 This talk is on the Division of Labor and Social Order. And we'll begin with a quote, a great quote from Ludwig von Mises. There's so many great quotes in Ludwig von Mises, Human Action. And this is one of the top quotes. That's just my own preference for this particular quote. And the reason why, I'll just give you a little background. I was trained actually as a neoclassical economist. I didn't know anything about the Austrians until I finished my, or almost nothing, until I finished my PhD work. And it was only after that, a couple of years after that, I was reading through man-economy and state and human action and the classic works. And almost everything you read in these works is, I should say, augments far beyond the knowledge that you gain in a neoclassical program. And it's almost to the point of boggling my mind when I read things like this, where Mises says, human society is an intellectual and spiritual phenomena. It's the outcome of a purposeful utilization of a universal law determining cosmic becoming. Namely, the higher productivity of the division of labor. As with every instance of action, the recognition of the laws of nature is put into the service of man's effort to improve his conditions. All economists, all students of economics, learn about the division of labor and about comparative advantage and so on. And we're gonna talk about some of that, the nuts and bolts of that this afternoon. But not every economist conceives of the meaning of the division of labor in this way, right? It's just a magnificent statement of the knowledge that economics can unlock for us. We can perceive the true nature of human society. That it isn't merely like the call of the blood, right? It isn't a furor who organizes all of us as pawns in some master plan. But it is, as Mises says, it's the recognition that all of us have of the laws of nature as we put them to use in our actions, right? To improve our conditions, what Joe Salerno called economizing. We're just striving to economize our actions. And we perceive that in interacting with other people, we can do this through a division of labor. Now, I'll make one more preface to the discussion, the nuts and bolts discussion of this. And that is that economics as a discipline, as an intellectual discipline, some of you may know was born with this insight. It was this insight that led to the development of economics as an academic discipline. It was the scholastic writers who conceived of society as what we might call a natural order, that there were natural laws that God had put in place that were working themselves out in society. And society could be left alone by the state, right? We could work this out ourselves, precisely because it's a manifestation of human nature. Where we're all just trying to do what God has designed us to do. That's how the scholastics thought about this, right? We're just trying to economize. We're striving to better our condition, or we're striving to attain ends that we value more highly in ways that economize on the resources that we have. And, well, we can do this more fully if we integrate our actions. Now, let's turn then to the nuts and bolts of this. Let's start with just a working definition of the division of labor. The division of labor fundamentally is just the opposite of self-sufficiency. If you're not self-sufficient, in other words, if some of your production is to satisfy the consumptive ends of other people, then you're in a division of labor. So these are polar opposites. And again, it doesn't take too much imagination for a person to recognize that his or her standards of living material well-being is astronomically higher in the division of labor than it is in self-sufficiency. Joe Salerno mentioned the Amish as an illustration of people who live in a rather simple way. And so I'm in Pennsylvania is where I live and there are a lot of Amish. We have Amish communities around the Grove City. But they don't live in total self-sufficiency. They live in kind of low standards of living in a material sense relative to us. But they still have a division. Some of them are farmers, some are cobblers, some put up houses, right? They're still engaged in at least a rudimentary division of labor. So now we can ask the question, well, why would that be so? Why would people choose then to come out? What is the principle by which they see that it's to their advantage to come out of self-sufficiency and enter into the division of labor? It's one thing to sort of look at the wonders of modern production and to realize that in self-sufficiency we wouldn't be very well off. But it's a little bit different to see why that's so, right? What exactly is it that drives all of the development of the division of labor? And here we just have to recognize the principle that the natural world is diverse in its productivity. The human beings are diverse in their productivity. We're not the anteep, right? We're not interchangeable cogs that can simply be interchanged in different production processes and leave production the same. If you take Tim Cook and take him out and make him a carpenter and take Frank Weintraub, a local carpenter at Grove City, and put him as the head of Apple, you won't get the same result in either production process. The same is true, by the way, of all resources, right? Landsites are this way. They're not equally productive in every endeavor. Eastern Nebraska is really good for growing corn, but it makes a lousy seaport. They haven't figured that out yet, I suppose. I mean, there's an underground sea, but I haven't made use of that yet, I guess. But anyway, so we find that as well, right? There's this diversity of the productive capacity of different persons, different temperaments, different personalities, different skills, different upbringing, and so on and so forth that create this. And because of this, then, there can be differences in the efficiency of different combinations of these resources in different production. And that's what we recognize, right? That we can do something, I could try to make my own automobile from scratch, and self-sufficiency and the cost would be that I couldn't do anything else because I would have to devote myself fully to that endeavor and all my working effort. Or I can have Honda, the Honda Corporation do it. I can have those guys over there do it, those 1,000 guys or 10,000 or however many employees they have, they can do it. And when Honda wants tires produced, they do the same thing, right? They say, hey, look, we could do that ourselves. We could set up a little tire production operation, or we could just buy the tires from Michelin, which is cheaper, right? Which is more efficient for us. So that's the kind of underlying principle that's behind the development of the division of labor. Now, this is the classic pedagogy when discussing the division of labor. We resort to very simple stylistic kinds of illustrations just to see the fundamental principles at stake because they're easier to deal with than complicated, complex situations. So we're gonna go to Robins and Caruso, and Caruso has come into contact with Friday, and so we can have the possibility of a division of labor. But just for a moment for the setup, let's think about Caruso's production schedule here. So what I've put up the chart is a production schedule. C is the gathering of coconuts, and B is the picking of berries. And you'll notice something peculiar about this, or if you study economics, it looks quite normal, but maybe peculiar to non-economists. As you move down the chart, the quantity produced by the application of each additional unit of labor, let's say hour of labor, is diminishing. So Dr. Salerno again talked about marginal utility, the principle of diminishing marginal utility, and Dr. Holtzman. Now we need to talk about the principle of the law of returns or diminishing marginal physical product. So the MPP sub L is the marginal physical product of labor. It's the additional output that Caruso gets by applying one more unit of its labor, let's say an hour of labor. Now why does it diminish? So in other words, if he applies just one unit of labor, one hour of labor, let's say, to coconut gathering, he gets six coconuts. But if he then applies another unit, he only gets five for the second unit. If he applies the third, he only gets four and so on. He applies his first unit to berry picking, he gets two quarts of berries. But once he's done that, when he applies his labor again, he just gets one and a half quarts. And once he's done that, once he applies his labor again, he just gets one quart. Now why does that happen? And the reason this happens, as we mentioned before, is that natural resources are diverse. If natural resources are diverse, then they're going to be more productive coconut gathering areas and less productive. They're going to be berry bushes, they're more lush and easier to pick and so on. They're going to be coconut grows close to his cave and coconut grows far away, where he has transportation costs to get the coconuts far away. So naturally, if he's economizing, what he's interested in doing is producing, he'll apply his first unit of labor to the most productive complementary factor of production. He'll pick up coconuts on the ground nearby. But once he's done that, that's exhausted, right? And now he has to move on to less productive, and so we get the law of returns. And again, economists would insist that this law, like the law of diminishing marginal utility, is universal and applies to all production processes. So again, to switch to a real case, let's say we look at world demand for corn, and we want to bring certain land areas in the world into corn growing. Well, we'd start in, as I suggested already, in eastern Nebraska, because that's where the corn huskers live. These are the jokes. Okay, no, you're just kidding. But okay, so what if world demand exhausts that, exhaust the capacity of eastern Nebraska corn growers? Well, then you're gonna move corn growing to the next most productive, relatively most productive area, right, and so on. So corn can even be grown sometimes in, still in western Pennsylvania, which hasn't really been a corn growing area. Pennsylvania is a dairy state, agriculturally speaking. But it hasn't been a corn growing area for hundreds of years. But if the corn prices are right, the farmers will plant. So that's the idea, right? We get these diminishing rate. We apply our productive effort to the most productive, complementary factors first, and then sequentially to the last. Okay, so now with that set up, we can see Friday compared to Caruso, is less productive in what we call an absolute sense. Or as I've put the word on the slide, proficiency. Caruso is more proficient at both gathering coconuts and picking berries compared to Friday. Now, again, there could be various reasons for this, and we're not gonna go into all the details of this. We just point out, look, people are different. People are different, they live in different areas that have different productive capacities, and so on. And so when they apply their labor to producing, you get differences. And they would look something like this, right? Now I will say, though, in passing that there is, what I put on the PowerPoint slide here is the difficult case. We could imagine an easy case. Again, let me switch back to corn growing. We could imagine the case where we ask the question, should farmers grow in Nebraska? Should they be self-sufficient in corn and oranges? And the farmers in Florida likewise, self-sufficient corn and oranges? And if not, how should they specialize? And it's quite obvious that they should specialize in Nebraska, in corn and Florida in oranges. But that's just because we know right away, without any examination, that oranges are quite the fertile growing area in Florida and it's a really good corn growing area in Nebraska. That each one is proficient in a different thing. But here we have the hard case where Caruso is more proficient in both things. So what do we do about that? Can Caruso enter into a division of labor with Friday? When Friday is a weaker producer of everything, so that's the case we've posed. Now that's where we get to the principle of efficiency. Efficiency tells us the cost of production. And we can calculate it in units of the good here, right? We can calculate what the cost of production is and we'll do a calculation in a minute. But basically, efficiency is found by the trade off ratio as Caruso or Friday moves from producing coconuts to berries or vice versa. If they switch back and forth to producing one or the other, they produce more coconuts than they produce less berries. We can determine how many berries they give up to produce a coconut. So we can calculate their cost of production, their opportunity cost. Okay, so let's go on to do that. And again, we'll make an assumption about their preferences so that we have a firm numeric example. Let's say that Caruso and Friday both choose to allocate just three units of their labor to these two production processes. And they allocate their labor in the same way. Each one of them allocates one unit of labor to coconut gathering and two to berry picking. So their preferences are roughly the same. Ordering of their preferences is roughly the same. The pattern of it is roughly the same. Now, of course, we could have differences in efficiency and trade in the division of labor just on the basis of our preferences being different. That happens in the real world too, right? So I hear that the French really like to drink wine. And they grow really great wine, but there are such gluttons for wine that they want to consume even more than just the French production, maybe, right? So wine could be grown in Spain or in California, and they could drink that wine too, right? So we might be efficient in California, even though we're not sort of in the abstract or technical sense, efficient in wine growing as the French. But anyway, I'm just leaving aside all those nuances. Just taking this, again, straightforward case, right? Okay, so if they allocate, remember again, if they allocate, we'll get these totals. Cruso will pick six berries, excuse me, gather six coconuts, and then he'll pick two quarts, and then he'll use his third unit of later to pick another one and a half. So he gets six coconuts and three and a half quarts of berries. And then Friday, it's five coconuts and one quart of berries. So that's where these numbers come from, six coconuts, three and a half quarts of berries, five coconuts, one quart of berries. That gives the two of them 11 coconuts and four and a half quarts of berries. So that's their group production, if you will. You notice though that the opportunity cost of production is wildly different between the two at that production pattern. Again, to go back to the slide, we're here and here. So notice if Cruso wants to produce more berries, he has to give up six coconuts and he can get one quart. So his cost for producing one more quart of berries is six coconuts. Friday, on the other hand, gives up five coconuts, and his additional production is only one fourth of a quart of berries. So his cost is 20 coconuts per quart of berries, if we standardize the cost, right? So it's clear that Friday is a much higher cost producer of berries. He's inefficient, high cost producer of berries. So we should switch the production in the division of labor. We should switch it from self-sufficiency. Having Cruso produce the berries and Friday, the coconuts. So let's try that and see what happens. We switch Cruso to his three units of labor now goes to only berry picking. He'll get two for the first, one and a half for the second, one for the third, so he gets four and a half quarts of berries. And Friday allocates his three units of labor to coconut gathering. He gets five for the first, four for the second, three for the third, so he gets 12. So now the group gets 12 coconuts and four and a half quarts of berries. So they've raised their physical productivity. That's the basic story of the division of labor, right? That's the logic of the division of labor. We have two producers, they differ in their efficiencies. They specialize in their area of efficiency, and with given inputs, output goes up. So this is just logically what happened. We've now logically demonstrated this principle, right? This is what Mises is talking about when he talks about the greater productivity of the division of, well, that's part of what he's talking about. In the greater productivity of the division of labor. Okay, now let's ask one more question though. Like my example of the corn growing areas, we saw there kind of vaguely that if world demand is really large, we'd have more areas of reduced efficiency brought into corn growing. Then if world demand was pretty small, and let's say Nebraska, eastern Nebraska farmers could satisfy world demand with their own production, then we wouldn't need to bring any additional producers in. So we can ask the same question in Caruso and Friday circumstance. We can ask the question, when will their specialization stop? How far will they specialize? Now, in my example, I've constructed the numbers to coincide with their inability to specialize any further with the actual efficient point of stopping their specialization. That of course wouldn't always be the case. But anyway, we can calculate once we get to this point on their allocation of labor from the chart, we can recalculate the opportunity cost for producing more berries, and we'll see at that point that it's equal. Again, let me pop back. Caruso now is right here, allocating all three of his units of labor to berry picking. If he wants to switch to coconuts, he'd have to give up that unit of berries to get six coconuts. So his cost of producing that unit of berries is six coconuts, as we saw before. Friday's right here, he's producing three coconuts, he's giving up half a quart of berries. If he switches, he'll get three coconuts, get a half a quart of berries. That's six coconuts per quart of berries. So their efficiency at the margin is exactly the same. Again, the realistic example would be if corn growing goes all the way to Western Pennsylvania, then the efficiency of production in Western Pennsylvania would be the same at the margin as the efficiency of the last corn growing area brought in to production in Europe or wherever else, you know, whether other parts of the world, corn is grown. Now, again, we can't go into all the details of this. It raises all sorts of interesting economic puzzles. But let me just, this kind of a quiz question. If Eastern Nebraska farmers are really efficient, if their costs are low, and Western Pennsylvania farmers are inefficient and their costs are really high, and yet they're both in the market together, selling a product at the same price, how can this persist? And the answer for the advanced students already know this, but so I'll give away the answer to the beginners. The answer is land prices are bit up in Nebraska. Investors want to get in on that extra profit, right? And they bit up the assets that can be used to get this greater productivity. They bit up those prices. So that the actual costs, if you include the cost of your assets, is the same across all producers. You get capital gain, but not extra profit from that extra efficiency. Okay, so that, again, is our basic demonstration. So we can summarize now this first step for the talk about the division of labor. So the division of labor, we see increases of productivity. We specialize factors according to efficiency. Then this must be the result. There can be no countercases to this. If we have difference of efficiency, then we specialize, according to that efficiency, we'll get more output for our given inputs, whatever they happen to be. Now, second, in order for people to share and therefore to willingly consent to this division of labor, there must be mutual benefit. And this mutual benefit doesn't come from just producing and having the extra output, it comes from exchanging the output at mutually agreeable rates, right? So the division of labor and trade always go together in the natural order. We're not going to do, we have a big accounting program at Grove City. And we graduate, I don't know, 30 or so accountants every year. And they go to work for a big eight accounting firm and all they do is the books for some, right? They're just doing books and asset valuations for some business. Now, if they couldn't trade those services, would they specialize in that way? No, of course not. They can't live this way in self-sufficiency. They can't live this way just doing books, right? No, they have to trade. Trade is the way in which the greater productivity is obtained by mutual consent of the participants in the division of labor. And so they go hand in hand. We'll mention the implication of this in a minute. So in my example, I just have Caruso trading one quart of his berries for six and a half coconuts and Friday trading six and a half of his coconuts for one quart of Caruso's berries. And they both wind up with half a coconut more than they had in self-sufficiency. And that's why they do it, right? Or at least that's a sufficient reason to explain why they do it. And then the last point here we want to make on this summary chart is that specialization per se doesn't have anything to do with this argument. It's not specialization per se that does anything. If all the land in Nebraska were specialized in oranges and all the land in Florida was specialized in corn, we'd actually get less output than self-sufficiency. So there's no magic in specialization per se. It has to be specialization according to efficiency. This is what a lot of our friends in the broader social sciences don't quite comprehend. They chide economists for, you just want people to specialize. You just want it to be little rabbits on the assembly line or whatever. And that was kind of a strange metaphor. But that's not at all what we're saying, right? What we're saying is that when there are differences of efficiency, specialization will generate this productive gain. Now in the cases where specialization doesn't do this, specialization for example could like on our assembly line personnel. Our assembly line personnel, maybe they get bored on the assembly line during the day. Well, that's an entrepreneurial problem then, right? That's a problem for the entrepreneur to manage his workforce to make sure he's doing something to stimulate their interest or he's getting rid of those workers and he's hiring other workers who are actually able to do their repetitive tasks without injury or inefficiency. So this is just an entrepreneurial issue. It may also be the case of course that specialization improves productivity. That could happen too. A person could do something over and over again and get better at it. That can happen. But that's not really what we're talking about. That again is just a practical question that's managed by people as they see empirically what's happening with their different production processes. It's just an entrepreneurial problem. Okay, so the last thing we want to mention in this Caruso example is the law of association. So you might be wondering or at least students in principles of classes at this point are wondering, what about poor Friday though? I mean, couldn't we find, Friday works out okay with Caruso, maybe just because we have two people. But what about people who really don't produce very much of anything? And don't they get sort of shut out of all this? Can you show logically that there's a room for them in the division of labor as well? Or is it just because, okay, we've got Caruso and Friday, we just have two people on the island. But what if we have a million people or seven billion people? And they have these different productivities and we have really low productivity people. Then is it possible logically to show that there's room for them in the division of labor? Yes, there is. This is called the law of association that demonstrates this. Now there is a caveat. There is a principle in the law of association that we'll talk about. There's a caveat we'll mention at the end. But just to go through the logic, the logic looks like this again for Caruso and Friday. This is all we need to show the logic of the case. If we calculate the opportunity cost of producing berries as we've done already, Caruso trades off coconuts for berries at six to one. So he's efficient relative to Friday because Friday has to sacrifice 20 coconuts per quart of berries. And so that's why we had Caruso specialized in berry picking. But the opportunity cost of producing berries is in terms of coconuts. And therefore, we can also calculate the opportunity cost of producing coconuts in terms of berries. And the opportunity costs of producing these two different goods are just reciprocals of one another. So if Caruso trades off six coconuts for one quart of berries, he has to trade off one quart of berries for six coconuts. He trades off one six of a quart of berries per coconut. But Friday only trades off one 20th of a quart of berries for a coconut. And so he is the more efficient producer of coconuts. Remember, what makes him the efficient producer of coconuts is that he can produce almost no berries. And so when he produces coconuts, he doesn't give up much, right? He doesn't give up partly anything. This is why Tim Cook won't push Frank Weintraub out of his carpentry work. Because Tim Cook has a huge opportunity cost to be a carpenter. Even if he's really good at carpentry work, he's not going to take Frank Weintraub's job. That just won't happen. So yes, even the low productivity persons, even if their proficiency is low, they're efficient somewhere. This is again just a mathematical principle, right? It's a law of reciprocals. We have two numbers, one bigger than the other. If we take the reciprocals, the inequality sign reverses. Yeah, this must be so. Okay, now let's go on to talk the rest of the time about the limits to the division of labor. The division of labor, again, is a central principle, both in society and of economic analysis of society. So it behooves us to think about the limits to the division of labor. Now, the first one that I've listed here, the extent of the market was noticed by Adam Smith. So we already went over this argument, right? If I can't trade with someone, if I'm barred somehow from trading with people, then I'm gonna have to be self-sufficient. I'm not gonna be an accountant for my whole career if I can't trade my accounting services for food and shelter and clothing and so on, right? I'm gonna have to give up specialization. So anything that bars the trading, anything that would interfere, unnatural interference with trading would then actually make us less physically productive because it would force us toward self-sufficiency. So I doubt if the Donald is watching the live stream, but that's our answer to his economic trade policy. So government intervention then, obviously, in all its forms, interfering with trade will actually make us more self-sufficient and therefore less productive. It will suppress this drive we have toward the extension of the division of labor. And then the other limitation that I want to make a few comments about is the extent to saving and investing. This is something Joe Salerno mentioned in his first talk that there's a capital structure in the economy. So we mine iron and produce steel and stamp the steel and defenders and then make cars. So there's this vast capital structure in society and the capital structure is built up through saving and investing and this capital structure, of course, is what provides opportunities for millions and hundreds of millions of people to specialize in an area where they're efficient. It's a development of this increasingly sophisticated set of interwoven production processes that provides room for all of us in the division of labor. Again, we could imagine the case, it's sort of an imaginary construct, but we can imagine quite easily what would happen to our standards of living in the division of labor that we all enjoy if tomorrow when we woke up, the capital structure of the economy had just been blown to smithereens. If we had no capital whatsoever, we'd all resort just to hunting and gathering and primitive farming and so on and most of us would die. So if we run that thought experiment the reverse way, we can see that that pretty well describes history. So we start with these sort of primitive production processes. The human population isn't very big. If pestilence comes and a lot of it dies off, the big swath of the human population dies off and then rebuilds and there's a sort of limitation to how far things can go without saving and investing, without the industrial revolution to put it in historical terms. But once we get that, it seems like, no, the sky's the limit then. It seems like this doesn't seem like there's any particular technological limitation except the one caveat that I do want to mention. Now this one caveat that Mises mentions in developing the Law of Association, remember this is the idea, right? Every person can find a place in the division of labor no matter how extensive it becomes. The one caveat is that the human population must not take up the entire surface area of the planet in productive activity. Or if we colonize other planets, the surface area of those planets. As long as we aren't not at that point, then we can extend the division of labor and the human population can increase. Not only increase, but increase at higher standards of living. Okay, so thankfully we haven't reached that point and this process can go on as far as we can tell indefinitely. Okay, so now let's think about overcoming these limitations. How do we proceed to overcome the limitations? Well, of course, the main thing is to eliminate all government intervention in trade. The state can intervene in all sorts of ways that force people not to trade, to prevent them from trading. This means, of course, that there are efficiency differences that they can't take advantage of. So we're left with inefficient production. We're left with too much auto production in the US, let's say, if their protection is tariffs on imports or other cases, if the French protect their wine industry, then there are these efficiency differences that we can't exploit underpain of the state. The same thing happens when the state subsidizes activity, though. They can forcibly make people trade or use the power of coercion to create artificial differences in value that people will then follow in trade. Like, let's say, well, it's been in the news, let's say NASA. Okay, so they spend, I don't know, how many billions of dollars to put their little probe, send it out to Pluto and 10 years later we get some pictures and some data. Well, okay, you know, if this is an economizing activity, one that adds to the division of labor so that we should have these scientists doing this and we should invest in the propulsion systems and the gizmos that gather the data and so on and so forth, then we have to have a market to indicate this, right? If the government can just extract tax funds from us and then spend them lavishly on, as they wish, on the project, then all we lose all ability to engage in this process of economizing our resources. We're just being forced, in other words, to get something of value that has less value than what we've given up, the set of goods we've given up. So the government is doing this constantly and so if we can eliminate, or to the extent that we can eliminate this activity, we would unleash a greater degree of the division of labor. We also want to eliminate state decision-making over resources. Again, Tim Cook, we want this kind of entrepreneurial decision-making of Tim Cook and other great entrepreneurs who are producing these products and suffering the losses when they do poorly, right? They're decapitalized and the capital funding goes to others who are doing better as opposed to bureaucrats. So we don't want the state, right? We should remove, in other words, decision-making from state bureaucrats. We should get rid of public education and public transport and so on and so forth, all these areas of resource use, road building and what have you, where the government is, bureaucrats are simply sitting again, spending funds that they've coerced from the taxpayers on projects without regard to the economizing nature of this. Sure, this creates jobs, but as the law of association indicates, we don't need jobs, we've got plenty of jobs. We need efficient jobs and the government forces us to replace efficient jobs within efficient jobs and this is not a net gain for the social order. So this process is underway and then I've also just noted here that the process of the market is a self-selection process where we're self-selecting into these different occupations by mutual consent of the people that we're interacting with. So we have entrepreneurs and they wanna hire whatever it might be, say, mechanical engineers to design things and then there are people who are trained to do this task and they get together, they have a job opening and they get together and they hire this particular group of people because they find that the terms are mutually agreeable. So there's a self-selection, so I wouldn't be hired as a mechanical engineer and even if I wanted to be, that was my dream, that would not, I wouldn't be self-selected into this. No entrepreneur would seek me out to do this job. So there is this, again, this is a better than, what I'm saying is it's better than having like a closed process of the state where jobs are assigned by political procedures or what have you, we wanna eliminate that sort of thing and have an open self-selection process like we have on the market. And then finally on this point, I put this idea of the natural barriers. What about the natural barriers? So again, when I learned economics as a neoclassical economist, most of my neoclassical colleagues would go along pretty much with what we've done. They recognize the division of labor and comparative vantage and all that stuff and how the state can interfere with this so they wouldn't be really against, in principle at least, the things that I've pointed out. But oftentimes they get down to this last point and they do have a sharp disagreement. By natural barriers, what I have in mind are things like culture. I hate to keep bringing up the Amish, but the Amish, you know, should we, should we propagandize the Amish constantly to try to get them to be hip like the rest of us and like higher material standards of living? I mean, what's wrong with these people? Should we, you know, is that the, is that a necessary part of the process of developing the division of labor? That they're being laggards and, you know, they're not really doing their part for society and so on. And, you know, surprisingly there are models by the neoclassical economists that would say, yes, yes they are. Yes, they should sort of be dragooned into the normal, you know, process of the rest of us, even though they have these cultural, you know, reasons and religious reasons or maybe it's just preferences that some people have are doing things differently that don't kind of integrate well into the norm. So we're not saying that, right? We're not saying that we, Austrians would not say that we have to dragoon everybody into the division of labor in some fashion, but simply that people are again self-selecting. They're free to come in and out, the division of labor as it's mutually advantageous for them to do. And then also I'll mention just quickly the object so culture and preferences and so on, we might call subjective natural barriers and their objective natural barriers. And again, my neoclassical friends are eager to get rid of these. I'm thinking of things like transportation costs or transaction costs. You know, those are evil things that have to be gotten rid of. You know, it's terrible that the government maybe can lower transportation costs for ocean-going vessels or whatever. So we can get our cars cheaper from overseas or whatever the particular case might be. But again, the Austrians would say no, no, no, that's, you know, if they're kind of natural obstacles to the division of labor, that's just part of the world as it is, right? That's just something we have to deal with in the world. Again, there might be people who aren't so bright. There might be mountains that we have to go over and so on to deliver things and what have you. But these are just features of the world that we grapple with and not things to be, so to speak, done away with or not special problems, if you will, to be done away with. And then finally on my last slide, let me conclude by just outlying real briefly the process of saving and investing in capital accumulation. Again, you'll hear more about this in talks later this week. And many of you have already been exposed to this, right? But economists like to lay out the logical structure of capital accumulation, of this process of saving and investing and building up the capital structure so that we have more and more tailored occupations for more and more people, producing at higher and higher standards of living, you know, the progress that we've seen since the Industrial Revolution. Anyway, it depends in part upon our preferences, what we call in economics, our time preferences. The extent to which we save and invest is determined by our preference for present satisfaction relative to future satisfaction. So if we don't have a really strong urge for present gratification, if we're willing to put off present satisfactions for greater future satisfactions, then people like that will save and invest more. You've probably seen the statistics on the Chinese while Americans save maybe 5% of their incomes, the Chinese save, well, the figures vary, but it's maybe up to 50% of their incomes. And so we wonder why their economy grows at 8% or 10% per year and ours grows at one or 2%. That's part of the reason, not the complete answer, but it's part of the reason. So there's more saving and investing, the building up of this capital structure and for our purposes in the Division of Labor, again, the point that we wanna see about the capital structure is the capital structure develops further and further nuances of productive activity for people to engage in and therefore to find their niche in the social order, right? To find a place in the social order. Now, the famous illustration of this is exactly how much music would Mozart have composed had he lived in 1000 A.D. in Asia. You know, if he's spending 16 hours a day grubbing in the field or hunting game in the forest or whatever, like everybody else, right? Everybody's doing this. Okay, so we lose that, that's the point. We gain that only by developing the Division of Labor, which develops not only higher standards of living so that Mozart can have what we might call leisure, but that he can actually be productive and earn income in composing or performing or things that couldn't have been done by people, at least except for, again, the political class who had tax money, you could hire people like this, but it couldn't be done in the natural society for thousands of years. This is also the place, the building up of the capital structure is also the place where new technology gets integrated into production, again, raising our productivity and providing new opportunities for people of diverse interests and abilities to find their place in the Division of Labor. And then this generates our higher and growing standards of living. Okay, at this point, we've used our 45 minutes, so I'll stop here. Thank you.