WEBVTT NOTE Socialism and Fascism: A Political-Economic Spectrum Analysis 1 00:00:00.000 --> 00:00:05.800 I want to begin by saying that it is an honor and a privilege and a pleasure for me to be here 2 00:00:05.800 --> 00:00:09.800 amongst people who are supporters of the Mises Institute. 3 00:00:09.800 --> 00:00:14.900 I regard the Mises Institute as the last best hope for civilization 4 00:00:14.900 --> 00:00:19.200 and I regard you people who are the supporters as crucial elements in this 5 00:00:19.200 --> 00:00:24.800 because without you there's no building, there's no professors here, there's no nothing. 6 00:00:24.800 --> 00:00:30.100 So, thank you for letting me be part of your meeting. 7 00:00:30.100 --> 00:00:41.000 What I want to do is to try to distinguish fascism from socialism, and I want to do this through the eyeglasses of the political spectrum, or spectra. 8 00:00:41.000 --> 00:00:48.100 Why do I want to do this? Well, categorization is important. Taxonomies are crucial to biology and chemistry. 9 00:00:48.100 --> 00:00:55.100 Indeed, one might say that chemistry and biology consist of almost nothing more than divisions and categorizations 10 00:00:55.100 --> 00:01:00.100 and I think that always helps me at least to think about these things. 11 00:01:00.100 --> 00:01:05.600 Notice I don't have physics envy, but I have chemistry and biology envy. 12 00:01:05.600 --> 00:01:16.800 Socialism and fascism seem both bad to me, both equally bad to me, and yet they're considered so differently by the powers that be. 13 00:01:16.800 --> 00:01:29.800 For example, Prince Harry of England wore Nazi regalia to some party and it was as if someone had stolen the crown jewels and stomped on him or something. 14 00:01:29.800 --> 00:01:37.800 I mean, he was excoriated all over the place and only his tender age let him escape from anything worse. 15 00:01:37.800 --> 00:01:45.800 But suppose he had worn commie stuff, the hammer and sickle. Nobody would have said squat. Nobody would have said boo. 16 00:01:45.800 --> 00:01:55.800 Another instance of this phenomenon is you see young teenagers with Che Guevara on their t-shirt or Stalin or Lenin, mass murderers. 17 00:01:55.800 --> 00:02:02.800 You don't see anyone with a t-shirt with Goebbels or Heimrich Kimmler or Hermann Göring or our man Adolf. 18 00:02:02.800 --> 00:02:07.800 I mean, where are the Adolf t-shirts? You just don't see them. 19 00:02:07.800 --> 00:02:14.800 We have Che being celebrated in the motorcycle diaries. Why not some of these other guys celebrated in a movie? 20 00:02:14.800 --> 00:02:22.800 I mean, you know, where's the movie for, well, the exception of the producers, but that's a different kind of a movie. 21 00:02:22.800 --> 00:02:26.800 Then, too, there are commie parties everywhere. 22 00:02:26.800 --> 00:02:34.800 There's a U.S. commie party, and Canada is a commie party, and Europe, there are commie parties that actually take part in the government. 23 00:02:34.800 --> 00:02:41.800 Where are the Nazi parties? I mean, not that I'm calling for them, please understand me, 24 00:02:41.800 --> 00:02:51.800 I don't know if you understand me but I'm just saying that we're treating them so differently and yet in terms of mass murder, if anything the commies are worse. 25 00:02:51.800 --> 00:02:54.800 I have some back of the envelope calculations here. 26 00:02:54.800 --> 00:03:09.800 Mao gets credit for 60 million people killed, Stalin 20 million, Hitler only 11 million, 6 million Jews according to the calculations and 5 million homosexuals and gypsies and others. 27 00:03:09.800 --> 00:03:18.800 Well, the score is, I don't know, according to my calculations, 81 million for the commies and 11 million for the Nazis, so the commies are worse. 28 00:03:18.800 --> 00:03:29.800 So why this disparate treatment? It's very puzzling. Could it be racism? That the fascists were more racist than the commies? 29 00:03:29.800 --> 00:03:35.800 The commies were sort of equal opportunity killers and somehow that's okay because they weren't prejudiced. 30 00:03:35.800 --> 00:03:39.800 You know, as they shoot you, you say, well, you know, nothing personal, but, you know, 31 00:03:39.800 --> 00:03:44.800 whereas the Nazis were evil because they would pick these guys and not those guys. 32 00:03:44.800 --> 00:03:49.800 And, you know, somehow that, I can't believe that that explains all of it. 33 00:03:49.800 --> 00:03:56.800 So what I want to do is to try to analyze these two systems through a series of political spectrums 34 00:03:56.800 --> 00:03:59.800 and see if we can't make any sense that way. 35 00:03:59.800 --> 00:04:08.800 And I start off with the usual spectrum. Here's left and there's right. I'm trying to be repertorial now. 36 00:04:08.800 --> 00:04:16.800 And people are put on these spectrums in accordance with the views that they're supposed to have. 37 00:04:16.800 --> 00:04:24.800 So, for example, we might put JFK on the left and Ronald Reagan on the right. I'm trying to be repertorial here. 38 00:04:24.800 --> 00:04:29.800 I brook no disagreement here, I'm just using these as examples. 39 00:04:29.800 --> 00:04:38.800 We might put Michael Moore over here and maybe the producers of South Park over here. 40 00:04:38.800 --> 00:04:46.800 We might put the ACLU over there and maybe the National Rifle Association here. 41 00:04:46.800 --> 00:04:58.800 We've certainly put Ron Paul over here, maybe Kerry over here, maybe Bush over here, sort of in the middle. 42 00:04:58.800 --> 00:05:04.800 In other words, this is the way the political spectrum is usually constituted by most people. 43 00:05:04.800 --> 00:05:08.800 There are grave problems with this way of looking at things. 44 00:05:08.800 --> 00:05:12.800 First of all, where do you put Stalin and Hitler? 45 00:05:12.800 --> 00:05:18.800 Well, Hitler, you put way over here on the right, because he's the most extreme rightist, 46 00:05:18.800 --> 00:05:22.800 and you put Stalin way over there on the left, and immediately you have a problem, 47 00:05:22.800 --> 00:05:29.800 because people are supposed to be close on the spectrum who are close in ideology and far apart on the spectrum, 48 00:05:29.800 --> 00:05:35.800 who are far apart in ideology, and yet there might be a dime's difference between Hitler and Stalin, 49 00:05:35.800 --> 00:05:39.800 but there's not a quarter's difference between them, so they belong together. 50 00:05:39.800 --> 00:05:44.800 Where do you put Mother Teresa? Is she a right-winger? No! 51 00:05:44.800 --> 00:05:50.800 Ma Teresa is over there on the left with her buddy Stalin, 52 00:05:50.800 --> 00:05:57.800 which is a juxtaposition from, I don't know, juxtaposition hell. 53 00:05:57.800 --> 00:06:00.800 I don't know, who do you put as a good right-winger? 54 00:06:00.800 --> 00:06:06.800 Well, I guess Ron Paul and Hitler are together, you know, buddies. 55 00:06:06.800 --> 00:06:14.800 So this is a problem, and this will not help us solve anything. 56 00:06:14.800 --> 00:06:20.800 Now, the libertarians, what they do, some libertarian members of the libertarian party, what they do is say, 57 00:06:20.800 --> 00:06:29.800 here is economic freedom, and here is personal freedom, and they make some sort of triangle like that, 58 00:06:29.800 --> 00:06:34.800 and they give you, the more economic freedom, the more you go in this direction, the more personal freedom, 59 00:06:34.800 --> 00:07:04.800 Freedom, the more you get in that direction. You've all seen these small political quizzes, and it ends up here are the centrists, and here are the libertarians, and here are the, I guess you'd call them, statists, which is okay, but now these people over here are, I don't know, conservatives or fascists, but that doesn't really fit because they don't believe in economic freedom much, 60 00:07:04.800 --> 00:07:13.800 And you put liberals here or commies over here, but they don't believe in personal freedom, so this is problematic as well. 61 00:07:13.800 --> 00:07:20.800 Plus, really it's three issues that we're involved with, not just economics or personal liberty, but also war and peace. 62 00:07:20.800 --> 00:07:26.800 Where is war and peace here? It's not there. So this is a problematic way of looking at it also. 63 00:07:26.800 --> 00:07:36.800 I like to look at it this way. Here is good. Here is bad. Here is right. And here is left. 64 00:07:36.800 --> 00:07:44.800 You'll notice a certain symbolism here. It's purely accidental. 65 00:07:44.800 --> 00:07:50.800 By good I mean those people who adhere to the libertarian axiom of non-aggression and private property rights. 66 00:07:50.800 --> 00:07:53.800 And by bad I mean those people who don't. 67 00:07:53.800 --> 00:07:56.800 And the left and right is just rhetoric. 68 00:07:56.800 --> 00:07:59.800 The left and right is silly. 69 00:07:59.800 --> 00:08:03.800 So now we can put Hitler over here, he's a right winger. 70 00:08:03.800 --> 00:08:05.800 Stalin here. 71 00:08:05.800 --> 00:08:10.800 And what they have in common is that they're about as bad as you can get on the good-bad scale. 72 00:08:10.800 --> 00:08:14.800 And you can put Mother Teresa here and Ron Paul here. 73 00:08:14.800 --> 00:08:16.800 And they're both good. 74 00:08:16.800 --> 00:08:18.800 And the differences between them aren't really worth much. 75 00:08:18.800 --> 00:08:29.800 And this, I think, is a better way to look at it, and the point is, if you're going to have a spectrum or a dimension or something, you can only have one thing on it. 76 00:08:29.800 --> 00:08:31.800 You can't have two or three things going on it. 77 00:08:31.800 --> 00:08:42.800 And the problem with the left-right spectrum is that you have economics, personal liberty, and war and peace all put together, and you get great anomalies that way. 78 00:08:42.800 --> 00:09:10.800 Let's then do what I just said, namely, try the single spectrum, not good, bad, but let's take economics, personal liberty, and war and peace, and make three spectrums for each of them, because my view, I think reasonable, is that you can only do one thing on a dimension. 79 00:09:10.800 --> 00:09:15.800 You can't be putting two or three things on, which is the problem with the usual left-right dimension. 80 00:09:15.800 --> 00:09:16.800 So how does this work out? 81 00:09:16.800 --> 00:09:30.800 Well, on economic freedom, it seems that the commies and the fascists are both way at the bad end of that, if this is better and this is worse. 82 00:09:30.800 --> 00:09:33.800 More economic freedom to the right, less to the left. 83 00:09:33.800 --> 00:09:39.800 because the difference between them economically with some risk of oversimplifying 84 00:09:39.800 --> 00:09:44.800 is that the communists believe in public ownership of the means production 85 00:09:44.800 --> 00:09:50.800 and the fascists believe in private property or at least the veneer of private property 86 00:09:50.800 --> 00:09:54.800 but underlaid with all sorts of regulations and control 87 00:09:54.800 --> 00:10:00.800 so the communists will nationalize everything, the fascists won't but they'll control everything 88 00:10:00.800 --> 00:10:03.800 and in terms of economic freedom, there's not much difference. 89 00:10:03.800 --> 00:10:10.800 Now, Gortney Lawson and I did a book on this, also the Heritage Foundation does a book on this, 90 00:10:10.800 --> 00:10:17.800 where we rate the economic freedom of about 100 or 200 different countries on 15 or 20 different criteria. 91 00:10:17.800 --> 00:10:24.800 And the fascists and the socialists or the communists have very little economic freedom. 92 00:10:24.800 --> 00:10:27.800 So there's not much distinction to be made there. 93 00:10:27.800 --> 00:10:34.320 Well, what about personal freedom? Is there much personal liberty under 94 00:10:34.320 --> 00:10:40.360 socialism or under fascism? And again, both socialism and 95 00:10:40.360 --> 00:10:47.480 fascism get poor marks, so you can't distinguish them on this basis. Well, what 96 00:10:47.480 --> 00:10:52.960 about war and peace? And here I would have to say that the fascists are a little 97 00:10:52.960 --> 00:10:56.920 worse than the socialists. Murray used to say that just because Russia was 98 00:10:56.920 --> 00:11:03.920 is an evil country domestically. It doesn't mean that they're necessarily intent on world dominion. 99 00:11:03.920 --> 00:11:09.920 Now, I speak under correction from the historians and the military theoreticians here, 100 00:11:09.920 --> 00:11:17.920 but my understanding is that Hitler was much more expansionist than some of the other Russian countries. 101 00:11:17.920 --> 00:11:21.920 But at least this gives some sort of difference. Maybe I shouldn't put the socialists all the way up there. 102 00:11:21.920 --> 00:11:27.920 I could put them a little closer but maybe some distinction could be made there. I don't know. 103 00:11:27.920 --> 00:11:36.920 All I'm doing is offering a taxonomy. I'm not really expert in who's to be put there, but my surmise is that there might be that distinction. 104 00:11:36.920 --> 00:11:47.920 While I'm on this point of one dimension for one concept, there is such a thing as the Austrian business cycle triangle, 105 00:11:47.920 --> 00:11:53.920 where this would be money and this would be time and also stages of production 106 00:11:53.920 --> 00:12:02.920 and one of the problems with the Austrian Triangle as I see it in my co-author Bill Barnett and I have a paper now making the rounds 107 00:12:02.920 --> 00:12:07.920 criticizing the structure of production in that it is trying to do two things 108 00:12:07.920 --> 00:12:15.920 and sometimes time and stages of production are in sync but they need not always be and when they're not there are problems with the triangle 109 00:12:15.920 --> 00:12:34.920 Well, now we have two more dimensions here, and this would be regulation and control, and this would be public ownership, government ownership. 110 00:12:34.920 --> 00:12:42.920 And this would be public ownership, government ownership. 111 00:12:42.920 --> 00:12:46.920 And here you can make a big difference between the two. 112 00:12:46.920 --> 00:12:52.920 There is very little regulation and control over the private sector under socialism, 113 00:12:52.920 --> 00:12:56.920 so they're pretty good because there's no property to control, right? 114 00:12:56.920 --> 00:12:59.920 So the socialists are pretty good on business regulation. 115 00:12:59.920 --> 00:13:03.920 They don't have any, because they own it all and they decide what's to be done, 116 00:13:03.920 --> 00:13:11.920 where as the fascists are very bad on that one, where as on the other one, namely government ownership, now the socialists are horrible 117 00:13:11.920 --> 00:13:16.920 and I suppose the fascists are a little bit better because at least there's some sort of veneer of private property 118 00:13:16.920 --> 00:13:20.920 there's not much, but there's better than there would be 119 00:13:20.920 --> 00:13:31.920 Now, another point that's interesting, and that is that a lot of the times we use socialism as a bad word, not fascism 120 00:13:31.920 --> 00:13:39.920 For example, I was once in a debate with Milton Friedman on privatizing the roads and he was against it and I was in favor of it, so I called him a road socialist. 121 00:13:39.920 --> 00:13:48.920 Why didn't I call him a road fascist? I don't know, it just sort of came naturally, road socialism. 122 00:13:48.920 --> 00:14:00.920 We have socialized medicine, not fascistized medicine, and yet one of the previous speakers mentioned that the Hillary plan was really fascism in terms of corporatism and regulation. 123 00:14:00.920 --> 00:14:12.920 and Regulation. We have social housing. Why not fascist housing? Maybe it's because the lefties favor this and the last thing they want to do is be associated with fascism. That might be the explanation of that. 124 00:14:12.920 --> 00:14:23.920 We have social studies, sometimes called socialist studies. Why not fascist studies or fascist housing or water fascism or water socialism? 125 00:14:23.920 --> 00:14:30.920 and that would be the people who refuse to engage in or defend private ownership of the oceans and rivers and the lakes 126 00:14:30.920 --> 00:14:33.920 which would be very relevant to what's going on in New Orleans. 127 00:14:33.920 --> 00:14:38.920 If the Mississippi and Lake Pontchartrain were privately owned, we wouldn't have any of this problem. 128 00:14:38.920 --> 00:14:48.920 I think what the Army Corps of Engineers did is raise the Mississippi River and lower New Orleans, which is not a good combination. 129 00:14:48.920 --> 00:15:03.920 There is another way of defining socialism. The main economic way of defining socialism is ownership of the means of production. 130 00:15:03.920 --> 00:15:06.920 You can own your shoes and your bicycle, but that's about it. 131 00:15:06.920 --> 00:15:13.920 Another way of defining socialism is from each according to his ability to each according to his need. 132 00:15:13.920 --> 00:15:19.920 It's not so much an economic way, but it's not an irrelevant way of defining socialism. 133 00:15:19.920 --> 00:15:26.920 And when you define socialism that way, you get socialism versus capitalism. 134 00:15:26.920 --> 00:15:29.920 And here you get voluntary and involuntary. 135 00:15:29.920 --> 00:15:35.920 See, most people think that the political debate is between socialism and capitalism. 136 00:15:35.920 --> 00:15:40.920 But if you define it this way, it's not really so much between socialism and capitalism 137 00:15:40.920 --> 00:15:44.920 as it is between volunteerism and coercivism or involuntarism 138 00:15:44.920 --> 00:15:48.920 because you can have voluntary socialism 139 00:15:48.920 --> 00:15:55.920 voluntary socialism might be the kibbutz, it's not a perfect example because the government does subsidize that 140 00:15:55.920 --> 00:16:00.920 or the commune or the nunnery 141 00:16:00.920 --> 00:16:04.920 all these things are run 142 00:16:04.920 --> 00:16:08.920 in accordance with, from each according to his ability to each according to his need 143 00:16:08.920 --> 00:16:16.920 The average family is run in that socialist way. The little three-year-old girl doesn't eat in accordance with her ability to produce income. 144 00:16:16.920 --> 00:16:23.920 She eats in accordance with her need, which is usually determined by the mother, who determines pretty much everything in these cases. 145 00:16:23.920 --> 00:16:35.920 Then, of course, we have involuntary or coercive socialism, which would be Cuba or North Korea or USSR, and that would be coercive socialism. 146 00:16:35.920 --> 00:16:45.920 And then we have voluntary and involuntary capitalism, and I think the benefit of looking, well let me give examples and then I'll try to say what I think the benefit of looking at it in this way is. 147 00:16:45.920 --> 00:16:54.920 Obviously the voluntary capitalism would be laissez-faire capitalism. What would be involuntary capitalism? Well this would be fascism. 148 00:16:54.920 --> 00:17:08.920 And so many people, especially in Latin and South America, confuse these two. They think, ah, capitalism, I know what capitalism is. That's a lot of fundia where the 12 families own 90% of the country based on land theft. 149 00:17:08.920 --> 00:17:20.920 Or they believe that capitalism is where George Bush's cronies in business get vast government subsidies, things like that. And since they're against that, they think they're against capitalism. But they don't make that distinction. 150 00:17:20.920 --> 00:17:25.920 So we have fascism here or nazism or whatever you want to call it. 151 00:17:25.920 --> 00:17:34.920 And one of the ways of trying to convert people or at least shocking them or at least debating with socialists, 152 00:17:34.920 --> 00:17:40.920 I was once introduced to some young lady and she was introduced to me as a socialist. 153 00:17:40.920 --> 00:17:47.920 So my question to her was, are you a coercive socialist or a voluntary socialist? 154 00:17:47.920 --> 00:17:55.920 And she sort of went like that, you know. At least it's a new ploy. It didn't work, but what the heck, you know. 155 00:17:55.920 --> 00:18:04.920 At least you've got something to try. So I recommend this to you on that basis. 156 00:18:04.920 --> 00:18:12.920 Similarly, I once was at a conference. I go to a lot of strange conferences where there are a bunch of actual Nazi young men. 157 00:18:12.920 --> 00:18:29.920 And I said, look, we libertarians will give you a better shot. We'll let you goose-step, we'll let you sing songs, we'll let you have the swastika, we'll let you have ovens. You can't put people in there without their permission, but you can have ovens and, you know, any volunteers. 158 00:18:29.920 --> 00:18:39.920 And I said, it's true, we won't allow you to initiate coercion because that's against the libertarian idea, but at least we'll give you a better shot than those liberals will. 159 00:18:39.920 --> 00:18:46.920 It didn't work either, but you keep trying. You do what you can. 160 00:18:46.920 --> 00:18:55.920 Another spectrum that we could relate them both on is democracy. 161 00:18:55.920 --> 00:19:02.920 How much democracy is there? And here the fascists do a little bit better than the socialists 162 00:19:02.920 --> 00:19:09.120 because Hitler, God bless him, I don't think I should say that. I'd hate to have that just 163 00:19:09.120 --> 00:19:15.320 little snippet come out and, you know, here's Block, God bless Hitler. No, I didn't mean 164 00:19:15.320 --> 00:19:22.600 that. Our man Hitler came to power through a democratic process. Now he didn't win the 165 00:19:22.600 --> 00:19:27.040 election. He won a plurality and there was some complication with the president of 166 00:19:27.040 --> 00:19:31.360 Germany but he got appointed somehow through the democratic process. Whereas 167 00:19:31.360 --> 00:19:36.160 in the Soviet Union and Cuba and all these other places there was not a 168 00:19:36.160 --> 00:19:42.280 scintilla of democracy. Not that I haven't benefited from Hans' book on 169 00:19:42.280 --> 00:19:54.800 on Democracy, because we could put, well, where do we put monarchy? 170 00:19:54.800 --> 00:19:57.000 And where do we put anarcho-capitalism here? 171 00:19:57.000 --> 00:19:59.960 Well, the anarcho-capitalist is obviously the least democracy. 172 00:19:59.960 --> 00:20:05.120 And here, the less democracy would be better, if you look at it that way. 173 00:20:05.120 --> 00:20:07.400 So the anarcho-capitalist would be here. 174 00:20:07.400 --> 00:20:09.840 I guess the monarchist would be here. 175 00:20:09.840 --> 00:20:39.840 And the Democrats would be over there, as Hans, I think, very aptly says, that Ceteris Paribus, and you have to have Ceteris Paribus here, other things equal, monarchy is better in some sense than democracy, because democracy, you're only in there for four years, and you, what is it, make hay while the sun shines, and, you know, if you're only in there four years, you grab. Whereas if you're the monarch, you can stay in there for 20 years, and then your kid can get in there, and you don't want to ruin 176 00:20:39.840 --> 00:21:00.840 Another point that's of interest is where does the U.S. fit? Is the U.S. more socialist or is it more fascist? 177 00:21:00.840 --> 00:21:08.840 Well, if we get back to the original definition of socialism, the pure economic definition of ownership of means of production, 178 00:21:08.840 --> 00:21:13.840 It seems to me that the U.S. is more fascist than socialist because how much really does 179 00:21:13.840 --> 00:21:14.840 the U.S. government own? 180 00:21:14.840 --> 00:21:18.600 And I was trying to make a list and there's not that much that they own outright. 181 00:21:18.600 --> 00:21:23.440 The Bureau of Land Management owns a lot of land, the Park Service owns stuff, then there's 182 00:21:23.440 --> 00:21:29.840 the buildings that they own, the post office, the roads, the Mint, the Fed, depending on 183 00:21:29.840 --> 00:21:31.080 how you count it. 184 00:21:31.080 --> 00:21:35.480 I tried to make a list of what do they actually own outright and there wasn't much. 185 00:21:35.480 --> 00:21:38.480 So, they're not that socialist. 186 00:21:38.480 --> 00:21:40.480 Now, how much do they regulate? 187 00:21:40.480 --> 00:21:42.480 Well, they regulate everything. 188 00:21:42.480 --> 00:21:46.480 Toilet bowls, ladders, you name it, they regulate it. 189 00:21:46.480 --> 00:21:49.480 If it moves, they regulate it. If it doesn't move, they regulate it. 190 00:21:49.480 --> 00:21:53.480 Since everything either moves or doesn't move, they regulate everything. 191 00:21:53.480 --> 00:21:58.480 So, the US is not so much moving towards socialism as it is moving towards fascism, 192 00:21:58.480 --> 00:22:02.480 if you look at the economic definition of that. 193 00:22:02.480 --> 00:22:13.480 Gabriel Kolko was named. I think Butler mentioned him. I want to talk a little bit about Kolko and Stigler. 194 00:22:13.480 --> 00:22:22.480 Stigler had this thing called Capture Theory. What was Capture Theory? Capture Theory was a theory of regulation 195 00:22:22.480 --> 00:22:29.480 where initially you have say the Food and Drug Administration or the Meat Inspection Act or something like that. 196 00:22:29.480 --> 00:22:40.380 And the reason we have that is because, you know, capitalists can't be trusted, they're fraudulent, they're invasive, they're bad guys, so we have to have the government to come in and regulate them. 197 00:22:40.380 --> 00:22:54.680 The problem is that the regulators don't make as much of a salary as the vice presidents of the regulatee, and if they regulate them in a nasty way, they can't later get a job there. 198 00:22:54.680 --> 00:22:57.560 So they have to regulate them in a nice way. 199 00:22:57.560 --> 00:23:02.080 Namely, they get captured by the very people that they're supposed to be regulating. 200 00:23:02.080 --> 00:23:05.560 And if you look at the careers of some of them, they start off as a low-level bureaucrat. 201 00:23:05.560 --> 00:23:07.400 They get a middle job in private industry. 202 00:23:07.400 --> 00:23:09.720 They get a higher job in the bureau. 203 00:23:09.720 --> 00:23:14.320 And then they get a much higher job, sort of a revolving door. 204 00:23:14.320 --> 00:23:18.880 That's the Stigler theory. 205 00:23:18.880 --> 00:23:19.960 Pretty good. 206 00:23:19.960 --> 00:23:22.040 It's got some truth. 207 00:23:22.040 --> 00:23:24.200 But the Kolko theory is much better. 208 00:23:24.200 --> 00:23:27.600 The Colco Theory, I think it's called the triumph of conservatism, 209 00:23:27.600 --> 00:23:31.600 where he shows that right from the get-go, right from the outset, 210 00:23:31.600 --> 00:23:34.680 the impetus for regulation did not come from 211 00:23:34.680 --> 00:23:37.840 aggrieved consumers or any of that, 212 00:23:37.840 --> 00:23:41.240 nor did it come from small competitors. It came from the big companies like 213 00:23:41.240 --> 00:23:43.400 Swift and Armore and Meatpacking. 214 00:23:43.400 --> 00:23:46.840 They were the ones that wanted the regulation. Why? You might say, well why? 215 00:23:46.840 --> 00:23:50.480 According to the Ayn Rand view, you know, this is hard to explain. 216 00:23:50.480 --> 00:23:51.520 The reason is 217 00:23:51.520 --> 00:23:57.080 that the large meat packers were losing market share to the small ones 218 00:23:57.080 --> 00:23:58.800 and they didn't much like that. 219 00:23:58.800 --> 00:24:04.520 Free enterprise wasn't all it's cracked up to be if these lowlifes are taking our markets away. 220 00:24:04.520 --> 00:24:06.720 So they came up with this ingenious idea. 221 00:24:06.720 --> 00:24:13.240 Let's have government regulation. We, the biggies, have economies of scale in filling out paperwork. 222 00:24:13.240 --> 00:24:17.800 So anytime there's a law or regulation, we can do it cheaper than they can so we now have a 223 00:24:17.800 --> 00:24:19.600 competitive advantage over them. 224 00:24:19.600 --> 00:24:23.600 And secondly, who do you think is going to staff those bureaus? 225 00:24:23.600 --> 00:24:28.600 The people who are going to staff those bureaus are from us because we're setting it up in the first place. 226 00:24:28.600 --> 00:24:38.600 So, Kolko, I think, is much preferable, the Kolko story is much preferable and much more radical than the theory of Stickler. 227 00:24:38.600 --> 00:24:46.600 Now, there's an interesting story behind Kolko. Kolko is a Marxist, but he's also a historian. 228 00:24:46.600 --> 00:24:51.000 and he's a competent historian. All he did is he went back to the records. He said, well, you know, the 229 00:24:51.000 --> 00:24:56.760 Meat and Spectrum Act came out in 1890 or 1880. I'm no historian, so don't count on me for 230 00:24:56.760 --> 00:25:01.920 closeness of dates here. And he just looked at the newspapers and he saw big ads from Swift and R. Moore 231 00:25:01.920 --> 00:25:05.600 saying, yes, we need regulation, let's have regulation. 232 00:25:05.600 --> 00:25:08.900 So he was a Marxist and what happened when 233 00:25:08.900 --> 00:25:13.100 libertarians heard about him is they started inviting him to their conferences because this is a very 234 00:25:13.100 --> 00:25:14.520 libertarian message. 235 00:25:14.520 --> 00:25:20.520 and Kolko would come and he'd give a speech or two and he'd come again and finally he refused to come. 236 00:25:20.520 --> 00:25:29.520 And the reason he refused to come is he was aiding and abetting the libertarian enemy by giving his own speech. 237 00:25:29.520 --> 00:25:34.520 The libertarians were embracing him and we weren't saying you have to give a free enterprise law. 238 00:25:34.520 --> 00:25:42.520 Just speak about what was in your book and somehow this was not acceptable. 239 00:25:42.520 --> 00:25:52.520 Let me end on a regulatory joke. I have to tell my antitrust joke. If you've heard it before, don't give the punch line away. 240 00:25:52.520 --> 00:26:00.520 There were three businessmen in the Soviet Union and they were all in the gulag and as prisoners do, they compare notes as to why you're in jail. 241 00:26:00.520 --> 00:26:08.520 The first guy said, well, I'm in jail because I came to work late and they accused me of cheating the state out of my labor services. 242 00:26:08.520 --> 00:26:14.800 Next guy says, well, I came to work early, every day, and they accused me of brown-nosing. 243 00:26:14.800 --> 00:26:19.800 The third guy said, well, I came to work exactly on time, every day, and they accused me of 244 00:26:19.800 --> 00:26:24.400 owning a Western wristwatch. 245 00:26:24.400 --> 00:26:30.260 I once told this joke to a bunch of antitrust lawyers and economists, and this joke got a big laugh. 246 00:26:30.260 --> 00:26:31.480 Second joke. 247 00:26:31.480 --> 00:26:36.360 There were three businessmen in the U.S. also in jail on antitrust crimes. 248 00:26:36.360 --> 00:26:43.600 And the first guy says, well, I charge higher prices than everyone else and they accuse me of profiteering and price gouging. 249 00:26:43.600 --> 00:26:52.000 The second guy said, well, I charge lower prices than everyone else and they accused me of throat competition and predatory pricing. 250 00:26:52.000 --> 00:26:54.600 The third guy said, well, I charge the same price as everyone else. 251 00:26:54.600 --> 00:26:58.120 It's hard to see how he could have with these other guys, but let that slide. 252 00:26:58.120 --> 00:27:03.280 And they accused me of collusion and cartelization. 253 00:27:03.280 --> 00:27:33.280 Dead silence. Dead silence because these guys knew where I was coming from. What I was going to say and what I'll say to you now is that this is not a law. A law is supposed to distinguish between good behavior and bad behavior. You know, you do good, you're okay, you do bad, you're in jail. But here, no matter what you do, high or low or the same, you go to jail. I mean, the reason they were after poor Bill Gates is he wasn't giving money to the people in Washington. Now he's set up all sorts of foundations and this and that and the other and he's giving money 254 00:27:33.280 --> 00:27:38.280 I predict there will be no more antitrust cases against Bill Gates, at least in the United States. 255 00:27:38.280 --> 00:27:41.280 I'll end at this point. Thanks for your attention.