 All right. Well, this is the first time in several years that I've been able to be here for the entirety of Mises you it is my favorite week of the year Joe just said it was his favorite week of the year. It's the best week you can imagine Bob Murphy and I have even coined or Bob coined an expression Post Mises you depression. That's what you get at the barbecue on Saturday Unless you win one of the cash prizes in which case you're quite cheerful spirits at dinner tonight I was asking people how they came to find out about Mises University. I myself found out about it in a very very old-fashioned way I saw it Advertised in a print magazine So, you know, obviously I'm an oldster. I read a print magazine and I found out about Mises University So I had several people tell me that they are students of Professor Pear Beeland who is Who has been a Fellow here and has done a lot of work with the Mises Institute And I've found myself saying, you know, it might be nice to have Pear on the faculty someday and then it occurred to me Well, maybe the reason Pear isn't here is that Peter Klein really covers His area Peter's really the expert in that area. So I'm not saying we want You know an unfortunate accident to occur with with Peter, but but if it did We'd have the you know benefit of hearing from Pear Beeland. He's nodding him When I'm not quite sure if that morbid joke is gonna work, but all right. He proves of it. Okay All right today. I'm gonna talk to you about I mean look I I don't really want to do this to be honest with you Like I think you came here so that you could avoid having to talk about the election, but I'm afraid I am here to throw cold water in your faces. Yes, this is really happening. I Do what they tell me to do they want to talk about the election doggone it That's what I'll do, but I'm gonna give it my remarks I have a bit of an Austrian spin as you might expect tonight and I'll start by making the observation that you Probably will hear this week and no doubt have read if you have done the the the readings and that is that Austrian economics is described as being value-free What that means is that as a science Austrian economics is not telling you what ought to be done it does not say sometimes people will say what's the Austrian position on Minimum wage laws or what's the Austrian position on the government budget? Well, there is no Austrian position per se the Austrians have a lot to say about the likely consequences of a minimum wage But as Austrians they don't say the minimum wage should be X or there should be no minimum wage But you can draw certain conclusions Certainly from what Austrian economics tells you and as a human being you can reach certain positive or I beg your pardon normative conclusions however, I Gave a talk here several years ago was the opening talk in which I said that you can in fact derive some useful insights from the positive statements of the Austrian school that if they don't quite compel you to certain moral conclusions they come pretty darn close and It seems to me that all you need to do is study Austrian economics and then insert the fairly Uncontroversial proposition that human welfare is a good thing and Austrian economics plus human welfare is a good thing does draw you some conclusions but there are other conclusions as well that we can draw and The for these I begin with the following If you were to read Murray Rothbard's book man economy in state, how many of you have read that book? Okay, great. How many of you are lying about that just now when you raise your hand? All right, good now if you read man economy in state, which by the way There there's controversy about whether you should read man economy in state before or after human action I'm a before us. I've been a before us for a long time but just because I think of the layout and it's it's the vocabulary and In some ways the elegant simplicity of the presentation. I would go with Rothbard first Some some week will have a debate between the before us and the after us, but I'm telling you I'm right on this read Rothbard first, and then you read me as it doesn't seem so bad But when you read man economy in state, what kind of a picture is painted for you in that book? the picture that's painted is An elegant structure the picture that Rothbard paints for example in his chapters on production theory is A picture of an extraordinary lattice work of of exchange and prices and buying and selling and interest rates That all works together harmoniously to produce the tremendous array of goods and services we see around us And we see that there are higher and lower order stages of production you've no doubt read about this so far and The production between the interaction between these stages is coordinated but there's no person who's in charge of all the stages ordering anybody around and yet interest rates and prices and You the utility that people derive from the finished consumer goods All these things are working together to yield you this tremendous structure production that just operates on its own It does not need central direction Moreover, where do these prices of the what we call the higher order goods come from a? A lot of times people will say the price of your toothbrush or your new hat or your steak dinner These things come from their costs of production Well, that's not what we believe so if you were writing that down cross that out because we believe the opp we opposite of that Where where in fact do? Where did the so-called costs of production? Where do they come from? Because simply to say well this good we can explain its price by it's caught by the cost of production Well, where did those costs come from? Blank out where do the costs come from? Well, it turns out that we believe in a reverse imputation when we talk about factor pricing That is to say first you have the consumer who wants things and who has who gains value from certain things and the consumer Who desires some particular good or whole array of goods is without realizing it? helping to Determine the prices of the factors of production that will go into producing that consumer good and we can understand this point Probably most easily if we think in terms of this is right out of mangers principles We think of a capital good that can produce only one consumer good and then let's say The demand for that consumer good drops to zero like everybody becomes convinced that it's poison and they don't consume it anymore Demand drops completely. There's no more demand But so that we see that correspondingly the same thing would happen for that capital good because that capital good can only produce This one thing that nobody wants nobody wants the capital good either So it's zero is imputed from the directly and very clearly and obviously from the consumer goods zero But again note that this is all happening without anybody Setting prices or or giving people questionnaires or running surveys or asking people about the intensity with which they desire certain things None of that. That's all just happens We could say the same about interest rates which coordinate production across time and reflect the social rate of time preference Which will be talked about a great deal this week and these again occur spontaneously as do prices themselves which occur in the ordinary process of buying and selling Likewise money itself Emerges on its own. This is one of the important points in Mises book the theory of money and credit 1912 in that book Mises is Trying to respond to what we might call the state theory of money By which money emerges by some kind of state fiat But it was Mises contention that money does not in fact emerge in that way and cannot emerge in that way and rather emerges Within the voluntary sector of society it emerges little by little When you're in the condition of barter people realize that the condition of barter is unsatisfactory No doubt you've heard this line of argument people find that unsatisfactory They find that they can achieve their ends more effectively if they settle upon some kind of more Generally marketable good that people have people like and then people begin to want to acquire this good Not because of any direct use They can acquire from it but rather because of its value to them in exchange They can use it to get the things that they want and so little by little you get a General medium of exchange that is in use throughout the society and that is known as money The point here is that money according to the Misesians is itself again a spontaneous production of peaceful society It is not the result of coercion violence all these things are occurring spontaneously Even profits now of course profits first require prices But profits the profit-and-loss system That system is the system by which we make sure that the scarce resources in society Are directed toward their most value productive ends and entrepreneurs can use profit and loss to decide What processes of production ought to be continued or discontinued or maybe there should be some different Type of production process substituted for another one because this one is too expensive and the inputs are more heavily demanded elsewhere it's because of the profit-and-loss system that these calculations become possible and These calculations are essential to human well-being because when you consider the virtually infinite array of possible input combinations and the vast majority of these are completely ludicrous from the point of view of Economy and economizing well we see the importance of profits Now note when we think about all this money prices interest rates the structure of production and so on What do they all have in common? They emerge on their own There is no coercion involved there is no need for leadership of any kind These things occur naturally and this is what I mean when I say that when we look at Austrian economics Even though it does not burst from the page telling us here is an Extra economic conclusion that you can draw Nevertheless, it seems to me that it is a very valuable thing to realize that what Rothbard is saying and what Mises is saying is That these essential ingredients of civilized life Do not require politics. I think that's a very very important insight and It is at no time more important than in an election year Because in an election year we are badgered constantly By people who tell us that politics is indispensable to our lives. Oh my goodness gracious. We get Political convention speeches. We get yard signs. We get inane slogans You get your next-door neighbor who never shuts up about Stupid nonsense. He doesn't even understand and it just goes on and on and on And now it's gotten to the point where three months after the election They're already talking about what do you think it's gonna run in 2020? Oh my gosh Can I have no peace whatsoever? So I want to note the contrast here Any time I hear the word leadership what we need is great leadership or we need somebody who knows how to govern Oh my gosh, especially coming from conservatives that they're the worst with this I expect that from the left of course the left are totalitarians. They want to run your life and throw you in a concentration camp I expect that But with the right for these people to talk about we need somebody who's ready to govern. What does that mean? What does that mean? Why do you feel? so Inadequate about your own life that you can't accomplish anything unless somebody is Governing or telling you what to do or shouting through a bullhorn or exerting leadership Why don't you just do something productive for once and shut up about leadership? Pat told me there'd be a bottle of water for me case things should heat up There are about ten of them down here. Oh, we're just getting going, baby Now look, I don't want to mention any real names. I have no choice. I guess I have to I have to mention some names So for example, let's talk, you know, let's why not let's start with the Republicans. Why not Republicans are fun to talk about Now by the way, let's point out remember what you're gonna hear the fundamental thing You're gonna hear over and over and over again over and over and over again from now until you drop dead if you keep hanging around with us It's that exchanges occur in the market only when both parties expect a benefit. Yeah, I know. I'm sorry. I had to repeat that I know you've already heard that but Compare that with politics Nothing happens in politics that both parties consent to or they wouldn't have had to do it politically. They could have done it on the market Oh good. I'm getting an amen from back there. That's good So bear bear that in mind. Okay, so in other words, there is a an a priori moral reason that we should want to favor Market activity as opposed to political which always involves grabbing from some and giving to others or Disabling some and enabling others. All right, so we're talking about the Republicans. Well, all right, the Republican nominee Yeah, I know we know it's Donald Trump. So I'll just say it I Watched the acceptance speech that he gave and It was a long speech. I actually I was thinking to myself this must be the longest speech I've ever and it turns out it was the longest turns out it was the longest but what I found interesting was that It was almost as an afterthought That taxation and regulation were mentioned as bad things. Oh, and by the way I should mention that if we seize your stuff and you know smack you around a bit that may also be disrupting production Yes, yes, that's the thing Why was that why did we get 75 seconds of that and 75 minutes of something else? But to me that I think these kind of are sort of important important issues the key one of the key Aspects of the speech seem to be that if we get inexpensive goods, this is a bad thing And I'm you know I again That's another thing that everybody brings up But it's brought up all the time because it's so darn good and that is if you haven't read it You got to read the Frederick Bastiott petition of the candle makers now I almost want to say how many people haven't read that but who's gonna raise his hand for that I haven't read it. I Don't want to put people on the spot like that But just just know that I have a funny feeling which ones in here haven't so get to it. All right It's great the petition of the candle makers of course is satirical and in there You have these candle makers who are petitioning the government for relief because they're saying look There's this terrible competitor out there. We can't who's totally unfair in his competition How can we possibly compete with this guy? We're producing light for people you know how important that is where would you be without light for heaven's sake and Meanwhile, we got this totally unfair competitor who's dumping light on the people for free and you may know him as the Sun So we propose that people be required to shutter up their windows and keep out this awful unwanted gift of nature So that they can instead buy candles to light their homes now when it's put that way you say Well, that would be stupid to expend resources on something that's being given away, you know for free. So why would we do that? But in some way That is what every protectionist argument boils down to every single one they all boil down to that at some level Oh my goodness protect us from the fact that now people's incomes can stretch a lot farther to buy a lot more of the Things that they want I want their incomes not to stretch as much and by the way as somebody with five children I can tell you that it is a good thing that you can get You know like a toddler pajamas for five or six bucks now Instead of 30 bucks, you know We used to be ripped off in the past and now I'm supposed to be saying boo-hoo I so wish I could get ripped off when I buy baby pajamas, but unfortunately I have to get a bargain Why would I think that way and why would I want to sign a petition? Yep, you know, you're darn right It would make us better if we imposed a sales tax on baby pajamas, then we would be richer That can't be that can't be we would not be richer if the government takes more money away from us That makes us poorer if I have fewer choices than I had before if I have fewer choices than I had before That makes me poorer Now there are a lot of a lot of more a lot more things that can be said in the free trade debate Certainly I had Bob and Vox day on my podcast not too long ago, and they had a debate on on free trade And I want to continue that as soon as Bob becomes available sometime in the year 2021 We'll try and get back to that But at least I mean these are some basic thoughts in other words the point here is that the argument really is That government is not really the problem The problem is that consumers have been spending their money in in ways that we would rather that they not spend it So that's the kind of message that's been sent now Ben Shapiro is a conservative writer. I don't much care for The other day he's all up in arms. Oh my heavens Donald Trump is Destroying the Republican Party because now look we have a party where the nominee Barely even mentions the Constitution He doesn't mention conservatism. He doesn't really talk about the free market And so what what Ben prefers apparently is a party where they talk about the Constitution all the time They talk about the free market all the time they talk about conservatism all the time And then they spend all their time violating the Constitution and screwing the free market that that's what he likes So he'd rather they talk a whole lot about it and then do nothing as opposed to somebody who's at least honest that he's not Gonna do anything man You know I slightly prefer the honesty if you ask me You know I mean in a way it's like what Malcolm X said about the 1964 election He says he prefers goldwater at least goldwater is up front with him Whereas Lyndon Johnson is obviously a snake who's never gonna tell you the truth. So all right. Well, I'll take that All right, and then the basic message is we need different people in charge Because the other people in charge haven't done it right. Okay, but maybe the problem is the it That they're doing Maybe we don't need people doing this it just to start with and in particular if I need people doing that it they would not be Newt Gingrich Chris Christie or Rudy Giuliani. They wouldn't those would not be the first people I would think of for anything except world's most annoying people Although I will say Chris Christie taking down Marco Rubio. I can forgive a lot for somebody who could do that I can forgive a lot. All right, let's talk about The other person in the other major party say a little something about Hillary Clinton I actually don't I have no idea what she's even saying in her speeches because I don't watch them I don't watch him. I'm sure you have not watched a Hillary Clinton speech And I'd love to say I sat down and watched one for you, but you know The Mises Institute couldn't possibly pay me enough to do that So I went to her website. Oh, I went to her website Yeah We have this filtering software so the kids don't do anything bad on the internet and this is gonna come up in the reports You know you went to the Hillary Clinton comm website, and I'll have to say no that wasn't the kids That was me. I I went to the Hillary Clinton website, so I just thought alright Let's just see what she's saying what she talking about now The thing is you have to bear in mind you can't always assume that what they say they're gonna do is what they're gonna Do I mean to some extent she's probably just trying to get some of the Bernie Sanders voters But on the other hand don't ever forget Horton's law Horton's law Yeah, please write this down. It's from 1840. I made that up. It's from like 2016 It's my friend Scott Horton Who comes on my show a lot Horton's law is that and and I defy you to find an exception to Horton's law Apodictically true. It is that when a politician makes promises you can be certain He will keep all the bad ones and forget about all the good ones Okay, so when Hillary Clinton promises she's gonna do these things. I pretty much take her word for it. Okay So for example, she wants to raise the minimum wage now We're all tired of hearing about the minimum wage been argued to death, right? Not me. I could talk about it forever but I mean most people they're tired of hearing about and because We we've been on the defensive a little bit We opponents of the minimum wage because the argument has been don't you know about all the empirical studies That have shown that the minimum wage doesn't cause job losses. All right Well, Bob knows all the literature on that you can badger him the rest of the week about that I've had him on to talk about it and just one of the zillion points You can make is that when you're talking to these people who want to raise the minimum wage to $15 That's a more than hundred percent increase None of these studies they're citing have had we're dealing with anything like a hundred percent increase in The minimum wage none so so none of them even apply to this whole fight for 15 thing now I I don't know that Hillary Clinton has come out expressly for fight for 15 What I do know is I saw a Facebook meme. This is where I get a lot of my news by the way I Saw a Facebook meme with a young woman holding a a megaphone outside of McDonald's and The quotation beneath her reads as follows I have worked at McDonald's for eight years and never gotten a raise That's why I fight for 15 All right. Now, let's we're gonna take that apart. Here is my translation of that. You ready? I've worked at an entry-level job for eight years and Haven't gotten a raise Also during that eight years I haven't been able to find a single solitary employer willing to pay me one dime more So you'd think I'd at least appreciate the one place on earth willing to employ me But instead I'm shouting through this bullhorn. I'm gonna continue. Oh good The person continues A raise is a human right therefore I am calling in the goons Who will hold a gun to my employer's head until I get paid $15 an hour an amount? Not a single solitary person anywhere on earth has ever been willing to pay me voluntarily. That's why I fight for 15 That's what that really means and when you think of it that way. It's suddenly you think Something kind of fishy about this Okay now with the minimum wage thing you can go through and talk about how few people actually earn the minimum wage How unusual it is to be earning the minimum wage for longer than a year much less eight years at McDonald's and you've had eight years to look for alternative kinds of employment eight Yeah, and you live in the age of you to me where you can learn an online skill in like a week and you find Nothing. All right now. I'm just riffing. I gotta stop this. All right So we got those she wants to raise a minimum wage Now the minimum wage point was amplified I think with an with an additional excellent argument in May at the Mises Institute event in Seattle by good old Walter Who says look on the one hand they tell us we got to send money to all these poor countries But on the other why don't we just tell those countries? Hey, just raise your minimum wage Yeah, I Put a meme with that on it up on my Facebook page it got almost half a million views Because people were sharing that thing like crazy because they realized yeah, I guess that's right Yeah, if it were that easy we would just yes, that's right. And in fact when you look at the entire Clinton program It's all we want more of this we want more of that We want more of that and so it just suffices to keep demanding and demanding and demanding more of the private sector so the private sector Gets ever narrower and narrower the demands begin to flower The base supporting all these demands gets ever narrower and narrower and narrower That's that's it. I mean that's the that is where statism takes you All right, then she says labor unions are essential to a free society Oh my gosh is she ringing a bell for a train that's gone 50 years ago I mean, I don't know if you ring a bell for trains, but it sounded good. I Mean Labor unions are dead and gone. They are dead and gone except in the public sector, but they're dead and gone because you You're either gonna have international trade or you're gonna have labor unions You're either gonna have affordable goods or you're gonna have labor unions now Look, I can say this as somebody whose father was a teamster for 15 years so I guess a Marxist would say I have suffering from false consciousness because I'm supposed to support the labor unions because My father was in one a pure Marxist of course has no patience for labor unions, but the labor union is one of these phantom Phantoms of the textbook that is sort of expected to bear a tremendous amount of Explanatory power when it comes to explaining for example Why the American standard of living has been so high in the 20th century why it must be because of labor unions The trouble with this is and I have a little bit I think I have a little bit on this in my 33 questions book that that book has such a terrible title I'm not gonna tell you the title. It's so terrible Just type 33 questions and woods and you'll find it but in there I talked a little bit about this and it turns out that in the 19 Let's see. Well through the whole 20th century the whole history of the 20th century labor unions never got to up to More than about a third of the labor force was was unionized So it's a little hard to explain rising wages when only at most a third And that was only at its peak of these people were in fact unionized, but by the 1920s the the If you look at the United States versus Europe Europe was much more heavily unionized in the US and yet American wages were higher Americans were able to get lower hours that they wanted sooner than Europeans were so there are some Factors here, but we think about what exactly happens with a labor union You have to think about here you have there are two parties in the textbook version of the labor union There's the employer and there are union workers Now there is a third party that's being left out Isn't that the truth of all of life right the third party being left out So you have the two parties the employer and the employee the union employee But I'm gonna show you about this third group because the third group kind of is the key to the whole thing as it turns out The labor union workers are not knocking on the door and saying a dear mr. Employer sir We've humbly assembled a petition of signatures because we believe that conditions and wages ought to be improved Instead what happens or certainly what happened in in much of the 20th century when labor unions were were more powerful was that Violence would be used destruction would take place and if you wanted to go in and say well You know I will accept the terms being offered by this employer. Well, you would be beaten up Kicked in the head. We have cases High-profile late 19th century cases where non-union workers homes were actually blown up with dynamite So that part of the story Generally doesn't show up in your in your textbook They talk about you learn you memorize the name Samuel Gompers and you write down American Federation of Labor But you don't learn about people having their limbs blown off or brick bats being hurled at people or broken glass Because then the story isn't quite as much fun to tell So that's just out. So what in fact does happen through intimidation of one form or another and the Well, let's let's let's face it. I mean the the state is conniving at this because the state's police will not intervene to stop What's going on? So they get the employer to raise the wage, but what does that mean? What do we know about economics, right? They're gonna raise the wage. They're gonna hire fewer people That's what the union wants. They they want to exclude They want their people employed and to heck with everybody else and the everybody else turns out to be that third party I was referring to what happens to those people. Well, those people are dehumanized because they're called scabs You know scab is like the nice word for them These people are scabs and they're even referred to when your textbook will deign to mention them Sometimes use the term scabs and you would think they would think that was kind of a dehumanizing word to use to refer to working people But these working people are to be despised and ridiculed and dismissed So where do these people go? Well, now they have to maybe they're just locked out of that industry. They got to go somewhere else and Now here's the here's the key point First we have the inefficiency involved that naturally we need the we should be having more people working in this industry, but we don't But a lot of these people were trained to work in that industry and now they've been shut out Because for labor unions to be able to keep the wage that high. They got to exclude people They got to create an artificial scarcity. So where do the excess go? They go down a level They go to a level of employment that's less desirable So you see when we follow the non-union people we see wait a minute There's another side to this story. So not only are these people in less desirable employment But now there's a lot of people there pushing wage rates down But secondly those people now don't get to use the skills that they train to learn Because they've been excluded from the industry that they belong in so all that training was a waste So there's all there's all there's all kinds of deadweight losses not to mention the union rules that are in effect that are basically meant to Make work as inefficient as possible like there'll be a guy who you know Let's say you got a lecture hall and that lecture hall is unionized So if you need to turn the cassette tape over in the old days of cassette tapes You'd have to wait get the union guy to come in and he would turn the cassette tape over and then leave I mean it would bizarre multiply that by 50,000. That's what you're dealing with with the union work rules So it turns out this is not good It's not actually good that the way wages rise is the opposite of this wages rose in the US Despite the fact that the US was very very little unionized compared to other countries wages rise because Profits are invested in capital goods, which mean that you can be more physically productive in your economy And the greater physical production puts downward pressure on prices and then the workers check Paycheck can go farther. That's what does it again? It just happens it happens through the natural orderly development of society and the economy You don't you don't actually need the goons. It turns out. Isn't that great? You think people would be happy about this society can be run Without the initiation of violence you think people would be happy about this and then when you try to tell them It's like you're telling them. We're going to rip the hearts out of cats just for fun You would think people would be delighted to hear this I didn't realize we could run society this way and you know the funny thing is they're not they're not delighted that way. Oh But my favorite Clinton policy. Oh my favorite even though. It's not front and center It's my favorite because it We're so right on this and she is so wrong And yet we make no progress whatsoever and for some reason Something about that just gets to me. So it's the it's the gender pay gap You know, I've lost track of lost track of which one of these bottles. I'm drinking in so I think I think what I'll do is I'll just take one swig out of each of the 10 All right, the gender but we all know this right men earn More than women and what and that is true in the aggregate men earn more than women Then we get this leap and now this with Bernie Sanders believed this Hilary Clinton believes this Ivanka Trump apparently believes this too And and the thing is The funny thing is she got the basic insight as to why it's there and she said it in the speech and didn't even Didn't penetrate wait women. Maybe that's why there's a gap. I'll get to that in a minute I'll tell you where the gap is with some of these people. All right all right, so it's it's It's that men earn more than women and then they draw this they take this leap and they say men earn more than women and women earn less than men do For doing the same work now that now wait a minute. That is not the same thing To say women earn less than men is not the same thing as saying women earn less than men for doing the same work That's that was dealt with in the Equal Pay Act of 1963. That's that's already covered So what are they talking about so they're looking in the aggregate they say well here's here's a big pile of money earned by men Here's a pile of money earned by women. The women pile is smaller. So something sinister is going on All right Well, I am now going to tell you the real truth of what's going on and Here's what I love about that. You know what? I'm gonna tell you I'm gonna keep the punchline a secret just for one more second Here's a fact about the the gender pay gap that's gonna lead into my punchline It turns out that these jerks who promote this thing are not even bothering to measure The simple issue of number of hours worked by men and women now you think oh no surely woods. They must be Factoring in that men work more hours than women. They are not Here's in fact what they're doing They're saying oh we are we are factoring that in because we're only comparing full-time workers Yeah, okay. Here's what the old full-time workers slide a hand. Well look baby, you know I'm I'm like Penn and Teller up here when it comes to that kind of sleight of hand, okay? It turns out that the the Labor Department thinks of full-time work as 35 plus hours a week Alright, so anybody working at least 35 hours is considered full-time, but you know some people work 40 So how many hours are men and women working? That's the question how many hours are full-time men working versus full-time women because as long as they're 35 and over It's considered full-time. Well, it turns out 12% of women are working just between 35 and 39 hours Only 5% of men work so few hours Well, how many men and women are working 40 plus hours? 26% of men work 40 plus hours 14% of women work 40 plus hours Well when you factor that in The pay gap goes down from 23 cents on the dollar to 12 With just that one adjustment for honesty Now the punchline Guess which prominent institution in American society also has a 12 percentage point wage gap the Obama White House. Oh How about that? So they asked poor Jay Carney Jay You guys are gonna go around persecuting. Well, they probably didn't start it this way. So I would have started the question You guys are gonna go around persecuting private businesses for having a 12% pay gap And you guys have a 12% pay gap between men and women. How do you account for that? Answer Well, you see men and women have different jobs here in the White House Do you think a private employer would be allowed to give that particular answer? But of course, that's the whole thing, right? So for instance, it's not enough to say boy, you know It seems like Asian PhDs earn more than black PhDs. There must be a pro Asian anti-black bias Well, how about asking what are the PhDs in? If you are getting it turns out that more than half of black PhDs are in education This is a very low-paying field. We all know that But the Asian PhDs tend to be in chemistry Engineering etc. So when you look at this, oh, well, okay, of course that makes sense. Don't compare apples and oranges Well likewise the experiences of men and women are like apples and oranges because in the case of women They have the possibility of childbirth Which will interrupt your career for an extended period of time So there are some career choices that will be less appealing to women because it'll be harder to jump back in if you're out of the Workforce for five years. There are some fields where your knowledge will be if not obsolete then very very much out of date And those things are ruled out. Whereas on the other hand if you're caring for children you're more likely to think that the more flexible and School-friendly schedules of for example a school teacher or a secretary are appealing So it's not like women are drawn to these fields by some kind of a giant magnet It's because they work with the life circumstances that they find themselves in and so Ivanka Trump actually she said that She said you know and you know mothers have a particularly difficult time in this regard But this is why it's because their mother's not because there's anything sinister going on because all you have to do is Look at never married women and never married men and there is essentially no pay gap there How about that? So You know There it is All right, so now you know there's no pay gap. There's a whole lot of crap Don't believe it. Okay All right, how about the Federal Reserve? What do you think Hillary thinks about the Federal Reserve? I'm not even gonna dignify that with an answer. Okay, we're not even gonna cover what Hillary thinks about the Federal Reserve I refuse to sully this podium in that way. I Will tell you that there have been times when I've thought that Trump had his finger on this that he would say that the Fed is Pumping up financial bubbles and I'd say that is great that somebody in public life is saying that and then on the other hand He'll say I think the Fed should continue its low interest rate policy. Oh But you see those are the same thing right the same thing All right, so I've done with the Fed But how about can you believe on her website? You'll never guess income inequality is on there now I mean you could make jokes about her speaking fees and blah blah blah and all that I'm not gonna go that route because you know, I'd be thrilled if I had that speaking fee No, what we're gonna talk about instead is the you know a few relevant Considerations on the subject of income inequality now. I have a little bit on this I put together a little e-book on Bernie Sanders Because he was his people on Facebook were driving me crazy and I thought Yeah, I remember when we Ron Paul people used to do that to people on Facebook But that was different because we were right and they're wrong but So anyway, I put together a Tom DeLorenzo has an essay in it Bob Murphy has an essay in it A few other people here have essays in it and I just thought let's just be blunt I call this e-book Bernie Sanders is wrong. Yeah So now that Bernie is kind of off the stage My free e-book is having a fire sale so If you if you want it these arguments are probably gonna come up again, I have a funny feeling All you have to do is text To the number 3344 just dial 3344 and text to the name Bernie And I send you that book. Well, not me of course some robot somewhere Yay for our robot overlords Okay, so texting Bernie to 3344 get to that book But even though you're gonna get that book don't read it right now because I'm gonna tell you what's in it Okay, so don't read it right now read it late, but on the on the income inequality thing we could talk about statistics. That's true. I Could sit here and tell you that over the course of their lives 56% of Americans at one time or another are in the top 10% of income earners in the US Now I dare say that is more mobility than we had in you know, European history Let's say 300 years ago 500 years ago ever Probably right very very unlikely that a surf really rose that high or almost anybody, right? So that's just that's just one fact How about when you look at these Studies that actually trace actual people usually you have studies that look at the bottom 20% here and the bottom 20% here, but they're different people. They're not different people Joe Schmoe who was in the bottom 20% in 1996 Joe's in another one in 2005. That's the study. I want to follow. Where did Joe go? What happened to Joe? The bottom 20% they actually did a study bottom 20% in the decade 1996 2005 but by the end of that decade the bottom 20% their incomes had nearly doubled and The top income group saw their incomes fall by 26% Now that's not what we usually hear. No, it's not But that's the truth And there I had again I Bob and I on a contra Krugman podcast We did a whole episode on income inequality. So you can find that it's contra Krugman comm Anyway, you can also look at just overall conditions of the poor Because you know Rothbard used to have this example, you know, he would say that eventually Only a lunatic would care about income inequality if it turned out that I have seven yachts and you have only five and you're still complaining There's something to matter with you. Okay, just quit it. Enjoy your yachts and live out your happy life So it is it is worthwhile just to think about the absolute standard of how the poor are living So the bottom 10% in the least capitalistic countries are earning something like barely a thousand dollars a year Whereas in the most capitalistic countries and this you know, it's hard to measure this but you can kind of figure it out The bottom 10% are earning about eleven thousand dollars a year You know, that's eleven time difference. That's something right? That's the point and it turns out by the way There's actually if you measure income inequality using the Gini coefficient There is less inequality in the most economically free countries in there. There's in the in the least economically free I got a whole bunch of these but but you know what to heck with them because you can you can read them You can find them you listen to the podcast To me what matters really is the overall improvement in the standard of living It's been so extraordinary that the fact that you could sit up and say well That guy's getting richer just a little bit too fast for my taste is just It's just a lack of gratitude on a scale I can hardly imagine so I'm gonna give you this example I Got this from Deirdre McCloskey who says that in burgundy as recently as the 1840s If you look at the men who worked in the vineyards after the crop was in in the autumn They would go to bed and stay sleeping. They would have in effect hibernate All huddled up together to preserve their warmth During the winter because they could not afford the heat and They could not afford the food. They'd have to consume if they got up and expended energy That's the real human face of what we're talking about that's gone basically for all intents and purposes That's what we're talking about. These people now have luxuries people could not even have imagined Could not even have imagined in fact sometimes when you watch the Twilight Zone and you look at what they consider to be futuristic It's so clunky and stupid you're laughing at them. They couldn't even have imagined What we have now and you know, there are people who scoff at that and they say oh material things Tell that to those people, you know, I think or you know money can't buy you happiness I bet it could have bought those people a little bit of happiness. Yeah Yeah, if you're telling me it doesn't buy happiness, then you go to burgundy and sleep through the winter you jerk I'm sorry. I just I'm in the middle of moving and I am in a foul mood people Around 1800 the world income in modern terms was about three dollars a day And I mean that's like three dollars in your wallet right now And you have to imagine how you would divide that up among all your needs and Then think how could you live a life of? Spiritual and intellectual fulfillment under those conditions if you were lucky to survive at all are you going to be able to go join a local book club? Are you going to become an expert chess player? How is that possible in that? That's a miserable existence Don't tell me material things don't matter. That is a miserable existence now That number is $33 a day even when you include the most backward countries and by backward countries, of course, I mean backward governments $33 a day an 11 fold increase Wouldn't you think an 11 fold increase the likes of which we've never seen and by the way in the major industrialized countries More like a hundred dollars a day and now you think to yourself. Yeah, I could if I if the chips were down I could survive on $33 a day. I could I could survive on a hundred dollars a day plenty of people do With that kind of unprecedented change the fact that you could even think about Income inequality just boggles my mind now. Yes. I know if the super rich people got that way because of the Fed or the government Then yeah, that's right. Take it all away. I agree. You're right The point is be happy with what you have, you know, I mean who's that? Who's that singer who she used to be married to that? steroid bicycle guy I Cheryl crow doesn't you have a song where she says you got a Want what you have or some kind of thing like that something like that I don't know. I don't listen to your I don't listen to your young youngster music Actually, that's already oldster music now, isn't it? That's when you know it's time to wrap up well The Marxists say that the market pits classes against each other But obviously the state pits classes against each other in the market We have all these voluntary interactions and on the in the state We have coercion and hang men and everything else that that means is described the international division of labor is the greatest assembly of human cooperation Ever seen in history now, what are we up against we who believe that society? Seems to just work. It can just work all the major ingredients just work. Well, let's see We're only up against the whole world by my reckoning. We're up against the politicians who exist in Order to contradict us on this point. We're up against the media We're up against the media and the movies which can find all kinds of private sector villains But never a government villain unless he's a sort of free market guy But then they even then they never quite get the free market guy right like on that show family ties in the 80s Alex Keaton was supposed to be the conservative He's got a portrait of Nixon by his bed if they don't even get what a young Republican would at least I knew young Republicans none of them had a Nixon. I mean they they were not good for other reasons But they at least they were better than that You're up against this the schools that exist to say, hey Where would you be without all the political you know without the political class? So we are very much the underdog, but you know what? people love the underdog and the underdog surprises you once in a while and Among underdogs the Institute has been an underdog The Institute does not have billionaire donors. It's not located in Washington DC. Thank heavens It does not get you know in invitations from government officials nor does it extend any and Yet it goes to show that if you quietly and diligently do your work and stay faithful things happen Now my advice to you this week Is to work and pay attention You'll be tempted to check your email check your twitter feed and i'm begging you not to do that Get your questions answered in person by this faculty This is a lot of fun this week no question about it But we're also doing something very serious here. We're training the next generation of dissident intellectuals People who will communicate and build upon these great ideas so let your efforts be worthy Of the great tradition of scholarship represented here You know whenever I hear the expression children the children are our future for some reason that sends a chill of my spine I'm not exactly sure why but If those of you in this room are our future well then we can look forward to it with confidence Thank you