the prices are higher.

489
00:43:23.320 --> 00:43:34.920
Economic ignorance is invincible, because people actually favor this stuff.

490
00:43:34.920 --> 00:43:39.020
There was a New York City case, what happened in New York City, which is sort of the...

491
00:43:39.020 --> 00:43:43.320
By the way, where do you have brain control nowadays? Which cities?

492
00:43:43.320 --> 00:43:52.120
People's Republic of Santa Monica, Ann Arbor, Cambridge Mass, although they just got rid of Massachusetts Spring Control, the whole state,

493
00:43:52.120 --> 00:43:56.420
but if you had had a referendum in Cambridge Mass, you know which way they would vote.

494
00:43:56.420 --> 00:44:03.020
Now, what do Cambridge Mass, Ann Arbor and Berkeley Santa Monica have in common?

495
00:44:03.020 --> 00:44:05.720
Big universities.

496
00:44:05.720 --> 00:44:12.920
And they have the audacity to say that higher education is an external economy,

497
00:44:12.920 --> 00:44:14.920
And we should subsidize it?

498
00:44:14.920 --> 00:44:18.840
No, it's a, what do you call it, an external diseconomy.

499
00:44:18.840 --> 00:44:20.520
It's a negative neighborhood effect.

500
00:44:20.520 --> 00:44:22.200
What we ought to do is tax this stuff.

501
00:44:22.200 --> 00:44:29.360
Because what they teach there is just the opposite of economics.

502
00:44:29.360 --> 00:44:31.440
Now it's true, most economics departments,

503
00:44:31.440 --> 00:44:34.040
with the exception of Cardin Kruger and, you know,

504
00:44:34.040 --> 00:44:38.360
Horsetown, places like them all, teach good economics.

505
00:44:38.360 --> 00:44:40.840
But, you know, what are they doing in the sociology departments

506
00:44:40.840 --> 00:44:48.840
in the Department of Feminist Studies, or Black Studies, or Queer Studies, or History, or any of these other fields, is that teaching rent control is great.

507
00:44:48.840 --> 00:44:56.400
And we've got to have not only a minimum wage, but a living wage of $10 an hour, and $5.50 or $6 is not enough.

508
00:44:56.400 --> 00:45:00.120
New York City is the champion of rent control.

509
00:45:00.120 --> 00:45:13.520
And what happened there was, do you know the rule or the law that is undergirding rent control in New York City?

510
00:45:13.520 --> 00:45:22.960
Anyone know when it came into effect? World War II, 1942, January 1942.

511
00:45:22.960 --> 00:45:29.000
The law of January 1942, under which the whole country was rent controlized,

512
00:45:29.000 --> 00:45:33.560
said that every two years you have to have a study to send you and it's called

513
00:45:33.560 --> 00:45:41.040
the wartime emergency law to prevent the homelessness and here it is 2005 and I

514
00:45:41.040 --> 00:45:45.080
once made a study every two years of these studies that purport to show that

515
00:45:45.080 --> 00:45:50.880
there's still a housing emergency from World War II which is over a year ago and there

516
00:45:50.880 --> 00:45:54.040
were no economists that do these studies. There are sociologists, political

517
00:45:54.040 --> 00:45:59.640
Science, somebody ought to do a review essay of all these studies.

518
00:45:59.640 --> 00:46:04.340
Really horrible stuff, you know, they're standing up on their hind legs and saying,

519
00:46:04.340 --> 00:46:08.940
yes, we need rent control because of the wartime emergency.

520
00:46:08.940 --> 00:46:13.240
So what happened was they noticed, you see, there are several levels of rent control.

521
00:46:13.240 --> 00:46:15.640
The pure rent control is rent control.

522
00:46:15.640 --> 00:46:18.440
That's it, no exceptions, rent control.

523
00:46:18.440 --> 00:46:23.140
But then they noticed something, after World War II,

524
00:46:23.140 --> 00:46:26.100
that no one was building residential rental units.

525
00:46:26.100 --> 00:46:27.020
Can't understand why.

526
00:46:27.020 --> 00:46:29.100
It probably has nothing to do with rent control.

527
00:46:29.100 --> 00:46:30.300
It's probably just a coincidence,

528
00:46:30.300 --> 00:46:32.740
but nobody was building residential units.

529
00:46:32.740 --> 00:46:34.540
They were building everything else under the sun,

530
00:46:34.540 --> 00:46:36.980
but not residential rental units.

531
00:46:36.980 --> 00:46:39.660
So they decided, okay, we'll have exception.

532
00:46:40.740 --> 00:46:42.780
New buildings are exempt from rent control.

533
00:46:44.020 --> 00:46:46.620
And if a tenant leaves, they decontrol,

534
00:46:46.620 --> 00:46:49.220
you can raise the rents from $22 a month

535
00:46:49.220 --> 00:46:50.520
up to the market level.

536
00:46:50.520 --> 00:46:56.520
Then, naturally, landlords became specialists in vacating tenants.

537
00:46:56.520 --> 00:47:01.520
See, ordinarily, the incentive of the landlord is to make the tenant comfortable,

538
00:47:01.520 --> 00:47:04.520
because, you know, you've got to pay the mortgage and you want to collect rent.

539
00:47:04.520 --> 00:47:10.520
But if the tenant is paying $22 a month for a $500 apartment, and there's vacancy decontrol,

540
00:47:10.520 --> 00:47:16.520
and the reason there's vacancy decontrol is to encourage, you know, so that they don't get rid of their housing,

541
00:47:16.520 --> 00:47:26.520
If there's an NCD control, then you get a different kind of landlord in there, one who is not into giving services, but into making it uncomfortable for tenants so that they'll leave.

542
00:47:26.520 --> 00:47:42.520
What happened there was that there was a housing crisis because of rent control, but the politicians in New York City didn't see it that way.

543
00:47:42.520 --> 00:47:48.520
And they decided to have public housing, about which I just spoke from Jane Jacobs.

544
00:47:48.520 --> 00:47:53.520
And the reason we had to have public housing is because the market has failed.

545
00:47:53.520 --> 00:47:55.520
That is the rent control model.

546
00:47:55.520 --> 00:48:02.520
And in order to get into the public housing, which was brand new, you had to be on a waiting list.

547
00:48:02.520 --> 00:48:05.520
However, if your house burned down, you got put on the top of the waiting list.

548
00:48:05.520 --> 00:48:12.200
Waiting List. And also what happened is that landlords had insured their

549
00:48:12.200 --> 00:48:17.200
buildings before rent control for a lot more than the buildings were worth after

550
00:48:17.200 --> 00:48:22.480
rent control. And if the buildings burned, get the pre-war value of the houses. So

551
00:48:22.480 --> 00:48:27.480
you'll never guess what happened. Burn baby burn. A lot of houses went up in

552
00:48:27.480 --> 00:48:33.320
smoke in the South Bronx. I once did a book on rent control and I was trying to

553
00:48:33.320 --> 00:48:40.320
I want to illustrate Assar Lindbeck, who is a socialist economist, one of the people in charge of picking Nobel Prize winners.

554
00:48:40.320 --> 00:48:48.320
And he said next to rent control, no, next to bombing, there was nothing as harmful to the city's housing as rent control.

555
00:48:48.320 --> 00:48:54.320
So what I did is I tried to get pictures of rent controlled out places in the South Bronx,

556
00:48:54.320 --> 00:49:00.320
and places from Hiroshima, Nagasaki and Dresden, which were firebombed.

557
00:49:00.320 --> 00:49:07.320
Now, naturally, I had to get rid of any picture that had a black person in there because I wanted to test the readers to see if you could tell the difference.

558
00:49:07.320 --> 00:49:10.320
And I had to get rid of any of those pagoda kind of things.

559
00:49:10.320 --> 00:49:13.320
And I have a confession.

560
00:49:13.320 --> 00:49:17.320
I had to get rid of the worst bombing cases because the worst bombing...

561
00:49:17.320 --> 00:49:21.320
See, each chapter had a picture and I wanted to see if people could tell the difference.

562
00:49:21.320 --> 00:49:26.320
And bombing really is worse than rent control because bombing, you know, in those cases, it was just nothing.

563
00:49:26.320 --> 00:49:30.320
There's no housing, whereas there's none like that quite in the Bronx.

564
00:49:30.320 --> 00:49:34.320
So, it's damaging of the bombing and the most damaging of the rent control.

565
00:49:34.320 --> 00:49:36.320
And I illustrated each chapter with a picture.

566
00:49:36.320 --> 00:49:39.320
And I had in the back, you know, a code where you could tell the difference.

567
00:49:39.320 --> 00:49:42.320
I couldn't tell the difference after a month or two.

568
00:49:42.320 --> 00:49:46.320
Rent control is really like bombing.

569
00:49:46.320 --> 00:49:50.320
Okay, so one exception was vacancy decontrol.

570
00:49:50.320 --> 00:49:52.320
Another exception was new housing.

571
00:49:52.320 --> 00:50:04.320
And what happened in New York City, the old rule was if you built at a certain time, you could build on 70% of your land.

572
00:50:04.320 --> 00:50:12.320
And then what they did is they changed it and they said, oh no, no, no, the new rule is you can only build on 40% of your land.

573
00:50:12.320 --> 00:50:27.320
But they gave you a grace period, like if you put in a foundation by a certain date, even if you didn't have the building built, you could build under the old 70% rule.

574
00:50:27.320 --> 00:50:31.320
So everyone and his uncle started putting in a foundation.

575
00:50:31.320 --> 00:50:38.320
And the supply curve of housing in New York City was phenomenal after two or three years when these high rises started to be built.

576
00:50:38.320 --> 00:50:48.320
And then what happened is they had a hard time getting tenants in them and they would promise, you know, six months free rent, a year's free rent if you see your lease or a three-year lease.

577
00:50:48.320 --> 00:50:54.320
And then what happened is there's no more building because now you're under the 40% rule.

578
00:50:54.320 --> 00:51:05.320
And four or five years or six years later after the buildings are built and the first three-year lease comes up and there's been no new build for almost a decade now.

579
00:51:05.320 --> 00:51:15.320
The rent rises were phenomenal, as you can imagine, and we couldn't allow this.

580
00:51:15.320 --> 00:51:20.320
So even though the New York City government promised that all new housing would be exempt from rent control,

581
00:51:20.320 --> 00:51:26.320
tenants were complaining that the new leases were three-fold.

582
00:51:26.320 --> 00:51:32.320
So they came up with this thing called rent stabilization instead of rent control.

583
00:51:32.320 --> 00:51:34.720
Now, don't ask me for the difference.

584
00:51:34.720 --> 00:51:36.120
Well, there is a difference.

585
00:51:36.120 --> 00:51:40.120
Rent stabilization applies to housing built after a certain number of years,

586
00:51:40.120 --> 00:51:42.620
and rent control applies to housing built before.

587
00:51:42.620 --> 00:51:45.920
It's sort of like the stuff with the new oil and the old oil and the middle-aged oil,

588
00:51:45.920 --> 00:51:47.720
and, you know, each oil has a different price,

589
00:51:47.720 --> 00:51:52.420
and it's very complex as to know how much oil prices can be.

590
00:51:52.420 --> 00:51:58.120
It sounds a little bit like the Soviet Union economy with all these regulations.

591
00:51:58.120 --> 00:52:02.640
So that's the rent control story.

592
00:52:02.640 --> 00:52:04.200
The slumlord is a hero.

593
00:52:04.200 --> 00:52:06.880
The slumlord is giving people what they want.

594
00:52:06.880 --> 00:52:12.000
He's giving them apartments at a low price.

595
00:52:12.000 --> 00:52:17.840
He's bettering their situation compared to what it would be had he not done it.

596
00:52:17.840 --> 00:52:21.760
Let me do one more before the break.

597
00:52:21.760 --> 00:52:27.040
And that's the ticket scalper.

598
00:52:27.040 --> 00:52:32.240
Why is the ticket scalper a hero? What's going on with ticket scalping?

599
00:52:32.240 --> 00:52:41.580
Well, the usual ticket scalping situation is you have a very fixed supply in the short run.

600
00:52:41.580 --> 00:52:47.840
This is a very short run kind of a thing because the stadium only holds 10,000 seats.

601
00:52:47.840 --> 00:52:50.940
That's the quantity of seats and here's the price.

602
00:52:50.940 --> 00:52:58.440
And ordinarily, you know, you have some sort of demand curve and the average ticket price is, oh, 20 bucks.

603
00:52:58.440 --> 00:53:14.100
But now comes, I don't know, the Beatles or Madonna or somebody comes along and the demand is very, very much higher for this special event.

604
00:53:14.100 --> 00:53:19.300
And the market price here would be 500 bucks.

605
00:53:23.700 --> 00:53:30.300
And at the $20 price, there would be, I don't know, 10 million people

606
00:53:33.200 --> 00:53:36.900
who would want to get in to see, you know, the second coming of Christ or whatever,

607
00:53:36.900 --> 00:53:39.900
you know, there's some important thing that everyone wants to see.

608
00:53:39.900 --> 00:53:47.900
So how do you ration the difference between 10 million people and 10,000 people, only 10,000 people can fit into the stadium?

609
00:53:47.900 --> 00:53:53.900
Well, one way to ration it is you raise the price to 500 bucks, and then all of a sudden supply equals demand.

610
00:53:53.900 --> 00:53:58.900
Okay, we're not at equilibrium, but it tends there.

611
00:53:58.900 --> 00:54:06.900
But, yeah, you can't charge 500 bucks. Only the rich could come.

612
00:54:06.900 --> 00:54:10.900
We don't want only the rich to come because that would show we're capitalist pigs.

613
00:54:10.900 --> 00:54:17.900
My answer to that one is, you know, what's the point of being rich if you can't buy a Maserati or a ticket for this thing?

614
00:54:17.900 --> 00:54:22.900
I mean, the whole idea of being rich is that you get some advantages, and if you get no advantages from being rich,

615
00:54:22.900 --> 00:54:31.900
why are you struggling working, you know, 62 hours a day and, you know, working hard and investing if there's no benefit of being rich?

616
00:54:31.900 --> 00:54:36.900
But somehow it's evil to have something that the rich can benefit from.

617
00:54:36.900 --> 00:54:39.900
You know, the poor should have a shot at the Maserati or the Cadillac.

618
00:54:39.900 --> 00:54:42.900
It's unfair that the poor have to have a Volkswagen.

619
00:54:42.900 --> 00:54:46.900
I mean, that's very unfair.

620
00:54:46.900 --> 00:54:50.900
So anyway, one way is to do that, but we can't do that,

621
00:54:50.900 --> 00:54:55.900
because then we would be seen not only be favoring the rich, but making horrors profits.

622
00:54:55.900 --> 00:54:58.900
We're not in business for profits. Profits? Us? No.

623
00:54:58.900 --> 00:55:02.900
Profits are evil. We can't be profiteering or gouging.

624
00:55:02.900 --> 00:55:05.900
Someone's from Florida here.

625
00:55:05.900 --> 00:55:12.900
There was a typhoon or something there, a storm, a hurricane,

626
00:55:12.900 --> 00:55:18.900
and people were raising prices on gasoline and milk and water and orange juice

627
00:55:18.900 --> 00:55:21.900
and staples that you need when there's a hurricane.

628
00:55:21.900 --> 00:55:25.900
And of course, Jeb, Free Enterprise Bush, had us say,

629
00:55:25.900 --> 00:55:33.300
This is unconscionable, you can't raise prices, this is gouging, and higher prices have two functions.

630
00:55:33.300 --> 00:55:35.100
One, they ration.

631
00:55:35.100 --> 00:55:40.800
I mean, if you have 500 people waiting to get into the Walmart, and that's a whole other story about the Walmart,

632
00:55:40.800 --> 00:55:44.900
the first few are going to grab it all if you keep the old prices.

633
00:55:44.900 --> 00:55:50.500
So then what you have to do is say only one quart of this to a customer or something, and then you have to watch that.

634
00:55:50.500 --> 00:55:55.400
And meanwhile, nobody's coming from Texas and Virginia to bring stuff on.

635
00:55:55.400 --> 00:55:57.840
Because, you know, what's the big advantage to them?

636
00:55:57.840 --> 00:56:01.320
Whereas if you allow the prices to rise two or threefold,

637
00:56:01.320 --> 00:56:04.400
then you ration the extent amount,

638
00:56:04.400 --> 00:56:07.200
and also you get new supplies from elsewhere.

639
00:56:07.200 --> 00:56:15.840
It's no accident that we don't have deaths due to drought or hurricanes here,

640
00:56:15.840 --> 00:56:19.680
because most times you are allowed to have prices to ration.

641
00:56:19.680 --> 00:56:23.840
Whereas in Africa, if you have a drought here, nobody's bringing stuff from there,

642
00:56:23.840 --> 00:56:27.840
Because the prices are held rigidly, even more so than here.

643
00:56:27.840 --> 00:56:34.240
Or, put this the other way around, if this anti-gouging stuff gets to going, we'll become like Africa.

644
00:56:34.240 --> 00:56:43.240
We're a calamity here, and nothing happens, or at least the market can't get government to help because the people are dying.

645
00:56:43.240 --> 00:56:49.540
Okay, to get back to the, how do you ration the difference between the demand and the supply?

646
00:56:49.540 --> 00:56:52.940
Well, another way is first come first serve.

647
00:56:52.940 --> 00:56:57.940
But the problem with that is you're going to wait in line for three days, camping out, and who's going to be doing that?

648
00:56:57.940 --> 00:57:03.940
The rich or the poor? Obviously the poor, unless the rich are paying the poor to camp out and buy them tickets.

649
00:57:03.940 --> 00:57:13.940
And then what happens is if a poor person gets a $20 ticket and can now sell it for $500, he becomes a scalper.

650
00:57:13.940 --> 00:57:18.940
In other words, the scalper is carrying the water for the facility.

651
00:57:18.940 --> 00:57:26.940
In other words, the price has got to be 500 bucks, no matter how you slice it, whether it's in money or in time or in anything else.

652
00:57:26.940 --> 00:57:36.940
And the function of the scalper is everyone can blame it on the scalper and the owner of the theater or the facility is no longer blamed.

653
00:57:36.940 --> 00:57:43.940
So what the scalper is doing is taking the negative flak for economics.

654
00:57:43.940 --> 00:57:49.540
I mean, the fault of it is that so many people want the ticket and there's only so many tickets, only so many seats.

655
00:57:49.540 --> 00:57:58.340
That's the cause of the problem, of the rationing problem, and the solution is the tickets, and that's who they're arresting.

656
00:58:01.340 --> 00:58:03.940
I'm ready to tell some jokes, so pay attention.

657
00:58:04.840 --> 00:58:08.940
This is the most important part of the lecture, the jokes.

658
00:58:13.940 --> 00:58:23.940
Okay, I'll tell the can opener joke. Due to popular demand, shut up, here's the can opener joke.

659
00:58:23.940 --> 00:58:32.940
There were three men on a desert island and they had cans of food but no can opener.

660
00:58:32.940 --> 00:58:40.940
And there was a physicist, a chemist and an economist. Chad, am I on? Great, okay.

661
00:58:40.940 --> 00:58:43.980
Okay, the people out there in radio land got to hear this joke.

662
00:58:45.180 --> 00:58:57.900
And the physicist says, what you do is you take the can at the 30 feet high and you drop it on a rock and that'll be just enough physical pressure to open the can and not cause any problem with the contents.

663
00:58:58.260 --> 00:59:04.420
And the chemist says, yes, yes, I agree with this in theory, but there's a better way, the chemical way, better way through chemistry.

664
00:59:04.420 --> 00:59:13.420
And what we do is we heat it up to a certain heat, and then it'll open up and the food will be cooked. So it's much better.

665
00:59:13.420 --> 00:59:18.420
Whereupon the two of them turn to the economist and say, well, how can you help in our deliberations?

666
00:59:18.420 --> 00:59:24.420
And he says, assume a can opener.

667
00:59:24.420 --> 00:59:30.420
Dan, you owe me five bucks for that joke.

668
00:59:30.420 --> 00:59:36.420
Here's another joke. This is an economic joke and a blonde joke, only this is pro-blonde.

669
00:59:36.420 --> 00:59:40.420
A blonde walks into a bank in New York City and asks for the loan officer.

670
00:59:40.420 --> 00:59:44.420
She says she's going to Europe on business for two weeks and needs to borrow 5,000 bucks.

671
00:59:44.420 --> 00:59:51.420
The bank offices the bank will need some sort of security for the loan, so the blonde hands over the keys for her new Rolls Royce.

672
00:59:51.420 --> 00:59:55.420
The car is parked on the street, she has the title and everything checks out.

673
00:59:55.420 --> 00:59:59.420
The bank agrees to accept the car as collateral for the loan and puts it in its garage.

674
00:59:59.420 --> 01:00:08.420
The bank's president and its officers all enjoy a good laugh at the blonde for using a $250,000 collateral against a $5,000 loan.

675
01:00:08.420 --> 01:00:17.420
Two weeks later, the blonde returns, repays the $5,000 in the interest, which comes to $15.

676
01:00:17.420 --> 01:00:23.420
The loan officer says, Miss, we are very happy to have had your business, and this transaction has worked out very nicely.

677
01:00:23.420 --> 01:00:28.420
But we're a little puzzled. While you were checked around and found out that you're a multimillionaire,

678
01:00:28.420 --> 01:00:32.920
What puzzles us is, why would you borrow $5,000?

679
01:00:32.920 --> 01:00:42.420
The blonde replies, where else in New York City can I park my car for two weeks for only $15 and expect to find it when I return?

680
01:00:42.420 --> 01:00:45.920
So the blonde wins out.

681
01:00:45.920 --> 01:00:56.620
Okay, another chapter is, I think the chapter is entitled, The Denier of Academic Freedom.

682
01:00:56.620 --> 01:00:59.460
So what's going on with academic freedom?

683
01:00:59.460 --> 01:01:04.100
Well, if academic freedom is upheld,

684
01:01:04.100 --> 01:01:09.620
and then professors are to say whatever,

685
01:01:09.620 --> 01:01:12.220
they damn well please, pretty much.

686
01:01:12.220 --> 01:01:15.820
Now, Hans Hoppe got in trouble with this recently

687
01:01:15.820 --> 01:01:18.700
because he was using homosexuals to illustrate

688
01:01:18.700 --> 01:01:23.860
a point with regard to interest rates and time preference

689
01:01:23.860 --> 01:01:37.860
and saying there are certain people that are more impatient and people are less impatient, more forward-looking if they have children and homosexuals don't tend to have children, therefore homosexuals or a society of homosexuals would have a higher interest rate.

690
01:01:37.860 --> 01:01:51.860
Very innocuous stuff, just trying to explain interest rates based on time preferences. Very innocuous, he's given a speech numerous times, we all have, I mean you want to talk interest rates, that's a good illustration.

691
01:01:51.860 --> 01:01:55.860
Another one, if the society was concerned, composed of little children.

692
01:01:55.860 --> 01:01:57.860
Little children are very impatient.

693
01:01:57.860 --> 01:02:00.860
You offer them a choice of one candy bar today or five tomorrow.

694
01:02:00.860 --> 01:02:04.860
They grab it because tomorrow doesn't mean anything to them.

695
01:02:04.860 --> 01:02:10.860
Some homosexual in his class takes umbrage at this and tells the dean,

696
01:02:10.860 --> 01:02:15.860
and then the dean says, you know, Professor Hoppe, you're out of line.

697
01:02:15.860 --> 01:02:19.860
You have to shape up. We're going to fine you. We're not going to promote you, whatever it is.

698
01:02:19.860 --> 01:02:25.360
And this was a denial of Hans' economic freedom, academic freedom.

699
01:02:26.360 --> 01:02:29.360
This was associated with the Mises Institute, Mike Levin,

700
01:02:29.860 --> 01:02:32.860
has written books on race and racial discrimination,

701
01:02:32.860 --> 01:02:36.360
and got into a lot of trouble with the politically correct people in New York City.

702
01:02:36.360 --> 01:02:39.360
And there are numerous cases, and this is group FIRE,

703
01:02:39.360 --> 01:02:42.860
Foundation for Individual Rights in Education,

704
01:02:42.860 --> 01:02:46.860
that does yeoman work in protecting professors' academic freedom.

705
01:02:46.860 --> 01:02:53.100
okay so that's the case for academic freedom that if one professors to be

706
01:02:53.100 --> 01:03:03.540
free to make new discoveries to have any spontaneity I'm not reading from notes I

707
01:03:03.540 --> 01:03:06.260
don't know what I'm gonna say I'm just sort of let it go like you would in a

708
01:03:06.260 --> 01:03:10.900
conversation and God forbid I'll say something that will offend someone I'd

709
01:03:10.900 --> 01:03:16.200
never have but you know radically it could happen and the idea is that if I

710
01:03:16.200 --> 01:03:22.200
If I don't have the spontaneity, then I'm not going to give an interesting lecture, or I'll give a more interesting lecture if I have the spontaneity.

711
01:03:22.200 --> 01:03:27.200
But if you have the spontaneity, then you might say something that offends someone, God forbid.

712
01:03:27.200 --> 01:03:34.200
And academic freedom is a way of protecting this and the other class of professors.

713
01:03:34.200 --> 01:03:41.200
Okay, the argument against academic freedom is once a year, they go to sleep.

714
01:03:41.200 --> 01:03:44.600
You know, they'll read their lecture notes from 20 years ago,

715
01:03:44.600 --> 01:03:47.400
and they'll not do any more research or publication.

716
01:03:47.400 --> 01:03:49.400
They'll just be on welfare.

717
01:03:49.400 --> 01:03:53.300
And they'll be doing it, and a lot of us have had professors that are just going through the motions,

718
01:03:53.300 --> 01:03:56.600
and it's a horrible situation.

719
01:03:56.600 --> 01:03:57.800
So, which is it?

720
01:03:57.800 --> 01:03:59.800
Should we have academic freedom, or should we?

721
01:03:59.800 --> 01:04:02.000
Or should we have tenure, or not, or what?

722
01:04:02.000 --> 01:04:09.600
All these sorts of questions come in together.

723
01:04:09.600 --> 01:04:15.600
The answer from the libertarian, getting back to the point that Prem made in a different discussion, is private property rights.

724
01:04:15.600 --> 01:04:23.600
The libertarian answer is, let each school be owned privately and let each school determine what it wants.

725
01:04:23.600 --> 01:04:29.600
It's very much like the question, should pizza paulers have blue tablecloths or red tablecloths?

726
01:04:29.600 --> 01:04:31.600
That's not a libertarian question.

727
01:04:31.600 --> 01:04:39.600
The answer is, let each pizza parlor pick whatever tablecloth color they want and whatever else they want,

728
01:04:39.600 --> 01:04:42.600
and then people will sort themselves out.

729
01:04:42.600 --> 01:04:47.600
And the same thing is, should you have smoking zones or what should the smoking policy be?

730
01:04:47.600 --> 01:04:49.600
Let each restaurant determine for itself.

731
01:04:49.600 --> 01:04:52.600
You know, some will say, smoke anywhere you want.

732
01:04:52.600 --> 01:04:55.600
Other food stores will say, no smoking at all.

733
01:04:55.600 --> 01:04:58.600
The moderate ones will say, you can smoke in this section on these days,

734
01:04:58.600 --> 01:05:03.880
and you know you can have various rules and then people will sort themselves out

735
01:05:03.880 --> 01:05:09.080
on the basis of the king or the tablecloth color or the academic freedom

736
01:05:09.080 --> 01:05:14.760
or whatever and that's roughly the answer that I give in the chapter that

737
01:05:14.760 --> 01:05:19.400
private universities and let private enterprise the magic of the market sort

738
01:05:19.400 --> 01:05:24.400
it out as to what should a public school do the answer is there should be any

739
01:05:24.400 --> 01:05:39.400
Public Schools. So there's no problem. But notice that it's an agnostic position. It's sort of like, should the NBA give long-term contracts or not?

740
01:05:39.400 --> 01:05:47.400
Well, if you give a long-term contract, you know, the player doesn't have to worry about next year's contract and he can focus on dunking the ball.

741
01:05:47.400 --> 01:05:53.400
On the other hand, if you give him a long-time contract, and he breaks his leg, and now you have to carry him,

742
01:05:53.400 --> 01:05:57.400
well, you know, should there be long-term contracts on it? What's the libertarian answer?

743
01:05:57.400 --> 01:06:03.400
The libertarian answer is there's no answer. Let each team decide what it wants, and that's how it'll shake out.

744
01:06:03.400 --> 01:06:11.400
So the way I see it, the denier of academic freedom is perfectly limited.

745
01:06:11.400 --> 01:06:20.400
Suppose you get the Bob Jones University, which is a Baptist school or a religious school or a Catholic school or any kind of school, a Mormon school.

746
01:06:20.400 --> 01:06:28.400
They don't want to have total academic freedom in Brigham Young University or in Hebrew University or Yeshiva City.

747
01:06:28.400 --> 01:06:35.400
They don't want people saying, well, you know, Jews think in Yeshiva University or more crappy in Brigham Young University.

748
01:06:35.400 --> 01:06:45.400
They want to have certain amount of academic freedom, but there are certain things you can't do in Brigham Young or Bob Jones, homosexuals, dating, whatever it is.

749
01:06:45.400 --> 01:06:54.400
So each school can have whatever rules it wants and then people will go there or not go there based on the fit between the rules and the customers.

750
01:06:54.400 --> 01:07:04.400
And in that way we get out from under continual fighting over, you know, should you have a pledge of allegiance or not, or should it be compulsory or not, each one decide.

751
01:07:04.400 --> 01:07:08.400
And then, all of a sudden, all the problems go away.

752
01:07:08.400 --> 01:07:18.400
Okay, to conclude the coverage of this book, and there are many others, and if people have questions about any of them, I can certainly get into them.

753
01:07:18.400 --> 01:07:23.400
What I'm saying is that these are not nice activities, or at least many of them are not.

754
01:07:23.400 --> 01:07:33.400
You may not want to summary one of them, but they're not guilty of initiatory violence.

755
01:07:33.400 --> 01:07:39.400
They're not guilty of violating private property rights, so they're legitimate.

756
01:07:39.400 --> 01:07:41.400
They should be legal.

757
01:07:41.400 --> 01:07:51.400
If you prohibit them, if you denigrate them, if you revile them and then they persist, then they're heroic.

758
01:07:51.400 --> 01:07:56.400
So that would be my conclusion on defending the undefendable.

759
01:07:56.400 --> 01:07:59.400
One of these days I'm going to come up with defending the undefendable too.

760
01:07:59.400 --> 01:08:02.400
It's just that I'm so lazy and I've got some shit.

761
01:08:02.400 --> 01:08:08.400
The book came out in 76, maybe by 2006, I don't know, 30 years later, I'll come out with a sequel.

762
01:08:08.400 --> 01:08:12.400
Well, what I want to do now is hopefully get some questions and discussion.

763
01:08:12.400 --> 01:08:16.400
And if I don't, I've got other stuff to stay, but I'd like to...

764
01:08:16.400 --> 01:08:20.400
What do you think would defend the violated copyright?

765
01:08:20.400 --> 01:08:30.400
Ah, okay, well, that's a very interesting question, intellectual property, of which there is mainly two, patents and copyrights.

766
01:08:30.400 --> 01:08:39.400
Now, the key piece that's ever been written on this, as far as I'm concerned, is one by Stefan Kinsella in the Journal of Libertarian Studies.

767
01:08:39.400 --> 01:08:45.400
And this, I think, won the award for the best article that year or that two-year period in the JLS.

768
01:08:45.400 --> 01:08:49.400
It's a magnificent piece. You absolutely must read it.

769
01:08:49.400 --> 01:08:56.400
See, some people accuse me of being an extremist libertarian. I'm not.

770
01:08:56.400 --> 01:09:00.400
I believe in full free enterprise, except you have to read this article.

771
01:09:00.400 --> 01:09:04.400
If you don't read the article, you go to jail. You see what a moderate I am?

772
01:09:04.400 --> 01:09:08.400
I don't adhere closely or totally to the non-aggression axiom.

773
01:09:08.400 --> 01:09:12.400
I'm willing to make exceptions. I've grown. I've been in Washington, D.C.

774
01:09:12.400 --> 01:09:17.400
I grew, and now you have to read Kinsella's article, and then for the rest, it's laissez-faire.

775
01:09:17.400 --> 01:09:25.400
Okay, now to go back a bit before we get into the Rothbard business, the Kinsella business is Rothbard.

776
01:09:25.400 --> 01:09:27.400
What was Rothbard's view?

777
01:09:27.400 --> 01:09:30.400
Rothbard's view is that patents were illegitimate,

778
01:09:30.400 --> 01:09:33.400
but copyrights were legitimate.

779
01:09:33.400 --> 01:09:34.400
What's wrong with a patent?

780
01:09:34.400 --> 01:09:39.400
What's wrong with a patent is that

781
01:09:39.400 --> 01:09:45.400
I have been both working on inventing the wheel or the bicycle or whatever it is,

782
01:09:45.400 --> 01:09:51.400
and she beats me to the patent office by five minutes.

783
01:09:51.400 --> 01:09:55.800
And she gets the total value of it, and I get nothing.

784
01:09:55.800 --> 01:10:01.600
And if you believe in intellectual property, which I don't, but let's assume that you do, just for the moment,

785
01:10:01.600 --> 01:10:03.700
well, I'm being cheated out of my labor.

786
01:10:03.700 --> 01:10:09.500
I invented the thing independently of her, and let's say we have no question of lying or anything like that.

787
01:10:09.500 --> 01:10:13.000
We know, we stipulate that I invented it independently of her.

788
01:10:13.000 --> 01:10:18.300
And she beat me by five minutes, and she gets all, and I get none. That's unfair.

789
01:10:18.300 --> 01:10:27.100
Second argument is, I own this pen, there's no time period, I'll own this forever, give it to my kid.

790
01:10:27.100 --> 01:10:35.300
Whereas with a patent, if Lauren owns the patent for this bicycle, why does it only last 17 years or 27 years?

791
01:10:35.300 --> 01:10:39.700
You know, what's with that? You know, you own this forever.

792
01:10:39.700 --> 01:10:43.400
And if you really own intellectual property rights, you should own it forever.

793
01:10:43.400 --> 01:10:45.600
And any time period is arbitrary.

794
01:10:45.600 --> 01:10:54.100
Not that I'm against arbitrary time periods because of continuum problems and age of majority and stuff like that, but still, why should it ever end?

795
01:10:54.100 --> 01:10:57.800
No other property right has a time period attached to it.

796
01:10:57.800 --> 01:11:08.900
So patents were out, but he thought that copyrights were legitimate because it was based on contract, you know, I'm selling you this book.

797
01:11:08.900 --> 01:11:11.800
Here's this book, I'm selling you this book.

798
01:11:11.800 --> 01:11:19.200
Here's a better book that I can sell you, better because it's a better example.

799
01:11:19.200 --> 01:11:31.000
I sell you this book, but I sell it to you on the proviso that you not resell it, or not recopy it and sell it again, and Rothbard accepted that.

800
01:11:31.000 --> 01:11:35.800
Now, Kinsella, before I get into that, I just want to say one word about Rothbard.

801
01:11:35.800 --> 01:11:40.500
I don't know if I'm repeating myself or not, but it's worth repetition if I am.

802
01:11:40.500 --> 01:11:48.980
There are some gurus, geniuses, who if you cross them, they hate you.

803
01:11:48.980 --> 01:11:51.740
If you prove them wrong, they don't like you.

804
01:11:51.740 --> 01:11:53.700
Murray Rothbard wasn't like that.

805
01:11:53.700 --> 01:11:56.180
Murray Rothbard had a genesis of libertarianism,

806
01:11:56.180 --> 01:11:58.140
and he based it on the common law.

807
01:11:58.140 --> 01:12:02.220
When Hans Hoppe came up with what was a better way of looking at it,

808
01:12:02.220 --> 01:12:07.700
the argument, and Hans was Murray's student, not formally, but in effect,

809
01:12:07.700 --> 01:12:11.220
He was his student, Murray was his mentor, as he was mine.

810
01:12:11.220 --> 01:12:13.340
Murray didn't say, oh, Hans, you're out of the movement,

811
01:12:13.340 --> 01:12:14.660
or something like that.

812
01:12:14.660 --> 01:12:15.620
He embraced it.

813
01:12:15.620 --> 01:12:16.740
He embraced Hans' spirit.

814
01:12:16.740 --> 01:12:20.980
He congratulated him for it, and he defended the idea.

815
01:12:20.980 --> 01:12:23.340
I think Kinsella came after Rothbard died.

816
01:12:23.340 --> 01:12:24.860
I'm not sure.

817
01:12:24.860 --> 01:12:26.380
No historian.

818
01:12:26.380 --> 01:12:29.620
But I know that if Murray, he might have agreed or disagreed,

819
01:12:29.620 --> 01:12:32.740
but he certainly would have been welcoming disagreement,

820
01:12:32.740 --> 01:12:36.780
as I try to emulate Murray and welcome disagreement with me.

821
01:12:36.780 --> 01:12:39.580
Okay, so what's going on with copyright?

822
01:12:39.580 --> 01:12:42.880
Consola's point is that the only time you can have property rights,

823
01:12:42.880 --> 01:12:46.380
the only justification for property rights, is scarcity.

824
01:12:48.280 --> 01:12:50.880
The reason we need property rights is we've got scarcity.

825
01:12:50.880 --> 01:12:54.280
If stuff came down from heaven and everybody, you know, you want a pen,

826
01:12:54.280 --> 01:12:56.880
you just sort of think a penance and there was no scarcity,

827
01:12:56.880 --> 01:12:58.780
there'd be no need for property rights,

828
01:12:58.780 --> 01:13:01.580
because property rights are the way of stopping disputes.

829
01:13:01.580 --> 01:13:09.620
Well, ideas, once they're known, are no longer scarce.

830
01:13:09.620 --> 01:13:12.020
One girl puts her hair up in a ponytail.

831
01:13:12.020 --> 01:13:14.300
Girl A puts her hair up in a ponytail.

832
01:13:14.300 --> 01:13:19.020
And girl B looks at it and says, hey, that's a good idea, I'll put up my hair in a ponytail.

833
01:13:19.020 --> 01:13:22.500
What did girl 2 steal from girl 1?

834
01:13:22.500 --> 01:13:25.060
She didn't deprive her of a ponytail.

835
01:13:25.060 --> 01:13:27.220
Girl A can still have a ponytail.

836
01:13:27.220 --> 01:13:29.460
She didn't take them.

837
01:13:29.460 --> 01:13:38.460
She took her idea, but you can't own an idea because an idea is not scarce.

838
01:13:38.460 --> 01:13:46.060
Another reputation of this, and here is an empirical type reputation, not a principle

839
01:13:46.060 --> 01:13:50.020
of one pack, all grist of the mill.

840
01:13:50.020 --> 01:13:55.100
If we really took seriously ideas that you own your intellectual creations, we couldn't

841
01:13:55.100 --> 01:14:16.100
can speak language because every word was invented by some caveman somewhere and if we take the God's eye view and we can know exactly who did what, you know, Dan's great-great caveman grandfather invented the word finger, Nick's invented shirt.

842
01:14:16.100 --> 01:14:26.100
Each word came into existence from someone, and therefore every federal word you have to find their heirs and give them a nickel or bond them.

843
01:14:26.100 --> 01:14:28.100
We couldn't speak.

844
01:14:28.100 --> 01:14:36.100
Now it's true that there are certain things that are copyrightable and other things are not copyrightable.

845
01:14:36.100 --> 01:14:39.100
But that's just the law. We're now talking principle.

846
01:14:39.100 --> 01:14:45.100
The principle is you can't own ideas because ideas are not scarce.

847
01:14:45.100 --> 01:15:14.900
Okay, then Kinsella deals with the empirical, if we didn't have copyrights in things, especially like pharmaceuticals and music and books, we wouldn't have enough of them, we'd have much less of them because the only reason I would write this book is that, you know, I can sell it to you and if you could put your name on the cover and sell it, you'd be cheating me out of stuff, right?

848
01:15:15.100 --> 01:15:29.100
And if the only reason I'm religion R&D and pharmaceuticals is because when I invent the cure for cancer, I'll make out like a bandit for a while, for as long as my patent or copyright holds out.

849
01:15:29.100 --> 01:15:37.100
Well, what Kinsella says is good scares. You can always have enough of something.

850
01:15:37.100 --> 01:15:39.100
And what's the optimal amount of research and development?

851
01:15:39.100 --> 01:15:46.300
Development, is the optimal amount of research and development 100% of GDP and we all die of starvation because we got all of our money in R&D? No.

852
01:15:46.300 --> 01:15:53.340
So we know that 100% of GDP is not the right amount of R&D.

853
01:15:53.340 --> 01:16:03.860
And what Kinsella says is that the right amount of R&D is the amount of R&D that would emanate given proper law.

854
01:16:03.860 --> 01:16:05.860
Now he says, would it be much, much less?

855
01:16:05.860 --> 01:16:09.220
And his answer is no, it wouldn't be much, much less.

856
01:16:09.220 --> 01:16:11.660
There are ways that you can benefit

857
01:16:11.660 --> 01:16:17.060
from creating an intellectual product indirectly.

858
01:16:17.060 --> 01:16:21.140
For example, I make up a song.

859
01:16:21.140 --> 01:16:22.860
Zip-a-dee, doo-dah, zip-a-dee.

860
01:16:22.860 --> 01:16:25.860
You don't want to hear me sing, because the audience...

861
01:16:25.860 --> 01:16:28.900
Well, in any case, I invent the doo-dah song.

862
01:16:28.900 --> 01:16:31.140
I won't sing it to you, unless you misbehave,

863
01:16:31.140 --> 01:16:39.780
and then I can get you by singing at you and what happens is you can download this

864
01:16:39.780 --> 01:16:42.940
and pass it among yourselves and therefore I don't get the money that I

865
01:16:42.940 --> 01:16:49.100
would get for it. However, if you want to have a concert, who are you going to invite to sing it?

866
01:16:49.100 --> 01:16:52.260
You need the original singer because I can do it best because it was my song.

867
01:16:52.260 --> 01:16:58.300
So in effect, all you downloaders, what you're doing is being my agent. You're

868
01:16:58.300 --> 01:17:02.300
You're shifting the demand curve for my services as a singer out to the right.

869
01:17:02.300 --> 01:17:05.300
You see that?

870
01:17:05.300 --> 01:17:17.300
When Betamax or what do you call those things where you have a movie and you go to blockbusters?

871
01:17:17.300 --> 01:17:21.300
VCRs. When VCRs first...

872
01:17:21.300 --> 01:17:25.300
Look, eventually I'm going to be drooling. You're just lucky that you got me before.

873
01:17:25.300 --> 01:17:32.060
I'm getting old you forget you know I can put my pants on still it's not all bad

874
01:17:32.060 --> 01:17:38.980
when VCRs first came out everyone thought there'd be no more movies because you

875
01:17:38.980 --> 01:17:43.540
know why I go to a movie and pay six eight or ten bucks per person when you

876
01:17:43.540 --> 01:17:48.020
go to a VCR blockbuster and pay three dollars and get it fifteen of your best

877
01:17:48.020 --> 01:17:51.780
friends and all watch it in the comfort of your own home and you can stop the

878
01:17:51.780 --> 01:18:21.780
The movie comes out, the VCR doesn't come out for a couple of weeks or a couple of months and everyone wants to see the movie and it's an experience to see it and be seen or whatever, and not only are movies still there, but movies are even more doing better because the interest comes from the VCR, people want to see it, they want to see it, they want to see it, they want to see it, they want to see it, they want to see it, they want to see it.

879
01:18:21.780 --> 01:18:48.780
Similarly, when soft-cover books first came out instead of hard-cover books, everyone thought nobody would be reading a hard-cover book anymore because the soft-cover book is $6 or $8 and the hard-cover is $30, but it didn't happen because the soft-cover book comes out six months later or a year later and everyone's got to have Harry Potter.

880
01:18:48.780 --> 01:18:55.780
Harry Potter just came out and it's time, but you know that Harry Potter will be around in softcover in a year or so.

881
01:18:55.780 --> 01:18:59.780
So what are you buying it now? Because you value the time.

882
01:18:59.780 --> 01:19:07.780
So if you come up with a cure for cancer, by the time you people can, what is it called, reverse engineer it,

883
01:19:07.780 --> 01:19:14.780
figure out the formula for Coca-Cola or something like that, I'll be making a ton of money.

884
01:19:14.780 --> 01:19:32.780
Maybe less than if I had a patent or a copyright, but still I'll be making a ton of money, so that the amount of R&D won't sink to zero, it'll sink to the optimal amount, the optimal amount being the amount that occurs when the laws occur, as opposed to some arbitrary amount when the laws are incorrect.

885
01:19:32.780 --> 01:19:49.780
The coup de grace, I think that Kinsella is the following, here's the scenario, the railroad is coming through town, we all live in the sticks, an acre of land is worth $10 because it's Booneyville,

886
01:19:49.780 --> 01:19:55.780
But when the railroad comes through, Faker will be worth $10,000.

887
01:19:55.780 --> 01:20:05.780
I know this. I'm the only one in town that knows it. But Maximilian, the dirty rat, breaks into my house and steals the idea.

888
01:20:05.780 --> 01:20:12.780
Now, he's a bad guy. He's a trespasser. We know he goes out. But what he does is he tells all of you.

889
01:20:12.780 --> 01:20:20.420
And now I come along and I say, hey, I'll buy all your land for 10 bucks, or 11 bucks.

890
01:20:20.420 --> 01:20:27.860
Now, if there was ownership of ideas, I rightful owner of that idea, he stole it to you.

891
01:20:27.860 --> 01:20:30.980
If he's to you, I could then come and collect it.

892
01:20:30.980 --> 01:20:37.220
So if ideas were really ownable, I could come and collect that information from you, namely, sell you the land.

893
01:20:37.220 --> 01:20:39.540
Do you have to sell it to me for $11?

894
01:20:42.980 --> 01:20:44.020
Well, this is silly.

895
01:20:44.860 --> 01:20:49.500
I can't own stuff in your head, even though it came to you illegitimately.

896
01:20:49.860 --> 01:20:56.860
So what Consola says is that if there were really ownership in land, ownership in ideas,

897
01:20:56.860 --> 01:21:01.020
you would have to sell me your land for the price that Maximilian stole the idea,

898
01:21:01.780 --> 01:21:03.540
which is just outright silly.

899
01:21:03.540 --> 01:21:21.540
So this is his case, and I think I'm just sort of hitting the tip of the iceberg of it. I hope I'm doing justice to this. I think I am. I'm certainly a fan of it. And that would be the five-minute answer to the IP question. Yes.

900
01:21:21.540 --> 01:21:36.540
When you were saying that you can't steal from a thief, and we were talking about the roads, well, certainly someone can't just come in and build some sort of structure blocking the interstate.

901
01:21:36.540 --> 01:21:43.540
It seems like that would be a violation of the rights of a lot of the other people too.

902
01:21:43.540 --> 01:21:54.540
Because even though, yeah, this road was built with illegitimate money, you know, we all have used it and we, in some sense, homesteaded at least a use of it.

903
01:21:54.540 --> 01:22:05.540
Well, there are really two questions that are intellectually separable. One is, should roads be privatized? And the other is, how?

904
01:22:05.540 --> 01:22:13.540
and what you're really talking about is how, you know, should we seize the street and set up a roadblock and, you know, that would be highly problematic.

905
01:22:13.540 --> 01:22:15.540
I don't think that would be the best way to go about it.

906
01:22:15.540 --> 01:22:18.540
A much better way would be to try to find it for loners.

907
01:22:18.540 --> 01:22:22.540
Rightful owners are proportionate to the taxes that you paid.

908
01:22:22.540 --> 01:22:28.540
And it's very difficult because there are different roads and, you know, even with a God's eye view, it's a big mishmash.

909
01:22:28.540 --> 01:22:37.540
Mishmash, but give or take the idea that we set up a stock company for the Route 66.

910
01:22:37.540 --> 01:22:41.540
It's owned by, let's say, that's a national road. It's owned by everybody.

911
01:22:41.540 --> 01:22:46.540
Well, everyone gets one share and now we have a corporation called Route 66.

912
01:22:46.540 --> 01:22:49.540
Or Magnolia Street. Well, who owns Magnolia Street?

913
01:22:49.540 --> 01:22:57.540
Well, the Rockwell, the Mises Institute should own a proportion of that road in proportion to the frontage on the road,

914
01:22:57.540 --> 01:23:09.540
The road half, because the other guys own the other half, and you should have the Magnolia Street Corporation and that would be a much more sensible way than grabbing it and setting up a roadblock and all of a sudden traffic can't move.

915
01:23:10.540 --> 01:23:11.540
Kevin?

916
01:23:12.540 --> 01:23:19.540
This is similar, but I don't know if you remember about a few years ago, Roger Long gave a paper about public property and libertarians.

917
01:23:19.540 --> 01:23:23.540
I'm going to talk about this, and I'll give you two kinds of examples.

918
01:23:23.540 --> 01:23:29.540
One, I guess I'll just use an example from my home town of Fairhope where there's an old Georgia colony

919
01:23:29.540 --> 01:23:35.540
and basically the Fairhope Single Tax Corporation, which owned the land, gave a park to, I think it goes,

920
01:23:35.540 --> 01:23:38.540
to all the citizens of Fairhope for all of eternity.

921
01:23:38.540 --> 01:23:43.540
And basically this is like sort of open to people as a kind of public property.

922
01:23:43.540 --> 01:23:48.540
And the other kind would be something that people homestead, but it takes a very large number of people

923
01:23:48.540 --> 01:23:55.880
and how people don't do it intentionally like on Silk Road where people just start traveling back and forth and just go on.

924
01:23:55.880 --> 01:24:00.880
An actual change in the place caused by a constantly different group of people.

925
01:24:00.880 --> 01:24:07.440
The idea is that there are orderly conditions that people from outside of Faroe come in and try to use the public park that aren't citizens,

926
01:24:07.440 --> 01:24:11.580
that they can be excluded, but a property for the citizens of my hometown Road.

927
01:24:11.580 --> 01:24:15.260
Like we said, if somebody built something right in the middle of a Silk Road,

928
01:24:15.260 --> 01:24:45.260
I think Randy Holcomb had a piece recently, I forget where it was, where he took JLS, where people were sort of walking, and I think what you said is correct, namely the people that walk, and if there are say 300 of them in the town, they're the owners, and it's the ownership, each one owns one 300th of a share of that, and they can then determine, you know, maybe we should make it as a lost leader,

929
01:24:45.260 --> 01:24:48.740
Like Walmart doesn't charge for parking, right?

930
01:24:48.740 --> 01:24:52.100
Well, maybe this little road doesn't charge for parking

931
01:24:52.100 --> 01:24:55.180
so that people can be drawn to the town and do commerce.

932
01:24:55.180 --> 01:24:57.660
Or they could save foreigners out, whatever they want.

933
01:24:57.660 --> 01:24:59.220
They're the owners of it.

934
01:24:59.220 --> 01:25:01.540
But just as nature abhors vacuum, I

935
01:25:01.540 --> 01:25:05.420
think libertarian abhors non-private property.

936
01:25:05.420 --> 01:25:08.620
And these attempts to get out of non-private property,

937
01:25:08.620 --> 01:25:09.220
there's one.

938
01:25:09.220 --> 01:25:13.700
The other one is this pure, what is it called, nature preserve

939
01:25:13.700 --> 01:25:16.580
where it's untouched by human hands.

940
01:25:16.580 --> 01:25:20.500
Well, you know, the hell with the nature preserve.

941
01:25:20.500 --> 01:25:22.500
Private property rights are the key.

942
01:25:22.500 --> 01:25:25.140
And the nature preserve will just

943
01:25:25.140 --> 01:25:29.500
have to have certain people that didn't then turn into a nature

944
01:25:29.500 --> 01:25:32.580
preserve, second growth or something, or tough on them.

945
01:25:32.580 --> 01:25:34.740
Too bad.

946
01:25:34.740 --> 01:25:35.940
One last question.

947
01:25:35.940 --> 01:25:36.580
OK.

948
01:25:36.580 --> 01:25:40.580
Well, this also relates to when you have a feeling

949
01:25:40.580 --> 01:25:51.580
I think there is certainly a case to be made that, for example, if Ben Kilpatrick steals my hat, and then Walter Block decides that he's going to steal a hat from Ben Kilpatrick, the hat still belongs.

950
01:25:51.580 --> 01:25:56.580
There was an example with the Rhodes that Indiana's response to Tom Kane illustrated that.

951
01:25:56.580 --> 01:25:58.580
But I wanted to also ask another question.

952
01:25:58.580 --> 01:26:07.580
When do you think it's okay for a third party, Walter Block, vigilante, to go and confront Ben Kilpatrick and take the hat and presumably restore the hat to me?

953
01:26:07.580 --> 01:26:36.580
Boy, I got one minute left. That's a toughie. Let me give you the 30-second answer.

954
01:26:36.580 --> 01:26:39.860
First of all, I can't steal it from Ben, because he's a thief.

955
01:26:39.860 --> 01:26:41.340
He's not the legitimate owner of it.

956
01:26:41.340 --> 01:26:44.060
I can only take it from him.

957
01:26:44.060 --> 01:26:45.740
Yeah, but I'm not stealing it.

958
01:26:45.740 --> 01:26:48.500
I'm taking it, or liberating it, or transferring it

959
01:26:48.500 --> 01:26:49.820
from him to me.

960
01:26:49.820 --> 01:26:52.940
Stealing, I think, the way the word works,

961
01:26:52.940 --> 01:26:55.060
into philosophy of language will correct me

962
01:26:55.060 --> 01:26:57.020
if I'm wrong on this, stealing can only

963
01:26:57.020 --> 01:27:00.660
be done from the original rightful owner, which is you.

964
01:27:00.660 --> 01:27:01.540
So he's a thief.

965
01:27:01.540 --> 01:27:02.860
He stole it from you.

966
01:27:02.860 --> 01:27:04.660
I took it from him.

967
01:27:04.660 --> 01:27:07.060
and now I'm trying to return it to you.

968
01:27:07.060 --> 01:27:08.660
So I didn't steal it from him.

969
01:27:09.900 --> 01:27:14.900
Second point is the law, the common law about salvage.

970
01:27:18.080 --> 01:27:21.220
What happens is if you lose a boat,

971
01:27:21.220 --> 01:27:22.900
you abandon ship and you take off

972
01:27:22.900 --> 01:27:25.260
in the life preserver or whatever.

973
01:27:25.260 --> 01:27:28.620
And now the boat sinks and I salvage it

974
01:27:28.620 --> 01:27:29.960
and bring it back to port.

975
01:27:31.540 --> 01:27:33.180
Who was the rightful owner of that boat?

976
01:27:33.180 --> 01:27:37.340
It's not exactly the hat, but it might shed light on it.

977
01:27:37.340 --> 01:27:41.380
And my understanding of the ruling from the private

978
01:27:41.380 --> 01:27:44.580
admiralty courts was that the rightful owner, the original owner,

979
01:27:44.580 --> 01:27:47.220
gets two-thirds of the value of the boat,

980
01:27:47.220 --> 01:27:50.900
and the salvager gets one-third of the value of the boat.

981
01:27:50.900 --> 01:27:53.020
Now, how do they come up with two-thirds and one-third?

982
01:27:53.020 --> 01:27:54.180
Should it be 60-40?

983
01:27:54.180 --> 01:27:55.420
Should it be 70-30?

984
01:27:55.420 --> 01:27:56.700
I'm not going to argue with that.

985
01:27:56.700 --> 01:27:58.900
All I can say is that it came from a legitimate set

986
01:27:58.900 --> 01:28:01.220
of private courts determining this.

987
01:28:01.220 --> 01:28:05.620
So as a libertarian, I would accept that bit of common law.

988
01:28:05.620 --> 01:28:09.300
Now, to get closer to a question you asked,

989
01:28:09.300 --> 01:28:13.420
did the loser of the vote have to commission

990
01:28:13.420 --> 01:28:14.500
someone to go out and salvage?

991
01:28:14.500 --> 01:28:17.020
No.

992
01:28:17.020 --> 01:28:18.580
Anyone could go out and salvage the boat.

993
01:28:18.580 --> 01:28:23.860
So I would say anyone could go to Ben and give it back to you.

994
01:28:23.860 --> 01:28:26.580
Unless you said, you know, I'm a pacifist,

995
01:28:26.580 --> 01:28:29.660
or I don't believe in using violence against people,

996
01:28:29.660 --> 01:28:39.660
I believe in thieves and I'm now giving it to Ben, in which case then Ben is the rightful owner even though he came by it through an improper process originally.

997
01:28:39.660 --> 01:28:46.660
We're out of time but great question and what I'm going to do is use this at the beginning of one of the other sessions to try to talk more about it.

998
01:28:46.660 --> 01:28:48.660
Thanks for your time.