WEBVTT NOTE What Government Is Doing to Our Money 1 00:00:00.000 --> 00:00:04.320 Since 1990, we've heard about what a low rate of inflation we've experienced. 2 00:00:04.320 --> 00:00:10.640 And in some ways, it might appear low compared with what we experienced in the late 1970s. 3 00:00:10.640 --> 00:00:20.360 The dollar of 1976 was worth only 63 cents by 1981, once the Nixon-Carter inflation had done its work. 4 00:00:20.360 --> 00:00:24.000 The cultural and economic consequences were devastating. 5 00:00:24.000 --> 00:00:28.040 A generation was punished for having saved and accumulated capital. 6 00:00:28.040 --> 00:00:33.440 Debtors were rewarded and of course the government being the biggest debtor of all. 7 00:00:33.440 --> 00:00:37.920 This period of our financial history was dubbed the age of inflation. 8 00:00:37.920 --> 00:00:40.440 But did it really come to an end? 9 00:00:40.440 --> 00:00:44.800 The problem is that we've continued to live through the late 1970s, 10 00:00:44.800 --> 00:00:48.120 just stretched out over a greater period of time. 11 00:00:48.120 --> 00:00:52.120 The dollar of 1990 is today worth 64 cents. 12 00:00:52.120 --> 00:00:54.920 Yet we call this a low inflation rate, 13 00:00:54.920 --> 00:00:58.760 while the same level of devaluation was accomplished. 14 00:00:58.760 --> 00:01:02.960 In some ways, it's perverse that we should ever be sanguine about inflation. 15 00:01:02.960 --> 00:01:06.760 It would be as if we screamed bloody murder if someone broke into our house one night 16 00:01:06.760 --> 00:01:11.400 and stole all our flatware, our electronics and our precious metals. 17 00:01:11.400 --> 00:01:18.160 But if the same burglar came in every day and took just a fork or an iPod or a Krugerrand, 18 00:01:18.160 --> 00:01:21.360 Perhaps we'd happily announce we're experiencing a low burglar rate. 19 00:01:21.360 --> 00:01:29.760 Now whether we think prices are rising or falling depends on what we've been 20 00:01:29.760 --> 00:01:34.240 buying lately because it's true that not all prices are rising, some are falling 21 00:01:34.240 --> 00:01:39.360 and for that we can only be grateful. Since 1996 wireless telephone services 22 00:01:39.360 --> 00:01:44.160 dropped by 40%, personal computers and software accessories by more than a 23 00:01:44.160 --> 00:01:53.160 100%. Apparel in general, including women's clothing, fallen by 10%. Furniture and bedding, fallen by 5%. 24 00:01:53.160 --> 00:02:01.160 I keep in mind several points. These price declines are a reality. They haven't occurred despite the existence of the CPI. 25 00:02:01.160 --> 00:02:05.160 Indeed, these price declines are factored into the creation of the CPI. 26 00:02:05.160 --> 00:02:13.160 But the CPI has nothing but an index number that compares the change in one group of averages to the same group of averages at a later time. 27 00:02:13.160 --> 00:02:18.500 may or may not have anything to do with an individual consumer's experience. 28 00:02:18.500 --> 00:02:23.400 Murray Rothbard used to say that the main thing he bought with his money was scholarly books, 29 00:02:23.400 --> 00:02:26.260 one of the fastest rising goods. 30 00:02:26.260 --> 00:02:30.440 And so his personal inflation rate was far above the average. 31 00:02:30.440 --> 00:02:34.160 Of course, that was before the internet started doing strange things to book prices, 32 00:02:34.160 --> 00:02:39.200 driving the price of new books down and the price of used books up. 33 00:02:39.200 --> 00:02:42.800 In any case, the CPI is not a measure of price inflation. 34 00:02:42.800 --> 00:02:49.100 This is statistical fiction that serves only the function of helping us keep track of general price movements. 35 00:02:49.100 --> 00:02:52.240 There is nothing in nature called a consumer price index. 36 00:02:52.240 --> 00:02:54.840 There are only consumer prices. 37 00:02:54.840 --> 00:03:00.240 In the absence of government money management, prices rise and fall based on supply and demand. 38 00:03:00.240 --> 00:03:07.460 Even in the presence of government management, not all prices rise at the same rate and some prices fall. 39 00:03:07.460 --> 00:03:14.060 For years, Fed officials and others have warned about the grave dangers associated with deflation. 40 00:03:14.060 --> 00:03:22.460 Now, we praise this very thing taking place in clothing, technology and other goods that you can buy, especially at large discount stores. 41 00:03:22.460 --> 00:03:26.060 What's been the result? It's, of course, a wonderful blessing for consumers. 42 00:03:26.060 --> 00:03:32.760 Indeed, it's been our saving grace in times of soaring prices for education, energy, houses and medical care. 43 00:03:32.760 --> 00:03:37.960 If some prices had not fallen, the American economy would be even in worse shape. 44 00:03:37.960 --> 00:03:45.460 Does deflation make business more difficult? Yes, it can. Retailers can't hold on to inventory as long. 45 00:03:45.460 --> 00:03:51.160 The maintenance of profit profitability involves relentless innovation, keen-eyed cost watching, 46 00:03:51.160 --> 00:03:54.360 and cutting and constant attention to the competition. 47 00:03:54.360 --> 00:03:59.460 In a deflationary environment, consumers expect outstanding service and a big bang for their buck. 48 00:03:59.460 --> 00:04:03.460 are ready to defect to the competition over the slightest thing. 49 00:04:03.460 --> 00:04:06.460 All these are facts of life in a deflationary environment. 50 00:04:06.460 --> 00:04:11.460 My only question is, despite Mr. Bernanke, why should we regret this? 51 00:04:11.460 --> 00:04:18.460 If we seek an economy in which waste is held to a minimum, the people are served, the consumer is king, 52 00:04:18.460 --> 00:04:23.460 business operates with top efficiency and innovation, this is all to the good. 53 00:04:23.460 --> 00:04:29.460 Deflation never harmed anyone except those not willing to work hard for their profits. 54 00:04:29.460 --> 00:04:34.460 Now, it's true that these industries are constantly quenching about the supposed problem. 55 00:04:34.460 --> 00:04:38.460 But I don't see any evidence that entrepreneurs are thereby avoiding these industries. 56 00:04:38.460 --> 00:04:44.460 In fact, these industries have become increasingly competitive and robust job creators. 57 00:04:44.460 --> 00:04:50.460 Deflation, in fact, clarifies what kind of business people should be doing and just who should be doing it. 58 00:04:50.460 --> 00:04:53.460 Let me give you an example from the Mises Institute store. 59 00:04:53.460 --> 00:05:01.460 Last year, some of our staff considered offering specialized flash sticks of memory emblazoned with the Institute logo. 60 00:05:01.460 --> 00:05:05.460 They thought of having sticks that held up to one gig of data, pricing them out. 61 00:05:05.460 --> 00:05:12.460 They discovered that they were running at about $100 of retail and they could get them customized for about half that. 62 00:05:12.460 --> 00:05:17.460 Then we took notice of price trends for hard memory and saw nothing but falling prices. 63 00:05:17.460 --> 00:05:19.460 So we decided against it. 64 00:05:19.460 --> 00:05:27.460 Sure enough, six months later, you could get a gig stick for $50 less than we could have, about what we would have paid to have gotten them. 65 00:05:27.460 --> 00:05:35.460 Today, you can find them for as little as $20. What would have happened to our stock? Well, of course, we would have had to sell at a loss. 66 00:05:35.460 --> 00:05:41.460 What this taught us is that we should leave the business of computer hardware sales to the specialists. 67 00:05:41.460 --> 00:05:48.460 Downward price pressure helped us understand this. If you're in business, you understand this point as well. 68 00:05:48.460 --> 00:05:53.460 I was walking through an office max the other day and saw some gig sticks for sale for $80. 69 00:05:53.460 --> 00:06:00.460 Now, either the store manager is not paying attention to price changes or he's counting on very gullible consumers, 70 00:06:00.460 --> 00:06:04.460 but you can't make money for very long with either practice. 71 00:06:04.460 --> 00:06:13.460 Well, let us consider then some of the price increases that have skewed the CPI so as to cause the entire index to raise so dramatically over this period of time. 72 00:06:13.460 --> 00:06:25.200 Medical care has gone up 45 percent since 1996, education up 80 percent, housing up 33 percent, energy prices more than 100 percent. 73 00:06:25.200 --> 00:06:33.600 Now given these figures and excluding the deflationary sectors, it should be clear that the CPI ought to be rising much more than they say it is. 74 00:06:33.600 --> 00:06:43.600 But even by the standard measure, the increase of inflation in our times has led to a decline in real wages over the last three years in a period of sustained economic growth. 75 00:06:43.600 --> 00:06:45.600 This is an alarming fact. 76 00:06:45.600 --> 00:06:50.600 Thanks to inflation, we're not benefiting from economic growth the way that we ought to. 77 00:06:50.600 --> 00:06:57.600 And if the economy turns into recession, as it may be preparing to do, it's not going to be a pretty picture. 78 00:06:57.600 --> 00:07:02.600 Take notice of the sectors in which prices are rising and those in which it is falling. 79 00:07:02.600 --> 00:07:08.600 The markets that are relatively free from are innovative and internationally competitive. 80 00:07:08.600 --> 00:07:14.600 Consumers are benefited from pressures from imports in textiles, for example. 81 00:07:14.600 --> 00:07:18.600 The globalization of textiles has been a great boon to consumers. 82 00:07:18.600 --> 00:07:23.600 This is despite all the protectionist legislation designed to keep out as many goods as possible. 83 00:07:23.600 --> 00:07:25.600 These sectors are also the most innovative. 84 00:07:25.600 --> 00:07:28.600 Meanwhile, the sectors in which government is heavily involved, 85 00:07:28.600 --> 00:07:36.600 Through taxes, regulations, subsidies, protectionism, price supports and what have you, we find prices are going up. 86 00:07:36.600 --> 00:07:41.600 What's happening here? To some extent, the interventions themselves are keeping prices high. 87 00:07:41.600 --> 00:07:51.600 But they're also immunizing these sectors against pressures that would otherwise cause them to respond to inflationary prices by cutting costs. 88 00:07:51.600 --> 00:07:57.600 In other words, it's the inflationary pressure of bad monetary policy that has affected these sectors more than any other. 89 00:07:57.600 --> 00:08:04.600 The relatively free-market sectors are dealing with inflationary pressure by adjusting to serve consumers in the best possible way. 90 00:08:04.600 --> 00:08:11.600 When I say bad monetary policy, let me be clear what I mean. I mean all monetary policy. 91 00:08:11.600 --> 00:08:14.600 The very existence of monetary policy. 92 00:08:14.600 --> 00:08:24.600 The free-market position that Mises and his successors laid out regards money as a good, like any other, whose creation and management should be handled by the market economy. 93 00:08:24.600 --> 00:08:42.600 Most economists are happy to have the market for shoes, watches and computers managed by the market, but they draw the line on money. They believe that in this sector, we need socialist-style management. 94 00:08:42.600 --> 00:08:49.600 This is where the Austrians are different. Carl Menger broke new ground in 1871 by explaining the origins of money. 95 00:08:49.600 --> 00:08:56.600 was not created by the state or some sort of social compact and emerged from within the structure of the market economy. 96 00:08:56.600 --> 00:09:03.600 Barter is suitable for primitive levels of development, but once societies and economies grow more complex, 97 00:09:03.600 --> 00:09:10.600 traders find the need for a good that they can purchase and hold onto to trade for other goods and services at a later point in time. 98 00:09:10.600 --> 00:09:15.600 This good is the most highly valued good in society, also called money. 99 00:09:15.600 --> 00:09:20.640 Experience suggests that the best money commodity is one that is divisible, 100 00:09:20.640 --> 00:09:27.480 qualitatively uniform, has a high value per unit of weight, is portable, cannot be manufactured 101 00:09:27.480 --> 00:09:33.040 without end. Precious metals then have served this function quite well. One precious metal 102 00:09:33.040 --> 00:09:38.960 rose above the others in being the most suitable and that's gold. Now there's nothing magical or 103 00:09:38.960 --> 00:09:44.480 mystical about gold that made it money. It just happened to conform most closely to the features 104 00:09:44.480 --> 00:09:54.480 Money is also makes possible the calculation of profits and losses over time. 105 00:09:54.480 --> 00:09:58.480 And this is the essence of what we mean to economize. 106 00:09:58.480 --> 00:10:03.480 That's why the quality of money in society is so critical to a well-functioning economy. 107 00:10:03.480 --> 00:10:05.480 And how do we assure quality? 108 00:10:05.480 --> 00:10:10.480 It is the same with money and banking as it is with computers and cell phones. 109 00:10:10.480 --> 00:10:18.080 We need free entry and exit, rivalrous competition, consumer sovereignty and no special privileges. 110 00:10:18.080 --> 00:10:27.200 Our current monetary system has none of these features, and so we shouldn't be surprised to see the quality of our money slipping day by day. 111 00:10:27.200 --> 00:10:33.560 As we all know, the dollar was once as good as gold. We never had a perfect gold standard in this country, 112 00:10:33.560 --> 00:10:40.560 which I would define as one that provides for perfect and instant convertibility between paper money and gold coin, 113 00:10:40.560 --> 00:10:46.360 one without a central bank managing it, one in which there is no government coinage but only private coinage, 114 00:10:46.360 --> 00:10:51.560 and a banking system that enjoys no government privileges whatsoever. 115 00:10:51.560 --> 00:11:00.960 Now, the ideal system has never been a reality in full, but as a general rule, the more closely a money system reflects the ideal, the better it is. 116 00:11:00.960 --> 00:11:08.200 The more it is monopolized, cartelized, managed and papered over, the worse it is. 117 00:11:08.200 --> 00:11:14.840 This was the thesis advanced by Ludwig von Mises in his 1912 book entitled The Theory of Money and Credit. 118 00:11:14.840 --> 00:11:20.280 At the beginning of the age of central banking, he took us back to the beginning to show what money is, 119 00:11:20.280 --> 00:11:25.720 how it acquires its value, and where the attempt to monopolize it would lead. 120 00:11:25.720 --> 00:11:29.880 In the intervening years, he has been proven all too right. 121 00:11:29.880 --> 00:11:35.680 The dollar today is worth a little less than a nickel of what it was at the founding of the Federal Reserve. 122 00:11:35.680 --> 00:11:44.180 Now this is a remarkable fact given that prices have been on a general downward decline during the whole of the 19th century except for periods of war. 123 00:11:44.180 --> 00:11:51.380 It is even more remarkable when you consider that one of the stated jobs of the Fed was to stabilize the value of our money. 124 00:11:51.380 --> 00:12:01.140 Looking at the long trend, we can say that not only has the Fed failed to do its job, but even worse, that it's produced the very opposite of the results that it promised. 125 00:12:01.140 --> 00:12:09.220 This is especially true in the area of business cycles, which the Fed was supposed to counter with careful management of the money supply. 126 00:12:09.220 --> 00:12:14.780 It was supposed to provide more money in times when business conditions supposedly required more liquidity. 127 00:12:14.780 --> 00:12:21.420 It was supposed to pull back on its money creation at other times when liquidity was not necessary. 128 00:12:21.420 --> 00:12:28.860 No surprise, it turns out the Fed has never met business conditions that it deemed not in need of more liquidity. 129 00:12:28.860 --> 00:12:35.220 In many ways, the Fed is a childish institution, and I mean that in a very precise sense. 130 00:12:35.220 --> 00:12:44.420 A key feature of childish behavior is that it is action taken without a thought given to how actions might affect the reactions of others. 131 00:12:44.420 --> 00:12:48.160 Children always assume that they live and act in a vacuum. 132 00:12:48.160 --> 00:12:52.720 They're forever shocked to see that others' lives are impacted by their choices. 133 00:12:52.720 --> 00:12:59.620 Part of the process of maturity involves the realization that one's actions cause reactions in others. 134 00:12:59.620 --> 00:13:01.920 But it takes many years to mature. 135 00:13:01.920 --> 00:13:05.420 Childish traits can continue even to the teenage and college years, 136 00:13:05.420 --> 00:13:08.420 when kids still imagine themselves to be autonomous actors 137 00:13:08.420 --> 00:13:14.060 and forget that their actions generate responses from others that might foil their plans. 138 00:13:14.060 --> 00:13:19.260 Think of the typical teenage driver, buzzing in and out of line, zipping around cars, 139 00:13:19.260 --> 00:13:23.820 speeding up and slowing down slowly, solely on his own whim. 140 00:13:23.820 --> 00:13:28.060 He doesn't give a thought to how his behavior impacts the responses of other drivers 141 00:13:28.060 --> 00:13:30.180 or whether it makes the roads less safe. 142 00:13:30.180 --> 00:13:37.020 He looks at traffic patterns as a given and assumes that everyone is neutral with regard to his own driving. 143 00:13:37.020 --> 00:13:43.060 So too does the Fed pursue its goal without a thought to how market actors are going to respond. 144 00:13:43.060 --> 00:13:46.420 It will lower the price of credit on the market for bank lending. 145 00:13:46.420 --> 00:13:50.100 This affects other interest rates by driving them down. 146 00:13:50.100 --> 00:13:53.940 All of it is paid for by money created out of thin air. 147 00:13:53.940 --> 00:13:57.900 In the same way that children and teens might consider their action neutral 148 00:13:57.900 --> 00:14:01.380 from the point of view of others since they're thinking only of themselves. 149 00:14:01.380 --> 00:14:06.580 So to the Fed considers its money to be neutral with respect to the market. 150 00:14:06.580 --> 00:14:10.820 The Fed figures it is only adding liquidity, but in fact it is gravely distorting 151 00:14:10.820 --> 00:14:17.260 in the decision-making process, particularly as it affects long-term investments. 152 00:14:17.260 --> 00:14:21.020 Because this assumption of neutral money is at the heart of the monetary model of the 153 00:14:21.020 --> 00:14:26.220 Fed, they can believe that their inflationary policies do not constitute an intervention 154 00:14:26.220 --> 00:14:28.540 in the market process. 155 00:14:28.540 --> 00:14:33.140 What they do not consider is that cheap credit sends signals to entrepreneurs to overextend 156 00:14:33.140 --> 00:14:39.660 themselves, planning products that take a very long time to complete and presume a much 157 00:14:39.660 --> 00:14:43.660 A much more robust capital stock than exists in reality. 158 00:14:43.660 --> 00:14:48.660 When the reality is revealed, usually after the rate of monetary expansion slows, 159 00:14:48.660 --> 00:14:50.660 the boom turns to bust. 160 00:14:50.660 --> 00:14:55.660 And here we have a short description of the business cycle and its barest outlines. 161 00:14:55.660 --> 00:15:01.660 The other day the London Financial Times published an article that drew attention to the Austrian theory of the business cycle. 162 00:15:01.660 --> 00:15:09.660 It's said that only Mises' and Hayek's theory can account for the constant emergence of bubbles in such sectors as housing. 163 00:15:09.660 --> 00:15:14.660 Having watched the press coverage of Austrians for years, I've noticed that we can almost track the business cycle 164 00:15:14.660 --> 00:15:20.660 based on the number of mentions of the Austrian cycle theory in the press. 165 00:15:20.660 --> 00:15:23.660 They never mention the Austrian theory in boom times. 166 00:15:23.660 --> 00:15:30.660 It's only once the bust hits and no one can really explain what is happening that the Austrians come in for a mention. 167 00:15:30.660 --> 00:15:36.660 If you've ever wondered why Austrians have a reputation as a school of gloom and doom, maybe this is why. 168 00:15:36.660 --> 00:15:43.660 But let us remember that the Austrian theory is not just a theory of the bust, it's a theory of the boom and the bust. 169 00:15:43.660 --> 00:15:49.660 It recognizes there is a distinction between the appearance of prosperity and its reality. 170 00:15:49.660 --> 00:15:56.660 If you really want to explain a bust, you can't just look at the factors that coincide it with the fall. 171 00:15:56.660 --> 00:16:04.660 You have to look back to the boom period and see what artificial factors led the market to an expand at an unsustainable rate. 172 00:16:04.660 --> 00:16:08.660 This was the primary focus of the Austrians in the interwar period. 173 00:16:08.660 --> 00:16:15.660 In a book that the Mises Institute is publishing right now, we find a series of wonderful essays by Mises. 174 00:16:15.660 --> 00:16:22.660 One is from 1928, which he warns that inflationary credit has blown up many sectors beyond a sustainable rate. 175 00:16:22.660 --> 00:16:27.660 He warns of a coming collapse, one that would affect banking in particular. 176 00:16:27.660 --> 00:16:33.660 After the bust hit, he wrote a series of essays that reviewed its causes and pointed the way forward. 177 00:16:33.660 --> 00:16:40.660 He urged a policy of laissez-faire that would let the downward adjustment take place so the economy could again stabilize. 178 00:16:40.660 --> 00:16:43.660 Of course, his advice was rejected. 179 00:16:43.660 --> 00:16:45.660 This was the age of central planning. 180 00:16:45.660 --> 00:16:51.660 Keynes was its profit in England and America, while FDR was its political arm. 181 00:16:51.660 --> 00:16:57.920 In the East, it was Stalin. In Europe, the future belonged to Mussolini and Hitler. The 182 00:16:57.920 --> 00:17:02.760 handful of laissez-faire radicals like Mises and Hayek, along with American thinkers like 183 00:17:02.760 --> 00:17:10.240 Nock, Flynn, Trotteroff and Benjamin Anderson, were an extreme minority. 184 00:17:10.240 --> 00:17:14.840 There is far more at stake with this debate than merely discovering the technical causes 185 00:17:14.840 --> 00:17:21.040 behind the business cycle, or even in securing the monetary unit against depreciation. What 186 00:17:21.040 --> 00:17:26.440 What is really at stake in the debate over money is the very idea of freedom itself, 187 00:17:26.440 --> 00:17:32.240 which always means freedom from the arbitrary and expansionist power of the state. 188 00:17:32.240 --> 00:17:36.280 After all, the real reason that government destroyed the gold standard and why our money 189 00:17:36.280 --> 00:17:40.720 has been completely untied from anything real and has been reduced to nothing more than 190 00:17:40.720 --> 00:17:46.100 computer entries backed by pressed cotton tickets with colored printing and idealized 191 00:17:46.100 --> 00:17:56.100 has little to do with theoretical error. Government found it in its interest to create all the money it would ever need for itself. 192 00:17:56.100 --> 00:18:06.100 The power to inflate is absolutely crucial to the agenda of everyone who believes in using government to manage the economy and society. 193 00:18:06.100 --> 00:18:12.100 As Mises said, they need the power to inflate in order to finance their policy of reckless spending, 194 00:18:12.100 --> 00:18:18.740 Banking, lavish subsidies, bribing voters. They also need it for financing their wars, 195 00:18:18.740 --> 00:18:24.220 bailouts, space shuttle trips, and for building their ever larger palaces to keep comfortable 196 00:18:24.220 --> 00:18:30.180 the millions of bureaucrats they employ to make our lives miserable. 197 00:18:30.180 --> 00:18:34.540 People talk of restraining government, but there will be no restraining government so 198 00:18:34.540 --> 00:18:40.500 long as the monetary system permits government to expand and spend without limit. So long 199 00:18:40.500 --> 00:18:54.500 So long as their debt is not traded with a default premium, so long as the government and all its connected institutions are considered to be too big to fail, we're going to have a problem with the expansion of power and the loss of freedom. 200 00:18:54.500 --> 00:19:01.500 Whenever the subject of monetary reform comes up, people ask many questions about the technicalities involved. 201 00:19:01.500 --> 00:19:08.500 How can we get by without a Fed, without deposit insurance, without a Bureau of Engraving and Printing? 202 00:19:08.500 --> 00:19:11.460 How can we determine the gold definition of the dollar? 203 00:19:11.460 --> 00:19:14.020 What will happen to all the dollars overseas? 204 00:19:14.020 --> 00:19:17.980 How can we really know how much money there is to be covered? 205 00:19:17.980 --> 00:19:20.300 There are answers to all these questions. 206 00:19:20.300 --> 00:19:23.180 You can gain them by reading two Rothbard books, 207 00:19:23.180 --> 00:19:25.300 What Has Government Done to Our Money? 208 00:19:25.300 --> 00:19:27.780 and The Case Against the Fed. 209 00:19:27.780 --> 00:19:30.820 I also highly recommend to you the most systematic study 210 00:19:30.820 --> 00:19:32.980 on the Austrian business cycle and its relationship 211 00:19:32.980 --> 00:19:36.740 to money ever published, Jesus Swerder de Soto's 212 00:19:36.740 --> 00:19:40.740 Money, Bank Credit and Economic Cycles. 213 00:19:40.740 --> 00:19:45.500 But I submit to you that none of these technical issues are what is standing in the way of 214 00:19:45.500 --> 00:19:48.080 monetary reform. 215 00:19:48.080 --> 00:19:52.900 What is really stopping a much needed change is public ideology. 216 00:19:52.900 --> 00:19:58.640 So long as the political system encourages the idea that government is the savior of mankind, 217 00:19:58.640 --> 00:20:02.940 the solver of all human problems, the machine that will bring freedom to the world through 218 00:20:02.940 --> 00:20:08.580 Through its bombs, we're going to have the problem of monetary instability. 219 00:20:08.580 --> 00:20:12.340 Sound money and freedom go together. 220 00:20:12.340 --> 00:20:17.280 So long as we do not want freedom, we can never achieve the goal of sound money. 221 00:20:17.280 --> 00:20:21.220 For what government is doing to our money is nothing but a microcosm of what government 222 00:20:21.220 --> 00:20:23.800 is doing to our freedom. 223 00:20:23.800 --> 00:20:28.340 To institute sound money is to put a lock on the door so the burglar of government cannot 224 00:20:28.340 --> 00:20:45.340 The answer is that owning and holding gold symbolizes independence and freedom. Governments can destroy it, they can take it away as they have in the past, if they can find it. 225 00:20:45.340 --> 00:20:48.340 and holding gold symbolizes independence and freedom. 226 00:20:49.340 --> 00:20:55.340 Governments can destroy it, they can take it away as they have in the past, if they can find it. 227 00:20:56.340 --> 00:21:04.340 But so long as we are free to buy it and keep it, we're able to hold a tangible good that remains universally recognized as a standard of value. 228 00:21:05.340 --> 00:21:12.340 It reminds us of what real money could be if we could ever let go of our attachments to the redistributionist state. 229 00:21:12.340 --> 00:21:17.340 Thus does the gold bug understand far more about the nature of things than others who 230 00:21:17.340 --> 00:21:22.980 blithely assume that wealth can be created from a printing press. 231 00:21:22.980 --> 00:21:27.660 The case for radical monetary reform need not be left to the gold bugs or the Austrians 232 00:21:27.660 --> 00:21:30.060 at the Mises Institute. 233 00:21:30.060 --> 00:21:35.060 We're perfectly happy for anyone of any perspective to join our cause. 234 00:21:35.060 --> 00:21:40.300 By understanding the connection between liberty and money, we gain some insight into why Mises, 235 00:21:40.300 --> 00:21:45.100 as a great classical liberal was also a passionate advocate of sound money. 236 00:21:45.100 --> 00:21:47.980 We can see why it is that his brilliant student Rothbard 237 00:21:47.980 --> 00:21:53.380 followed up on this cause. It's only libertarians who seem to fully understand 238 00:21:53.380 --> 00:21:58.380 the relationship between free markets and money and free markets in general. 239 00:21:58.380 --> 00:22:01.580 To champion one is to champion the other. 240 00:22:01.580 --> 00:22:05.460 This, I believe, is why we seem to be so alone in this battle. 241 00:22:05.460 --> 00:22:10.460 Those who have a stake in statism also have a stake in its means of finance. 242 00:22:10.460 --> 00:22:21.460 Those who might otherwise appreciate an economy without business cycles and inflation are unwilling to abide by the extreme limits that sound money places on state expansion. 243 00:22:21.460 --> 00:22:27.460 Consider a book like Jesus Swear to De Soto's On Money and Business Cycles. 244 00:22:27.460 --> 00:22:31.460 This is one of the great works on money that has ever been published. 245 00:22:31.460 --> 00:22:34.460 Why is it left to the Mises Institute to publish it? 246 00:22:34.460 --> 00:22:40.460 Because it takes a seriously radical institute to raise the fundamental questions of our age. 247 00:22:40.460 --> 00:22:45.460 Our publishing arm is not afraid to push forward the boundaries of economic science 248 00:22:45.460 --> 00:22:51.460 to the point where the conclusions bring into question the whole of the modern political process. 249 00:22:51.460 --> 00:22:54.460 And so we must, and so we will. 250 00:22:54.460 --> 00:22:59.460 We appreciate every bit of help that you can provide us in this great cause. 251 00:22:59.460 --> 00:23:07.460 Join us in this intellectual struggle so that we may once again embrace the freedom that is our heritage and our destiny. Thank you.