 So I'm talking a little bit about technology today and its history, but first like to raise a point, you know how when you read history you quite often imagine what you might be doing in that situation? I mean when I read like ancient history and I read about the death of Socrates or something and I imagine myself as a Greek citizen, what would I have done, what I have supported him, you know what I have opposed him, you know I don't know, I would like to have gone back. You probably have your favorite period of history, you know some people imagine themselves fighting it out during the Civil War or perhaps being there, you know it was part of the greatest generation of Iwo Jima or something like that. Well, so I want to share with you what my own sort of fantasy is about history and that would be to be at the Chicago World's Fair in 1893, which as far as I can tell is like the most interesting thing that's ever happened in history and hardly anybody ever talks about this, but this was in many ways the dawn of modernity as we know it and the culmination of a thousand years of capital accumulation, all sort of sitting in one city. Now these World's Fairs were very interesting, I guess they're not really common anymore and they sort of fell apart sometime in the middle of the 20th century, but back in the day in the 19th century World's Fairs were the place where the great entrepreneurs and the great capitalists and the great captains of industry and governments too would come and display their wares for the public just to show what's coming. I mean the 19th century was an age of unbelievable optimism and hope, actually it's true that the 18th century too where people had a profound sense that everything that lies in front of us is going to be progress and what does progress means? It means more peace, more prosperity, more wealth for everyone, more gizmos, more fun things to do, spectacular stuff all around, so the World's Fairs were times when all these things were kind of gathered in one place, you know this is your future, it gave you a chance to look at the future before it really came and that World's Fair in 1893 the US was in a unique position to reveal really to all people of the world all the great things that were happening in this country and great things were happening because you know the Civil War had ended which is a catastrophic thing for the country but very quickly the country got back on track again so that tariff barriers were low, we didn't have a lot of barriers to imports and exports, the taxes were you know very very low, there was no such thing as an income tax imagine you make money you keep it that's the end I mean it's just I have to say that out loud because it seems almost hard to believe, no income tax we were on a gold standard so we couldn't we didn't have a situation like like Mark and Doug were talking about where a central banker could just crank out dollars endlessly if a business failed it failed if a business succeeded it profited and that was true after Civil War up until up until this this great World's Fair and remarkable things were happening I mean this is a period it's called in history the Gilded Age it's called the Gilded Age okay beautiful image captains of industry amassing massive amounts of wealth for themselves but also you know they became benefactors to the public both in terms of the great things they were doing with their with their industries and the employment that they were able to create but also in terms of the charitable activities I was just in Pittsburgh and I went to the Pittsburgh Cathedral which is one of the most beautiful buildings I've ever seen okay so I haven't been to shard I haven't seen the cathedrals there but I can't imagine there is grand and magnificence the Pittsburgh Cathedral I mean the pillars inside the churches big around is like this room or something I mean the the scale is is beyond belief I mean it's the sort of thing you can't even imagine being built today you can't even imagine such a thing existing so I just inquired well when did it go up well 1914 right at the end of the Gilded Age and how did it come to be they raised money from the workers and peasants no Andrew Carnegie wanted to buy some land from the Archdiocese of Pittsburgh so he said I tell you what if you'll tell me this land I'll build you a cathedral I will build you a cathedral just down the street and so the Archdiocese agreed to it and with his own money he paid for this cathedral now there was no revenue bounce back to this thing right it's not like building a casino in Las Vegas you know we expected the returns to pay no it was a gift there's a gift not only to the Catholic Church but and he himself was a Piscopalian by the way but also to the whole of Pittsburgh into the whole community I mean this is a grand achievement you know this kind of thing was very very common there was a great belief in the Gilded Age that America was giving rise to a new form of aristocrats you know they weren't lords and barons appointed by kings and queens you know and given land titles by virtue of their connections to the state or by virtue of their birth their heritage you know and you know walking around titles no that was not America the new aristocracy in America was going to be an aristocracy of merit you know if you did great things then you could be known as a great person so that's a cool system right you provide jobs you build great industries you build brilliant businesses and advanced civilization then you're highly regarded and respected and then you can wear a top hat and strut down the street and fancy clothes right but there's not some of you do by virtue of birth there's something you do because of the things you've accomplished in your life America was great it was a great country because this system was really born here so between 1850 and 1900 we saw unbelievable amounts of economic growth I mean there were there was a full decade I think between 1880 and 1890 where the economy was growing as high as six and seven percent per year okay so this there's unimaginable levels of growth and a low growth in those days was considered you know four or five percent there was no inflation there a little miniature banking panics that came into went a few big shots went belly up and that was the end of it you know nobody intervened there's no Keynesian fiscal policy the government didn't spend didn't have the money to spend so they couldn't bail out anybody they couldn't stimulate the economy with ridiculous projects they didn't have the money it was it was not even a question and oh you know I should say it wasn't just that GDP was essentially it was it was doubling you know like every 10 years during the Gilded Age imagine such a thing and to keep in mind the wealth was increasing per capita income was growing as it had never grown in any country in all of human history and keep in mind this is an age of fantastic growth of immigration too so we had all these countries in Europe the people from countries all over Europe were coming here from all over the world really so the population was booming and people were living longer I mean in 1850 the average lifespan was was was was 40 so like I would not be giving the speech right now for sure and some of you might not be here but by 1900 so the lifespans that increased to 49 which still sounds low to us but that was an unbelievable increase and we would never seen anything like that in the whole history of the world that people be living the average lifespans was was was 49 49 years and infant mortality was plummeting income is rising economic growth is booming and what was causing this this was well it was caused because of new technologies like railroads new communications technologies and just the accumulation of capital I mean as savings rose their investment could rise too and and this this all kind of built on on on this this powerful foundation of that capitalism had provided creating therefore you know the most mighty economy in the entire world and during this period to the US past Britain and economic growth and overall wealth so in other words this is the place where it was happening so 1893 comes and what kind of cool things were going on at the Chicago World's Fair well the big thing was well let me just mention some small things Scott Joplin was there playing ragtime that's a neat little contribution the foundation of modern jazz you know that was neat some people say the hamburger was was was displayed at the World's Fair the first time I mean there's big arguments about who invented the hamburger but anyway some people like claim to that there and there was the the ferris wheel I don't know if you've ever seen pictures of this gigantic the guy was named something ferris and he built this ferris wheel which is this gigantic round thing that held I forget now how many hundreds of people would it would put on this on this wheel that went around and around I mean it must have just been amazing to look at in those days but the big thing that everybody was talking about Chicago's Fair was electricity so electricity was new and there were two companies competing each with their own team of scientists and innovators for who could provide the most smashing electrical displays you know and this is a time to an electricity was was a luxury was becoming a luxury good so that the the the great captains of industry would build gigantic new homes and they would wire it with electricity so instead of lighting candles all over the house as you had done from you know the beginning of the history of time up until about this time now you could just push a button the light would come on how great is that I mean that's we're talking about man conquering nature here unimaginable we take all the stuff for granted actually the electricity went out a couple of days ago the Mises Institute really it was like civilization just sort of died you know for like an hour and a half you know we all sat there you know it's kind of a scary prospect anyway so electricity was that was the really cool thing that was going on there these are all luxury goods that we saw oh also the first display of something approaching the modern movies you know went on at the World's Fair an exciting time of great great progress it was in many ways the culmination of everything that had come before not only in this country but around the world in terms of economic exchange capital investment innovation everything all of it done by private entrepreneurs so who funded the World's Fair well you know governments gave a little bit of contributions but as I mentioned in those days governments didn't have much money at all the whole thing in Chicago was funded by private enterprise I mean private money we can't even imagine this sort of thing I don't know what you know would there's yes there's pistachios of private wealth around nowadays but nothing they could fund to me like a Chicago World Fair like we like we like we saw back then it's unbelievable and there was no question that it's gonna be funded by private money that's the way things were done and it was to show and put on display this beautiful thing the practical art of technology and entrepreneurship so you can imagine yourself coming out of this the world the civil war was was a catastrophe then we had this great period of peace and prosperity low taxes no government involvement at anything huge accumulation of capital the rise of a newer aristocratic class in the United States based on not on on title or grant of privilege from the government but rather by merit and achievement and in 1893 you know the literary writers at the time what were they writing about what were the great injustices that they were concerned that they concerned themselves with well they were interested in things like penal reform you know we've got to make our prisons a little more humanitarian you know we've got to we've got to improve the way courts deal with issues of crime we've got to end terrible squabbles between families and groups and in other words there were small issues they were important issues to them but compared to what we dealt with in the 20th century these things were nothing I mean it seemed as if in 1893 that there were only just a few small improvements that needed to be made into the made to the world to make it you know a perfect place a perfect place of peace prosperity and well-being for all endlessly increasing lifespans forever increasing technology an ever nicer more beautiful utopia for all people that was 1893 and nobody could know what was coming but what was coming I mean essentially the end of civilization was coming nobody knew it and we stumbled into it almost inadvertently didn't we with World War one a war that hardly anybody today can even explain at all I mean how did it happen a series of diplomatic missteps and next thing you know everybody's killing each other bloodshed and death and destruction all over the place governments are drafting people sitting in mocked foreign lands to kill and be killed and so on it went for years and years and that was the beginning of the end folks that was the beginning of the end and then in 1913 we got the Federal Reserve this magic money machine that permitted the government to create endless quantities of the thing that everybody wanted and debase the currency and fund the state and fund evermore wars and that led to all kinds of government planning you know and eventually because of the unresolved problems of World War one we got another world war that led to massacres holocaust gulags and disaster that another 40 years of the Cold War where half the world's population was shut to shut behind an iron curtain and cut off from from exchange you know none of this 100 hundred million people dead by government at least in the 20th century at the hands of the state nobody could imagine such a thing in 1893 where everything was bright and beautiful and then just like in an instant everything turned to darkness so I tell that story because well one reason is that we never really know what the future is going to hold it's naive of us to believe that whatever good things that exist in the world today can't be taken away from us immediately we can't know that for sure all we can really do is work for good things and work against bad things so we can hope that we can provide a world for our children and their children that is more like the Gilded Age and less like the holocausts and gulags of the 20th century so how do we go about that well one way is to think in terms of economics about the science of wealth the science of things that lead to prosperity so we can recreate the beautiful age of the guild by the way you know one of the things is very interesting about today's intellectual elites and public culture you've probably heard maybe a little bit about the Gilded Age maybe not that much I don't know can anybody name a president from the Gilded Age probably not right hey that's good you know when you don't know the name of the president things are probably going pretty well you know when presidents become famous there's usually a problem some something bad is brewing so we don't even know who those guys were they're called the postage stamp presidents he's bring it back I say you know bring back presidents whose names we don't know I was in Costa Rica one year and I was stunned to learn that how anybody in Costa Rica knows the name of the president and he lives in like a regular house you know like you would find in the suburbia or something like that seems like a pretty good system to me so what does economics teach us about how to continue and perpetuate peace and prosperity of the sort that we saw during the Gilded Age well the main thing Mark mentioned and that's that we need to understand the source of wealth and the source of creativity and the source of innovation is not the public sector rather it's the private sector and it's not just private entrepreneurs need to understand this also the public sector needs to understand this if you're in the military for example I mean I think the American military has learned over the years to discover that the private enterprise is going to be the main source of all the great innovations that are that are being used by the military I mean every great military will ultimately have to depend primarily on the products of private enterprise because that's where the innovations come from but more importantly than that in the private sector we find features that lead to wealth creation that do not exist in the public sector for one thing in the private sector you have a clear goal I'm like everything of the world's fair okay think about all the goods of the world's fair what is the point of all that stuff the point is to serve the consuming public so there's a goal the goal is to find things that people want and can afford and provide those things to them I mean every private enterprise in the whole world is devoted to that and mainly if you achieve that goal you profit if you don't achieve that goal you lose money and there's nothing in between your profits a bad word to people these days which is very strange to me I mean it's like well you either have profits we have losses you know I mean are we supposed to favor losses I mean there's nothing wrong with profits profits are the reward are the sign and the signal that you've done well that you've served the public in the best possible way people talk about these the tycoons of the Gilded Age now evil they were the robber bands but what was it what was their goal what was their primary purpose whether it was coal or railroads or or or steel or whatever your industry was electricity the goal was to make human life better for the people on this earth that's a beautiful image it's a wonderful thing so there's a clear goal in the private sector and the public sector there's not so much a clear goal is there I once went to a seminar that was sponsored just because I was curious by the Department of Human Services in the Washington DC Washington bureaucracy and they had like a jobs fair and a person stood up and they said well you know our department we're part of a great growth industry last year we managed to get you know 10,000 new people on welfare next year we hope to get another you know say 20,000 new people on welfare and this means jobs jobs jobs well you know I mean this is a strange goal I mean this is not exactly serving the consumers it's a different kind of goal it's it's a goal of building the bureaucracy and building its clients so the private sector there's always a goal in the private sector both the risk and the reward for everything you do is always borne by the owners of the things being invested that is not true in the public sector every day we listen to interviews with politicians who tell us all the things they want to do well what if their plans don't work how do we know what's the test we don't really have a test and let's say we did have a test and we can declare their programs to be failures are they gonna pay a price for this not really they're just gonna get sort of slink away you know or come up with some bogus excuse I mean there's ultimately there's no there's no punishment in the public sector for doing bad things instead of good things one of the reasons I like Donald Trump you know for all of his disgusting habits is that he puts his name all over everything you know so if anything goes wrong you always know who to blame and he's always willing to take the blame I mean this is typical in private private enterprise there's a tremendous accountability always it was always always there in the private sector there's the ability to calculate profit and loss and that's the number one most powerful tool that is enjoyed by the by private enterprise that that government does not have access to every day at the end of the day you've got to balance the books and the price signals that you're given permit you to calculate whether what you have done is the right thing or the wrong thing in a bureaucratic world those price signals do not exist ultimately you're guessing really and this is true even when it comes to budget cuts for example if I own a cupcake shop on the other side of town and I go for a full month of full month with losing money and I'm facing serious problems I'm going to have to look at my my my books to try to figure out where I can cut back where I can buy cheaper ingredients which whether I need to fire employees whether I need to use like less electricity maybe not still stay open as many hours or maybe I need to stay open longer hours and serve even more consumers I can get more revenue whatever the results are there's always an always constantly a test and the test is the profit and loss test in bureaucracies it's completely different because you know in order will come down that says well we had planned to grow your revenue five percent next year turns out it's only going to grow three percent so whatever expanses you had planned they need to be cuts well where what do you cut what do you cut when the money stops coming in nobody really knows for sure and there's no real test to know whether you're doing the right thing ultimately it's it's a political decision and it's not an economic decision the other interesting thing about the private sector is that private sector is careful to not introduce technology before its time has come in the 20th century we found governments in love with the idea of of technology like space travel was very enticing you know to Russia and then US politicians got very jealous of Russia's interest in space so we funded this gigantic space program too well you know whether space travel is the right thing or not it's hard to say in the abstract all technology comes in its time and tech technology that's really serving consumers has to be introduced not at the expense of other things but in accord with the preferences of the public governments will typically ignore this sort of thing they will just kind of look out and say well you know strikes me that we've got to create a lot of a lot of jobs so let's take ten years and build a gigantic dam here that will have some spin-off effects of creating electricity okay that's a very interesting idea but how do we know that that's the right decision I mean can you do this abstractly really do we know for sure this is the right time the right place the right use of these resources we don't know for sure ultimately it's a political decision so no technology comes before its time some people say that the government should be given great credit for inventing the internet well in the first place the internet we use today a government had virtually nothing to do with it the the the infrastructure was created long ago by the government for serving a government purposes but it was the private sector they that put the fire under it that made it that made it serve the public and in such a beautiful way the thing is I mean even when technology comes about by virtue of public investment we don't know for sure that that's the best use of those resources at any one time I mean the essential economic problem we're always dealing with is that there are two kinds of goods in the world there are scarce goods and there are non scarce goods like the speech I'm giving you is a non scarce good you can take it with you but it doesn't take it away from me right a song I sing you you can go out singing that song it doesn't take that song away from me it's very beautiful lots of non scarce goods in the world information mainly pictures sounds there's no reason to restrict or allocate these things or ration them once they're made public they're for everybody that's not true in the physical world this podium I'm speaking from this book one copy so far all the chairs you sit in all the clothes you wear all the food you eat everything you can you can see and touch these are all scarce goods which is a way of saying that there really isn't enough in existence right now to serve everybody who would like to have it so there has to be some mechanism we use to allocate these things we can either allocate those things through political decisions we can allocate them through economic decisions the economic decisions use markets and prices and private owners political decisions use things like public demand dates and force and bureaucracies those the essential choice that we face and I think is the illustration of the gilded age gives us if we can unleash this power of private enterprise to do amazing things innovate distribute compete it's a beautiful thing then we can see a beautiful world world emerge before our eyes something like what was emerging after the Civil War and before World War one where we saw unrelenting progress unrelenting progress and incomes life spans and and every way I mean during that period we saw the seemingly impossible accomplished expanding population people living longer growing wealthier vast immigration and huge amount of economic growth all coming together at once that is a gigantic apparatus created entirely by the private sector and the private sector alone when we turned in the 20th century towards systems of government planning we we wrecked in many ways the possibilities of the private sector to accomplish similar miracles however at the end of the Cold War we saw the opening up of that whole world that have been shut behind the iron curtain now we see all of these countries introduced into the worldwide division of labor so now we can we can trade with China we're trading with with Russia and all the former client states of the Soviet Union millions and millions and really billions of people newly introduced into the world exchange system and as a result we're seeing we've we've seen fantastic innovation we're living in the the the age of the digital revolution which in many ways is just as spectacular as the first and second industrial revolution and this is mainly because of the elimination of government controls from major parts of the world at the same time we're seeing pressure in the other direction towards ever more and more control the things that Mark and Doug were talking about the attempts at stimulating the economy through the printing press through government spending and all these phony mechanisms that that they tell us is going to make us richer they don't they all make us poor because they take away our freedom that new book is called the Jetsons world private miracles and public crimes that sort of sums up what I what I think we should all hope for somebody like the the old world that lived on that existed in that show called the Jetsons that's what I think of as a kind of a space age gilded age you know amazing gizmos all over the place bourgeois society continues to exist as it always has peace and prosperity for all this is the dream of all the great philosophers all the great economists all the great thinkers of all ages and it truly is within our grasp is provided we take the right steps and not the wrong ones thank you very much