 So this lecture just so you know what we're covering in this economics of the stateless Society so Some people here are anarchists just to let the cat out of the bag We used to we used to kind of defer until like Thursday I think oh surprise At this point we think everyone kind of knows about what it is And so this lecture has been moved up but just in a serious note to clarify This option this lecture today. I'm gonna just go through a bunch of different sort of topical areas But I'm not gonna cover Police like judicial services and military defense that if you want to see that that's my lecture later in the week on the market for security Okay, so this is sort of like a bait and switch right now I got you in here you thought you were about that and then what you see have to you have to re up and pay 999 just get the next thing later on Okay, also, I'm glad I think this is the first time I've had like a big group of you here So I hope you're enjoying your time. It misses you for those of you It's your first time you can see you're not just learning economics What you're also getting you know a pretty strong dose of of liberty and people telling you about how the world is I love Judge Napolitano's talk last night most of you were there for that and you saw him Tell you guys quite frankly that you know, he's gonna die peacefully in his bed Whereas, you know, some of you may end up being Executed in the public square some might die in prison just so you know by the end of this week We'll let you guys know which of you is gonna die in the public square Prison you might say Bob you made that joke last year. Yes, I did but it's worse. Okay Okay, another sort of public service announcement It is so funny to me when you guys come up to us with our books and you're timid and go Would you mind autographing this? This is the one week in the year where people think we're special. Okay? It's not like we're like man the paparazzi. I can't even go out to dinner with my family and all these people coming up You know, thanks so much about anarcho-capitalism. I love it. That doesn't happen. Okay? We do you think we were the cool kids in high school think about that Peter Klein thought he was but he wasn't all right So anyway, don't be at all ashamed to come up or timid to ask us about that stuff Okay, so let's set the context for this I'm gonna be getting into just like standard economic analysis But I don't want to give the impression that there isn't some ideological or moral position behind this And so in general when it comes to libertarianism and remember Austro-economics is not the same thing as libertarianism Austro-economics is a value-free science that teaches you, you know If then propositions and then libertarianism is a particular political philosophy that does allow for certain value judgments to be made And but for a lot of libertarian issues Unfortunately, it's it's not enough just to point out that hey that that's wrong or you know that that would be initiating aggression a lot of people say Well, yeah, but it's necessary and they come up with a rationale So most of what I'm gonna be doing in this talk is just looking at specific things where you have probably been led to Believe and certainly the average person thinks well clearly we need a state to do this particular thing Because otherwise disaster would result all right, but I do want to say that some people Almost feel that that's a fool's errand that we're playing their game if we'd like try to play defense and you know Hit pit the ball back on every single thing they allege and just to make the more moral point I kind of think it's it's important to do both so it's not enough Just to do a pure utilitarian like it wouldn't people feel better But more to say there's this strong moral issue at stake and but then also don't worry If you think disaster would result from doing the right thing on this issue Actually, no it wouldn't all right, so that's the the stance I'm gonna take So I like this quote for those in case you can't read let me read it It says for if the bulk of the public were really convinced of the illegitimacy of the state if it were convinced The state is nothing more nor less than a bandit gang writ large Then the state would soon collapse to take on no more status or breadth of existence than another mafia gang Hence the necessity of the state's employment of ideologists and hence the necessity of the state's age-old alliance With the court intellectuals who weave the apology of for state rule now You might be surprised who actually said this it was an economist who wrote this Janet Yellen she was very radical in her Come on. I didn't it's not Janet Yellen the point of this is trust no one Some guy gets up with a suit and starts telling you stuff question authority. Okay, obviously that was Murray Rothbard. Come on guys All right, so before we jump into the specific issues. Let me just give you a general framework Somebody comes up with some issue and it's hilarious. It's like oh You know we need the state to do such and such because otherwise this obvious disaster would happen And it's like someone who has no inkling of how this industry works But yet just thinks about it for three seconds and knows oh clearly business people just set loose in this thing Would invest billions of dollars and lose all their own money and I can see this even though I've never worked a day in my life in a real job and therefore we need the state to come in and Prevent these businessmen from throwing away their own money right and you can see that that's that's crazy All right, so what I'm saying here is just in general when someone gives you this rationale with you know They blame market failure. They start giving you all these specific things They got from their mainstream economics textbook to say why the state is necessary and why? Decentralized profit loss mechanism would lead to a disaster in this area you can point out and say alright Well, do people like disasters? No, would people be willing to pay for somebody who could prevent the disaster from hey Yes, and so you know is there really it's impossible for some Institution or some company that's obeying pre-existing definitions of property rights to at least greatly mitigate this problem So I like to think of this as the vanilla ice principle does anyone know why? Can anyone guess Americans come on? Yes, exactly all right So he had a famous line about there's a problem you all solve it all right, so that's the What I say for the entrepreneurship, okay, so Let me now jump into The topic of money now. I think You guys may have gotten this so I'm gonna go quickly through this this part of the analysis But it is when people think about what do we need the government for it's surprising people are sure You need the government to issue money like to them That just seems like obviously you'd be crazy to let private companies create money or something So let's walk through it. So as Carl Manger noted money emerge on the market. It was not created by the state right it's not that Eddie money's ancestors created money no and I got to get better cultural references. You guys don't even know what I'm talking about How do you money's Eddie money's worse than vanilla ice alright, so And there's there's various reasons for their objections that Manger points and by the way I don't know if they stress this in the lecture on this topic that was devoted this but just so you know Historians of economic thought I mean they credit Carl Manger as being one of the members of the so-called marginal revolution One of those three pioneers and also for a while like he wrote literally the Encyclopedia article on you know money and how did money emerge and so that was that was like his his contribution or one of his Contributions, but he pointed out that we have no record of some wise king waking up one morning and inventing money And also if you just thought about if you hadn't grown up in a world using money It sounds like a nutty idea right that if you grew up and people were engaged in barter or what you know What more actor really called direct exchanges where I'm going to give up something that I that's useful to me Because I'm going to get something else that's more useful to me That makes sense and this advice versus with the person on the other side of the trade But then somebody comes along and says wait a minute everyone Let's let's take these shells these shells that you don't actually have a use for and every time you want to sell Something take this in exchange and people say why would I do that and say because everybody else is doing it trust me? This will be better you you would laugh at that person you think that's crazy But yet that when it comes to fiat money certainly government fiat money that is what we do And even though this system is not great. It's certainly or it's better than if we were just engaged in barter Okay, so I'm saying thinking of that it's it's not possible that some Person who hadn't directly experienced money could have just invented it de novo So how did manger say it emerged? It was a process of You went to market you had something that was very unsaleable illiquid Unmarketable and if you couldn't find somebody who had the thing you wanted then you would at least trade up for Something that was more marketable if you were going to market with like a telescope If you found somebody who wanted your telescope and would give you chickens Even if you weren't looking for chickens You might take that trade because you know I'm going to do better Walking around with chickens than I am trying to unload this telescope So when you get the logic of that people will start becoming willing to accept things not because they want to directly use them But because they know oh, this is marketable. This is more marketable than what I'm holding right now Then those things that initially were more marketable their advantage Multiplies right there's a snowball effect where people start accepting the things that are initially pretty marketable Because of that fact and so now they're even more marketable people who originally didn't want It now will take it and so it gets to the point where certain commodities were generally accepted And as you know gold and silver because of their their properties were the ones that people historically Settled upon okay, so you're at a point where Money emerges spontaneously if you will from natural market forces It's the result of human action But not of human design if you want to use that phrase that Hayek likes so much so money emerges from the marketplace from voluntary actions and Then let me clarify in case this hasn't been spelled out that coins coinage that is a separate function that also was originally done by private businesses so don't think that all the creation of Coinage of metal coins and so forth that that's something that the state has to do no with all these things We're going to go through it was originally free people Doing it in the voluntary private sector I mean if you just think about it that kind of makes sense that if something new thing is going to happen It's going to happen from pioneering individuals who are trying something new It's not going to be some uniform top-down command from the state if it's something that's genuinely beneficial So as far as coinage Be clear here. It's by stamping the coins when gold was money for example The stamping of the coins that didn't turn it into money that what the function of Coinage was was just to make it easy for people to identify So if gold is the money and prices are quoted in terms of ounces for example, then it would be convenient if some firm existed That would take those hunks of yellow metal Certify you know themselves to have their experts look at it make sure yes This is genuine the genuine thing and then they would go ahead and make coins That had certain properties that would make it hard for others to counterfeit them Alright, but the function of the stamping and so forth was not to turn it into money Because the gold was the money an ounce of gold was an ounce of gold But it was just it made it easier in commerce for a merchant to know this this person's really handing me an ounce of gold If they're in the form of these coins and there was competition among them. All right, George Seljan It was here at the Institute I don't remember what year it was but several years ago gave a nice talk where he had some slides showing historical examples and the contrast between The beautiful like an ornamental value in terms of the coins that private mints produced Compared to when the states got involved and so among other reasons why you wouldn't want the state involved with money It's the coins they made were ugly. All right And so if you think about in terms of private competition you're stamping your coin What's how do you get the public to hold yours? And they you know, they would make a little bit of a senior edge that the private firms You know, they would make a little bit to justify their existence and how they could why would they go to the trouble of stamping these things? And so they wanted the public to use their coins and not the competitors So one way you would compete is to make the thing look prettier. All right, so that makes you understand that again completely Emerged first on the market and then the state got involved and made it worse Now banking is a separate thing and a lot of times I think people conflate this and it's understandable in our modern context Given how much the government has distorted the banking sector and in this lecture I don't want to get too much into the whole Fraction reserve stuff, but I just want to make sure you understand conceptually the difference between money and banking So thinking of it in terms of a purely free society So if the money is the gold, I think that's what prices are quoted and that is the money and then You have coins being stamped just again for convenience and identification to make it simpler in commerce Merchants don't have to get out scales and so forth and weigh something to see how much gold is this person actually handing over still there could be large purchases where You don't want to go in somewhere. You can go buy a house You don't want to have as much gold in your backpack as you're gonna have to hand over to someone to buy the house That's it might be heavy for you. And also it's your dangers You got you it's vulnerable. You could get you could get mugged on the way to the sale So you want to have a place to store your money. And so that's one of the functions of a bank So in terms of what we you might think of as a checking account, but more specifically it's a demand deposit Then you could have these institutions that have vaults and guards and so forth and they have insurance Policies out in case they get robbed or there's a fire or something And then you go and give your chunks of metal to them. They put it on deposit and then they give you Ways that you can use it So historically it was actual notes bank notes. And so again, you might think of a Note is like, oh, that's something the sovereign government issued back in the days of the gold standard But there they were copying what commercial private banks Originally did right so originally a bank note was just something a private company would issue saying the bearer of this note Who goes to any of our branches of the you know This company if you turn this in then we will give you upon, you know Presentation of this this much silver this much gold in terms of weight All right And so then those notes began to circulate in the communities if they were had been issued by a reputable Bank all right that the public trusted. Yeah in my experience I never have trouble if I turn this piece of paper and I get the actual money Which is gold or silver and so these things begin to circulate all right So that's again totally private Emerged in the marketplace and only later did government come in and start regulating it and make it perform worse and so in this Context this is the central banks do the opposite of what the public is told So here I'm gonna go through this quickly because I think there's probably a whole another lecture talking about this topic, but The standard story you hear is that oh, yeah back in the 1800s in the United States There were these you know, it was laissez-faire Wildcat banking fly-by-night operations They were issuing their private notes the public You know you're just an average Joe and somebody comes at your merchant Someone comes into your store and starts buying stuff with various notes issued by out of state banks that you've never heard of and you Don't want to lose the sale so you accept it and then it turns out that company fold it and you know There's this sort of nightmare and that's why we need to have a strong central authority Presence to come in and regulate that to stamp out this inflationary Wildcat banking to protect the integrity of the dollar and you know The soundness of the banking system all right That is exactly 100% wrong in the in the Austrian tradition at least that that's they're saying that's not the the rationale That's not really what was going on. So a private banking system and Mises refers this in human action. He talks about He says something like lays laissez-faire should never have been abandoned and when it came to banking just as in any other area That's not an exact quote, but that's paraphrase and he just talks about it's it's hard to know what he means because he says it So quickly but the system he has in mind what he's saying is that if you had Just decentralized banks and all you had was the government enforcing property You know Relationships and contracts and so forth with no other special regulation. You wouldn't need to worry about Inflationary booms coming from the banking sector It would get nipped in the bud pretty quickly through normal market forces because let's say you got you know 20 major banks and so each the public is Divided up like one twentieth of the public goes to this bank and one twentieth this bank and so on and Merchants might even be willing to accept all the notes at par Meaning that the merchants aren't going to be in the position of looking at notes from each bank and saying Oh, what are the reserves on this bank and what's their lending policy? No, they can go ahead and sell stuff and accept the notes and they go at the end of the day or the end of the week And they deposit their notes with their own bank and so what ends up happening is there's periodic clearinghouse operations And so if one bank is inflating more than the other ones, right? So it doesn't have that much gold on deposit It's issuing too many of these paper notes In general its customers are going to be spending more than The other banks customers right because they've issued more of these paper notes from the you know The acne bank that's inflating and so as these clearinghouse operations occur and the banks settle up with each other in general The inflating bank is Going to have more of its IOU notes saying the holder of this is entitled to an ounce of silver an ounce of gold More of those are going to end up on net with the with its competitors than vice versa And they're not going to cancel out so on net at the end of the week or the end of the month or whenever they settle up The other banks are going to say to that inflating bank. Okay, you OS on net now 200 ounces of gold so please send that over and so you see very quickly if just one bank starts inflating when its Competitors don't its reserves get drained very quickly. Right. So the point is The banks would have to all inflate together and if just one bank Bucks the trend it doesn't go along with them. It will start accumulating all of the metal From its competitors. Okay, and so even if all the existing banks form an alliance and start inflating together There's a profit opportunity for somebody to start a new bank and then quickly absorb all of their reserves You know the stuff that's in their vaults. So Mises is saying that mechanism is how in a market where you just have normal rules of Property rights and contract enforcement You don't have to worry about some fly-by-night bank inflating and getting the public to hold all these notes There's a massive crash and so on The way it works is the government comes in and suppresses that and in particular with the central bank It's waiting in the wings The first of all has all kinds of regulations about which entities can start a bank so that regulates in and keeps competition out Imposes all sorts of reserve requirements and other things to make it a uniform policy among the banks and then when it inflates It tells each bank. Don't worry. We are a lender of last resort. So if you do get caught Over extended our one of our main functions is to come in and rescue you from your previous Prophelegacy right from your silly mistakes our function even in terms of how the public talks about it is that we will come in and rescue you All right So of course that beats down all of normal market checks on an inflationary banking system So again, it's the exact opposite of what the public has been told Okay, who would build the roads this is everybody's favorite question Tom Woods has the best Thing on this and I'm sorry Tom. I didn't go and dig it up But it's something funny like you think with this road It's like there's people over here who want to go to the store There's the store owner over here and there's all sitting around scratching their heads saying what can we do instead of like building a Road to connect the two things we're trying to get together right so in here, too It's not you can understand why a statist would say. Oh, yeah, how could we have sent the man to the moon? You know with if it weren't for government involvement because there it is true that that took technological innovations It took resources being put into areas that they wouldn't have been and I would argue should not have been at that point But when it comes to building roads, it's not like there's some secret mystery that only three people know how to do that You know that the priests of the state and that you know, they have this, you know this engineering Emblem and so forth. So it's it's amazing that this is the go-to Concern that people have and yet it is so again historically the first US roads They were called turnpikes you so instead of just like dirt roads, but actual like for commercial purposes You're saying, you know, we got a lot of people shipping goods between these two points It would be nice if there was a smooth paved surface here that was privately financed All right, it was again private entrepreneurs who did this stuff and they had different techniques For raising the money they might have like gotten big Contributions from some of the major shippers. They might have gotten contributions like people buying shares to get the money from the tolls of Like local merchants who would benefit knowing oh if our town got more traffic then we would we would enjoy Spillover benefits from that right so there's all sorts of ways they could figure out. There was even funny stuff about like having public campaigns and certain people in some cities were writing like real You know like laying a real guilt trip on the wealthy people in the city saying, you know I noticed you haven't contributed to the turnpike and just real funny So like letting that be publicly known that this person wasn't kicking in so various methods of people being obnoxious And then also looking at profit opportunities, but nonetheless Turnpikes were privately financed and it wasn't till governments came in and what's Amazing to me about this is it's not like the public is so happy with the roads the government provides Right, it's I mean that everyone complains about roads You know when there's construction delays and things like it's like are you kidding me? All these people having to wait to go to go to work now because of this one lane closure And so it's odd that they again they just so well they assumed there would be nothing without government provision What you might find is people will say something like oh, but there would be Anarchy meaning the chaos in the bad sense if you didn't have the government in charge of this and there would be You know some places people would be driving on the right side Some people who've been driving on the left side and so on you know there'd be some places red would mean go and it'd be crazy and Again, you don't see that kind of problem like in science, right? It's not like every at every city all of a sudden the units of weight are different or you know The units of length are different that you have standard uniform measures that people can agree on But in general that that is a good thing You don't want there to be just one way of doing something and that's it period that you want there to be Experimentation so there's things like you know you go on YouTube you can find videos of guys Designing things that initially look crazy like in terms of like having roundabouts and things and this one guy who invented this new Approach to traffic flow management He's walking with the reporter and he says watch this and he turns around and backwards walks into the road And all the cars just swerve around them and stuff and it's it's amazing But because the way he designed the road is The drivers don't really know what's going on like it forces them to pay attention Where's what happens with like the system in the US where you know they have all the lights and everything It sort of dulls your your reflexes you're thinking oh is if I see that green light That means I can go and I you kind of just zone out or especially if you're on the interstate You're not really paying attention and so that's why if somebody just goes in the street in the United States And you see a green light you either might hit the person whereas this guy the intersection he walked into he had designed it So the people were a little bit apprehensive and they were really paying attention and that's why he knew nobody's gonna hit me All right, I'm not suggesting you go playing traffic, but I'm just saying that isn't it is an example Okay, Walter blocks got by the way He's got a whole book on the privatization of roads if you really want to get into the Manusia of well, what if somebody buys you know a road around my house and then I can't get out and I got to Hire a helicopter and I'm gonna paint that is so he has all of that, you know all those Concerns you can imagine imagine Walter blocked entertaining silly objections, you know, so That's that's what he does in that book if you want to see you know that kind of argument taken to the logical fruition But he's got a great point where he says, you know again, what would the world look like if the government were doing a bad Job with the roads. It's not just that there's potholes and man the construction delays It's that tens of thousands of people die every year in traffic fatalities And so he said if some private company were doing that with whatever its product or service was There would be government commissions looking into this about this is unacceptable these these monsters This is like out of a Charles Dickens novel, but yet since it happens here It's just always well, you know, that's because they're drunk drivers or you know It's the fault of the user like who used the product improperly. It's not the fault of the manufacturer Which is the government? All right, so it's again amazing What would the world have to look like for the public to say maybe the government isn't doing such a great job with the roads? Maybe we should let private enterprise take a crack at it Okay, well we're talking about transportation Let's talk about some of the forms of public transportation now if you haven't lived in a big city This might not mean anything to you But when I was at NYU in taking the subways, I mean there were certain times of day in certain stops Where the you know, it was like 445 p.m. And you were at a place like near office building So everybody's going home from work and the subway would come open and everybody would pile in Until literally like every square or sorry every cubic centimeter in the in the place because it was volume Like it would just everybody would be squished in there I'm not exaggerating if you haven't seen what you're all you would not believe I'm kind of claustrophobic and so I wouldn't you know do that plus people I just that's why I'm a libertarian people kind of so But so I mean I just couldn't do but it'd be literally if I had to go somewhere something that it would have been inaccessible to me I would have to wait or what I would do is I would take the subway the wrong way a few stops Like to go to get to the point where we were past like the busy area So then I could get a seat coming because there was sort of like an etiquette where if you were standing people could literally Be pressed up against you like if that had been at a club you would say hey I'm dating somebody get off, you know So you were allowed to do that But if you had a seat somebody couldn't sit in your lap that would just be weird All right, so there was a sort of etiquette and so you could take the subway the wrong way to finally get a seat And then you'd be all right, but that's literally how it works on what I'm saying is People said well come on Murphy. There's a lot of people, you know And it's because of libertarians like you the government doesn't have enough money to build more subway lines Right, so that's what there's just saying there's this big demand and so duh Of course, it's gonna be people crammed in and I point out. No, that's not true that there's like Broadway shows There's movies that sell out on opening weekend, you know, everybody wants to go see the new Avengers movie And so what happens? There's big lines. Maybe you show up and ah, it's sold out They don't just let people pile into the theater and so you got to watch the whole movie like that Because they know that would ruin the value of the product right or the same thing with a with a flight a private plane If it gets a little bit, I mean we can make jokes about all you other really squish, you know It pushes in like sardines, but technically everybody has a seat All right, and so it's not that they just let people get into the plane I know there's safety issues and stuff too But you get the point that private businesses that are in control of their property Even if there's a high demand and they've missed forecast and the price isn't clearing the market in some sense and there's More people who want to use it that can be available The company doesn't let them just come and pile in and reduce the value of the product to the people who do get it They let the first come people, you know first takers get it and then they try to hurry up and make more for the next wave Of people and they try to forecast better next time All right, so this is what I was saying it would look like this is actually has nothing to do with it But it was a cool Groucho Marx photo, so I thought I would put it in Okay, what about free and compulsory schooling so again? This is a lot of people are very concerned about oh if we didn't have this state there You what we would would anybody even know how to read, you know That's sort of issue and you could say again with this stuff What would the state have to do for you to think they're doing a bad job when it comes to educating the public? You know looking at the things that there's test scores by any objective measure and so on So in many places now probably a lot of you haven't Experienced this but in some places I'm more familiar with the US than other countries But I mean the government schools it is it is a dangerous place to be in I mean it's not just oh Yeah, I'm not learning a lot or I'm bored or something or I'm gonna hear some bad language I mean there people get assaulted and things happen to them There's gangs and so on like the teachers are Worried about working there all right So the lives places are horrible and again the government is forcing the kids in this area to go to it So the kids are sitting there being forced to attend this thing They don't want to be there they're forced to be there in many cases They're physically being injured in this place the government's forcing them to go to now in terms of why are they doing this? They mean well, but shocks. It's just you know gosh darn it. No, this it's on purpose a lot of stuff So here's the mark between like a new libertarian and an older libertarian the young libertarians Think the government means well, and they're just dumb and then the older libertarians say they're not dumb These guys know what they're doing all right So as Tom points out that by the way, it's only because Tom's here that I keep mentioning him if he weren't here I would I wouldn't even talk about him, but He's got a great thing where he says can you imagine if Walmart was it Walmart Tom is that the okay? He said can you imagine if Walmart ran the schools right and then we saw that they would all you kids Would go in in a history class would consist of looking at the previous presidents or CEOs of Walmart and how like the years of US history Would be demarcated in terms of administrations of Walmart CEOs And that's how you think of history and everything good that happened would be because something Walmart did and yeah They remember the time when Walmart like exterminated all those Indians well that was they meant they screwed up, you know, okay? By the way the way I said it was funnier than the way Tom says it I kind of ripped off Okay, so But you can see that that's again the function of the school if you're gonna remember that quote from Rothbard in the beginning To to get this to work this whole system to stay in place when you know Why is guys like me are sitting there and pointing out well that doesn't you need to have this the intelligency the average public people Who out of maybe a false sense of modesty? But you can understand somebody who's not like an academic or like a thinker somebody just goes to work takes their kids to Soccer practice they just need to have some group of official people telling them yeah We know that that was a screw-up, you know that shouldn't have happened But we're we're fixing it just so they could say okay somebody's dealing with that I'm gonna go back to you know my job and dealing with my kids and planning for my cruise and so forth and that I Met like a retirement cruise. I didn't mean okay Yes And so The way to do it is to get the kids to grow up in an environment where they hear this non-stop And you can see this most directly just as I go off on a tangent here for a minute the importance of ideas and indoctrination I think sometimes a lot of like Opponents of the aggressive Leviathan state think in terms of armies and force and oh, yeah They have all these guns and whatever and that's what but it's ultimately public opinion There's some great passages and me says talking about this saying all governments ultimately rest on public opinion And if you think that's naive Well, then if you were right that means the most totalitarian states where the leader could just have somebody disappeared at night Or just you know have someone the march and the soldiers take them and shoot them publicly Then there they should have free and open internet access They could let the schools teach whatever they want right because if anyone gets out of line They just kill them, but no it's precisely in those totalitarian societies where they can just kill people at will where they want the most strict control over Information because it's in precisely those societies where if the state's that powerful They really have to make sure most people think The leader means well or he's even you know divine or wet whatever and so that's there where they have to Where it's a state that's not so Oppressive and violent they can afford the luxury of letting people have some free thoughts because it's not that bad and the people Probably you're gonna be okay with this system Okay, the more you get into this in terms of you know, you guys are young but when you start having kids and You start looking at various school types. It is amazing just the difference it makes between Put it this way how much time people waste in a typical especially government program But even just more traditional forms of education If you have a bright student a lot of the time they're sitting there waiting for the teacher to just explain stuff to the other kids Right or even the same kids some might have aptitudes in some areas versus others and so just allowing for Experimentation different types of programs like self-directed learning and things like that. It is amazing. How much young kids Can learn I mean like with my son for example I started teaching him stuff about like number set theory and things like this and quantum physics And I didn't tell him. Oh, this is really hard stuff. I just told him to like was normal Like yeah, every eight-year-old knows about set theory, you know, and he was like, oh, okay You know, so can we talk about Super Mario now and I was like, okay, sure, but So I'm just it's I mean and again you can be just say yeah That's too bad that school like formal government schooling tends to kill the love of learning or you can be real cynical Say that is on purpose. They want don't want people to be curious They don't want them trying to figure out how stuff works because you don't want people You want people who are smart enough to make the planes not crash, right? What fun is it to rule the world if you can't even fly across the ocean, all right So you need to have people who can maintain the planes and make sure that that work But you don't want people reading philosophy. You that mean that's that that's where we draw the line. All right Okay, as far as this stuff So I I one time when I was I taught at Hillsdale And then I got I came out of that and I was remarking to people that with that experience I had there they said, you know what I think half of the students shouldn't have been there Like I would have wanted to teach like the better half and the other ones they should have after high school They should have gone into the workforce and people are horrified thinking I'm making fun of them or something No, they weren't happy there They would have been happier had they gone right into the workforce and the other half that went on to school like College education undergrad they would have been happier too because I would have been able to teach more to them And because otherwise I couldn't leave behind half the class who wasn't getting it And it would have been a better system and people are horrified at that and think oh my gosh You're being so crass and and so the way I try to deal with that is okay. Well, why is it that right now? We have the exact perfect balance, you know Why don't we instead just insist that everybody? Gets a PhD and then goes in the workforce and you can kind of see that that would be crazy Right that it wouldn't be worth going for an extra five six years for every single person Typically to get a PhD Because they would be miserable and in order for that to be possible You would have to lower the standards and so the PhDs wouldn't mean as much anymore So now it gets the point where every employer would say, okay, what's your PhD in okay? All right, yeah, you can go ahead and sell fries right so All right, you see what I'm saying So you can see how that would be crazy and if we somehow did get to that system It would be a move towards sanity to get rid of that requirement and to stop funding that it would save a bunch of money And it wouldn't make people worse off. It would just be it's a relative thing to the extent that Academic degrees are somewhat of a signal then it's sort of an arms race if everybody now has to get a PhD that it sort of cancels it out All right, so I'm saying what we have right now this present system where people are coming out of college with $50,000 in debt they can't get a job. They're living with their parents and so on they're on Facebook arguing about libertarianism This is what this is Not just spontaneous market forces. This is largely the result of government funding things Helping people pay for college. Well, imagine that the government starts throwing billions of dollars at something and the sellers raise the price Who could have thought right? Okay safety regulations All right, whenever it's amazing how this works whenever there's like a foodborne illness or some really tragic thing like a plane crash When there's something that goes wrong Everybody says thank goodness we have government regulators on the job Right, so it's whenever the government regulators screw up that is taken as evidence that the government is necessary in this area Right that doesn't it doesn't make sense So it's not the other way around like if a plane crashes you could say Yeah, the FAA that foreign students That's the entity that regulates air travel the United States you could say yeah They this slip, you know, this was a mistake or this was unfortunate But you know what in terms of the system these things are gonna happen you can't totally prevent plane crashes So I still am in support of this maybe they should tweak the rule But that's not typically what government apologists will say I mean I remember there was um It was the value jet crash in the Everglades when I was younger And there was some guy who did an op-ed in my local newspaper about you know saying some libertarians I want to roll back government because this was like the Reagan years You know how Reagan that crazy anarchists president we had And saying yeah libertarian want to roll back the federal government But in the wake of the value jet disaster The rest of us are hoping that these you know airline regulators work overtime and it's not just oh yeah It was a fluke thing. I mean it was the documents came out that the FAA inspectors were totally Not following their own procedures when it came to this particular airline And so it was kind of like a disaster waiting to happen and then it did happen All right, and so again you could ask what would the world have to look like for people to say maybe there's another way of approaching this problem Okay, so here I'll be really quick you say well, okay, how would that possibly work? You know, does the public have to Keep track of airline fatalities and then whenever you buy a ticket you have to know which airline is safe and you have to go do Safety checks yourself and go make sure they change the oil and things like that. No, that's that's a straw I mean that's not what would have to happen for example It could be that Standard a part of what you get standard package when you buy an airline ticket. There's a clause saying if There's a crash and you know, you die or we something happens to your property Then we're going to indemnify your estate by such and such So like in a country like the united states, maybe it'd be five hundred thousand dollars seven hundred fifty thousand dollars Who knows something like that where they're compensating your estate. So if that were the standard Inclusion in what what it was when you were buying an airline ticket And you could say well, why would they do that? We'll just competition right that if different airlines offer different things like that The public would feel safer going in airlines that after that kind of a of a pledge and then how would they Deal with that They would have to get insurance contracts But the airline would right so the airline would get some big insurance company to then indemnify them because the airline doesn't Want to have this huge Volatile potential liability on their hands if there's a plane crash all of a sudden they owe 30 million dollars. They don't want to have to just roll the dice. They would want to be able to just book that as a Known expense and so that's what insurance companies are for where there's things that there's a small chance of happening But a disaster where you have to pay out a lot. That's what insurance is for as long as you can Get some assessment of the probabilities And so if you did have that and the insurance companies where you know Not only regulate or looking for if the building is caught on fire and things like that that you typically think of as insurance But also something like a plane crash and covering what they owed to the passengers Then the insurance companies would do stuff like say, okay, if we're going to cover your airline and all your flights We're going to make we're going to look at your your procedures and do your pilots get enough sleep Okay, what's the air traffic controller situation like how does that work? Okay And by the way on that one the fAA the air traffic control system. They use very antiquated Systems, right? So again when you people are thinking like the government is this super Secret organization that has all this killer technology and in practice in a lot of cases They don't they use really outdated stuff and it's ridiculous a private system wouldn't do that So I think again, it's not that there would be zero airline crashes in the system I just painted but when you look at the comparative incentives and the institutional structure Which systems more likely to minimize plane crashes? With the fAA they get more funding when there's a plane crash because they go to congress they get hauled in before hearings Some people the top might get fired But it's not that congress is going to cut the funding of the fAA when there's a plane crash because they're going to say We're understaffed and they are they're not lying they can point to and just say the task you're giving us is Impossible and we're doing a poor job of it We could use an extra 20 of funding who couldn't everybody could use 20 more funding, right? You could do your job better if you had more money to throw at it And so it's a perverse system where when things happen they get more money It's not that I'm saying they're consciously wanting planes to crash But there's no reason to expect that system to work well when the incentives are the opposite of what you'd want When it comes to the fAA Let me present you quickly the standard free market libertarian critique, but then give you More nuance to it So if you read somebody like Milton Friedman and free to choose he talks about it probably some other places too And it's perfectly fine. I'm not criticizing the analysis, but they will say something like the fAA That's the food and drug administration for foreign students. That's what regulates pharmaceuticals and things like that So if you have some medical issue A drug company is going to produce a product and so the fda in the united states is the Agency that has all the rules in place for what you're allowed legally to sell to the public and all the testing You got to do and so forth and so that's What Milton Friedman pointed out decades ago is that If there's a scandal like the thalidomide scandal and then the fda comes in and then ramps up all the requirements So now drug companies have to go through years of testing spend millions of dollars Getting new drugs approved and so of course that ends up restricting Product choice to consumers right that they people have to jump through all these regulatory hoops It also means if people have a disease that's very That's a small fraction of the population It might not be worth it to a pharmaceutical company to put research into coming up with something for that Because they know all we can only sell to a small market. They're instead gonna Look at stuff that has a huge market because in some cases Depending on how you quantify it the research and development for like a new drug being brought to markets over a billion dollars at this point All right, so that's one angle of the standard libertarian critique, which is perfectly fine But the other angle is The fda approved stuff and if the fda approved something it doesn't matter how dangerous it ends up being They're going to be very reluctant to say we screwed up we shouldn't have approved that And if you want to just later look up the vioxx scandal And just read like just a wikipedia entry on that and if you have if you're not familiar with that I think you'll be surprised It you know just normal people who don't have an ideological axe to grind where are astonished at like how many Thousands of deaths are arguably a trivial to the fact that the fda wouldn't admit that. Yeah, we screwed up and we shouldn't have approved this thing Okay, let me in the last minute or two. I have left to so very uh Hot button issue immigration So with something like prayer, let me do an analogy something like prayer in school Some people meaning government schools They say should there be prayer in school and there's good arguments on both sides You could say it's very dangerous to have the state interfering with religion That's totally true on the other hand you could have religious parents saying are you kidding me? You're teaching my kids about using condoms in fifth grade and they can't say god bless you And that's also a valid point and but the point is there's no solution if you're going to have government schools Some parents are going to be unhappy There's no way to be neutral right the way you solve that problem and reduce social Um stress and so forth is just to have everything be private property Some schools are religious some are not parents choose and that ends the problem No one's kids being forced to hear something the parents don't like And so I think with immigration It's a mistake to start arguing about what should the libertarian policy be if you have Central planners in washington making rules For borders around the country. There is no Right answer to that that both people on the both sides of the bait are going to point out things that are true about Well, jeez if we did your thing these horrible things would happen. Yep If we did your thing these horrible things would happen. That's right So I think i'm run out of time here. Let me just show you my brilliant diagram So what would happen? I just want you to think like this because people never think like this if things were privately held Then there wouldn't have to be like an immigration policy with me So it's not there's just the united states and what are we going to do with respect to mexico? There's individual property owners and they're all just have very short first names for some reason and They're all on the border and you could so this is how it now people get to no Well, what if pam is just crazy and she lets in you know al-qaeda and isis and stuff and People you know people with communicable diseases Okay, well Then the people around pam just adjust their policies appropriately, right? So there was nothing magical About mexico having this border originally when we were thinking the problem is how do we secure this line right here? If pam in your opinion is doing something crazy Then the people around pam came into and it's as if mexico looked like that originally, right? There's nothing like You know, oh libertarianism could handle that but not that that would just be crazy You see what i'm saying so It's again, and it's not like i've just therefore solved the problem. Thanks everybody. I'm here all week But i'm just saying in terms of thinking at least this is what Private property the the first best solution should be for libertarians I think just to acknowledge this and then move on from there, but ultimately You know having just private property rights people setting their policies that works in other areas And it would work through this too. Yeah, if if you have some violent group coming in trying to kill people in your region That's going to be a problem and things would have to be done You know guns can hurt people like you heard it from me first, right? so No one's denying that but in terms of how do you solve these problems again The more you put decision making into the hands of private property owners good things result It makes the best of a bad situation. Okay. Thanks everybody