 Now, we've done plenty of talking today, but we want to give you guys a chance to talk as well. I know you have a lot of questions about things that were said and maybe things that weren't said that you would like to know about. So please, let's have some questions from the audience. Yes, sir. So I'm going to repeat, summarize the questions for our audience listening on the internet. The question is about, instead of talking about regulation in general, are there specific regulations that would be appropriate in particular to prevent financial contagion or something like that? Or maybe another question to put the question a different way. This is not what you asked, but I'll add to your question anyway. If you put Bob Murphy and Peter Klein in charge and we were able to get rid of the most harmful regulations today, but it would take us a while to get to some of the others, what would we strike down first? I'll let you comment first. Okay. If I just speak, can you guys hear me? Is this amplifying? Yeah. Okay. So, well, one thing, let me just make this point and then I'll let him chime in. The problem when you do things like this is that the government right now is subsidizing certain things. And so, as some people put it, you've got this issue of what's called moral hazard with the commercial banks, for example, where there's this thing called FDIC, Federal Deposit Insurance. And so, right now, consumers don't have the incentive. When you go and open a checking account with the bank, you don't go and do a bunch of research to make sure, well, what do these guys do with their money? Let me make sure this is a solid bank because you know if something were to happen, as a bank were to fail, I would get reimbursed by FDIC. And so, there are a lot of free market economists who say maybe it is appropriate for the government to lay down certain regulations about what investment firms can do with their money given that we have this sort of blanket subsidy and this escape hatch, as it were. So in other words, the best of all worlds would be don't subsidize them, and then don't regulate them, just let the market regulate people. But it's not obvious, well, given that we do have all these subsidies, should we then let them do whatever they want? Just to give a different example, Murray Rothbard mentioned this one when it came to the former Soviet republics desocializing and when we have what's called deregulation in the United States and elsewhere. And he said, look, from one point of view, I'm against price controls. I'm against the government telling businesses what they can charge for their product. But if we're going to give the post office a monopoly on the delivery of first-class mail, I'm not sure I want to give them the freedom to charge whatever the market will bear. It might be appropriate to say to the post office, no, you can only charge such and such for a stamp and if you want to raise prices, you've got to get permission from us because we're giving you that monopoly. And so, Rothbard said it would be wrong to say, oh, it's a move towards freer markets if we just lifted the ability of the post office to charge or to get price fixing from the government. So that's a kind of framework and I'll let you be more specific. And that's, I was going to, I would give the same response. Another example is you think of the police department, right? So Mises wrote about the appropriate way to manage a police department. Let's assume that you have a government provided, government funded police department. You know, a free market economist wouldn't say, well, you shouldn't impose any restrictions on what policemen can do out on the street. You know, they should get, there should be a performance bonus based on number of arrests and you give them complete latitude to decide how they want to get their arrest rate up, right? And if I said, gee, I don't think that sounds like a good idea. I think we ought to have some restrictions on what police officers can do. You wouldn't say, well, I thought you were in favor of the free market, right? So you're in favor of regulation then? Well, I mean, that's not regulation, right? Now, where it becomes more complicated is if you look at, you know, take Goldman Sachs, okay? Goldman Sachs is not nominally a branch of the federal government, like the post office or a branch of a local government, like a police department. But a lot of times de facto, I think Goldman Sachs might as well be part of the federal government. I mean, it's so closely tied to so heavily protected by, so strongly subsidized by, you know, I don't lose a lot of sleep over, you know, regulations from the financial regulators restricting what Goldman Sachs can do. I mean, that feels like one set of distortions trying to counteract another set of distortions. As Bob said, the best outcome would be to remove the distortions on all sides, right? But it is, you know, it has to be determined on a very careful sort of case-by-case basis. If we can't repeal all of the regulations, it's possible that changing one may actually lead to a net increase in government intervention, right? Again, if you're subsidizing a firm's losses, but then allowing it to do whatever activities it wants, where the taxpayers are on the bill, put the bill for the loss, it's not obvious that that's a move in favor of a freer market, okay? So it's a great question, though. What else? Yes, sir? My question was, in dealing with economics, you mentioned that the main, basically the goal of an economist or a businessman or anybody in the business sector is to basically predict what people are going to want, or maybe what a whole society is going to want. So basically what my question is, with all the different venues that companies, businesses have, different forms of statistics, what do you think is the most reliable way of predicting what people want? And maybe tying it to the example I was just mentioning as far as the computer or the housing industry, I guess how to avoid such a situation where when it comes so immersed in a statistic, a number, that it kind of absents from the human element, that you can see how it helps with the housing industry. Okay, thank you. So there's the two parts to your question as I read it, a kind of a theoretical part or theoretical issue and a practical one. The theoretical one is just to ask us to restate, is it the right way to think about what an entrepreneur does as trying to predict or forecast what consumers will want to buy? And second, if so, what's the right way to do that? And is it possible that even private entrepreneurs nowadays are over-reliant on quantitative statistical models to try to predict the future as opposed to using intuition or gut instinct or something like that? It's a really excellent question. Let me take a, I'll take the first stab this time. I think the way you characterized the situation is just right. Although I might, the word predict is a little bit tricky in that case because we use the word prediction in the philosophy of science, you know, to me, you think about, you know, predicting in the laboratory, the scientific sense of one molecule interacting with another. I mean, I would tend to use language that's more about, you know, sort of intuition or understanding or a word that Mises used, judgment, right? So maybe instead of saying that entrepreneurs try to predict the future or try to predict what consumers will want, we say, could say that entrepreneurs exercise judgment or discretion about, you know, what they imagine the future state of the market to be, right? And that includes not only trying to anticipate how much consumers will be willing to pay for something, but also what competitors will do, right? What other products will be available on the market at that time? What the overall, you know, what macroeconomic conditions will be at that time? Maybe consumers will really like this new phone I'm producing, but if it comes out in the middle of the recession and people don't, you know, they're not spending as much on electronics, that's something I have to take into account as well. It's very complicated, right? And you're absolutely right that it isn't something that quantitative models can ultimately or with any sort of sense of finality, you know, predict the way that we think of science predicting. Mises has a discussion of differences between the kind of scientific quantitative prediction that we usually have in mind and the more intuitive sort of notion of business judgment. He, Mises uses the same kind of distinction with slightly different language that is often associated with another famous American economist named Frank Knight. Frank Knight is not a member of the Austrian school, but Frank Knight is famous for distinguishing between what he called uncertainty and risk. So risk is where we don't know what is going to happen tomorrow or we don't know what's going to happen in the future, but we know a lot about the problem and we can characterize it in a very formal way, like throwing dice. Okay, if I have a six-sided die and I roll the die, I don't know what number's going to come up, but I know there, if it's a normal die, you know, I know there are six possible numbers and the probability that any one number will come up is one-sixth, okay, but saying, you know, what is the likelihood that I will be able to make money selling my new phone? That's a far greater level of complexity and Knight argued that what we, you know, we wouldn't characterize that as a risky situation because we don't know the probability distribution. Rather, that's a situation of kind of deep fundamental uncertainty. Now, the entrepreneur can try to use quantitative tools. He can hire a marketing firm. He can do surveys. He can do interviews. He can look at past buying trends and try to anticipate. So statistical forecasting tools would be part of the entrepreneurs. They would be in the entrepreneurs toolkit. But successful entrepreneurs do not rely exclusively on those kinds of approaches because the future in a complex market economy, full of human beings, right, is not, it can't be characterized like throwing dice. It's characterized by real fundamental uncertainty rather than risk. And it may be that a lot of financial market professionals were also seduced by the siren song of these quantitative models constructed by the smartest, the physicists with the highest IQs and so forth. But that may not be relevant for dealing with human beings, dealing with human problems. Yeah, just to elaborate on that a little bit, it's, and people ask us that a lot to question being, you Austrians, you know that you can't model human beings the way that physicists model particles and so forth. And so doesn't that mean you're against any company that relies in terms of its marketing or whatever on these statistical approaches? And no, I don't think that that follows. Like Peter said, they can do whatever they want and the ultimate proof would be if it's profitable because they're using those methods of modeling their customers, great. But if it turns on a dime, which we know it could, and it blows up in their face, well then, in retrospect, we can say that that wasn't a good idea. The other thing too is if it really were the case that all you needed were to use the right statistical approach, and then boom, it would be obvious what the investment decisions would be, well then you wouldn't be able to earn a profit from it because everybody would be doing that, right? So the way you earn what we mean by profit and above average return on something is because you saw a possibility or an opportunity that other people didn't see. The other point is that the metaphor of that consumers and consumer preferences are steering the ship and that the entrepreneur is sort of constrained by subject to the whim of the consumer in deciding what will work or not. I mean, that is a metaphor, right? Remember what Steve Jobs famously said, Steve Jobs said, well, consumers don't know what they want until I show it to them. In other words, that the entrepreneur is not just sort of a helpless slave of consumer, sort of random consumer passion. Now, of course, entrepreneurs work with buyers. They work with consumers to try to shape some kind of a shared vision of what the future and what the future could look like. So entrepreneurs are, of course, active participants in trying to bring about a future state of affairs that they want. Not merely passive recipients of things that just sort of randomly come down the pipe, okay? Great, great questions. Let me, yes, lady behind first and then in front. Thank you, I'd like to bring up two subjects and only two. And get your reaction to number one, I'm aware of the 50 to 100 year infiltration by Marxism, all of our institutions, particularly education, the universities, the press, Hollywood foundation to the point where I have zero trust in many of these institutions. Zero, they're all corrupt and their minds are being perpetuated all the time. And I don't know to what extent these young people have any knowledge of it. I've lived long enough to be aware of it, you know what I mean? So that's one thing. It's very real, but I'm just growing up, communism was a bugaboo. But they went underground and they have succeeded. And I see our main task is trying to bring this country back or we will fail. So, okay, so that's one thing. The other thing is take the financial crisis. I happen to have a Wall Street back at me. I remember the hearings office, I watched them on C-SPAN. It was a minority, the Democrats controlled wherever the hearings were. The majority report blamed all Wall Street companies, but there was a minority report that brought out the government role in forcing banks to lend money to people who could not pay. It was like reparation, hey, we're going to give you the money you never had. You do it or we won't regulate you properly. So this leads to the regulatory state. And in my lifetime, there is so much more regulation than ever existed. I don't even want to work because I'm probably doing something that's going to get me in trouble. These regulations are written by bureaucrats like top guards. You don't know what they're going to come out with and there's no control. No one checks it. The health care bill, pages in the financial bill, pages and pages of regulations written by male bureaucrats affecting every one of us. We don't have it on a webinar. We have no control over it. And this leads to the crony capitalism. I don't know when you think that started, but it may seem me. You have to see this and feel stupid. Oh, I didn't go to Washington to get my share of the government in there. What's wrong here? I should have grown up thinking I got involved in Washington to get my hands on power so I could get the taxpayer money for myself. That's not how I was taught when I grew up, but that's how it is. In filtration, number two, the crass and the crony capitalism that's emerged where business does not try and it's shared. Someone else will get the money. Yes, thank you for your comments. Let me propose this. I'm sure that we both agree with your comments. Let's take one or two more questions and then we can maybe respond to them all at the same time. Yes, ma'am? I'm going to go over the law. Oh, yeah, great question. Actually, the question is about resources for teaching entrepreneurship to young people. Why don't I, let me address that Bob first and also the previous set of comments simply by saying that it's true that existing institutions, including our institutions of higher learning, established universities, colleges, and secondary schools and so forth trying to transform them into the kinds of institutions that we would desire, getting them to teach what we think should be taught. That's a pretty tough row to hoe and so an alternative to trying to transform existing institutions is to bypass them, is to do an end run around them by creating our own kind of alternative institutions. In a sense, that's what the Mises Institute does from our Mises Academy program that I mentioned before, which offers things that are like college courses to events like this, to all of our materials on our website. You can think of that as an attempt to build up an alternative educational paradigm where students, they're not enslaved to the ideas that come to them from the established institutions, which are very, very hard to change. So rather than infiltrate the government, the media, the established media and universities, it might be more profitable to set up our own alternative media educational institutions and so on, which leads me to your question about business education. I mean, there are a number of good resources. Of course, you can start by looking on Mises.org. Dr. Murphy has authored one of the politically incorrect guides, politically incorrect guide to capitalism, right? And also a set of lectures for high school and beginning college students, lectures to the young economist. Why don't I let Bob talk about those? And if he doesn't, then I might be able to add something about things specifically for business and entrepreneurship, which sure. So it's the book is Lessons for the Young Economist and all the stuff that the Mises Institute is. You can get the PDF if you want to look at it and see what it is. And that just goes through giving a lot of free market lectures. Because a lot of the problem I think that Peter and I have is when we get students at the college level or older, and they've learned a bunch of Keynesian economics, and then we're basically trying to undo that. And so here we were thinking, what if you just caught someone who hadn't heard that, so I just teach them what we think of as proper free market economics from the get-go. And then as he said, the politically incorrect guide to capitalism isn't a textbook, that's more of a popular book. Just taking a bunch of topics like environmentalism and minimum wage laws, rent control, and just trying to give it two, three-page analysis of why the conventional wisdom on that is wrong, and that government intervention actually gives the opposite outcome. So tying into what the earlier questions were there, I mean, it's true, I do a lot of work in policy circles about what climate change issues and things like that. And you do a lot of times, I say to my colleagues, these people who want the government to do such and such because of climate change, you get the sense that they're giving reasons they know will resonate with the public, but really they don't like the American way of life. They don't like Americans consuming so much, they just offends them. They don't like that aesthetically, and you get that sense. Just to give you one quick example, because you're talking about, if you're really concerned about carbon emissions, you should be a big booster of nuclear power. But most of the groups who are totally for a big carbon tax and we gotta have electric cars, they're not for nuclear power plants, even those those have zero carbon emissions, right? So little things like that where it looks like, wait a minute, if they really thought about the thing that they're saying they care about, it would be such and such. So, but what do you do? I think, unfortunately, we're in the minority and the public thinks that we're apologists for big business or whatever. And so I think it's better if we just teach proper economics and hope that that gets absorbed as opposed to justifiably, in many cases, correctly pointing out the motivations of our opponents. Because I think a lot of people are just gonna be turned off by that. One of the things on books that we also have a textbook authored by David Gordon that's available at Mises.org called, I think it's called Introduction to Economic Reasoning, that is designed for high school students. Some of you might be interested in that. But there are a lot of other individuals and organizations that have produced good curricula. One of my kids has really enjoyed a series of comic books on entrepreneurship and management, authored by some business school professors, one is an associate of mine named David Ketchum, K-E-T-C-H-E-N. Sorry, I think the correct term now is graphic novels. So they're graphic novels on entrepreneurship and management aimed at a high school or college audience. And there are a number of good resources out there that can help in this way. So, thank you. Other questions or comments? Yes, sir? I really like something that you touched on a little bit more about the type of regulation that we want to give to government agencies. If you look at our bill of rights, it's essentially a list of regulations on the government itself. But in thinking about regulation, we've heard about some that can be insightful. And the question when I started learning about this that came up was, well, what about regulations that would appear to be helpful? What about regulations for employee safety, for patient safety? I'm a doctor and one of the things I think about as well, if everybody is getting antibiotics over the counter whenever they want, we'll soon look at it and start to have a bunch of infections that are resistant to antibiotics. And that's not something that a market will necessarily take in place. So how do we know that or is there a balance? Sure, so the question is about, well, talking about some of these financial industry regulations, okay, sure, people understand that those might be helping big banks or something. But what about more difficult cases like health and safety regulation? Government regulations on what kind of things can be in food or use of medicine that, ostensibly, according to their proponents, are designed to protect the public from harmful practices of businesses and other people. How would we go about addressing what are some good arguments that we would use to challenge those kind of assumptions? I'm going to ask Bob to start with you. Sure, I don't know enough about medicine to talk about that, but let me, I have written about the FAA, all right. So the federal government's regulation of airlines, because that's something where the general public advice, I don't think the federal government should be regulating air travel at all, let the market settle it, that sounds crazy. And people, oh, there'd be planes dropping out of the sky. You say, wait a minute, the planes cost a lot of money for those airlines. Do you really think they're not going to take care of them? And I say, okay, no, they wouldn't be dropping out of the sky, but clearly we want the government, it can't hurt to have the government come in and lay regulations on top of it to random spot checks to see if the pilots are drunk, to just send in random people to check the equipment and make sure it's up to date and that sort of thing. But I can argue that, no, actually, I think it is harmful because it would displace what the market would do instead. And just the crucial thing here is to remember, just because the government has an official program and hires a bunch of people and gives them a job to do, doesn't mean they're actually going to achieve it. So just because they have this agency devoted to airline safety by itself doesn't prove air travel safer. One example of what I mean is when there is a crash, when I was growing up it was a big thing in the Everglades and it was, was it called Value Jet? Was that the name? What's it now? Is it AirTran? Yeah, so they changed their name. But and that was a huge, and it was a big deal because they violated all of these regulations, right? And all these FAA things that they didn't do and the FAA signed off on and they shouldn't have, did the FAA get its budget cut in half? No, they got more money. And there's like, this proves, look at how bad the market is, the FAA needs more money because they're understaffed. So clearly we got to give them, so it's this perverse thing where when a government regulatory body screws up, everyone just blames the free market. And so like there's no way it could ever be the case. A different example is the government, the Bureau of Land and I forget they changed their name through the BLM is what they used to be called. More recently, the people who were supposed to be regulating big oil and they got in trouble. They were literally letting oil representatives throw parties where they were bringing in like cocaine and other things that are illegal and immoral and had a big party and they had a cake that said drill baby, drill on it. And so these are the guys regulating the oil industry. And so the idea that we need big government to put a check on big, I mean, that's very naive that in reality what happens is the big regulated corporations co-opt the people regulating them. That's a nice cozy relationship. And so the one person, the people that don't benefit are the average consumers in the mom and pop shops. So I guess the quick answer would be the market can regulate too. So it's not that we're against third party oversight. It's we're saying when the government comes in and does it, it performs as well as the government does anything else that it tries. Yeah, I mean this leads to an important general point. When we talk about the free market and what a society would be like if we had a free market without an interventionist state. What we're not claiming that such a society would be a utopia, right? That it would be peace and love and kumbaya and everyone would be nice to their neighbors. No, I mean, this society would still be populated by fallible human beings that are subject to whims and passion and there would be bad people who wanna do bad things and so forth. The question is what set of social arrangements is most likely to minimize, will minimize the harm that's caused by all of the foibles that make us human beings, including ignorance and malice and apathy and so forth. So would you want the institutions that try to encourage safety? Right, I mean, government safety regulators do not eliminate harm, right? There are still plane crashes. There are unsafe, people get sick from food they eat. Medicine can do harm to people who take government to prove medicine. So there's certainly no utopia. The government doesn't create a utopia. The question is what kinds of institutions, what kinds of individuals, what kinds of arrangements are gonna mitigate, best mitigate that kind of potential harm? Would it be independent third party inspectors and certifiers who make a living from their reputation for doing high quality work and for integrity and so forth? If you had a private market-driven, supervising authority that was throwing the kind of parties that Bob just described with the people supposedly inspected, what would happen to a private inspection company like that? They would go out of business tomorrow, right? Because they could only make money by having a reputation for integrity and honesty and high quality and so on. But government regulators have no incentives to do what they ostensibly are charged to do. There's no connection between their performance and their reputation in the eyes of the public and the resources they have to control, their salaries and so on, right? So we're not claiming that we can wave a magic wand and make all bad things go away. We're saying that taking very difficult situations and putting the government in charge of making them right merely exacerbates the problem rather than making the problem better. We think we can minimize harm in other ways by relying on voluntary peaceful interaction among people rather than government coercion. I think we have time for maybe just one more question. Is there anyone who, yeah. Okay, yes, sir, in the back. Von Mises, this is a standard Austrian tenant that government can distort prices and that a market, a free market in order to work would have to have honest prices or prices being true. However, a critique of this is that what if in a free market, businesses and corporations also distort prices and signals? Okay, so the question is about price distortions. When government distorts prices through price controls and subsidies and so forth, that has harmful consequences to resource allocation. The question is what about private entities distorting prices? So you mean firms conspiring to raise prices or something like that? Yeah, I mean, it's a good question. The short answer since we're about out of time is that the way Austrian economists typically think about prices is a little bit different from the way a lot of mainstream economics textbooks think about prices. So in the typical treatment that you get in the average textbook, there's a certain kind of price which they might label as the competitive price or the perfectly competitive price which is good and desirable and has all these properties that we've been talking about, it's giving signals to entrepreneurs and so forth. But some prices can be off away from these equilibrium prices because of monopolizing firms that have so-called market power and they can charge prices that are higher than these competitive prices. Well, Austrian economists deny the legitimacy of that distinction between competitive prices and monopoly prices as long as there is no government intervention in the market. So whatever prices obtain through the voluntary interactions of individuals and firms are competitive in the sense that people are free to pay them or not to pay them and your business partner is free to agree with you to charge the high price that you want or to disagree with you and try to undercut your price and so forth, right? The only distinction that we would typically recognize is between prices that come about on the free market and prices like the price of a first class letter, that's a price that is set by the government, right? So a government enterprise that charges a price for its services, that's not a market price, right? Or if the government passes a law that says if you are hired to work for a firm the firm cannot pay you less than X dollars per hour, right? That's not a free market price. That's a government price floor, right? So when government intervenes in prices, prices are different from what they would be on the market but aside from that, any kind of, you know whatever prices emerge from voluntary interactions among individuals and firms, we would not call those distortionary even if they're higher or lower than we might like or prefer or instinctively be guided to, okay? That's an excellent question. All the questions have been terrific. We are out of time so I wanna thank all of you for coming and thank our audience remotely for watching. I'd like to thank Dr. Murphy for his talks. I guess I can thank myself for my talk also. But we look forward to seeing all of you at a future Institute event. Please look at our website mesas.org for resources, information on other events including the online courses that I mentioned and we look forward to seeing you all in person or on the net, bye-bye.