WEBVTT NOTE Limits of Limited Government Mercantilism, the Unvanquished Foe of Liberty 1 00:00:00.000 --> 00:00:08.420 The topic of today's conference, the delusion of good government, I think in a way reminds 2 00:00:08.420 --> 00:00:14.160 me of my definition of a good meeting, that a good meeting is just a bad meeting that 3 00:00:14.160 --> 00:00:25.400 could have been worse. And as we see kind of the history of this country that good government 4 00:00:25.400 --> 00:00:29.560 is just bad government that could have been worse. 5 00:00:29.560 --> 00:00:32.360 And we've got bars sort of. 6 00:00:32.360 --> 00:00:37.960 So my framework in here is that we 7 00:00:37.960 --> 00:00:41.800 went through both an intellectual and a physical revolution 8 00:00:41.800 --> 00:00:47.480 starting about 1776 to try to abolish absolutism 9 00:00:47.480 --> 00:00:52.120 and really the economic policy of absolutism, mercantilism. 10 00:00:52.120 --> 00:01:21.880 and what we really see is one of the big delusions of good government now is just this ubiquitous almost public private partnerships or what I labeled in here is the entanglement of big government, big business, big labor and big charity at the expense really of all of us in here. 11 00:01:21.880 --> 00:01:31.000 So, that 1776 just was an incredible, remarkable year that you had the physical revolt, which 12 00:01:31.000 --> 00:01:38.800 was the American Revolution, and at the same time you get the publication of Smith's book, 13 00:01:38.800 --> 00:01:46.280 An Inquiry into the Nature and Causes of the Wealth of Nations, and I'm going to focus 14 00:01:46.280 --> 00:01:56.280 Let's focus a little bit on Smith to start with because I think he does two really remarkable things in that book. 15 00:01:56.280 --> 00:02:03.280 One, he asks the right question rather than too many people ask the wrong question. 16 00:02:03.280 --> 00:02:15.280 What is it or how is it that some people started to produce, accumulate and expand wealth? 17 00:02:15.280 --> 00:02:31.280 And the first is kind of, if you look in your packet at figure one, which is just some data from Britain from early in the 12th or 13 hundreds on wealth to about 1995 that's in Mark Skousen's. 18 00:02:31.280 --> 00:02:43.280 And while this is data on Great Britain, the first part of that data, if you look just so century after century after century 19 00:02:43.280 --> 00:02:57.840 Theory of subsistence level production income. And not only subsistent, but you'd see in 20 00:02:57.840 --> 00:03:07.240 that society that you really had 90 to 95% of the population was living really in almost 21 00:03:07.240 --> 00:03:14.480 Abject Poverty, subsistence-type farming, where you're really one bad harvest away 22 00:03:14.480 --> 00:03:21.600 from hunger and two bad harvests away from starvation. 23 00:03:21.600 --> 00:03:28.840 And if you really look at the undeveloped part of the world, that that pattern of human 24 00:03:28.840 --> 00:03:33.760 existence has persisted in many ways even to the present state. 25 00:03:33.760 --> 00:03:40.400 So what was it that caused the change, that started that acceleration, where not only 26 00:03:40.400 --> 00:03:47.840 did you see the standard of living in absolute terms go up, but if you really look at the 27 00:03:47.840 --> 00:03:53.480 U.S. economy, we've really almost reversed the situation, where we've got really 90 28 00:03:53.480 --> 00:04:00.640 to 95 percent of the population lives very, very well in material means, particularly 29 00:04:00.640 --> 00:04:07.320 compared to historical standards, and we're dealing with this fringe 5% that we now... 30 00:04:07.320 --> 00:04:08.320 What causes poverty? 31 00:04:08.320 --> 00:04:22.300 And I would say that one's almost the no-brainer, that what nature provides are not resources 32 00:04:22.300 --> 00:04:29.680 until some human figures out how to take what's there and build it into an action plan to 33 00:04:29.680 --> 00:04:36.680 to make things better. 34 00:04:36.680 --> 00:04:43.440 And then the challenge becomes what kind of institutions, what kinds of environment led 35 00:04:43.440 --> 00:04:44.440 to improvement. 36 00:04:44.440 --> 00:04:48.520 And one of the dilemmas I'll bring up in the mercantilist system is, well, it's a system 37 00:04:48.520 --> 00:04:50.320 of absolutism. 38 00:04:50.320 --> 00:04:57.280 And I try to stick with Smith's sort of hidden definition of what mercantilism is. 39 00:04:57.280 --> 00:05:07.060 And it's basically a system of privilege and restraint that you work through the government 40 00:05:07.060 --> 00:05:13.800 to get the privilege or the opportunity to take advantage, produce, market, sell goods 41 00:05:13.800 --> 00:05:14.880 and services. 42 00:05:14.880 --> 00:05:19.420 But often what came with that privilege was restraint on other people from engaging in 43 00:05:19.420 --> 00:05:22.400 that same competitive activity. 44 00:05:22.400 --> 00:05:49.400 Mercantilism is still with us and one of my criticisms kind of of Rothbard, or not Rothbard, but Hayek and Mises' approach to interventionism, mercantilism, is they view that there's no middle road, no possible feasible economic system, and I follow David Osterfeld here, 45 00:05:49.400 --> 00:05:55.640 that mercantilism has been very, very successful. One, because compared to the old feudal or 46 00:05:55.640 --> 00:06:03.480 other type of system, it does open up opportunities for some that enhanced wealth creation, but 47 00:06:03.480 --> 00:06:14.320 it also locked in the figure two that I point is kind of Osterfeld's kind of topography 48 00:06:14.320 --> 00:06:19.320 of economic systems and he's got capitalism and as you move to the right, you'd be moving 49 00:06:19.320 --> 00:06:27.200 Moving more towards the anarcho-capitalism of Murray Rothbard, actually left on the diagram, 50 00:06:27.200 --> 00:06:31.720 and then to the right you move into what he classifies as interventionism, heavy government 51 00:06:31.720 --> 00:06:37.160 interference in the economy, the middle ground he refers to as mercantilism, and then the 52 00:06:37.160 --> 00:06:44.440 far extreme over into socialism, and I just argue if you look around and keep this definition 53 00:06:44.440 --> 00:06:54.800 in mind of this system of privileges and restraint is that historically this has been a long 54 00:06:54.800 --> 00:06:59.520 enduring type of economic system. 55 00:06:59.520 --> 00:07:07.940 And one of the political kind of undug is that whether it's a revolt through an election 56 00:07:07.940 --> 00:07:16.280 or revolt against the absolutism in an actual revolution is that the temptation is always 57 00:07:16.280 --> 00:07:23.680 once you become the elite is, wait a minute, it's not the system that was so bad, it was 58 00:07:23.680 --> 00:07:25.960 who was in charge of it. 59 00:07:25.960 --> 00:07:32.780 And so you see a tendency for the revolution, and I'll pick maybe Alexander Hamilton and 60 00:07:32.780 --> 00:07:39.700 The system of the Federalists early on that quickly thought, well, wait a minute, it really 61 00:07:39.700 --> 00:07:43.020 wasn't all that bad under the British system. 62 00:07:43.020 --> 00:07:47.720 It's just that we weren't in control at the top determining who the beneficiaries would 63 00:07:47.720 --> 00:07:51.020 be and who would be less privileged or who would tax. 64 00:07:51.020 --> 00:07:53.420 So it's kind of an ongoing in there. 65 00:07:53.420 --> 00:08:18.420 So anyway, the second is Smith actually to me also provides the correct answer to how to become wealthy and actually with a couple of quotes in there, he first, about 1755 in a lecture probably to a group at that time equivalent to this type of thing, 66 00:08:18.420 --> 00:08:32.900 first sort of made the comment that little else is requisite to carry a state to the 67 00:08:32.900 --> 00:08:38.260 highest degree of opulence from the lowest barbarism, but peace, pardon the spelling 68 00:08:38.260 --> 00:08:45.220 on the handout, easy taxes, and a tolerable administration of justice. And to Smith, justice 69 00:08:45.220 --> 00:08:51.300 This was the protection of person and property from predators, not the modern social justice 70 00:08:51.300 --> 00:08:52.300 in there. 71 00:08:52.300 --> 00:08:56.420 He says, all the rest is being brought about the natural course of things. 72 00:08:56.420 --> 00:09:03.140 All governments which thwart the natural course, which force things into channels or which 73 00:09:03.140 --> 00:09:09.840 endeavor to arrest the progress of society at a particular point are unnatural and to 74 00:09:09.840 --> 00:09:21.600 to support themselves are obliged to be oppressive and tyrannical. 75 00:09:21.600 --> 00:09:29.000 Nearly 20 years later when he published The Wealth of Nations in his attack on mercantilism, 76 00:09:29.000 --> 00:09:34.560 he writes, it is thus that every system which endeavors either by extraordinary encouragements 77 00:09:34.560 --> 00:09:42.060 to draw a particular species of industry a greater share of capital of society than that 78 00:09:42.060 --> 00:09:49.680 which would go to it naturally. Sound familiar with green energy policies? That the only 79 00:09:49.680 --> 00:09:58.340 thing missing from those policies is any affordable energy in the middle run in here. Or to force 80 00:09:58.340 --> 00:10:02.620 from a particular species of industry some of the share of the capital which would otherwise 81 00:10:02.620 --> 00:10:09.140 as be employed in it is in reality subversive of the great purpose which it means to promote. 82 00:10:09.140 --> 00:10:15.180 It retards instead of accelerates the progress of society towards real wealth and greatness 83 00:10:15.180 --> 00:10:25.580 and diminishes instead of increasing the real value of the annual produce of the country. 84 00:10:25.580 --> 00:10:36.980 Why has the system of privileges and strengths continued, and I think one of it, as Osterfeld 85 00:10:36.980 --> 00:10:44.300 points out, is that, or let's say I'll go back, and if you look at my view just from 86 00:10:44.300 --> 00:10:49.960 the topology of Osterfeld in there, is Smith's looking at the system that's starting to 87 00:10:49.960 --> 00:10:54.140 create well, and if you really look at that chart, how slow that progress has been, so 88 00:10:54.140 --> 00:11:01.100 So what insights he really had on what might have been coming is that Smith looked at what 89 00:11:01.100 --> 00:11:10.100 was going on, saw the accelerating increase in production and wealth as being generated 90 00:11:10.100 --> 00:11:15.580 by the opportunities that were being opened up through some of the privileges and he answered, 91 00:11:15.580 --> 00:11:20.780 well if this is beneficial for some, just think how much more beneficial if we just 92 00:11:20.780 --> 00:11:28.820 opened it up to everyone else, so he points in the answer that you want to eliminate these 93 00:11:28.820 --> 00:11:37.980 special privileges and these restraints and leave people free following what we now refer 94 00:11:37.980 --> 00:11:44.820 to as self-interest or gets misrepresented as selfishness or greed, where in Smith's 95 00:11:44.820 --> 00:11:56.520 Framework, actually self-interest fell under the virtue, properly understood, of prudence. 96 00:11:56.520 --> 00:12:05.020 Other critics of the system looked at what was going on, and Marx particularly, but many 97 00:12:05.020 --> 00:12:12.660 others, and looked at problems that still existed, and inappropriately blamed those 98 00:12:12.660 --> 00:12:22.140 was problems on free markets rather than on the system of privilege and restraint. 99 00:12:22.140 --> 00:12:28.880 And their recommendation was the wrong people are benefiting, the wrong people are bearing 100 00:12:28.880 --> 00:12:30.340 the burden. 101 00:12:30.340 --> 00:12:36.940 So what we need is to achieve the goals we want is move towards more government and more 102 00:12:36.940 --> 00:12:44.060 Control, an enlightened government that would more appropriately choose who the beneficiaries 103 00:12:44.060 --> 00:12:46.340 would be. 104 00:12:46.340 --> 00:12:51.340 And so we perpetuate this system. 105 00:12:51.340 --> 00:12:58.140 And the confusion comes in and Osterfeld in the volume Requiem for Marx that was edited 106 00:12:58.140 --> 00:13:06.220 by one of our later speakers, Harry Moulson, when you go back into the writings of Marx 107 00:13:06.220 --> 00:13:13.580 Marx points out that Marx gives a pretty good definition of capitalism as essentially freedom 108 00:13:13.580 --> 00:13:23.580 to produce and exchange, but then when he shifts and starts to criticize the outcomes 109 00:13:23.580 --> 00:13:30.540 of that system, he really criticizes mercantilism and the restraints that have been put on and 110 00:13:30.540 --> 00:13:36.340 and limited the advancements of capitalism. 111 00:13:36.340 --> 00:13:50.640 So we get the sort of unvanished foe as mercantilism and to see how prevalent this really still 112 00:13:50.640 --> 00:14:08.120 People pointing out China, Japan in the 50s, other areas pushing for indicative planning, 113 00:14:08.120 --> 00:14:13.840 industrial planning, goals like that, that as you move from a more restrictive system 114 00:14:13.840 --> 00:14:22.200 to a Mercantilist System, Do a Pair to Growth, and Monday's Wall Street Journal, A Businessman, 115 00:14:22.200 --> 00:14:30.200 some of the worst enemies of free market or business people, is by Jeremy Wison, The U.S. 116 00:14:30.200 --> 00:14:38.500 Needs Its Own Industrial Policy. And he says, the term industrial policy should not be seen 117 00:14:38.500 --> 00:14:57.500 It certainly isn't in China, nor should it be anathema for the U.S. government to provide capital and other incentives to keep scientific and entrepreneurial talent at home, 118 00:14:57.500 --> 00:15:06.500 should give aggressive trade assistance and incubate new businesses, all of which was done in China. 119 00:15:06.500 --> 00:15:11.500 Then he ends it with a comment about maybe businesses should actually do this type of thing. 120 00:15:11.500 --> 00:15:20.500 It's just an incredible temptation and someone would also, one of my duties as Dean of the School of Business, 121 00:15:20.500 --> 00:15:25.500 as I've said on an advisory board to the Denver Small Business Development Center, 122 00:15:25.500 --> 00:15:31.420 Development Center, Small Business, the Heart of America, the Job Creators, those that 123 00:15:31.420 --> 00:15:34.780 most need the opportunities to open up. 124 00:15:34.780 --> 00:15:44.660 The number one concern for many of these small businesses is how can they get help on procurements? 125 00:15:44.660 --> 00:15:51.740 How do they get onto the government bandwagon to get benefits from that? 126 00:15:51.740 --> 00:16:01.860 I've also been participating in the Chamber of Commerce Energy Coalition on the cap and 127 00:16:01.860 --> 00:16:11.660 trade issue. While some were rightfully concerned with how this was going to restrict their 128 00:16:11.660 --> 00:16:20.060 opportunities, how it would limit their ability to provide affordable energy, the major interest 129 00:16:20.060 --> 00:16:30.300 in that group was how do we work through the lobbyist and the legislative process to direct 130 00:16:30.300 --> 00:16:41.460 subsidies that we can get in grants that will offset our capital costs? How do we figure 131 00:16:41.460 --> 00:16:49.020 out to get involved in the financial rewards that would come from creating new market instruments 132 00:16:49.020 --> 00:17:01.700 in Trading Carbon Emissions and or Carbon Offsets. And then there's always lawyers at the table. 133 00:17:01.700 --> 00:17:07.680 So how can we make more money providing you services to help you get on the gravy or the 134 00:17:07.680 --> 00:17:18.340 bandwagon in here? And we're now at a real crisis. And if you can see the problem, figure 135 00:17:18.340 --> 00:17:29.160 Chapter 3 was in Thursday's Wall Street Journal on an article by John Taylor, Michael Boskin 136 00:17:29.160 --> 00:17:33.700 and other sign-amants. Some of the packets may not have that because I didn't have, 137 00:17:33.700 --> 00:17:45.740 but it shows a forecast going out to 2015 from the most recent budget that the size 138 00:17:45.740 --> 00:17:58.740 The size of the U.S. government relative to the U.S. economy could get up pushing 50 to 60 percent of the total economy, total takeover in here. 139 00:17:58.740 --> 00:18:07.740 So the problem is how do we avoid that? How do we get back to this simple system of liberty and justice? 140 00:18:07.740 --> 00:18:15.740 How do we get back to an economic system based on the economics means? 141 00:18:15.740 --> 00:18:25.740 Where people get wealthy by producing and exchanging, and they engage in true charity, gifts. 142 00:18:25.740 --> 00:18:29.740 It's often forgotten that that's part of a free society. 143 00:18:29.740 --> 00:18:35.740 That you can make the resources that you've created available to help society 144 00:18:35.740 --> 00:18:42.380 or to help others as a way to solve problems as opposed to the modern political conception 145 00:18:42.380 --> 00:18:47.820 of compassion or charity is to help out your less fortunate neighbor by taking resources 146 00:18:47.820 --> 00:18:51.860 away from your more fortunate neighbor. 147 00:18:51.860 --> 00:19:00.500 The political means or predatory behavior, so we really face challenges. 148 00:19:00.500 --> 00:19:08.460 We have, I think as I point out, the solutions is really, simplest terms, is recognizing 149 00:19:08.460 --> 00:19:13.300 what we need is what Osterfeld and really looking at more in the development of the 150 00:19:13.300 --> 00:19:18.860 world, is we need to ensure that we have an enabling environment, an environment based 151 00:19:18.860 --> 00:19:24.620 on private property, production and exchange. 152 00:19:24.620 --> 00:19:30.020 And even some mainstream economists are catching on. 153 00:19:30.020 --> 00:19:36.820 Esquire this week has an article by Darren Asmonglow on essentially what makes a nation 154 00:19:36.820 --> 00:19:42.980 rich and providing an answer very, very similar to Smith's. 155 00:19:42.980 --> 00:19:52.100 Proper incentives and proper incentives require proper institutions, but to fix or get proper 156 00:19:52.100 --> 00:19:59.340 For institutions, you need to fix government. You need to get it back into its limits in 157 00:19:59.340 --> 00:20:09.060 here. And the dilemma we face is that there are proposals and the article in the Wall 158 00:20:09.060 --> 00:20:14.920 Street Journal by Taylor and them, it's worth looking at because it probably would 159 00:20:14.920 --> 00:20:22.560 would be good government in the sense that I used it at the start, is that it's not 160 00:20:22.560 --> 00:20:30.760 as bad as what we currently have in there, but one of the guides we have, and the handouts 161 00:20:30.760 --> 00:20:48.440 and I won't look at time here, that we should seriously be looking at any reform that eliminates 162 00:20:48.440 --> 00:20:58.480 or reduces the use of mercantilist type policies, the use of people relying on privileges to 163 00:20:58.480 --> 00:21:06.920 to Create Wealth, and Relying on Restraints, the Activity of Others to Protect and Maintain 164 00:21:06.920 --> 00:21:10.920 that Wealth Over Time. 165 00:21:10.920 --> 00:21:19.800 Even this kind of, what are the best recommendations, and maybe 15 years ago I got an email from 166 00:21:19.800 --> 00:21:27.680 Walter Block and he asked me, well, we've got a bet down here at Loyola, New Orleans. 167 00:21:27.680 --> 00:21:36.520 Are you an anarcho-capitalist or just a run-of-the-mill classical liberal? 168 00:21:36.520 --> 00:21:45.000 I wrote back to him, well, the answer would depend on how recently I had just read Rothbard. 169 00:21:45.000 --> 00:21:50.720 His arguments are very, very convincing in there, but then I talked about that I probably 170 00:21:50.720 --> 00:21:56.280 at that time was leaning more towards the classical liberal because when I taught in 171 00:21:56.280 --> 00:22:05.240 in Class, I could make points more in the classical liberal line, and people would listen. 172 00:22:05.240 --> 00:22:12.600 And then you could direct them to Rothbard's argument, and those that are rational would 173 00:22:12.600 --> 00:22:17.200 probably be persuaded to move more in that direction. 174 00:22:17.200 --> 00:22:23.680 But we really are looking in short run, and I cite a couple of papers in there that I 175 00:22:23.680 --> 00:22:31.100 I think, one, we need to get the discussion that goes in the common area here away from 176 00:22:31.100 --> 00:22:35.100 the focus on the size of the deficit and the size of the debt. 177 00:22:35.100 --> 00:22:38.760 The problem is the size of government. 178 00:22:38.760 --> 00:22:44.720 And a couple of those works, Richard Vetter and Galloway from both out of 98 and then 179 00:22:44.720 --> 00:22:54.180 Randy Holcomb, James Gortney and Lawson who did some pretty interesting work both on the 180 00:22:54.180 --> 00:22:55.180 US and others. 181 00:22:55.180 --> 00:22:59.960 I think their answer comes out too big, but they look at core government, which is kind 182 00:22:59.960 --> 00:23:06.300 of consistent, a lot broader than many of us would like, but it's better than that, 183 00:23:06.300 --> 00:23:12.540 and some very, very convincing data on how over expansion of government beyond those 184 00:23:12.540 --> 00:23:19.980 First Core Means retards growth and prosperity rather than expands it. 185 00:23:19.980 --> 00:23:28.300 So we've got one is, and I guess I'll close with that, but at a preferred alternative 186 00:23:28.300 --> 00:23:34.020 would be to look at Mises, which I'll quote, and he's got another quote somewhere that 187 00:23:34.020 --> 00:23:42.380 he says, you know, government is like gasoline if kept to its appropriate and proper use 188 00:23:42.380 --> 00:24:12.380 can be very, very useful within society. Problem like gasoline, if it is misused, it can be quite explosive and quite destructive, and that's really the dilemma or maybe the delusion of limited government is that no matter how much you think you are limiting or setting up government to provide 189 00:24:12.380 --> 00:24:19.500 The sort of necessary enabling things that are often pointed out as protection of person and property 190 00:24:19.500 --> 00:24:24.620 and from Smith is from foreign predators and domestic predators. 191 00:24:24.620 --> 00:24:32.620 This simple system of liberty and justice in there, very consistent with Mises. 192 00:24:32.620 --> 00:24:39.660 You still face the dilemma that how do you finance that without going into immoral means. 193 00:24:39.660 --> 00:24:43.460 But it's certainly a better benchmark than what we've got. 194 00:24:43.460 --> 00:24:47.660 The core government is a better benchmark than what we've got. 195 00:24:47.660 --> 00:24:49.860 How do we scale down? 196 00:24:49.860 --> 00:24:55.360 How do we keep this train wreck from happening in there? 197 00:24:55.360 --> 00:25:03.660 And then I'll just close that I think there's lots of better 198 00:25:03.660 --> 00:25:09.160 economists and economic models that make arguments for free markets 199 00:25:09.160 --> 00:25:16.040 is based on the economics, that it's the best system for generating wealth and prosperity, 200 00:25:16.040 --> 00:25:24.600 but ultimately the defense of a free society or free markets is moral, and I paraphrase 201 00:25:24.600 --> 00:25:30.720 Bastiat that I think should be maybe our ethical guide as you look at proposals, one do they 202 00:25:30.720 --> 00:25:38.640 move us in the right direction, but when we look at what goes on in here is how fundamentally 203 00:25:38.640 --> 00:25:46.080 Can any law be just, that allows people to do through government, that which would be 204 00:25:46.080 --> 00:25:56.160 considered illegal or immoral if done individually, that if we can avoid the predatory means. 205 00:25:56.160 --> 00:26:01.280 And for the business people in here, my handout, there is a, one of the privileges I had as 206 00:26:01.280 --> 00:26:08.340 a School of Business Dean is I occasionally could bring in speakers and I saw an article 207 00:26:08.340 --> 00:26:13.820 School on Business Ethics by Rich Wilkie who's another adjunct scholar at the University 208 00:26:13.820 --> 00:26:24.660 of Louisville that I think should be read by more and more people because ethics are 209 00:26:24.660 --> 00:26:34.180 important in a free society in here and schools of business are being pushed through certain 210 00:26:34.180 --> 00:26:39.200 channels and stuff to emphasize business ethics, but it really in many cases is the way they 211 00:26:39.200 --> 00:26:46.040 left us, philosophers are getting their foot into the business school and getting emphasis 212 00:26:46.040 --> 00:26:54.980 on sustainability and businessman's obligation to give back to society in here. 213 00:26:54.980 --> 00:27:06.660 And Rich had a really interesting, as an ethical business person, that you should pledge not 214 00:27:06.660 --> 00:27:16.940 to take money from the government, whether through procurement or subsidies or whatever. 215 00:27:16.940 --> 00:27:23.740 Because the ethics that drives businesses to fulfill people is that you essentially, 216 00:27:23.740 --> 00:27:31.940 In your self-interest, you ask yourself, what is it that other people need as consumers? 217 00:27:31.940 --> 00:27:38.980 And as you fulfill that need through your plans and resources in there, where you're 218 00:27:38.980 --> 00:27:44.660 successful, where you provide value to other people, your wealth increases and enhanced, 219 00:27:44.660 --> 00:27:51.420 as opposed to the modern version of how do I get wealthy, is how do I, through lobbying, 220 00:27:51.420 --> 00:28:21.420 to direct the government to direct either revenue forms that can be used as the founding capital, subsidies, or to sell my products into, and then I guess the last thing is a piece I did in, got me in trouble in the academics, a paper I did on separating school and state, privatization, true and false, is I lost a promotion when that came out, and then the next year I advertised it as an 221 00:28:21.420 --> 00:28:29.420 Boucher Paper and did quite well, but one of the points I try to make in there is that 222 00:28:29.420 --> 00:28:35.960 as we're looking and what do we need to do in this environment in here is we need to 223 00:28:35.960 --> 00:28:41.260 shrink government and where government does exist it needs to be decentralized as much 224 00:28:41.260 --> 00:28:44.740 as possible down to the local level. 225 00:28:44.740 --> 00:28:53.500 And in that process, we need to privatize resources, but false privatization, where 226 00:28:53.500 --> 00:28:59.620 you just have the government collect taxes, pay for the service, and they allow firms 227 00:28:59.620 --> 00:29:03.940 occasionally to compete through a bidding process to see who will be. 228 00:29:03.940 --> 00:29:07.140 That's not privatization. 229 00:29:07.140 --> 00:29:14.180 Privatization is both the revenue source and the product and service come through voluntary 230 00:29:14.180 --> 00:29:23.140 Interactions and Agreements with Citizens in a Free and Open Society.