 I want to say something about the political consequences of the welfare state. We are discussing now already for 11 years in this society the problems of interventionism or as we call it the welfare state now. And we never mentioned that this transition from the old free state to the welfare state broke about or was caused by tremendous political changes. First of all I want to say something about the term welfare state. It has been said already here today welfare state means the state of the good, the state that produces welfare. And by implication it means you are against welfare. You who do not go with us, you are the enemies of mankind and of every decent man. And now it is as if somebody, a party would call itself the good party and by implication all the other parties, the bad parties. Now I want only to say because our chairman made some remarks about this problem at the beginning of this meeting that from the beginning on the term welfare state was invented in order to camouflage and to justify the policies of governmental interventionism and absolutism in Germany. The German princes of the 18th century had a very bad record in history. The literary portrait was made by Friedrich Schiller in his play Kabale und Liebe in which he described a German prince who wasted the greater part of his country's income with mistresses and in order to restore the equilibrium in his budget, this unfortunate prince, didn't have already the invention of credit expansion and paper money and banknotes. He had to sell his army to fight foreign wars in the service of foreign countries. This is the famous case of the Hessians which is very well known in this country. And now this was the portrait of the German 18th century prince in 19th century Germany. And then those professors who were historians and statesmen who were in favor of the return to government interference tried to justify this system which was called by everybody at that time the police state by saying the police state was not the police state. It was the Landesfürstliche Wohlfahrtsstaat. Landesfürstliche means the princely. Wohlfahrtsstaat is precisely the original from which the welfare state was translated. Now I want only to say this incidentally as an introduction. What I want to say about the political consequences is this. In the ideas of those people of the 18th century who were the real fathers of modern representative government the citizens all agreed in wishing their country happy and fortunate and free. But there were some differences of opinions how this goal common to all could best be attained. And therefore they formed political parties. But one political party was different from another political party only by the fact that they had different opinions about the means to be resorted to for the attainment of the same end. The flowering of their own country. And this idea of political parties remained during the first part of the 19th century but it is not the idea that prevails today. We still have the names left. Especially in this country we still have two parties. One is called Republican, one is called Democrats. And there are certain differences between them. Mostly personal differences. But there are also very important identities of programs between them. Because what the member of parliament is interested in today, whether in this country or another country is not the welfare of the nation but the welfare of his constituency. The first problem for a member of parliament is to be re-elected. And in order to be re-elected he has to do something for his constituency. And it happens that in this constituency are many dairies and they are producing better. And therefore this member of parliament, it doesn't matter whether he belongs to the left or the right, one party or another party, he is a member of parliament for better. There are other members of parliament for silver, for wine, for many other things. But there is nobody for the nation, for the welfare of the nation. And it doesn't matter for this man, for our better man. The other better man in parliament, he is not the only one, belongs to his own party or to another party. One used to talk a lot in this country about the 17 parties which the German parliament had in today's preceding Hitler regime. And one compared it with the advantages of the two-party system. But in fact, the two-party system does no longer exist. If you ask an expert, then he will tell you, this man is for better, and this man is for silver, and this man is simply for labor, and this man is for peanuts, and so on. And this is our, of course, this is the consequence of the system, you know. If the government makes law in favor or against something in favor of better and against margarine, then of course the consequence is that members of parliament are interested in these problems, that it means something for them. And therefore many things can be explained. Especially what you can first of all explain is people complain, they say the days of the great parliamentary leaders and speakers are gone. There is nobody today to make such great speeches as once were made in the parliament of all nations. Today the statue of the members of parliament is much smaller. But what do they want? One could make great speeches in ancient Athens against Philip of Macedonia, who wanted to destroy the liberty of Greece. One could make in ancient Rome, Cicero could make speeches against Catalina Revolutionary and so on. But do you want to have a great speech against margarine? You can have a great speech against Philip, but not against margarine. But this is the problem of the member of parliament. It's not true that these are the lobbies. The lobbies are only technical advisors of these people. The decisive problem is that there are members of parliament who know from the first day on that they are not talking about any special country. They know from the first day on that their duty is to do something for silver or for butter or for peanuts or for cotton. What they have to do, this is another thing. They need advisors and they get these advisors. I wouldn't call this corruption because it's absolutely open. Everybody knows about it. Everybody knows that this member of parliament has to fight for the interests of the dairy farmers and the other man has to fight for the interests of peanut producers. Therefore I wouldn't call it corruption. But I want also to say something about corruption and before saying this I want to say any similarity of what I have to say with governments, countries and nations living or dead is purely accidental. I am not talking about any country which you know. I am only talking about a country which I know very well. It's the country Ruritania. Now Ruritania has a problem of corruption. They talk about it. Let us take one example. There is, and the modern interventionism and the welfare state, a very popular system and method. Many professors have written big books about it. This is called quantitative trade controls. That means that the amount of foreign goods of a certain quantity which can be imported is restricted. And that means that you need an import license in order to import. Now in this country Ruritania there is a tremendous shortage of waste paper baskets. You know they need so many waste paper baskets in their offices. They have so many offices. And therefore the price of waste paper baskets is higher in Ruritania than it is abroad. By importing you could equalize the price. But this would be very bad for the Ruritania waste paper basket manufacturers. And they are especially concentrated in several districts in which the members of parliament are in favor of a quantitative control of the import of waste paper baskets. If you import, if you get such, if this requires of course what the professors never said in their books that there is an office that gives permits to people to import a definite quantity. This is a very valuable permit because the price is very different between the two countries. And by importing let us say 5,000 waste paper baskets, 5% of the total amount admitted, you can make let us say 20,000 dollars. Rurs I am speaking of Ruritania. Now who gives this permit? The permit is very valuable. There is a man in an office and there is a sheet of paper. And if he writes on this sheet of paper, permit to import 5,000 with paper baskets. This means money. It means 20,000 dollars for the receiver. Now of course our doctrine assumes always that in the welfare state the officials are angels. But in fact the angels do not comply, do not apply for the positions in the government of Ruritania. And there sits a man, he got this position because he is the nephew of somebody who is important. He sits in his office. He knows that there are waste paper baskets, but he doesn't know anything about the business of waste paper baskets. And there he has 100 people want to get such important baskets. Why should A get license and not B? This our man doesn't know anything. If he is really a faithful, honest, decent official, he doesn't know anything about waste paper baskets. Now he sits. But on his desk is a telephone. And somebody telephones. I don't know who. But he telephones. For instance from the office of the Dalai Lama. And this man says now, now at least I know to whom to give it. And those people and then there appears a man and says you don't know me. But I am a parliament member for some place. And I would like you to give you have among your applications one of a man for my constituency. I do not assume that any money is used to bribe either the man who made the telephone call or the member of parliament who appeared in this office. No, I don't want to discuss such dirty subjects. But the question is what else did the public expect? What else how can if they make a law which practically discriminates between people who are getting such a piece of paper from the office and people who are not getting it? What was their idea? Who should get this import license? And to whom should it be denied? Therefore to use a term which we hear today nowadays very often implied in a very inappropriate way. I want to say that there the corruption is built in. It is necessary. It doesn't make any difference whether the man says I like better the name of this applicant than the name of the other applicant and so on. There are no reasons to give the meaning of the permit mean simply that the man who got it will get a certain amount of money out of the pockets of the people. This is another question because the people is not interested in these things. They have elected these members of parliament and they are getting what they deserve. But it is absolutely impossible to avoid this. And if then there are other people who also take bribes and so on, then this is merely a consequence of this thing. We are discussing and I did it always until now, until today. We are discussing the welfare state and interventionism and the various interventions under the assumption, under the theoretical assumption that all men are angels. But even if all men were angels, I didn't see how they could find out what the difference is between A who gets a license and B who doesn't get a license. Or what the difference is between better and margarine. There are people who like margarine and those who don't like margarine are not forced by anybody to eat margarine, to buy and to eat margarine. But nevertheless the law wants to make differences between them and so on. And we have every day a number of laws and other administrative provisions that do these things. It happens sometimes when a man came to me or wrote me a letter in which he said, as you are criticizing interventionism you will probably very much interested in the fact that here and there there were bribes and so on. If these informers informed me they are lawyers, then I asked, I answered them that I am dealing with these problems under the assumption that there is no bribery, that there must be a division of labor between people. Other people may deal with this and I don't want to deal with it. But I find it nevertheless necessary to discuss this problem today because we have now a case which is really astonishing. The case is that we had Congress and just Congress knew that in November there will be elections. And because there are elections they were very open handed. They gave away money and money for everything. And the result is that the country is faced with a deficit of 10 to 12 billion dollars. And nobody has any idea how this deficit could be covered otherwise than by inflation. And therefore I think that when we will discuss in two days or is it already tomorrow when we will discuss inflation we cannot separate this from the fact that the system of government, of interventionist government makes such inflation the only way out because every member of parliament in Mauritania and in other countries tries to get something for his own country. Once at the beginning of this period it was a railroad or a bridge. It was comparatively very cheap. Now it must be a big hydroelectric work or something like the Tennessee Valley Authority or something like that. It gets more expensive more and more and he doesn't bother how to find the money. This is another body's problem. This is the problem for the government, he says, for the bankers, for the people. What he has done, what has been expected from him. His constituency gave him the order or asked him to do something for them. And when he comes back, when he has to face re-election, they will ask him, what did you do? And then he said, but look, here I voted in favor of this and I voted in favor of this and so on. And the question is only, who has to foot the bill? Perhaps we will answer this question in discussing inflation tomorrow, is it, or the day after tomorrow? Thank you. Thank you, Professor Mises.