 Renowned economist Ludwig von Macyth begins the series with an analysis of the economics of the middle of the road. Subsequent weeks, Dr. F. A. Hayek, Dr. Henry Hazlitt, Drs. Badero, Pietro, Niemeyer, and Sennoldt will appear. One, a short system. A short system that is called by the economist interventions. A system that retains private ownership of the means of production, does not want to nationalize and to socialize. A system that retains therefore private enterprise, but that improves. A system in which the government interferes by orders and prohibitions in order to prevent all those things which the government doesn't like. This system therefore is a system which must clearly be distinguished from the policies of those parties which in the 19th century were called the liberal parties. Parties that do not exist any longer and for which we therefore do not have any name. Practically nothing. These parties of the middle of the road protest that they are not socialists. They declare that they want to preserve free market conditions and that they only want to protect them when it is necessary. But the question is, who has to determine whether such an interference is necessary or not necessary? Of course the government says so. And this means that this short system means that the government interferes only if the people do not do what the government wants. And the government gives to the consumers who by their buying or abstention from buying on the market determine all conditions of production and consumption in the market economy. The government gives to these consumers the right to do spontaneously what the government wants it or to do. But if they want to do something else then of course the government interferes. There is a philosophical and a semantic problem in this kind of freedom to do the right things but not to do the wrong things. It has been discussed for centuries by philosophers, politicians, lawyers and authors. It was the problem for instance in the religious conflicts where some people were prepared to call religious freedom the right to profess the faith which they themselves and the government declared to be the right thing. Of course there cannot be any right to believe or to do the wrong things. Now we may leave this question which has been very pertinent we discussed for centuries undefined. And let's ask ourselves only how does the government or do the government of the countries which are committed to this middle of the road policy? How do these governments exercise the powers which they have our way to themselves? We realize very well that the market phenomena rises, wages, interest rates, profits, that the market phenomena are a system of interconnected facts. And if one interferes with one of these facts then one brings about a situation in which this order of the other phenomena brings about what is called an automatic reaction. To explain, to say it in other words, if the government interferes with one of the market phenomena, the market phenomena being prices, if the government interferes with the price of one commodity only or with a few commodities then the consumers do not simply remain idle and do not react to this, they are reacting. And these reactions bring about effects which from the point of view of the government are even worse than the previous state of affairs which they wanted to order. In dealing with these problems I have for many, many years again and again, wanted out how the interference with one single price or the price of one commodity only brings about conditions which step by step are forcing the governments to go farther and farther until they arrive at the point at which nothing is left of the free market. And I used to argue always by choosing one commodity which in fact in the history of the last 15 years in many countries was the first commodity, integrated inflation, the first commodity that the government wanted to interfere with in order to lower its price, I took many better, very products. Of course this was from some point of view very unrealistic because in seeing from the American point of view the government is not at all interested in the low price of these very products and other agricultural products. The American government as we know considers at its most important task to make these products more expensive. It spends billions and billions for many decades already here every year in order to make the prices of these activities scored. But one must not assume that this is the general tendency of the policy of the American government. The same government that thinks that butter and potatoes and eggs are too cheap, the same government believes for instance that steel is a commodity which is very easily too expensive. And therefore it has the size of the opposite policy with regard to steel, a policy which is very different from the policy which it has with regard to the most important food stuffs. There is still another fundamental policy between these two policies. The policy of keeping the price of steel low requires only a little bit anger and a little bit of anger. And a few other things that the policy to keep the prices of agricultural products high is a very expensive policy because the simple order, the simple appeal to the various government committees, commissions in the Department of Justice and other such institutions wouldn't make it possible, wouldn't be sufficient to make it better more expensive than it is on the unhelpful market. And therefore the government is forced to do something, to pay something. It pays in redrawing this agricultural surplus product from the market and store it. There is a very interesting point about this special surplus product. What is a surplus? We hear that it is one of the tasks of the policies of the government and especially also of the policies of the United Nations and formerly the League of Nations to embark on policies that prevent the emergence of surpluses. Now what does for instance the surplus of coffee mean? It means that coffee will be available at cheaper prices and those people who can't afford an expensive coffee, but can afford cheaper coffee will certainly not score this situation a surplus situation. Therefore the semantics of all these things is already very interesting. And out of these semantics develop very special criticisms of the attitudes of the public. For instance, as ever the governments interfere then they try to justify their interference with some neglect of important points or important things on the part of the people. For instance we know very well that especially the program of health plays a very great role in such ideas. Now a short time ago a very important functionary of the American government blamed the American consumer for not consuming sufficient quantities of certain foods because the doctors had declared that overindulgence in these foods brings about undesirable consequences for human life and for the heart and for overweight. These are the questions I am not a doctor I can give you the details, but the fact is that the government blames the public for not eating enough vector and for not consuming enough facts and junk. And then the government says we must interfere, we must buy larger quantities of these foodstuffs to take them out of the market because otherwise something directly could happen. The prices would go down and people who cannot afford today to buy vector would be in a position to buy more vector than they used to buy. Now all these things appear so terribly crazy that one wants to have some guiding idea that determines the world what is going on. And this guiding idea is that there is something automatic in the world that brings about improvements in the standard of living improvements in production. Progress, technological progress in productivity is considered as something that happens, it just happens, one doesn't know why. And therefore it is not possible for any actions on the part of the government to stop this progress. And we have therefore developed a new doctrine, a new branch of economic studies that didn't exist several years ago. If you look at the textbooks of economics, of scientific magazines of economics, of daily reports in the newspapers and so on, you couldn't find 10 or 15 years ago any reference to the phenomenon that is called growth. One always knew that the improvement in economic conditions, the improvement of the standard of living and so on depends on an increase in the capital invested per head of the population. For 150 years all those authors and economists whom Karl Marx and the thousands and thousands of people who are repeating his slogans used to call the Virgo economists, the epigones of the classical economists and so on, repeated again and again that there isn't a world only one means to improve the standard of living for the majority of all of the people. And that means to accelerate the increase in capital accumulated in the invested as against the increase in population figures. That means an increase in the per head water of capital investment. And they repeated again and again that the accumulation of capital starts with savings. Saving that means consuming less than has been produced. But we know it to take much better. You know these large things, let's point it out that saving is very bad. And now we had to find out what brings about these improvements. And so we developed a new science of economic growth. In the last years there were books written about this problem, there were meetings of economists, they discussed it. What does it mean? It is a metaphor. If people don't know what to say and to think about it problem, then they resort to a metaphor. Metaphoric speech is very important. It's poetry, one of the main methods, resorted to, but it is less advisable in the field of science. And especially this metaphor with growth is very misleading. It is a biological metaphor. In biology we have a phenomenon that is called growth. We don't know what it is. It's an ultimate deal. The virologist only knows that there is something very small, a small component that out of this small component there develops either an oak tree or another tree. He doesn't know why. And he knows that this little thing and this tree grows and grows until a certain day and then stops growing and then the decade begins and the whole individual returns to nothing from the next day. But we know very well what makes it an economic improvement. We know much more than the virologist knows. The virologist doesn't know why people, why children are growing and growing and one day stops growing and then one day begins to decay and one day disappears completely. But we know precisely why there is economic improvement. There is economic improvement. If the tools are improved, if the way that leads from the beginning of work to its finishing is prolonged by the interjection of many stages of what we call capital goods and capital goods production. Therefore we must realize that the basis, the scientific basis as it varies, we don't want to deny them that this growth structuring is also scientific, at least a scientific metaphor. The basis is that these authors and the governments who have adopted their policies do not want to admit that the problem in economic activities is to increase the amount of capital invested ahead of the war, the old, very old thing. I read on a few days ago again in a book that a special British economist McCoy was considered by all progressives into second part of the 19th century as one of the worst laissez-faire economists. So I look up again what I found was that he repeats again and again if you want to improve the conditions of the masses, there is only one way. You must increase the capital invested ahead of the population. And if we compare the conditions in various countries of the world today to realize very well that what is called productivity depends on the amount of capital invested per head of the work. It is obvious that if that per head of the worker in the shoe factory in the United States, much more can be produced than per head of a man working somewhere in Asia or Africa or in the backward parts of Europe with old fashion tools of shoes. And because more shoes are produced, the people who have to go without shoes decline in them. And this is such a simple thing that it needed really a development of the theory of growth to conceive, to make it possible to take the students, to thank the public, to thank the government that we need is a rate of growth. And this rate of growth is considered as something that falls from heaven. One doesn't know why when Bertrand has only to say growth is very important. And then these people said we want to measure the growth. And they measure the growth in terms of course, you can't measure economic quantities otherwise, they measure them in terms of money. But what they do not take into account or let us say not sufficiently into account is that this system, this measurement in money is in a period in which the governments, with full knowledge of what it means are inflating, that this comparison, this measurement is very misleading. And it is enormously misleading if one compares different countries in which the rate of inflation is different. Therefore it is very easy to point out, even if we assume that Russia's statistics are absolutely correct, it is very easy to calculate that the rate of growth in Russia is greater than the rate of growth in the United States. And therefore in the year 27,533, the Russian economy will be on a much better and higher the better stage of development than is the present day in American economy. What all these relative effects are is that the governments and the policies and the economists and also many reporters of these things do not care about the quantity available for investment in various branches of business. They do not raise the question what will happen if capital consumption will one day be so great that it will not be covered or supplanted by accumulation of new capital in other countries. We could think out this already when we realize that the government is already on the point to be forced to enter various branches of production because it has prevented the inflow of private capital by price control and similar measures. I want only to name two fields, one is the field of housing. Rent control has in this country as well as in all other countries of the world wrote about one effect that the government had to go into housing. If you do not let the individuals fulfill certain tasks, then the government must step. And we will very soon have in this country a problem of very great importance the problem of the railroads. Railroad story is very interesting and it may also point and explain what the advantages are of this middle of the road system as against oceans. Many countries in the world have nationalized their railroads. They nationalize them because they believe that the railroad is a very easy business. Everybody must use the railroad and therefore a railroad will ever be very successful in earning money, in making money. And so the government is embarked on this. And the one must say that one government even for some time, the Russian government really had some income from the nationalized railroads. But in all other countries, the nationalized railroads were a burden for the treasury. The nationalized railroads are today the main deficit makers. When the German government or the Russian government were brought, the Russian government in the 70s and 80s nationalized the Russian railroads, then it was reasonable to assume the part of the government railroads are a very good business if we nationalize them, we will always have them. But about 50 years later or one day I had the pleasure of meeting an eminent socialist in Great Britain. He came a little bit late to a lunch and excused his comment late by saying I had to attend a very important meeting, meeting the program in England, the nationalization of the English railroads. It's a very important thing and I hope it will be done very soon. Now, politeness requires that you say something. And so I ask this gentleman, the famous Mr. Sidney Webb, I ask him, now look, when Bismarck nationalized the Russian railroads, he nationalized a flourishing business. And he expected that this business will also flourish under the administration of the Reichskanz line. But what you want to nationalize today, the British railroads, it was at the end of the 20s, the British railroads are not in such a good situation. Why do you want to nationalize something that will probably be the source of a considerable deficit? Which Sidney Webb answered, this is not a financial problem. If I want to go from London to Manchester, I do not want to depend on the good graces of the private corporation. I said then that because you don't want to depend on the corporation, you want the British taxpayer to pay nearly a deficit of $100. In this regard, you know, the system of this middle of the road system certainly was certainly for some time of their language. The American government did not nationalize the railroads. It regulated, as I said, as a decline in schools. It means it made the railroad, it conducted all the important affairs of the railroad business. It determined the rates and it determined the wages of the employees and it prevented any improvement in the methods of transportation which would have reduced the number of employees in this famous situation out of which the taxpayer is now in development. From the purely financial point of view, which of course is the eyes of Sidney Webb didn't count, one must say the railroads, let's say for instance in Italy, Switzerland and Austria are producers of deficits. And the railroads in the United States for a very long time were not only not producers of deficits, of course their deficits didn't fall upon the treasury, they pay taxes and the government had some incontinence. Of course, these spills constrain. And this is why I mentioned this whole story. These advantages of the middle of the road system come to an end. And we will very soon be in this country in a situation in which we will have to invest capital in order, government capital in order to make the railways run again. We are already at the beginning of it. We have their funds, several hundred millions already, which are decided to be given for transportation. So that's what I said. This will be a method of providing capital that the railroads can no longer provide to the public because it doesn't pay from the government. Now, whatever one may say about this system, one thing is always hard to answer. This tool, this system of government interference with business, it means a way towards socialism, step by step. And perhaps this will be the end of the march. But at least it is not Marx. It is different from the russians. Marx wouldn't have approved of it. But this is not true. This is simply not true. Because Marx had in the, this is not a very remarkable, you know, Marx lived to many and wrote for many decades. He changed also in the course of his life his opinion about some very important problems. And he had, and this is from our point of view important, he pointed out two entirely different ways and methods to attain socialism, the full totalitarian system. The first one of these methods pointed out into communist manifesto in 1848. In the communist manifesto, Marx did not yet think of a nationalization overnight of a transformation of a system like the russian system from a highway system or let us say from a very far developed system of government interference with business into a socialist system. He did not yet think of such an overnight all-round sensation. What he had in mind was a parliamentary victory of the socialists. And then the socialists should begin step by step to all those things which we know as the methods of the government that interferes with business. He pointed out, he said only to exemplify the things he pointed out various such measures. And among these measures there is one which is very well known especially about the time of the months of April to every American. He wanted a heavily graduated input tax. It is true that he wanted also the abolition of inheritance but not at once you know there's also a progressive inheritance tax. And so there are various things in these points and later Marx and Andes added that there could also be considered some other points apart from these things. But it is very interesting what Marx and Andes themselves expected from these measures and why they recommended these measures. They called these measures means of the spotted inroads on the rights of property and on the conditions of bourgeois production. They called them means and measures which appear economically insufficient and intolerable but which in the course of the movement outstrips themselves, necessitates further inroads upon the old social order and are unavoidable as a means of entirely revolutionizing the mode of production and to destroy the imminent laws of capitalistic production. I want to say that this is the only good economic tenable point in the whole writings of Marx and Andes. They realized very well that these measures are untenable and that in the course of the movement they outstrip themselves and they learned more and more in the course of the years. They had in 1848 written this in the Communist Manifesto and the German editions of the Communist Manifesto and still today repeat the same thing. But several years after the death of Marx in the middle of the eighties, an English translation of the Communist Manifesto was published, an authorized translation and this translation was edited by Andes. And Andes added a few words only to what has been said in the previous text. This was shown that Andes and probably also Marx had understood very well what these measures were. The necessities words which he injected in 1885 are necessities further inroads upon the old social order. This is the characteristic of interventionism. All these interventionist measures insufficient in themselves and they are forcing the government either to go back to the free market or to go farther and farther until they come to a point in which nothing is left of the free market. This was a proof in a very wonderful way as if it had been an experiment made in a laboratory. It had been proved in Germany the first one to work, then again when the Chancellor Brunig and later Hitler, one of his successors, adopted again price control in Germany and it was proved in England in the second world war with the price control measures. If one limits only the price of one commodity, what one breaks about is precisely contrary to what the government wanted. The government wanted that this commodity, let us say me, should be more easily available to poor people. But the effect is that those producing with the highest costs, the marginal producers, are going out of business. They must go out of business because as conditions are private individuals cannot produce with losses. If either they are going bankrupt or they stop in time and use for instance their house and their meal for other purposes, one can make better and then open to wait until the government limits only the price of butter and so on. Now what can the government do if it has to face such a situation? The government wanted to make this commodity more easily available and now the supply drops. Of course the government was rationing, but rationing is not satisfactory. What the fact remains that precisely because the government interfered the supply drops. Now the government asked the people why does the supply drop and then the farmer always said, you know, the dairy farmer always said it drops because now the production of milk does no longer pay. Why does it not pay? Now look, here is the price of butter and other things, oh, it's the price of butter which is too high, very easy. And the government need to fill us with butter. One needs only a little bit of paper and ink and it's done. But then the whole story repeats itself with butter and so from step to step it happened in Germany in the first world war. They began really I think only with whipped cream, I don't know. In years, they arrived at a plan, the Hindenburg plan, which regulated everything, also the production of lecture. Why? Because if one had left the production of lectures free, then capital and labor would have wanted the production of lecture where there was no price. And the Hindenburg plan made it complete. Complete socialism according to the system in which everything was done by the orders of the government. Unfortunately, they came to the machine and the Hindenburg plan disappointed many other things. In the second world war, already before when the Hindenburg regime, the same thing repeated itself in Germany. Starting with a few articles, they had to go farther and farther until they had a system in which everything was determined by the orders of the Reich Wirtschafts Ministerium or one of its subordinate offices. And there was, it looked, the whole thing looked as if there were still capitalism. Some names, some neighbors of capitalism they even left. Not all. For instance, what disappeared was the term labor market. German labor must not be negotiated on markets or something. But what does it mean? The workers were assigned to the factories in which they had to work and they had to receive the wages that the government had ordered. And the businessmen had to buy the raw materials where the government ordered it, at the prices, the government ordered it and to save the products and so on. Everything disappeared. The entrepreneur was no longer an entrepreneur. He had, he was called with a word for which, or which the best English translation would be Chief Manager, Betriebs Fuhrer. Everything was of the Fuhrers. Now in England that was fighting against the Fuhrer. The same economic laws brought about the same effect. Started with a few activities only, which they wanted to limit in price. Great Britain had to go farther and farther until at the end of the war, almost the whole British economy was a socialized economy, socialized according to the German type of, let us say according to the Hindi books. The socialism came to Great Britain not as an effect of the labor government that took office after the war, but as a product of the war, I mean it, had it by sort of a monthly charge, in which of course half of the members were representatives of the labor party. Now this was one, this of course to one of the socialist methods suggested by Marx. But in it, when he went to afterwards, when he moved to England and took the reading room of the British Museum and discovered the British economists, he changed in many regards or any other regard his ideas. And he was no longer, he did no longer think of a socialist future to be brought about by actions of people, by conscious actions of people. He, he got a quite different idea. What brings about socialism is the doctrine, what does capitalism tie, of his main treatise, published in 1867. What brings about socialism is the development of capitalism itself. If capitalism reaches its maturity, you remember the word maturity from the doctrines of the New Deal. If capitalism reaches its maturity, then it turns over with one stroke into socialism. This is the only way in which socialism can be brought about. And therefore, everything that is done in order to improve conditions of capitalism delays only the coming of this maturity. There Marx, forgetting what he had wrote in 1848, developed the doctrine of the Petit Bourgeois. What's the Petit Bourgeois? The Petit Bourgeois is a man of very limited mental expertise who thinks that capitalism can be improved by various government agreements. But this is a mistake. Capitalism cannot be improved. What these measures bring about is only that they delay the coming of maturity and therefore postpone the day of liberation. What brings about this liberation is, on the one hand, the concentration of all property in the hands of the continually shrinking minority of explorers on the one hand and, on the other hand, the progressive impoverishment of the masses. How this impoverishment of the masses can be brought about is from the point of view of the Marxian doctrine not to be explained. Because according to the Marxian doctrine the wages can never arrive above a level that is necessary just to keep the worker and his family alive. If wages go higher up then there will be an increase in population figures and the pressure of the unemployed will bring wages down again to the normal level, to the existing level. Therefore from the Marxian point of view he said it cannot be explained why and how such an impoverishment of the masses can be decided. But at any rate we have not to discuss this. The fact is that this impoverishment didn't help. But we don't have to discuss this. In the eyes of Khrushchev and his staff of economic advisors it happened. As they see the streets of New York are full of unemployed who are starving and the number of these unemployed would still be greater if the American government would stop to pay foreign aid and to pay for armaments. Then nobody would have employment, nobody would find a job and the whole system would break down. But this is how conditions look for Moscow. They look different from other parts of the surface of the earth. This is also something that we have to take this man who comes from the other planet. There are many other difficulties in this second doctrine of Marx which is today the official Marxism doctrine. There is for instance a very difficult problem that according to this doctrine the maturity of capitalism is something that is brought about by this very strong evolution of capitalism itself. People cannot accelerate it, people cannot do it. And only when this capitalism reaches maturity only then can socialism be realized. Now this is so. Why didn't driver's Marx and his friends so anxious to start a socialist party? What's to do with what's to function for a socialist party if the coming of socialism is unavoidable? It's like as Marx says in the Schapital, the coming of socialism with the inexorability of a law of nature. You do not need a party with books and magazines and newspapers and all these other things in order to bring about the next earthquake. This next earthquake will come with inexorability of a law of nature. But precisely on account of this fact we keep silent, we don't talk about it, we don't say we have to bring it about. But this is all of minor importance. The most important thing is for us that although this method of socialization, although this step by step improving as people think the capitalist system by government interference, although this system brings about according to Marx to socialism. And then we have today the very paradox situation that in the world there are two parties more or less both in favor of socialism. One party, the communist party, which of course its own system, a socialist republic, which wants the overnight transformation of everything into a socialist unit. And on the other hand we have the party of those middle of the orders who have adopted the system recommended by Marx into communist manifesto. They call themselves anti-communist and we must also say that there is a certain difference between them and the people in Moscow. But how or they base their teachings into communist manifesto? Why is there adversaries who are called by everybody and call themselves communists? They are adversaries, reject the solution of the communist manifesto and adopt the communist of the book in which Marx prefers the term socialism to the term communist. We have this system as a government system that a government system is of course the outcome of the ideas adopted by the majority of the people and we must ask ourselves what is it, what is the effect of these policies upon the individuals? Let us look at it from the point of view of the individual citizens budget. For time in memorial the individual citizens had to pay for the upkeep of the government apparatus of course the government what the government has to do is expensive and somebody has to pay for it and taxes were paid in order to support this institution. In the budget of the individual citizens government and state were an item of expenditure and everybody knew that this is important we have to pay for it. But slowly with the rise of interventionism there developed another situation and consequently also another mentality of the citizens. Today the individual more and more looks to point the government and to point the state as to point the Santa Claus who gives him something. There's even a formula, famous formula, something for nothing. It is the individual citizen if he's asked how can something come out of nothing says it's not precisely general nothing only my nothing I do not understand but the rich man they have to pay. Now unfortunately the amount that can be collected from the rich man is limited and already here's the war great leaders of socialism for instance Stafford, heads of England have to admit there is simply not enough left to the rich to be taken away and to begin to take power. Therefore this idea that Santa Claus has some sources of income which are not open to the individual citizen. This idea is at least as far as the united states are concerned not correct let's say or not fully correct. It is not the same thing for instance with those countries that are receiving foreign aid. These countries in my face there is we have a rich uncle and some place but in the domestic policies is impossible. This is not something new not entirely new. Two thousand several hundred years ago a great Greek warrior politician and speaker isocrates said our citizens of New York go into the time hall meetings with the ideas with which the shareholders of the corporation go to the meeting of the annual meeting of the shareholders. They want to get a dividend and it is obvious that this is something that cannot be done by a government because the government has no other sources of income than tax of its citizens. I wanted to point out this because it shows us that the whole attitude of the citizenship changes under this system of government interference with business. It is really something that cannot be explained that we are expecting more and more from the government. Of course we are only at the beginning. Now we have already we know the government has to give education to everybody. It has to be hospital care, care for the age, for the old, care for the children. It has to provide various entertainment. It has to do various things. It's the beginning. But if you say that it is very difficult to oppose the individual suggestions, everyone says that the government has to pay the hospital bill for everybody who is over 65. I am in favor of it. Then the question comes why 65? Why not 64? And if one says the government has to pay for education, one says why should the government not always pay for the apprenticeship of people who want to travel abroad? Travel abroad is very important. It's the best way to learn foreign languages. Why should one not do this? It is a difficulty to find. And this difficulty is still greater when we realize that this is not a method in which one increases his expenditures. The method is by certain groups of people called pressure groups that are asking for such improvements. There's a very important pressure group of farmers. The farmers are asking the government for subsidies. Why should only the farmers get such subsidies? Why should not, for instance, the text I industry that also has some difficulties? Why should not also the textile workers and the textile enterprises get some? And if the textile enterprises are getting it, then the question comes why should not another branch of business get the same thing. The clear division between a government and the production activities of the citizens must be left untouched. As soon as one begins to question this clear distinction, one enters a field in which there is no stopping point. And this is also true with regard to certain types of taxation which we have called progressive taxation. It is generally assumed that it is perfectly right to tax the higher incomes at higher rate than the lower incomes. Why? Because their ability to pay is higher. Certainly. You can't ask $10,000 income tax from a man whose income is only $9,000. But if once you adopt this ability to pay principle, then where is the stopper? Then every higher ability to pay is considered as an invitation to the pressure groups and to the members of Congress who depend on these special groups every two years on election day to do something that makes this higher ability to pay disappear. And we have therefore, we are therefore on a decline in which there is no stopping point. And if you want to stop, you cannot say precisely 91% is the highest percentage of the income tax is something that must be left for all times to come. Because they are come from time to time, they are come from emergencies. An emergency in the terminology of the budget makers is the situation that the government asks for more money for a higher budget. But the members of Congress are not prepared to or they are not able to find a source of accession, a source of higher income for the government which will not endanger their election chances. And this is the problem. And now the election chances are not endangered by taxing the people with higher incomes. If the whole policy all theories arising is today directed and guided by the problem of re-election. Why is the government in favor of higher prices for butter and for lower prices for steel? No philosopher can answer these questions, but it can be answered very easily by the campaign makers. They will tell you how many boats have the steel makers and how many boats have the butter makers. This does not mean that I assume that the butter makers will always be in the position to achieve what they have achieved. Now, after all it's a paradox situation that the immense majority of the American people votes in favor of higher prices, artificially higher prices for commodities which they are consuming and not producing. I don't know whether one out of five hundred or four hundred people in the United States is interested in a higher price of sugar. Nevertheless, the whole policy of this country is in favor of higher prices for sugar and this is not merely a problem of budget. It is not merely a problem that it makes a very important food stock more expensive and that the taxes must go up because the government has to pay all these subsidies that are needed in order to make sugar more expensive. It is also a very important problem for instance of foreign policy. The whole foreign policy of this country was in influence let us say and not in a very favorable sense influenced by the fact that we didn't like foreign sugar. If we say we, you must ask the question who are the others who are included in this. I want to exclude myself. I am not a producer of sugar and probably most of those present here are in the same situation. A very fantastic situation that minorities, small minorities are in a position to determine the cause of these middle of the road prices. That a fantastic situation is that a group like the producers of peanuts or the producers of eggs are in a position to force the whole nation to adopt a policy which is very expensive and double in a double sense expensive for every individual. This may show that the problem of the middle of the road price is not merely an economic problem. I don't, if I say merely economic problem I am quoting other people. I am putting these words merely under quotation marks because I do not believe that economic problems can be considered as minor problems. But even from the point of view of those people who believe in this they must admit that the whole system of representative government, the whole system of government by the people disappears when the government becomes not only the government that prevents gangsters from doing what they want to do but when the government wants to regulate as it says everything with every condition. It is not an accident that the socialist governments are not governments by the people. That they are not representative government. It is necessary. It is an absolute necessity of this system because if the most important problem for the socialist government is to whom not to give and not to whom to give some. And this problem cannot be decided by parliamentary means. The first step toward the socialist system is therefore you can see that all countries and unfortunately you can find some traces already in this country. The first step to dictatorship and to socialism is an enabling group. A law that gets to the executive powers that previously were in the jurisdiction of the parliamentary parties. And this is the beginning of the idea. This is the first step or one of the most important steps on the way that leads from the government by the voters to the government by those who have the guns.