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NOTE 08. Major Episodes in American Labor History: An Austrian Reevaluation, Part II (video)

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Last time we went through this sort of dry section, which was just to go over some of the principles that are enshrined in law by certain pieces of legislation pertaining to labor unions.

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And now I want to go into, you know, maybe some more arguments that might help to disabuse us of, you know, of myths that even free market people, I think, in the deep down have.

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Does this really work? Don't we actually need this or that to protect workers?

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Isn't it true that people had to work long hours in the past?

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I want to try to address all that as best I can.

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But just to recap from last time, the key thing that I want to note is that originally,

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that is up until really the 1930s, you had a system of freedom of contract between workers and employers

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so that employer and employee alike were free to make and then to accept or to reject any

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offer of remuneration.

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With the 1930s comes the principle of an exclusive bargaining agent decided on by a majority

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of the workers that would then be applied to all workers in that bargaining unit.

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We get a legal order in which it becomes very difficult to stop union violence even while

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it's underway.

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Employers have difficulty speaking against unionism or making statements about unionism

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around the time of the campaign for the certification election because then they can be accused,

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even under the 1947 amendments, of engaging in speech that involves threats of reprisal

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if the workers decide to choose for a union.

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And by the way, also if they promise benefits to the workers, if the employer says that,

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you know, look, I'll give you this wage increase right now, just don't unionize, well, needless

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to say, you get severely punished for that.

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So the freedom of speech of employers is curtailed under this new order, this new legal order.

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Employers can be found guilty of failing to bargain with this designated bargaining agent,

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In practice, what it has meant is that employers have come to the conclusion that the only way they can prove that they're bargaining in good faith is that they've had some give and take, so they begin by making absurdly unreasonable offers because they feel like that will then provoke bargaining.

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Massive strikes, even dominated by complete strangers, who are in no way associated with a particular firm, become permitted.

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Strangers are permitted to come onto private property to agitate among the workers.

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So this is definitely a very, very different legal order than had existed in the past.

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Now two little points before I go on to my big point.

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One little point is, I want to make note of Morgan Reynolds, who wrote a book called Making America Poorer, and the subtitle is The Cost of Labor Law. It's worth reading.

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But he listed seven distinct ways in which he believed labor unionism imposed costs on the economy.

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Because I didn't really develop that point too much before lunch. I gave some brief indication of it.

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And by the way, if you want to get these points, you can either get Professor Reynolds' book, which is out of print and difficult to find, or you can get my book, The Church and the Market, which is in a second edition, a second printing has just come out.

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That was the second annoying thing I've said all week. My quote is, I think I have three more between now and the end.

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Okay, well here's what they are. He says, number one, the redistribution of income from the general community to union bureaucracies and their members.

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Number two, he says the unemployment effects of unions, which is naturally going to happen if you increase wages artificially, less labor will be demanded.

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The consequences of union wage inflexibilities over the business cycle.

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4. The Cost of Union Work Rules

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for You. You couldn't actually get up and flip it over. So that was it. Sometimes you get these

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bizarre rules that are inserted into labor contracts that lead to just bizarre inefficiencies,

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and certainly that would be an example. Or other union work rules would involve deliberately

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avoiding using labor-saving machinery because we want more workers. By the way, in case there

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still is anybody, I'm sure not in this room, but anybody listening who is uncomfortable

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I remember reading the Grapes of Wrath years ago, John Steinbeck, and there is a part where he goes on this little tangent about farm machinery and how bad it is because it throws people out of work.

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I always have to use this example in my classes to make sure they all understand this point.

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I say, let's suppose you have an economy made up of four people, and three of them work at the post office, let's say.

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All their work, three people, is to send letters to the other guy.

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I say to them, this is not a realistic scenario, but it nevertheless works.

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And the other guy basically has an orange grove.

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Well, let's suppose that the post office gets some of those stamp vending machines and to buy stamps you don't have to wait in line anymore, you just go to the machine.

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Well, let's suppose that means that you now need only two people working at the post office.

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Well, that means that with two people working at the post office you can now produce the same amount that you did with three,

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but now you've released one person to go out into the economy and produce more things that we couldn't have had before

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I've had before because he was wasting his life selling stamps to you.

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Now he could go work in an orange grove or something and increase the overall amount of

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wealth.

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So there's no need for that third person to go up to that machine and shake his fist

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at it and say, you SOB taking my stamp dispensing job away.

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No, you should think in terms of all of society, okay?

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It's hard to do sometimes when you're the one who has to bear the burden of benefiting

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all of society.

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The point is that any alternative situation in which people start smashing machines, or I'm entitled to sell stamps the rest of my life, is just antisocial and interferes with the increase in everyone's standard of living.

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The fifth one, the dynamic impact of unions in discouraging research and development, investment and entrepreneurship.

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And he can give you examples of that.

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Number 6 would be the direct costs of strikes, strike threats, negotiating costs, labor consultants, national labor relations board elections, bureaucratic costs, grievance costs and related expenses.

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And then finally, the political role of unions in increasing international trade barriers, which is well known, government spending and related forms of discoordination sustained by political action.

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Okay, I'm going to come back to that sheet later.

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My second small point before my large one.

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The first point was to go over what Reynolds points out,

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or some of the deleterious effects of labor unions,

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and exactly what they are.

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Secondly, there's another point that's sometimes referred to by economists a lot,

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but it seems counterintuitive at first.

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You sometimes hear people speak of the scarcity of labor.

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There's a scarcity of labor and that doesn't seem to be correct because it seems like there's just a huge number of people and sometimes you have unemployment and how is this evidence of a scarcity of labor?

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But I am arguing that in fact there is a scarcity of labor in the sense that in labor relative to land, it's just an empirical fact, that labor is scarce relative to nature given factors.

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If this were not the case, we would have no unused or sub-marginal land.

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If labor were just super-abundant, or at least abundant in relation to land, all land would be brought into use.

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The very fact that some land and some resources remain untapped reflects the scarcity of labor,

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which is to say that labor is too dear to be wasted on extracting resources or using land

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whose returns would be lower than in some other area in which scarce labor is more urgently needed.

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And also George Reisman notes this, I think it's a very good point.

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Many of us would be happy to have the services of cooks, gardeners, personal secretaries and the like,

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but we're frustrated in this desire precisely because of the scarcity of labor.

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Most of us cannot command the funds necessary to divert scarce labor away from other sectors of the economy

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and toward the fulfillment of domestic labor and personal services for ourselves as individuals.

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In addition, while it is possible for any given person to desire a supply of goods that could be produced only by the labor of many individuals, on average a person can of course never acquire more than the products of just one other person.

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Riesemann, when the very young and the sick and infirm are allowed for, who can only be

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supported by the labor of others, it turns out that for each person who consumes there

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is on average substantially less than the labor of one person available to produce.

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And then he goes on to provide much more evidence of the ineradicable scarcity of labor, including

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the fact that as workers grow wealthier and more comfortable, they begin to desire more

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and more leisure and thereby wish to supply less and less labor.

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So this really is in fact true and a defensible statement that there is such a thing as a scarcity of labor.

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Now typically the way a lot of market economists explain...

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See, I have bottled water here, I forgot about this.

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It's sort of rude to drink water right out of the bottle, especially like on camera.

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Well, not rude, but not sophisticated, like drinking out of a glass, so I'll drink out of a glass.

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Now, if only I had one of those little umbrellas, then I'd be really sophisticated.

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Like Steve Martin wanted in The Jerk.

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Be somebody!

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All right, let's just move on.

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I watched The Jerk recently with my wife. I'd seen it in college.

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We'd watched like a TV-edited version of it over and over when there was nothing else on.

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And then years passed, I was in grad school, years passed, and then I was with my wife recently.

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I said, oh, this is a great movie, we've got to watch it.

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And I put it on, I totally forgot how stupid this movie is.

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Oh my gosh, just the whole movie, I just wanted to cringe and leave.

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So anyway, if you're watching, dear, I'm sorry, sorry we had to watch that.

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Anyway, when it comes to labor unionism, typically market economists will argue along these lines.

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They'll say that it's natural for people's well-being to increase on the free market as laborers because there's competition among employers for this scarce labor.

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And so if somebody is employing me and I'm making pentium processors and you're paying me a dollar a day, well, the argument goes that there will be another employer somewhere who will bid me away,

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And so then the other employer has to bid up, so that eventually the argument goes that through, in effect, a kind of labor arbitrage, eventually the price of my labor is bid up to the point, you know, more or less at my discounted marginal value product, so that it gets to the point where, you know, I'm in effect being employed more or less at the level of, at a wage that more or less corresponds to my labor arbitrage.

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The Theory of Money and Credit

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in an unhampered market.

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So what I'd like to do now is to look at that for a moment and give this alternative explanation

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as to why it is that people, in fact, workers included, tend to do better and better over

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time in an unhampered market.

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First of all, Reisman points out that let's bear in mind that his theory is not going

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to be that easy to see taking place in our economy because we have an economy with an

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and expanding money supply, a very active Federal Reserve system.

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And so we've grown up in an economy in which we think it's just normal that things get more expensive all the time.

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Like this is just like a fact of nature, things always get more expensive and that's just the way life is.

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But it need not be so. Of course the price level in America was consistently falling for a century and a half,

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really from the 18th century, if you don't include wartime.

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And that's because if you have a more or less fixed supply of money,

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And the gold supply is more or less fixed.

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I mean, at least because compared with the money supply since going off gold.

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If you have a basically fixed money supply,

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but you have an economy that gets progressively more productive

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and it produces more and more goods all the time,

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well, then that constant amount of money will come to command

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correspondingly more and more goods.

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Whereas we live in an economy where both wages and prices just seem to be going up

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and it just seems to happen like that.

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But let's imagine an economy that isn't like that, where you have, in effect, a stable money supply.

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I understand that you're always mining gold, but in effect a stable money supply.

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Let's just consider we have a constant money.

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And then we can look at this and see how our standard of living is increased.

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The key to the process whereby the unhampered market increases the average standard of living

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is business investment in capital goods that increase the productivity of labor,

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which is to say, how much each worker is capable of producing.

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A forklift, for example, makes it possible for a worker to move and stack far more pallets than before

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and to reach heights that would have been impossible with his bare hands.

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Other kinds of machinery can multiply the efficiency of a single worker many times over,

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sometimes by orders of magnitude.

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The amount of goods the economy is capable of producing rises and at times even explodes and this is how wealth is created.

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As a result of capital investment, firms can now produce many, many times more goods than before and at considerably lower cost.

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Thanks to the pressures of market competition, firms pass on these cost cuts to consumers in the form of lower prices, better quality merchandise or a combination of both.

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The ordinary person's standard of living increases, therefore, not because government takes from the rich to give to him,

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or because labor unions struggle with employers to win him concessions.

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His standard of living increases because on the unhampered market business firms are in a position to invest in machinery

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that makes it possible for more and more goods to be produced with fewer and fewer hands,

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thereby increasing the overall amount of material goods available and rendering them less and less expensive.

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Riesemann puts it this way,

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it is the productivity of labor that determines the supply of consumer goods relative to the supply of labor

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and thus the prices of consumers' goods relative to wage rates.

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This does not mean that we will run out of jobs.

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As long as human wants remain even partially unfulfilled, there will never be a shortage of jobs.

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Now Riesemann sometimes puts this sort of playfully and he'll say, you know, look, I mean, as a, like right now,

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Most people would like to have your own gardener, or you'd like to have two cars, or better

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cars than you have now, or a yacht, or a plane, or a yacht from which you can launch your

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plane.

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He says, in other words, you can always imagine at least some material improvement that not

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everybody needs to have that sort of thing.

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But in other words, given where we are now, and given a society where everybody is launching

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In some fields, such as agriculture, the increase in output made possible by productivity gains will not be met by a proportionate increase in consumption.

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If, for example, we increase the productivity of agriculture such that we can produce ten times as much food, it doesn't necessarily mean that we're all going to want to eat ten times as much.

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In that case, we're going to want to shift resources out of agriculture, because otherwise we're just going to be drowning in rotting food.

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So in that case, even though it'll get more productive, we'll probably have fewer people employed in agriculture, as has in fact happened.

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But this released labor is now available to produce other goods that we could not have had before.

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They can go now work in the Orange Grove, as it were.

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This is labor that had previously been tied up in agriculture, and so we have greater wealth.

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But in other fields like automobile manufacturing, productivity increases will make possible a mass market in a product that had once been a mere luxury and will therefore attract more employment.

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In both cases, the great mass of consumers are enormously benefited.

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Now this is not the description of events that you find in a typical history book.

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Instead, we hear, and I remember this from junior high onward, that massive redistribution of wealth from rich to poor was morally necessary and economically indispensable in order to improve the lot of the least wealthy.

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But that kind of policy could have done absolutely nothing to improve the standard of living of American workers.

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Riesemann's description is as follows, he says,

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If one person in a thousand, say, is a wealthy capitalist

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and eats twice as much and has 20 times the clothing and furniture as an average person,

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hardly any noticeable improvement for the average person could come from dividing the capitalist's greater-than-average consumption by 999 and redistributing it.

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So at best, this kind of wealth redistribution would have been useless in eradicating the poverty of the past,

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But at worst, by discouraging the wealthy from investing, by in effect threatening to

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confiscate their wealth again in the future, this approach would only have inhibited the

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process of wealth creation, and diminished or halted altogether the progress toward a

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higher standard of living that would otherwise have occurred for the great mass of the population.

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This is a very brief overview of this, but immediately, of course, in people's minds,

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the objection is raised.

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Isn't it true though that workers in the past had to work very long hours?

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There's some kind of intervention that's necessary to alleviate that problem.

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And certainly that is true.

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I wouldn't want to be a laborer in the year 1870.

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By today's standards, people in the 19th century worked an exhausting schedule.

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But again, when output per worker is miserably low, then a supply of consumer goods that

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most people consider adequate requires people to work correspondingly long hours to produce

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them all.

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I mean if all the machines in our society were suddenly to break down but yet nevertheless we all continued working 40-hour weeks we'd probably all die or at the very least we'd be living in huts or we'd be scrounging for worms to eat or something I mean it would be difficult if you thought all we need is the aggregate amount of work that can be produced by everybody working 40 hours well 40 hours working with everybody's bare hands would not produce anything like the goods that we've taken for granted

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So you need the machines. Machines are the key here.

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So this is, and not the wickedness of big business, accounts for the low standard of living

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and long hours of work that existed in the past.

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As the productivity of labor increases and with it the level of real wages,

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people can begin to opt for additional leisure rather than continue to work the long hours of the past.

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So without the need for any government legislation,

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Education, a situation will eventually arise in which employers find offering correspondingly

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fewer hours to be in their own economic interest and will offer them without the need for coercion.

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If someone who once worked 80 hours per week now wishes to work only 60, that is three

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fourths as many hours, and is willing to accept a wage at or less than three fourths that

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of his previous wage as a premium on the leisure he will now enjoy, it makes perfect sense

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for his employer to offer these terms.

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To the extent that maximum hours legislation corresponded with people's desire to work

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fewer hours, it was superfluous, since such an outcome would have come about by this means.

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But to the extent that such legislation was economically premature, forcing fewer hours

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on workers who needed the wages of their longer hours in order to maintain what they considered

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an adequate standard of living, it harmed people.

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It harmed the people who were supposed to help.

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And this is true in the same way for legislation to improve working conditions.

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Obviously, people want to have improved working conditions, but there are other considerations here.

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Now, improvements in working conditions that pay for themselves in terms of less workplace damage and disruption,

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perhaps better morale among the workers, will be readily adopted by any profit-seeking enterprise because it's in their interest to do so.

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But even improvements that do not pay for themselves will still be adopted in cases in which the wage premium

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that would have to be offered to attract workers in the absence of the improvement would be

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higher than the cost of simply introducing the improvement.

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So for example, the only non-arbitrary way of introducing an improvement like climate

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controlled facilities therefore, and the only way of doing so that does not price workers

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out of jobs entirely or impoverish society out of proportion to the satisfaction derived

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by workers now enjoying climate control is by paying attention to the market.

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Everyone knows that certain lines of work, because of their difficulty or because of

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undesirable or unpleasant aspects of the labor involved, carry a wage premium to attract

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sufficient workers by compensating them for these negative factors.

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As time goes on, and more and more places become climate controlled, the wage premium

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for non-climate controlled workplaces will rise.

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The wage differential that the non-climate controlled workplace must pay in order to

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to attract workers away from employers with climate controlled facilities may eventually reach a level

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at which it would be less expensive for the firm simply to install climate control

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rather than to go on paying higher wages than their competitors who provide it.

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The market thus allows for rational allocation of resources

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and helps to ensure that improvements in workplace conditions

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do not come at the expense of other goods that workers and consumers value more.

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After all, there is no logical limit to the improvements in working conditions that could be brought about.

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We would all enjoy having five-hour lunch breaks, the service of a masseuse, and an office with a view of Niagara Falls.

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But any improvement in working conditions must come at the expense of something else that must now be foregone.

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And there is no way, in isolation from market exchange, that these foregone opportunities can be rationally compared.

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So this is why taxes on business and capital are so foolish and counterproductive.

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Since these taxes hamper business investment, which as we've seen is precisely what raises our standard of living, to impose them is in and of itself destructive.

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Now the vast bulk of high school teachers spend their time condemning the wickedness of businessmen and the wealthy,

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and describe taxation as a righteous method for redistributing the supposedly ill-gotten gains of the wealthy to the oppressed poor.

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To put it kindly, such people have not the faintest idea of how wealth is created,

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and their envy-driven policy proposals inevitably make society poorer than it would otherwise be.

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Now, let's recall the point about labor union work rules.

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Labor unions are notorious for opposing the introduction of labor-saving machinery,

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since they believe, sometimes rightly, that it will lead to the unemployment of some of their members.

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But such machinery in the steel industry, let's say, allows the same amount of output to be produced by fewer hands,

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thereby releasing into the economy a supply of labor that can now be applied to the production of goods that we could not have had before

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because the requisite labor had been tied up in the production of steel.

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This is an example again of how wealth is created.

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The additional goods produced by the additional labor have the happy result of raising real wages, that is the purchasing power of wages.

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Since an increase in the supply of goods available will increase real wages by endowing all real incomes with greater purchasing power.

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Thus by opposing the introduction of labor-saving machinery, labor unions directly sabotage the very mechanism by which real wages are raised.

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Okay, well that's a little bit of theory on this and I'd like to look at some specifics from history.

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There's a very interesting, along these lines, a very interesting chart in Tom DiLorenzo's book How Capitalism Saved America.

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And he and I seem to be in some kind of a mutual help society because he writes articles about me and then I say three words about him at a conference.

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I really owe him a lot at this point, so we'll start with item number one.

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But I wanted to mention this anyway because I think this is a great chart.

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Page 98 of Tom DiLorenzo's book, How Capitalism Saved America, shows it's got a number of products listed

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and then it lists three calendar years, 1900, 1950 and 1999.

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And in each of those columns, what Tom has done is to list the number of minutes of labor

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that it took in each of those years for you to earn enough money to buy the product.

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And what he's showing is the incredible increase in productivity over the years

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that's made it possible for people to produce so much in such a little time

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that they can command so many goods in the marketplace on the basis of a very short amount of time spent in labor.

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So, for example, we have a half gallon of milk.

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Well, I don't know, 2005, we'd have to re-measure this one.

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But nevertheless, 1900 would have taken you 56 minutes of labor.

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In 1950, 16 minutes of labor. In 1999, 7 minutes.

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And then he goes on in this regard. There are some of these. The data is not available from the year 1900.

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But, for example, chocolate bars I'm going to ignore for reasons I've already mentioned earlier.

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We're not going to discuss chocolate bars. But a pair of jeans, 9 hours in 1900 to work to get a pair of jeans.

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4 hours in 1950, 3 hours in 1999. A 3-pound chicken, okay, we're going to imagine this

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as a skinless chicken with nothing fun, no cheese on it, no bacon. 1900, 2 hours and

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40 minutes for a 3-pound chicken. 1950, an hour and 11 minutes for a 3-pound chicken.

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1999, 24 minutes, baby, you got yourself a three pound chicken, okay?

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A hundred kilowatts of electricity, a hundred and seven hours and seventeen minutes in the

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year 1900, is it even worth it at that point?

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And then 1952 hours, 1999, fourteen minutes, and then finally a three minute coast to coast

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phone call.

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In 1950, you'd have to work an hour and 44 minutes to be able to make a three-minute coast-to-coast

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phone call.

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In 1999, you had to work for two minutes.

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So there you go, two minutes, three minute phone call.

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And actually, even better, since my wife and I, we use IDT, long distance, we pay a flat

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$40 a month and we get free everything, free interstate, free within state.

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I got like a hundred bucks for that.

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No, that's not true, but I mean, you're crazy not to be using this thing.

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Like, my friends call me and I say, let me call you back, it's free.

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And they're going, whoa.

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So I'm getting lots of calls these days, all kinds of calls from people,

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because I call them back for free.

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So I mean, that's quite impressive.

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I think this is where you take some of this theory

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and you show that it actually does correspond to something in the real world.

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Well, Tom, in the actual text of this chapter,

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How Capitalism Enriched the Working Class

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When portable radios first appeared in American stores, the average American worker had to work 13 hours to buy one.

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Now it's one hour. It used to be that in the 20s if you wanted a nice men's suit, you had to do the equivalent of 79 hours of labor.

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Now it's less than half that.

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At the beginning of the 20th century, the typical American family spent three-quarters of its income on food, clothing and shelter.

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Today it spends about a third on those items, and Tom DiLorenzo, being who he is, also points out,

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and they spend an even greater proportion on taxes, another important thing to remember.

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He says, in 1908, the typical American worker had to work two years to earn enough money to buy an average quality car.

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Today, a Ford Taurus costs an American worker about eight months of labor, but the car is a technological miracle compared with the cars of yesterday, with standard air conditioning, power seats, safety devices of all kinds, cruise control, a sunroof, tinted glass, a CD player and so on.

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In 1970, an IBM mainframe computer sold for around $4.7 million.

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Today, a personal computer that operates 13 times faster goes for under $1,000.

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And then Tom goes on to discuss the oft-debated question of, has American leisure time increased?

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Because there are some scholars who argue that we're working more than ever and there's much less leisure.

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But some of that is just playing with the data a little bit.

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And others neglects to note the fact that now that we have all these labor-saving devices,

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from dishwashers to a million other things.

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In fact, that's another factor that contributes to our leisure.

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And much as I hate to admit it since I consider the cell phone

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an unbelievably irritating invention,

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the fact that I can make a call on my way somewhere

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as I'm walking down the street, which means that when I get home

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I don't have to waste my time on that, I can be doing other things,

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this actually does mean that we can be more productive

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and enjoy more leisure time.

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Oh gosh, I had to really bite my tongue, grit my teeth to say that

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I don't want to say that because for some reason, I know I read Jeff Tucker's beautiful piece,

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but I still think about people who are in 7-Eleven buying bread and they're calling home.

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What is this that urgent? You've got to be on the phone right now while you're buying a loaf of bread.

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But anyway, if Jeff were here, he'd correct me, but that's his own fault, once again, for being out of town.

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Well, let's look at a couple of episodes from American labor history that are sometimes cited as just glorious moments

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Let's start, for example, with the Haymarket incident, which is a terribly tragic event,

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certainly, but it's sometimes portrayed as a glorious moment in the history of American

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and Unionism.

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And it's not clear why that should be.

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The major meeting that was called on May 4th when the Haymarket incident took place was

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not even called by labor unions.

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It was called by so-called anarchists, left-wing anarchists, so-called anarchists called it.

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And in fact, these were people who had been denounced by labor union leaders.

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So first of all, just on the face of it, it's not clear why this would be a glorious labor

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Union Moment, when labor unions were not even supporting these people.

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But as I say, let's look in more detail.

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There's a very useful article by Charles Baird in which he does a revisionist study of this

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incident of the Homestead Strike of 1892 that we'll look at next, and the Pullman Strike

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of 1894.

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And you can find it in the Cato Journal, 1990.

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Now for those of you who don't have the entire print run of the Cato Journal in your homes,

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Is there anyone who fits that description in this room?

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Then you can nevertheless find it online.

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You just do a Google search for...

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Oh, it's called labor law reform lessons from history.

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It's actually in the bibliography to my book,

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but you'll notice that my book doesn't cover any of that material.

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So what's it doing in the bibliography?

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Well, originally there was a labor union chapter.

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That was cut for space reasons, but the bibliography stayed the same.

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So sometimes there are items in the bibliography on subjects that I don't even remotely touch upon.

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But anyway, this one I highly recommend because it's an example of how labor history should be done.

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It should be done, first of all, by somebody like Charles Baird who understands the economics of labor.

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And secondly, it should be done primarily with the use of the most primary sources you can get your hands on

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to try to reconstruct what happened.

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Because the example of Haymarket is a good example of how very often these stories of labor union triumphs or tragedies are typically distorted in a standard history.

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Well basically we start the story of what happened at Haymarket, which is talking about Chicago.

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We start with the McCormick Reaper Company in February 1886.

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The incident in Haymarket takes place May 4, 1886, so a little earlier that year, there

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had been a lockout at the McCormick Reaper Company.

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The company had basically shut down in anticipation of a strike.

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There was a strike threat looming, and the strike was not actually a strike about wages

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and hours and working conditions.

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The strike was about whether the McCormick Reaper Company had the right to employ five

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non-union workers.

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This was a unionized plant by and large, and McCormick, though, had five non-union workers,

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and they claimed they had the right to negotiate with anyone on whatever terms they want.

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But at the same time, they were negotiating with this union that represented the vast

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bulk of the workers, so they felt that they were being contractually honest and reasonable.

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But the strikers said, or the opinion, that no, they should not hire anyone except union

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workers.

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Okay, well, as the month of February progressed, eventually, the McCormick Company and at least

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a group, a committee of union men, announced that they were prepared to reopen, basically

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on the terms offered by McCormick.

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They were going to reopen on March 1st, but according to the New York Times, another group

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of unionists at McCormick, and these are the words of the New York Times, intimated very

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Well, March 1st comes along and a great many strikers come out, crowds of them, and so, of the 1,000 McCormick workers who had initially indicated a desire to return to work, initially only 150 actually dared to do it.

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Well, once local police had managed to disperse some of the rather intimidating crowds that had gathered around McCormick, a couple hundred other former McCormick workers returned to work, and within a couple of months the remainder of workers, for the remainder of positions, McCormick had simply hired replacements, and that was really the end of that. And there really hadn't been a notable amount of violence in any of this process. That's sort of the background for this.

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First, an entirely unrelated event takes place. For two years, basically labor unionists had

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been struggling for the eight-hour day. Since May of 1884, there had been a campaign going

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on saying that for the next two years we were going to agitate for the eight-hour day. Let's

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put in parentheses here that when they say the eight-hour day, the eight-hour day movement

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was saying that we want to work eight hours a day for ten hours of pay. They weren't just

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We want to cut our hours back. We want to cut our hours back and get the wages, the amount of money that we used to get at 10 hours or whatever amount.

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But 8 hours of work for 10 hours of pay. So this got started, this movement got started in 1884 and said for the next two years we're going to be agitating about this.

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We want to try to get as many employers on board to impose the 8-hour day.

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and then when May 1st, 1886 comes along, if there are employers out there who still haven't gotten on board for the 8-hour day,

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then we go on nationwide strikes and refuse to go back to work until the 8-hour day is granted.

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Well, by the time you get to May 1st, 1886, a great many firms have in fact granted the 8-hour day.

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And interestingly, the McCormick Reaper Company was granting the 8-hour day at about this time.

396
00:38:35.700 --> 00:38:54.700
But not all firms by any means had, so the strikes began, the general strikes began, and in Chicago in particular you see people particularly working in lumber and other areas were going on this major eight-hour day strike that began on May 1st, 1886.

397
00:38:54.700 --> 00:38:59.180
Okay, so they go on strike, a bunch of workers.

398
00:38:59.180 --> 00:39:05.620
The vast majority of the people who are striking in favor of the eight-hour day beginning on

399
00:39:05.620 --> 00:39:12.020
May 1st are not people who had ever at any time worked at the McCormick Reaper Company.

400
00:39:12.020 --> 00:39:16.860
There is practically no connection whatsoever between what we looked at with what happened

401
00:39:16.860 --> 00:39:21.500
at McCormick and this long scheduled rally on May 1st.

402
00:39:21.500 --> 00:39:30.100
are entirely disparate events, yet as that event unfolds, there comes to be a connection

403
00:39:30.100 --> 00:39:34.820
between the two, because at the rally for the 8-hour day and at some of these rallies,

404
00:39:34.820 --> 00:39:40.380
May 1st you get a series of rallies, May 2nd is a Sunday where things are quiet, then May

405
00:39:40.380 --> 00:39:45.740
3rd things get started up again, you begin to get some very inflammatory speeches being

406
00:39:45.740 --> 00:39:50.280
delivered that are not entirely related to the 8-hour day issue.

407
00:39:50.280 --> 00:39:56.120
So for example, one speaker who represented something called the Central Labor Union speaking

408
00:39:56.120 --> 00:40:01.160
to this group, again which had practically no connection, I mean in effect a totally

409
00:40:01.160 --> 00:40:07.180
negligible connection to McCormick, reminded workers that you know, right here in our midst

410
00:40:07.180 --> 00:40:13.860
there's a plant that hired replacement workers, that hired scabs during a strike and we should

411
00:40:13.860 --> 00:40:14.860
punish them for that.

412
00:40:14.860 --> 00:40:20.860
So that has nothing to do with the 8-hour day, it just has to do with labor frustration.

413
00:40:20.860 --> 00:40:28.860
So a labor union figure from the Central Labor Union named Fritz Schmidt said this at the rally,

414
00:40:28.860 --> 00:40:33.860
On to McCormick's and let us run every one of the damned scabs out of the city.

415
00:40:33.860 --> 00:40:37.860
It is they who are taking the bread from you, your wives and your children.

416
00:40:37.860 --> 00:40:41.860
On to them, blow up the factory, strike for your freedom.

417
00:40:41.860 --> 00:40:47.860
and if the armed murderers of the law interfere, shoot them down as you would the scabs.

418
00:40:47.860 --> 00:40:51.860
Kind of an inflammatory speech, okay?

419
00:40:51.860 --> 00:40:58.860
Well, in the midst of this type of speech being delivered, and by the way, again, that comes right out of the New York Times, recapping that speech.

420
00:40:58.860 --> 00:41:04.860
Right around the time these speeches are being delivered, the bell sounds for the end of the workday over at McCormick.

421
00:41:04.860 --> 00:41:19.860
The New York Times reports that thousands of workers from this particular demonstration stormed over to McCormick.

422
00:41:19.860 --> 00:41:25.860
Other eyewitness testimonies have the figure much lower. I've seen as low as 200.

423
00:41:25.860 --> 00:41:37.860
But the point is that at least some number of people ran over to McCormick armed with stones to start pelting the scabs with, the scabs over at McCormick.

424
00:41:37.860 --> 00:41:48.860
The result was that you had a very ugly confrontation with the McCormick workers having to run back into the plant for their own safety.

425
00:41:48.860 --> 00:41:53.220
and so they were having so they were having rocks whipped at them and then

426
00:41:53.220 --> 00:41:56.620
the rocks are being thrown through the windows of the plant and eventually the

427
00:41:56.620 --> 00:42:02.460
police arrived and you know attempted to restore order they they fired their

428
00:42:02.460 --> 00:42:08.780
their guns trying to trying to just get the crowd to disperse but eventually they

429
00:42:08.780 --> 00:42:12.620
actually ended up killing at least four people who were there at least four of

430
00:42:12.620 --> 00:42:17.820
the people from that other rally who would who would run over there the

431
00:42:17.820 --> 00:42:24.340
The workers themselves then began to open fire back, but ultimately it was viewed by

432
00:42:24.340 --> 00:42:28.540
some of the anarchist types as a massacre by the police.

433
00:42:28.540 --> 00:42:32.780
But let's bear in mind here, because the way it's often described, I mean, certainly

434
00:42:32.780 --> 00:42:35.460
these four people shouldn't have been killed, obviously.

435
00:42:35.460 --> 00:42:41.220
But the way this is often described is that if you could be easily forgiven for believing,

436
00:42:41.220 --> 00:42:45.060
reading the standard account of this, there was a strike going on at the McCormick plant

437
00:42:45.060 --> 00:42:47.740
and the police came and started shooting them.

438
00:42:47.740 --> 00:42:52.420
And in fact, not only was that not the case, the plant had been operating for a couple

439
00:42:52.420 --> 00:42:57.900
of months with basically no violence, but also the people involved over there were not

440
00:42:57.900 --> 00:43:03.140
even McCormick workers, they were workers from a completely unrelated rally.

441
00:43:03.140 --> 00:43:12.700
Well the next day there was a meeting held at Haymarket and there were flyers distributed

442
00:43:12.700 --> 00:43:17.820
to try to get people to show up, and not as many showed up as they wanted, but some of

443
00:43:17.820 --> 00:43:24.120
these flyers were distributed, as I say, by so-called anarchists, and one such flyer read

444
00:43:24.120 --> 00:43:29.540
in big letters, revenge, working men to arms, and it read in part, if you are men, if you

445
00:43:29.540 --> 00:43:33.860
are the sons of your grandsires who have shed their blood to free you, then you will rise

446
00:43:33.860 --> 00:43:39.400
in your might, Hercules, and destroy the hideous monster that seeks to destroy you, to arms,

447
00:43:39.400 --> 00:43:41.700
we call you, to arms.

448
00:43:41.700 --> 00:43:46.900
Another hand-bill read, Attention, working men, great mass meeting tonight at 7 o'clock

449
00:43:46.900 --> 00:43:48.420
at the Haymarket.

450
00:43:48.420 --> 00:43:52.820
Good speakers will be present to denounce the latest atrocious act of the police, the

451
00:43:52.820 --> 00:43:56.100
shooting of our fellow workmen yesterday afternoon.

452
00:43:56.100 --> 00:44:01.220
Working men, arm yourselves and appear in full force.

453
00:44:01.220 --> 00:44:05.180
Well as I say, this May 4th meeting was not called by the Knights of Labor or the American

454
00:44:05.180 --> 00:44:11.340
Federation of Labor, it was called by anarchist groups from which these other labor organizations

455
00:44:11.340 --> 00:44:20.180
In the meeting, there were still more inflammatory speeches made, and at the moment that the

456
00:44:20.180 --> 00:44:24.980
police late at night, around 10 o'clock at night, demanded that people disperse, that

457
00:44:24.980 --> 00:44:31.180
the meeting cease and everyone go home, a bomb exploded, and to this day, no one knows

458
00:44:31.180 --> 00:44:38.500
exactly who it was who dropped this bomb, but in the chaos that ensued and the hysteria

459
00:44:38.500 --> 00:44:43.500
A number of anarchists were rounded up and accused of the crime.

460
00:44:43.500 --> 00:44:47.500
Some of them were, in fact, several of them were even executed.

461
00:44:47.500 --> 00:44:52.500
And in subsequent years, the governor actually went back and looked at the evidence

462
00:44:52.500 --> 00:44:54.500
and said these people were railroaded.

463
00:44:54.500 --> 00:44:56.500
So any of them who were in jail, he let them go.

464
00:44:56.500 --> 00:45:00.500
But, of course, the executed people were already dead at that point.

465
00:45:00.500 --> 00:45:06.500
But the significance of all this, as Baird says, is it may be that these anarchists were treated very badly.

466
00:45:06.500 --> 00:45:11.500
You know, there was no real evidence against them, other than the fact that they had given inflammatory speeches.

467
00:45:11.500 --> 00:45:17.500
But he says, in what way can this incident be viewed as a glorious moment in the history of American labor unionism?

468
00:45:17.500 --> 00:45:22.500
When the anarchists were not involved in the labor union movement, they detested the labor union movement,

469
00:45:22.500 --> 00:45:27.500
for basically the reason that Marxists detest the labor union movement, has nothing to do with it.

470
00:45:27.500 --> 00:45:35.500
And in fact, basically what it amounts to is it started off when a bunch of non-MacCormac people went and started throwing rocks at peaceful workers.

471
00:45:35.500 --> 00:45:42.500
What is particularly glorious about this, is what Baird wants to ask, and it's a reasonable question.

472
00:45:42.500 --> 00:45:48.500
But still more dramatic, though, is what happened in 1892 in the Homestead strike.

473
00:45:48.500 --> 00:45:53.500
This is the Homestead, the Carnegie Steel Works in Homestead, Pennsylvania.

474
00:45:53.500 --> 00:45:59.500
It was a very important facility for the production of steel.

475
00:45:59.500 --> 00:46:06.500
and the production of steel. I mean, it was tremendously efficient, much more so than comparable European plants.

476
00:46:10.500 --> 00:46:14.500
And there's a historic strike that occurs there in 1892.

477
00:46:15.500 --> 00:46:23.500
And again, the standard account has it that, again, this is a glorious moment for organized labor and it's something that needs to be solemnly commemorated.

478
00:46:23.500 --> 00:46:28.500
And there is, in fact, a monument in Homestead that commemorates this incident.

479
00:46:28.500 --> 00:46:41.620
1889, there was a strike at the homestead plant, the Carnegie Steel Works there, and

480
00:46:41.620 --> 00:46:48.460
during that strike, strikers were assaulting people, there was property destruction, the

481
00:46:48.460 --> 00:46:55.420
sheriff of Allegheny County was not able to control the strikers, basically anybody who

482
00:46:55.420 --> 00:47:10.420
The Carnegie Steel Works at Homestead drew a conclusion from this. We cannot rely on the public authorities to defend us.

483
00:47:10.420 --> 00:47:20.420
So if something should happen again in the future, if there should be labor unrest in the future, we're going to have to look to some alternative means of protecting person and property.

484
00:47:20.420 --> 00:47:26.140
Okay, now we fast forward to 1892, the year of the strike.

485
00:47:26.140 --> 00:47:33.180
There had been, for several years, a wage agreement with the workers at Homestead.

486
00:47:33.180 --> 00:47:38.460
And that wage agreement, it had involved a sliding scale, in the sense that the wage

487
00:47:38.460 --> 00:47:42.900
that the worker was paid would in some way be proportionate to the price of steel at

488
00:47:42.900 --> 00:47:44.140
that time.

489
00:47:44.140 --> 00:47:49.580
So in a certain sense, the idea, more or less, was that it's profit sharing, so that steel

490
00:47:49.580 --> 00:47:53.580
is very expensive, then we get a higher wage.

491
00:47:53.580 --> 00:48:02.580
Steel goes down, to a certain extent we get a lower wage, but if steel goes below $22 per ton,

492
00:48:02.580 --> 00:48:06.580
then our wage cannot go down any lower than that.

493
00:48:06.580 --> 00:48:11.580
Even if it went down to $18, $17, our wage would stay at the $22 level.

494
00:48:11.580 --> 00:48:13.580
That was the agreement.

495
00:48:13.580 --> 00:48:17.580
That was set to expire in July of 1892.

496
00:48:17.580 --> 00:48:39.580
The price of steel had been declining and the homestead plant was finding that it would be difficult for them, given that the price of steel was at $22.50 per ton, to keep $22 as that low point would have been difficult for them.

497
00:48:39.580 --> 00:48:44.580
So they wanted to negotiate that point. How would the sliding scale work under the new conditions?

498
00:48:44.580 --> 00:48:48.580
All right, so the company and the workers are negotiating back and forth.

499
00:48:48.580 --> 00:48:51.580
There were several different unions represented at this plant.

500
00:48:51.580 --> 00:49:00.580
Now, Frank Taussig, who many of you may know from his tariff history of the United States, said this in an article he wrote in 1893.

501
00:49:00.580 --> 00:49:01.580
He said,

502
00:49:14.580 --> 00:49:28.580
by the time of July 1892, it was clear that the two sides were not going to reach an agreement.

503
00:49:28.580 --> 00:49:39.580
In particular, it was the amalgamated iron and steel workers that represented about 800 of the 3,800 workers at the plant.

504
00:49:39.580 --> 00:49:49.580
They were not accepting the new offer, and they threatened a strike in that month, and in fact they went ahead with it.

505
00:49:49.580 --> 00:49:55.580
They went ahead with the strike, but it wasn't just the 800 who belonged to this recalcitrant union.

506
00:49:55.580 --> 00:50:04.580
Basically all 3,800 workers went on strike, and it seemed to the folks at Homestead that intimidation must have been used here.

507
00:50:04.580 --> 00:50:10.100
Well, how would you be able to get all 3,800 workers to go on strike when 3,000 of them

508
00:50:10.100 --> 00:50:12.720
were perfectly happy with the deal?

509
00:50:12.720 --> 00:50:13.720
How did they do that?

510
00:50:13.720 --> 00:50:20.820
And so they were convinced, both Carnegie, who was not present, and the guy who was actually

511
00:50:20.820 --> 00:50:25.740
running the Homestead plant, Henry Clay Frick, was of the belief that there must have been

512
00:50:25.740 --> 00:50:27.060
intimidation used.

513
00:50:27.060 --> 00:50:30.500
Well, regardless, whether there was or wasn't, it would be hard to get to the bottom of that

514
00:50:30.500 --> 00:50:32.260
at that point.

515
00:50:32.260 --> 00:50:39.900
But the strike went on, and so the 3,800 workers basically ceased to work, ceased working.

516
00:50:39.900 --> 00:50:44.680
And Carnegie himself, when he got word of this, was stunned that his workers had gone,

517
00:50:44.680 --> 00:50:46.220
all of them had gone on strike.

518
00:50:46.220 --> 00:50:53.820
He was of the opinion that he had modern facilities, that he had reasonable safety precautions

519
00:50:53.820 --> 00:51:00.180
in place, given that steel production is inherently an extremely dangerous line of work.

520
00:51:00.180 --> 00:51:16.180
Well, the strikers now form what they call an advisory committee and this advisory committee now begins to in effect exercise the powers of government in Homestead.

521
00:51:16.180 --> 00:51:25.180
This advisory committee surrounded the Homestead plant, would not allow basically anyone other than company officers entrance

522
00:51:25.180 --> 00:51:33.180
Entrance, and they made it clear they were trying to prevent non-union workers from getting into the plant.

523
00:51:33.180 --> 00:51:41.180
They would stop and question strangers, people they didn't recognize going into the plant.

524
00:51:41.180 --> 00:51:49.180
So in early July, 300 guards from the so-called Pinkerton Detective Agency were dispatched.

525
00:51:49.180 --> 00:51:54.180
The Pinkertons were a private organization that would sometimes be dispatched in situations like this,

526
00:51:54.180 --> 00:52:13.180
300 Pinkerton guards set out on a couple of barges along the river heading toward the Carnegie steelworks at Homestead.

527
00:52:13.180 --> 00:52:19.180
So there's a docking site, in other words, on the property for the barges.

528
00:52:19.180 --> 00:52:27.180
Well, the striking workers caught wind of this, that these several hundred Pinkerton guards were on their way,

529
00:52:27.180 --> 00:52:33.180
and a mob of thousands began to rush over to the docking site.

530
00:52:33.180 --> 00:52:40.180
When the boats finally got to the docking site, the mob in fact greeted them

531
00:52:40.180 --> 00:52:48.180
by letting the Pinkerton Detective Agency guards know that they really were not welcome there.

532
00:52:48.180 --> 00:52:52.180
And the way they let them know that they were not welcome there was that, for example,

533
00:52:52.180 --> 00:53:00.180
when some of the Pinkerton guards tried to disembark and actually come ashore,

534
00:53:00.180 --> 00:53:05.180
along with the leader of these guards, Captain Hinde,

535
00:53:05.180 --> 00:53:09.180
we get from a modern historian this description of what took place.

536
00:53:09.180 --> 00:53:14.300
Three strikers ran forward. Two grabbed the end of the gangplank while the third deliberately

537
00:53:14.300 --> 00:53:19.500
laid down upon it as if to dare the enemy to cross his body. As Hinde was trying to

538
00:53:19.500 --> 00:53:25.420
shove the prone man aside, the latter pulled a revolver and shot him through the thigh.

539
00:53:25.420 --> 00:53:30.020
The heavy cartridge knocked him over backward. A torrent of gunfire swept the men on the

540
00:53:30.020 --> 00:53:35.020
plank. Hinde was hit again. Another guard named Klein was killed instantly. Four of

541
00:53:35.020 --> 00:54:05.020
Well, the Pinkerton's hadn't even fired at this point, had not fired a shot at all, but at this point, given that one of them has now been killed and others have been shot at, wounded, they began to return fire, and at this point, two strikers were killed and several injuries, the mob retreated, but temporarily, because ultimately, all day long, the Pinkerton guards who are still on board the boat,

542
00:54:05.020 --> 00:54:12.020
The way that the strikers are going after these Pinkerton guards changes over the course of the day.

543
00:54:12.020 --> 00:54:23.020
First they fire cannons at them, hoping to sink them, then they try to set the barges on fire, and then they try to use dynamite on them.

544
00:54:23.020 --> 00:54:35.020
Now again, there are some sort of sticklers who would say that this is not appropriate behavior toward fellow human beings,

545
00:54:35.020 --> 00:54:40.020
but I think people who say that are just oppressors of the working class.

546
00:54:40.020 --> 00:54:46.020
Well, this advisory committee now, which again is sort of directing the strike,

547
00:54:46.020 --> 00:54:50.020
as I say, it has basically usurped the powers of government in Homestead.

548
00:54:50.020 --> 00:54:59.020
They're basically running Homestead. They're censoring the press. They're throwing people in jail just because they said that we don't like the way the strike is being run.

549
00:54:59.020 --> 00:55:07.020
Charles Baird said the only thing that was missing was the guillotine. He said it was like the French Revolutionary Reign of Terror, in effect, compared to Robespierre.

550
00:55:07.020 --> 00:55:31.020
All right, well eventually the governor activated the National Guard and managed to begin to gain control over the area and the plant from the advisory committee and with the passage of time, non-union workers were able to be hired, enough of them so that you could actually get things up and running again.

551
00:55:31.020 --> 00:55:47.020
Now, in fact, even workers who have been on the strike were welcomed back to the plant, except those who were responsible for the most egregious examples of animal exuberance, as we mentioned earlier today.

552
00:55:47.020 --> 00:55:56.020
They were exempted, but many of the strikers were welcomed back and some non-union workers were admitted to employment as well.

553
00:55:56.020 --> 00:56:06.020
Well, by the time you get to the fall of October, this advisory committee is still trying to carry on pressure against the Homestead plant.

554
00:56:06.020 --> 00:56:12.020
And it's pretty obvious by October that they've lost. I mean, the plant is up and running. Everything seems to be fine.

555
00:56:12.020 --> 00:56:22.020
So in October, given that even some of the people associated with the advisory committee group were going back to work for Homestead,

556
00:56:22.020 --> 00:56:24.020
In the midst of all this, by the way, the gentleman who had been in charge of the plant was Henry Clay Frick.

557
00:56:52.020 --> 00:56:55.020
I can't put my finger on what it is exactly.

558
00:56:55.020 --> 00:57:00.020
But while this was happening, he was actually shot twice by one of these anarchists.

559
00:57:00.020 --> 00:57:02.020
But he stayed at work.

560
00:57:02.020 --> 00:57:05.020
In fact, he wrote a letter to his mother that day.

561
00:57:05.020 --> 00:57:08.020
And in the letter, he had this solitary reference to what had happened to him.

562
00:57:08.020 --> 00:57:18.020
He wrote, was shot twice today, though not seriously.

563
00:57:18.020 --> 00:57:21.020
It's funny, he and Carnegie after this actually didn't really get along.

564
00:57:21.020 --> 00:57:33.020
Don't let my mother tell the story about the winter morning when I slipped on the ice,

565
00:57:33.020 --> 00:57:37.020
after she said, be careful, it's slippery out there, yeah, yeah, yeah, bang!

566
00:57:37.020 --> 00:57:40.020
And I fractured my elbow. I didn't realize that at the time.

567
00:57:40.020 --> 00:57:43.020
And I brushed myself off and went up to the bus stop and went to school.

568
00:57:43.020 --> 00:57:46.020
And then later on I realized, you know, I've lost functionality in this arm,

569
00:57:46.020 --> 00:57:48.020
and it turned out it was fractured.

570
00:57:48.020 --> 00:57:51.020
Even then I was saying, well, maybe I can get back in time for English later.

571
00:57:51.020 --> 00:57:55.020
What a dork, right? It's like me and Henry Clay Frick, you know?

572
00:57:55.020 --> 00:58:03.020
Anyway, the Chief Justice of the Pennsylvania Supreme Court eventually made a statement on this matter

573
00:58:03.020 --> 00:58:08.020
because the strike leaders were tried for treason against the state.

574
00:58:08.020 --> 00:58:10.020
They were not, in fact, found guilty of that.

575
00:58:10.020 --> 00:58:14.020
But in the course of that case, the Chief Justice said this,

576
00:58:14.020 --> 00:58:19.020
The relation of employer and employee is one of contract merely.

577
00:58:19.020 --> 00:58:23.180
Neither party has a right to coerce the other into the making of a contract to which the

578
00:58:23.180 --> 00:58:25.540
mind does not assent.

579
00:58:25.540 --> 00:58:30.460
The employer cannot compel his employee to work a day longer than he sees fit, nor his

580
00:58:30.460 --> 00:58:34.880
contract calls for, nor for a wage that is unsatisfactory to him.

581
00:58:34.880 --> 00:58:39.140
It follows that the employee cannot compel his employer to give him work or to enter

582
00:58:39.140 --> 00:58:48.180
When the negotiations between the parties came to an end, the contract relations between

583
00:58:48.180 --> 00:58:49.580
them ceased.

584
00:58:49.580 --> 00:58:53.700
The men had no further demand upon the company, and they had no more interest or claim upon

585
00:58:53.700 --> 00:58:55.660
its property.

586
00:58:55.660 --> 00:58:59.260
Nor does it make any difference that a large number were discharged at one time.

587
00:58:59.260 --> 00:59:03.560
Their aggregate rights rise no higher than their rights as individuals.

588
00:59:03.560 --> 00:59:08.460
The mutual right of the parties to contracts in regard to wages is as fixed and clear as

589
00:59:08.460 --> 00:59:12.960
is any other right which we enjoy under the constitution and laws of this state.

590
00:59:12.960 --> 00:59:17.020
It is a right which belongs to every citizen, laborer or capitalist,

591
00:59:17.020 --> 00:59:23.100
and is the plain duty of the state to protect them in the enjoyment of it.

592
00:59:23.100 --> 00:59:27.380
Labor historians, by the way, hate this judge. I'm not making that up, they hate him, they say,

593
00:59:27.380 --> 00:59:30.420
this guy doesn't understand the situation at all.

594
00:59:30.420 --> 00:59:33.100
I don't know, I think he understands it perfectly well.

595
00:59:33.100 --> 00:59:34.940
But isn't it interesting though that

596
00:59:34.940 --> 00:59:38.420
there is, to this day, a ten foot high

597
00:59:38.420 --> 00:59:46.420
that commemorates the Homestead strike, and the inscription on it reads as follows, it says,

598
00:59:46.420 --> 00:59:51.420
Erected by the members of the Steelworkers Organization Committee, local unions,

599
00:59:51.420 --> 00:59:55.420
in memory of the iron and steel workers who were killed in Homestead, Pennsylvania,

600
00:59:55.420 --> 01:00:03.420
on July 6th, 1892, while striking against the Carnegie Steel Company in defense of their American rights.

601
01:00:03.420 --> 01:00:11.420
It doesn't seem like really the description that I think I would use to describe what happened as a defense of their American rights.

602
01:00:11.420 --> 01:00:23.420
And Baird's assessment is to say that it seems to me that what they were actually doing was violating the American rights of other people who just simply wanted to work at the Homestead plant.

603
01:00:23.420 --> 01:00:29.420
Well, all right, that's at least a little bit of an overview of a couple of the better known labor incidents.

604
01:00:29.420 --> 01:00:34.020
I think it goes to show how much work there is to be done on this, because that's not

605
01:00:34.020 --> 01:00:37.980
the version of the story that typically comes out, and yet these are all sources that are

606
01:00:37.980 --> 01:00:43.760
easily consulted, that you can easily get, and so we need to toward a reconstruction

607
01:00:43.760 --> 01:00:47.460
of American labor history.

608
01:00:47.460 --> 01:00:51.920
I now have two little kids and I have a million things to do, so somebody here has to undertake

609
01:00:51.920 --> 01:00:52.920
this project.

610
01:00:52.920 --> 01:00:57.900
Okay, so we'll stop here, we'll finish talking about labor, and then take questions.

611
01:00:57.900 --> 01:01:20.900
If I understand, if I could just summarize it this way, you sort of see these labor problems as a result of, to coin a phrase, outside education, that in the absence of outsiders coming in and creating turmoil, that we wouldn't have these interfaces?

612
01:01:27.900 --> 01:01:34.900
The question is, am I saying that in the absence of outside agitation, would we basically be free of these type of labor disputes?

613
01:01:34.900 --> 01:01:37.900
Is it only because outsiders are coming in and organizing people?

614
01:01:37.900 --> 01:01:43.900
But just as an empirical fact, it's so often the case that, at least in many cases,

615
01:01:43.900 --> 01:01:47.900
the agitation for labor organization comes from an outside organization.

616
01:01:47.900 --> 01:01:51.900
It oftentimes does not just emerge spontaneously from the workers themselves.

617
01:01:51.900 --> 01:01:53.900
It emerges when some guy from the Teamsters comes in and says,

618
01:01:53.900 --> 01:02:20.280
I was thinking what you said about the event and thinking about what happened in Paris in 1876, and how much of that influence of what happened in Paris was going back to the

619
01:02:20.280 --> 01:02:27.280
This was going back to the anarchists that were getting involved for agitation purposes.

620
01:02:27.280 --> 01:02:34.280
Because I remember back in my college days when agitators would say critical shows, now Berkeley.

621
01:02:34.280 --> 01:02:38.280
And we had people, Parkinson and out there.

622
01:02:38.280 --> 01:02:42.280
And they would get the crowd all stimulated, and they leave.

623
01:02:42.280 --> 01:02:45.280
And then they go on ahead facing the National Guard.

624
01:02:45.280 --> 01:02:55.280
I was wondering how much of that outside agitation in 1892 was affected by what happened to Paris in 1876.

625
01:03:15.280 --> 01:03:20.280
The Knights of Labor really suffered as a result of the Haymarket incident in 1886

626
01:03:20.280 --> 01:03:26.280
because one of the people who was accused of in some way conspiring to set off that bomb

627
01:03:26.280 --> 01:03:29.280
happened to be a member of the Knights of Labor.

628
01:03:29.280 --> 01:03:32.280
Now, that doesn't mean that the Knights of Labor endorsed this.

629
01:03:32.280 --> 01:03:34.280
I mean, they can't control every single person as a member,

630
01:03:34.280 --> 01:03:39.280
but people began to associate in their minds, oh, Knights of Labor, yeah, Haymarket.

631
01:03:39.280 --> 01:03:42.280
And it's devastating for them, and it's not coincidental

632
01:03:42.280 --> 01:03:48.280
The American Federation of Labor began to increase.

633
01:03:48.280 --> 01:03:52.280
The best way I can answer your question is to say

634
01:03:52.280 --> 01:03:57.280
that there was a very careful attempt on the part of a guy like Samuel Gompers

635
01:03:57.280 --> 01:04:00.280
who was the head of the American Federation of Labor

636
01:04:00.280 --> 01:04:04.280
to try to make sure that people who were violent or radical

637
01:04:04.280 --> 01:04:08.280
just by philosophy, as these types of anarchists were,

638
01:04:08.280 --> 01:04:10.280
were not associated with his organization

639
01:04:10.280 --> 01:04:30.280
Do you say more about Samuel Dumpers and his role? If he's still a hero among high school

640
01:04:40.280 --> 01:04:52.280
I can forgive a lot. When people do one heroic thing, oftentimes in my mind it very much offsets other things.

641
01:04:52.280 --> 01:04:58.280
Gompers was involved in the Anti-Imperialist League at the time of the Spanish-American War,

642
01:04:58.280 --> 01:05:01.280
but then mainly the suppression of Philippine independence.

643
01:05:01.280 --> 01:05:02.280
and Independence.

644
01:05:02.280 --> 01:05:08.280
So, he was somebody who, he wasn't the sort of labor leader who rallies the, rallies his

645
01:05:08.280 --> 01:05:13.040
troops to go be rah-rah-rah and we've got to support every war because they're all

646
01:05:13.040 --> 01:05:15.080
ipso facto just.

647
01:05:15.080 --> 01:05:19.280
You know, he took a gamble by saying, well, you know what, I think this is immoral and

648
01:05:19.280 --> 01:05:22.960
I'm going to stand up against it even if there are a bunch of flag waivers in my organization.

649
01:05:22.960 --> 01:05:26.240
I'm nevertheless going to come out against it.

650
01:05:26.240 --> 01:05:27.240
That's a good thing.

651
01:05:27.240 --> 01:05:32.240
I don't want to take his name in vain too terribly much because that was a heroic thing

652
01:05:32.240 --> 01:05:35.240
and we needed many thousands more people like him doing that.

653
01:05:35.240 --> 01:05:44.240
By the way, my favorite incident on that, by the way, is that Andrew Carnegie, as if to counter the claim that capitalism is imperialistic,

654
01:05:44.240 --> 01:05:47.240
you know, like somehow of its nature is imperialistic,

655
01:05:47.240 --> 01:05:51.240
does some of you know that Carnegie was not only involved in the American Anti-Imperialist League,

656
01:05:51.240 --> 01:05:58.240
Do you mind sharing the, you mentioned a quote earlier, this morning, about, you know, the

657
01:06:21.240 --> 01:06:37.240
The idea that voluntary unionism can't, and that benefits the people for the work that is done, and it's likely to cross the power of the state to get these funds. Is that your position?

658
01:06:51.240 --> 01:06:56.740
So it's not in and of itself impossible to imagine, you know, a labor union that uses non-coercive methods.

659
01:06:56.740 --> 01:07:03.240
It just may be unusual, it may go against the grain, just simply because.

660
01:07:03.240 --> 01:07:11.740
It's in the same way that it's not impossible to imagine a business in the 1920s that just wanted to be a free market competing business,

661
01:07:11.740 --> 01:07:18.240
even though everybody else in the 1920s, or a large number of them, were clamoring for one kind or another of government assistance.

662
01:07:18.240 --> 01:07:21.440
Well, certainly there are exceptions to that, but I think there are certain pressures in

663
01:07:21.440 --> 01:07:26.440
the very nature of the labor union that make it want to use the coercive powers of the

664
01:07:26.440 --> 01:07:31.400
state, because that way they can more effectively keep out competing labor. But you can nevertheless

665
01:07:31.400 --> 01:07:37.960
have a voluntary union that confines itself to either to things like helping out fellow

666
01:07:37.960 --> 01:07:45.020
workers and just negotiating with the employer. I mean, it still performs a useful function.

667
01:07:45.020 --> 01:08:06.020
And sometimes a strike, and I think Rothbard has made this point, a strike can play a useful role if, let's say, the employer is in fact offering a wage that is well below the market wage, and he may just legitimately not know this, and the workers then go on strike and basically nobody comes and accepts this offer.

668
01:08:06.020 --> 01:08:14.020
It's a way of alerting the employer peacefully that these terms are not acceptable and you need to get your wages up to a reasonable market level.

669
01:08:14.020 --> 01:08:21.020
So, you know, so I think, you know, labor unions could play that type of role. Yes.

670
01:08:44.020 --> 01:08:57.020
There's people like Cindy Hillman, and they have a goal, like the communist concept that was kind of involved in labor, but now it's kind of marginalized in such an extent that it's really not there anymore.

671
01:09:14.020 --> 01:09:31.020
There's a decision that people do not have to pay, or could even be in the 90s, that if you're paying labor union dues, you have a right on the basis of conscience not to have them be earmarked for political purposes that you don't support.

672
01:09:31.020 --> 01:09:34.020
Isn't that right? Wasn't there some kind of thing to that effect?

673
01:09:34.020 --> 01:09:43.020
Oh, the teachers' unions have that? I'm actually in a teachers' union, by the way. I get the American Federation of Teachers thing, because we're in a union at my college.

674
01:09:43.020 --> 01:09:50.020
And part of me wants to call up and say, hey, you know, I don't want to read this magazine. There's no point in you sending it to me.

675
01:09:50.020 --> 01:09:55.020
But then I remember something I learned at the Morton Blackwell Leadership Institute.

676
01:09:55.020 --> 01:10:03.020
And that is that if the bad guys want to give you a free copy of something, take it, because then it's one less copy they have to give to somebody else.

677
01:10:03.020 --> 01:10:32.020
At the beginning of the lecture, you talked about growth effects, and you quoted a lot from Morgan Arnold, and I was wondering to what rigor you consider your own work and groundwork to maintain the youth of the United States and the rest of the world.

678
01:10:32.020 --> 01:10:41.020
Utilization of growth effects without submitting to bounties of social utility or interpersonal utility comparison.

679
01:10:41.020 --> 01:10:48.020
We spent a lot of time talking about objective consumables that we have that even the people of the highest wealth in the past didn't have.

680
01:10:48.020 --> 01:10:57.020
But granted I have a toaster oven and Henry VIII didn't, I might still rather be Henry VIII.

681
01:11:02.020 --> 01:11:07.620
Internetland, you know, just because, and this is a comment that's made by a lot of

682
01:11:07.620 --> 01:11:12.940
types of people, just because we have, you know, amenities today that people didn't have

683
01:11:12.940 --> 01:11:18.420
in the past, that doesn't necessarily really mean anything, because maybe I would still

684
01:11:18.420 --> 01:11:22.460
rather live at some other time in the past, maybe I value other things about society more

685
01:11:22.460 --> 01:11:27.380
strongly than I value having a washer and dryer, and I'm sympathetic to that argument

686
01:11:27.380 --> 01:11:34.880
Because, you know, washer and dryer or a toaster oven, you know, in and of themselves, you know, they're not the be-all and end-all of life.

687
01:11:34.880 --> 01:11:48.080
All I'm saying is that other things being equal, just saying other things being equal, if you have, let's say you had two identical societies and the only thing separating them was one has a toaster oven, one doesn't.

688
01:11:48.080 --> 01:11:57.280
I still can't say objectively that the toaster oven one is better because you could still say, well, you know, then you don't get the really earthy flavor that comes from putting everything over a fire.

689
01:11:57.280 --> 01:12:01.080
You know, I can't anticipate every possible objection somebody could have, but what I'm

690
01:12:01.080 --> 01:12:06.400
trying to appeal to is, I think, a generally common sense that people have, you know, that's

691
01:12:06.400 --> 01:12:10.880
common to most people, that they would rather be, you know, they and their children would

692
01:12:10.880 --> 01:12:15.960
rather be physically and materially comfortable. And I think these things make us more comfortable.

693
01:12:15.960 --> 01:12:19.800
But if people disagree with that, then I wouldn't say, well, you can't hold that opinion, or

694
01:12:19.800 --> 01:12:23.880
it's illegitimate to hold that opinion. I would just say we have different first principles.

695
01:12:23.880 --> 01:12:25.880
Yes, Kevin.

696
01:12:53.880 --> 01:13:03.780
or whatever, because the whole system of organization is approved to such a degree that our people can be left out in new ways.

697
01:13:03.780 --> 01:13:12.300
Now, I mean, at least my point is to say while that's true, I don't know if it means whatever happen with the automotive bureau,

698
01:13:12.300 --> 01:13:19.340
I mean, not at that point, it's not at any partner's point, everything is, I think that's some force, I mean, I did think that's something to be aware of.

699
01:13:19.340 --> 01:13:26.340
There are certain changes that come from development that can have adverse effects in that respect.

700
01:13:49.340 --> 01:14:02.340
Nevertheless, the fact of our improved standard of living means that everybody needs a car, or needs some of these bigger things, and not everyone can afford them, and so they get left out, left behind, whatever.

701
01:14:02.340 --> 01:14:13.340
I guess I would say that, just as an interesting counter example, in the 1980s, in the 1980s you could barely walk down a city block without seeing a help wanted sign.

702
01:14:13.340 --> 01:14:23.340
And yet, it seemed as if inner-city unemployment, or black unemployment, for example, seemed to be more or less stagnant.

703
01:14:23.340 --> 01:14:34.340
And in fact, if you ask these people, is the reason that you don't have a job because there's a lack of jobs out there?

704
01:14:34.340 --> 01:14:37.340
And three-quarters of them would say, no, that's not the reason.

705
01:14:37.340 --> 01:14:41.340
And in fact, when you ask them about each other, what qualities do you think your neighbor has?

706
01:14:41.340 --> 01:14:45.340
They all found their neighbor was lazy and wouldn't get up and look for work and whatever.

707
01:14:45.340 --> 01:14:48.340
Not themselves, of course, but their neighbor.

708
01:14:48.340 --> 01:14:54.340
I have a lot of statistics about this in my chapter on the 60s in the Politically Incorrect Guide.

709
01:14:54.340 --> 01:15:01.340
So in other words, I guess I'm saying that sometimes we get kind of grandiose explanations

710
01:15:01.340 --> 01:15:05.340
for what's causing poverty in this or that sector of the economy,

711
01:15:05.340 --> 01:15:09.340
but yet when you actually look very closely, they don't seem to hold water.

712
01:15:09.340 --> 01:15:11.340
The Theory of Money and Credit

713
01:15:39.340 --> 01:15:41.340
I'm still trying to get me to do it, I'm sure.

714
01:15:41.340 --> 01:15:43.340
Anybody else?

715
01:15:43.340 --> 01:15:47.340
You go to China, you see 50,000 bicycles at a red light.

716
01:15:47.340 --> 01:15:49.340
Yeah, that's true. Yeah, right. Yeah, that's right.

717
01:15:49.340 --> 01:15:53.340
He says, the gentleman says, go to China, you see 50,000 bicycles at a red light.

718
01:15:53.340 --> 01:15:56.340
Yeah, you get a bicycle.

719
01:15:56.340 --> 01:16:00.340
Now, this will be, you mark my words, that will be quoted on the internet.

720
01:16:00.340 --> 01:16:05.340
Tom Woods's solution to poverty? Get a bicycle.

721
01:16:05.340 --> 01:16:08.340
I guess the point was that it can be applied to other cars.

722
01:16:08.340 --> 01:16:12.340
Oh, right, no, I understand. Yeah, no, I understand that. Yeah, yeah.

723
01:16:12.340 --> 01:16:16.340
Well, let's see if we can hammer out a good, you know, but that'd be a good, like we should write something on that,

724
01:16:16.340 --> 01:16:21.340
because I know you're overloaded with spare time, as am I. Yes?

725
01:16:21.340 --> 01:16:25.340
No, but I think the bicycle answer is a reasonable response.

726
01:16:25.340 --> 01:16:29.340
It can be applied to anything, but then there are also dynamic responses to anything.

727
01:16:29.340 --> 01:16:32.340
Yeah, that's right. Yeah, see, that's what I want to say, is that there are dynamic responses, right.

728
01:16:32.340 --> 01:16:47.340
Brian Kaplan has a recent piece on why is it that all the statistics that are aimed at curing unemployment or homelessness, they draw information out of single-bedroom apartment rates and whatnot,

729
01:16:47.340 --> 01:16:58.340
yet college freshmen around the country have to bump down in these slum hotels of dormitories and to cure homelessness, he says, make them get roommates.

730
01:17:02.340 --> 01:17:09.340
Thankfully, when I lived in New York City, when I was in grad school, I had a reasonably good apartment,

731
01:17:09.340 --> 01:17:14.340
but some of the housing they had for the grad students, I thought, you've got to be kidding me.

732
01:17:14.340 --> 01:17:21.340
I mean, you walk in there, and it's a bed and a door that hits the bed as you walk in.

733
01:17:21.340 --> 01:17:24.340
You've got to be kidding me. Someone's got to...

734
01:17:24.340 --> 01:17:27.340
My gosh, no wonder everyone's crazy at Columbia University.

735
01:17:27.340 --> 01:17:30.340
Human beings aren't meant to live this way.

736
01:17:30.340 --> 01:17:32.340
Okay, any other, yes?

737
01:17:32.340 --> 01:17:48.340
I was wondering, is there any work that you can recommend for additional reading, dealing with the movement of radical left, like starting off with, you know, 1876 in Paris, coming over to the United States,

738
01:17:48.340 --> 01:17:59.480
You know, a lot of American radicals from, you know, the time of World War I were going off to Russia to create the communist revolution.

739
01:17:59.480 --> 01:18:01.480
I remember one attorney from Chicago and...