 We'll close that. All right, here is F.A. Hayek on why intellectuals dislike capitalism, which on which he wrote a famous essay. So this is a very brief exposition of an essay that he wrote about this and has to do with a lot of the way he thinks about the world, which I disagree with. Whoops. And there's William Buckley. All right, here we go. Mr. Hayek, you wrote a very famous essay on the intellectuals and socialism in which you attempt, I think, quite successfully to show why socialism is so new by for the intellectuals. Can you guys hear well? What is that thesis of yours and do you still defend it? You know, certainly, yes, it's a very interesting story intellectually, all of the dominant ideas which governs thinking since the 18th century is the idea that we can make everything to our pleasure, that we can design social institutions in their working. So what he's saying is that we have this attitude that we can design things, that we can make things be the way we want them. I've increased the volume, hopefully you'll notice that in a second, that we can design them, that it's all based on design and it's smart people, this kicks up to like, can design the values necessary for everybody else. That is basically mistaken. Social institutions have never been designed and do much more than we know, they have grown up by process of selection of the successful. But that's interesting too, because I disagree with that. Social institutions have never been designed, they go through in a sense a process of evolution where they're selected by the fact that they're successful. Now really, I mean, sorry, I mean it is Hayek after all, but really, communism, which was a social institution when it ruled over the Soviet Union and in Mao's China, was not selected because it was successful, you know, selection works in evolution based on what is successful, what works, what enhances life, and the communism was the opposite and yet it won. Or take a flip side to that, the American Revolution was not selected, it wasn't a slow evolution and then we came to the American Revolution and there's a sense in which the ideas behind the American Revolution were small evolution, yes. But the actual institutions that the founding fathers created, they literally created them from scratch. It wasn't like they took the British system, it just replaced the queen with the president, but they thought it out. They designed checks and balances, they designed a system with a goal, it was designed. Even though yes, there's a sense in which the ideas behind them evolve, but not the institutions. Now, it's true in places like Great Britain, yes, things evolve slowly, but that's not all social, all human institutions, not all social institutions. Some are designed, some are designed well, some are designed poorly, but Hayek presents the idea of design and I think as a consequence he even misses out on the role of an entrepreneur in an important way. And again, it's sad to see people missing, missing what's essential. It's not design versus spontaneous, which is free markets. But even in the spontaneous there are elements of design. The entrepreneurs are designing, the entrepreneurs are working hard to design, they're creating. So it's the allowing the entrepreneurs to be spontaneous and the market to respond spontaneously which results in capitalism. But you have to design the system, the American institutions were designed and they led to capitalism. And you have to design particular companies. The iPhone was designed, it didn't just evolve, suddenly you could say the iPhone evolved from the iPod, but the iPod was designed. Frequently known why it was successful, that applies to the market. The market is, I was going to say most ingenious, but ingenious without having been designed. See he's so opposed to design, because he thinks that if he says design that and applies for central planning. This command which enables us to utilize knowledge which is distributed among 100,000 of people. That's all true. The expectation to thousands of circumstances which nobody ever can know as a whole and whether prices formed on the market tell the individual what to do and what not to do in the social interest. Now in order to understand this you have to know economics. The naive person who imagines all the distribution of income is determined by some more deliberately than actually. It seems that if this is the responsibility of a particular guide, this is evidently done very unjustly. The fact is it's not being done unjustly because we achieve all that we do achieve by having come to agree to play a sort of game. So it's all a game? Sure. The game of the market as I like it to call it, in which because we are utilizing more information, more facts than anybody knows, the outcome for a particular individual is necessarily unpredictable. Now an outcome which is unpredictable and undesigned by anybody cannot be just. Wow. Now you see the moral leap there? So the outcome is unpredictable because it depends on the market and the market it's not designed, it doesn't follow one path, it could follow any number of paths. Because it's unpredictable it's almost random, it's an issue of chance and as such it cannot be just. Now it's not unjust but it cannot be just. Justice doesn't apply to it. Let me say that again. Outcomes of the marketplace. Justice does not apply to them because they are not indeed determined by individuals. They're determined by this game that we cannot predict. Now venture capitalists should try to. Some people seem to be pretty good at it at predicting and some companies seem to be really good at predicting what consumers want or teaching them what they want. Here it's not even that the market is priming. It's that the market is spontaneous that the one thing that they don't get about the market is at the end of the day the market is just individuals thinking, designing, planning, creating, making, building and that of course there is a logic to it but the market is not random. It is not random that the iPhone was a success. It is not. It is a product of planning, thinking, designing, brilliant marketing, brilliant management, brilliant production, brilliant supply chain, all products of a brilliant marketing, brilliant management team at Apple. It's not arbitrary. It's not random. Whether you succeed or not in the marketplace is not random. Certainly you can take action that leads to you succeeding and certainly you can take action that leads to you failing. I can tell you exactly what will lead to your failure and I can tell you what kind of behavior will lead to your success in this supposed market, random marketplace. So no, no, no, no, no. The great tragedy, the great tragedy of the 20th century, the greatest tragedy maybe of the 20th century certainly intellectually is that brilliant economists like Hayek did not know we're not good at philosophy and didn't really even understand what they were talking about when it came to markets themselves. And didn't tragically take Iron Man seriously. If Hayek and Mises and all these guys had taken Iron Man seriously, Milton Friedman, we would be 50 years ahead in terms of changing the world. Maybe 100 years ahead in terms of changing the world. But the great intellectuals of the 20th century didn't, even the free market, great free market intellectuals of the 20th century. They didn't take Iron Man seriously, they didn't take a philosophy seriously, they didn't take ideas seriously. And as a consequence, they floundered. This is not an explanation of anything, I'm sorry, Frederick Hayek. It's not. Markets are not a primary, they're not spontaneous, not completely. There's elements that are spontaneous, there are elements that are unpredictable and they're partially predictable and designed and planned and all of that. It's as little as the outcome of a game of time, a game of chance, a game of chance. But people think... So markets are like a game of chance. And people imagine, oh, it should be possible to design all this, to arrange this, accept the government to do this in a manner that the distribution is just. So if the government does it, then we can get justice. But if the market does it, justice is irrelevant. Morality is irrelevant in markets. That's why we're losing, guys. If you divorce morality from markets, we're never going to win. Now that is literally impossible because it would require that all this widely dispersed information about particular facts and particular circumstances and particular gifts can be used and controlled by a central authority. All right. It's sad. It really is sad because the knowledge was there, the knowledge is there. And to this day, so many of my free market friends ignore the philosophical knowledge that is truly required to change the world, truly required to convince people about the efficacy of capitalism, about the morality of capitalism, about the justice of capitalism. Now compare this to Ayn Rand's lead essay in capitalism not known ideal, where she talks about capitalism as the system of justice, capitalism as justice. It's so different. It's so much more fundamental, so much more essential, so much more convincing, so much truer, but it's not so much convincing because this is the problem with Ayn Rand. It's hard because it disrupts, it's different, it's challenging. It doesn't fit into the usual boxes that we have. It doesn't fit into the usual modes of thinking that we have. It's so much easier to believe Hayek and to believe Mackie than it is to understand and to grasp and to comprehend Ayn Rand. Ayn Rand requires you to actually think for yourself in an original way, to challenge convention, to challenge Christianity, to challenge altruism, to challenge Platonism, to challenge Kant, to challenge almost all the intellectuals since Greece. I mean, Hayek was very clear there that justice cannot be applied to the outcomes of markets. Justice is an alter, very clear, and you can go read his essay. You can go read his essay. What we need today, what I call the new intellectual, would be any man or woman who is willing to think. Meaning, any man or woman who knows that man's life must be guided by reason, by the intellect, not by feelings, wishes, wins, or mystic revelations. Any man or woman who values his life and who does not want to give in to today's cult of despair, cynicism, and impotence, and does not intend to give up the world to the dark ages and to the role of the collectivist broods. All right, before we go on, reminder, please like the show. We've got 163 live listeners right now, 30 likes. That should be at least 100. I figure at least 100 of you actually like the show. Maybe like 60 of the Matthews out there who hate it, but at least the people who are liking it, you know, I want to see a thumbs up. There you go. Start liking it. I want to see that go to 100. All it takes is a click of a thing, whether you're looking at this. And you know the likes matter. It's not an issue of my ego. It's an issue of the algorithm. The more you like something, the more the algorithm likes it. So you know, and if you don't like the show, give it a thumbs down. You won't see your actual views being reflected in the likes. 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