 Now, Wilson, Waldo, woke CEOs in ways forward. When we look around at the level of economic literacy, it's easy to get depressed, honestly. How many of you feel like we're losing? Are wasting our time? Or have a sense of failure? I don't blame you if you do. I watch the media. I look at social media. I grade my students papers. They're understanding the most basic economic concepts. It's very poor. Price increases, which is just labeled as price gouging, is the result of greed and contrived shortages. Businesses grow at the expense of the poor. Government enterprises are better because they do not pursue profit. And it's Putin's fault. Sometimes I feel I'm not very successful in teaching economics. I know I'm not alone. How I'll do your students, your friends, your neighbors, and your relatives understand economic topics such as economic incentives, rent control, inflation, or even the minimum wage. When Frank Knight gave the presidential address to the American Economic Association back in 1950, did you know that he had the same misgivings? He wondered whether his job as an economist was a job or a racket. He stated the critics, aggressors, have more or less explicitly advocated the abolition of economics principles and its replacements by almost anything or everything else other than principles. Maybe we should turn the clock back a little further. We can look at Edwin Cannon, professor of political economy at the University of London. On May 25, 1933, Cannon gave pointed criticisms in his presidential address before the Royal Economic Society. He said that because of economists, economics was no longer accessible to the public. Economists had become too far removed from the average person. He stated, theory has never made much way among the general public, simple as it is, because instead of being expressed in plain language understood by the people, it has been treated as a classroom plaything to be illustrated by lines and curves on a blackboard, which, like the stone and wooden idols of a more degraded religions, come to be revered for themselves rather than for the things they were originally intended only to represent. Economic illiteracy is not a new problem. However, it certainly has not gone away either. Have the experts at least focused on issues important to the general public? What would your neighbors say if you handed them a copy of the latest mainstream economics journal? I took a look at the American Economic Review, the supposed top journal, January 2022, and here are the first four titles that came from that. Consumption responds to credit expansions, evidence from experimental assignment of 45,307 credit lines. Information networks and collective action, evidence from the women's temperance crusade. That's 100 years ago! Measuring the welfare effects of shame and pride. Imperfect competition compensating differentials and rent sharing in the US labor market. Does any of this cutting-edge research help us to understand economics? Do any of these conclusions help society? Now, just by comparison, I ran a JSTOR search of the American Economic Review just between, say, 1919 and 1923, and the first four articles that popped up were these. Theory of production, the institution's approach to economic theory, the minimum wage and efficiency, the nature of our economic problem. Maybe we should focus less on the conclusions, and maybe it's more about the technique, right? Maybe that's what it's all about. So, like natural scientists, the methodology is to gather data sets, create testable models, and then check for significant results. However, what is produced are merely historical relationships in points of time. Outside of that time and place, they mean very little. In other words, these articles are about statistically significant relationships at moments in time and no more. The German historical school appears to have won. We have mountains of data and empirical relationships, but little understanding of how the economy fits together. Now, if the highly educated at the top universities are this way, then what's being communicated by these experts to the regular person? Here's an example. Now, there was an article that just came out recently published by the associate dean and full professor of finance at North Carolina State University. It begins. In a healthy economy, prices tend to go up. A process called inflation. While you might not like that as a consumer, moderate price growth is a sign of a healthy growing economy. January 18th of this year. He then gives the tired old Keynesian demand side reasoning as to why some inflation is good, but it was also quick to point out that too little inflation is bad and deflation right out. The economics profession in general has been failing at its job to educate the general public on basic economic principles. And it has been doing this, failing for at least a century. The consequences of this failure are visibly manifested in the form of wokeism, the adoption of diversity, equity, inclusion, DEI. And then if you add social justice to us and arrange the letters a little bit, you get Jedi. But that's bad because that also promotes the patriarchy. No, it's in an article. A published article. Look it up, Sean. Then they add what's referred to as environmental, social, and governance values. And I'm putting quotes around values, right? Because it's sarcasm. So if you see a sign that says fresh fish, it's not really fresh. And you add it all together and what do you get? You get the rejection of the free market. Are you depressed yet? Isn't this the Rothbard Memorial Lecture? Wasn't Rothbard known as being the happy warrior? Would he say we should tuck tail and run? Of course not. We have our work cut out for us. But before we can look at solutions, we need to understand not just where we are, but how we got here. So let's look at what is motivating our zeitgeist, the spirit of our age. So Woodrow Wilson. Woodrow Wilson typifies the progressives. Wilson believed that an administrative state was better than a representative republic. The state should create bureaus to be run by experts, not by political appointees or popular people who just happen to win an election. These experts would be well trained and above reproach. They would cut through the political infighting and just do the right thing. This is one of Wilson's favorite books. It's called Philip Drew Administrator. Have you guys read that? Is anyone? Yeah, a few of you? Okay. It shows how a competent organizer could simply gather the best minds together, solve the problems of the day, and life would be great. Now one problem, one of many with Wilson's administrative state, is that the experts are never value neutral. As Dwight Waldo, you're like, is this about, where is Waldo? No. Dwight Waldo. As he argued in his 1948 book, The Administrative State, the administrative experts would always have their own normative values and they would apply these values into their analyses. Waldo took the progressive vision a step further and argued that not only is it impossible for the experts to be value neutral, but he also argued that the experts should never be value neutral. They are the experts. They have a superior knowledge of all the issues involved. The experts alone are in the best position to weigh the competing values and decide which course of action is best. Arising from the progressive movement is not only the idea that the administrative state should run society through bureaucracies full of competent experts, but that it also should do so because the experts are better at making normative decisions. The argument is, for example, that Dr. Fauci has superior knowledge of medicine than the general public, but through his expertise, his ability to make normative judgments is also superior to the general public. It's a blend of meritocracy and technocracy. So why didn't this happen in 1948? The short answer is that the public and the businesses were simply not ready for it. The Allies had just fought a war against national socialism where the heroic goal was to uphold individual liberty. The Cold War was portrayed as a conflict against authoritarian dictatorship. Strategically, what was required at the time is now called the long march through the institutions, the gradual takeover and conversion of society's fundamental foundations. Now let's introduce a new player into our orchestra. Vladimir Lenin. Lenin argued that capital concentrates capital. Capitalism evolved from old capitalism where workers owned the means of production into new capitalism where publicly traded companies owned the means of production. Under new capitalism, the tools are owned by shareholders, that is, the capitalists. Over time, the large companies would merge into cartels and monopolies. These industries, these industrial monopolies, would then be controlled by banks, financial capitalism, which too would then cartelize. And at the top of the system, pulling the strings, what he called the rentiers. Now who are the rentiers, right? These are the guys sitting in their big overstuffed chair and their seagars and their cognac and they're just shuffling paper around, not doing the real work. Lenin argued when capitalism reaches this stage, it's ripe for communism. All the means of production are developed and concentrated. All that's needed is for the workers to take over by pruning the rentiers. Or take them outside and shoot them in the head. The movement, after 1948, modified Lenin's final step. And they asked, what if instead of just eliminating the rentiers, what if we could turn them? Wouldn't they make powerful allies? And this reminds me of Empire Strikes Back, with Darth Vader. And he's talking to the emperor and he says, if young Skywalker could be turned, he could become a powerful ally. And the emperor's like, yes, Lord Vader, yes. This movement has gone by many names, mechanical Keynesianism, postmodernism, critical theory in its offspring, CRT, queer theory, postcolonial theory in the many different fill-in-the-blank studies. Regardless of its name, the scheme is always the same. A top-down authoritarian, constructivistic, rationalist solution. It is the opposite of a spontaneous order. The children of the progressive movement have no faith in a market order and cannot conceptualize the market as a process. Instead, they wish to impose on society their values of diversity, equity, inclusion, social justice, and environmental, social, and governance values. Altogether, we can label this philosophy as wokeness. Today, this wokeness philosophy manifests itself under the guise of the great reset. A prominent example of this philosophy taking root is found in the action plan of the World Economic Forum, which enlists the graduates from the elite schools. Many who now run the big corporations to adopt these values and implement social chains through informal, cooperative agreements between governments and big corporations. They are co-opting Lenin's rentiers to their side. Now, there's a powerful incentive for the woke to enlist the help of the elite, but why would the leaders of industry buy into it? The benign explanation may simply be that these CEOs share the same values of DEI and ESG. The founders and CEOs of Ben and Jerry's, REI, Toms, and so forth genuinely believe in the woke zeitgeist. They're proudly up front about it and promote these values through their companies' activities. Both consumers and investors are aware of these corporate values and make their decisions accordingly. And there's nothing wrong with having these values or using them as a basis of business decisions. For a counter example, John Mackey and Whole Foods. Mackey founded Whole Foods to bring healthy food to people without the greed and selfishness and exploitation he thought capitalism was founded on. Of course, Mackey is the exception to the woke CEO who rejects free markets. The typical woke CEO uses non-traditional stakeholder positions to promote DEI and ESG values and oppose the free market. Another reason why CEOs might push woke values, even if they personally don't share these values, is that they believe their customers hold these values. Thus, to cater to the desires of consumers, the CEOs implement DEI and ESG aligned policies. Or, moving a little bit further afield, let's consider this alternative. While the CEO and supporting management team may not support woke values and do not believe that their customers are particularly woke either, they may conclude that the negative attention woke is simply too expensive. It's simply easier to go along with the woke mob than it is to stand and fight against the cancel culture. Now if the CEOs went no further than simply catering to the different stakeholder groups, which includes the woke mob, then the market would reveal how successful their strategy is. If the community's preferences were such that they patronized woke companies, more than non-woke companies, then the market would reward the woke over the non-woke. If not, then the non-woke would outstrip the woke businesses. Now the evidence suggests that social responsible index funds underperform relative to the general market. Now, if in general, woke companies underperform relative to the market, then why do corporate boards put up with CEOs implementing woke policies? Now while the cases outlined above certainly exist, I contend that there is a deeper, greedier reason as to why CEOs and corporate boards are willing to go along with and promote woke policies. It's quite simply that they personally benefit from it. Now, I wrote a full paper on this and this section here on the profit mechanism, I'm going to skip through kind of quickly because of who you are, you know this, but just to show you where I'm coming from. To explain my contention, we're going to take a few steps back and examine what markets actually do and how markets work. A foundational point that we must begin with is this, all value is subjective. You're like, surprise, no. All value is subjective. A double coincidence of wants must exist for any trade to occur and all trades are therefore win-win. In a world of barter, only direct exchange occurs. Economic calculation is the direct comparison of the two goods to be traded. Where there is intimate knowledge about others, then the decision maker can do a fair job of making choices for others. For example, when parents select meals for their children, they tend to make good choices. It's obviously not perfect as any parent can attest, but more often than not, the parent's selection for the child is acceptable. Unfortunately, most interpersonal relationships do not have this level of familiarity, which makes direct economic calculation impossible even to approximate. The conclusion is that any system of barter is relatively small and poor. Fortunately, we do not live in a barter's system. Today, we deal with strangers and integrate our wants and desires with the larger group in what Hayek called the extended order. The extended order is a set of rules that allows people to safely interact with strangers so that they can mutually benefit. We are familiar with this extended order because it is most commonly manifesting itself through the market. The market system has evolved to reduce transaction costs by using a system of indirect exchange, one that uses money. Money is a medium of exchange connecting one person's production with everyone else's production, and transaction costs are reduced when we switch from finding people who will trade what we want for what we have to finding people who will trade their goods for money. When an economy switches from a barter economy to a money economy, the problem of economic calculation also shifts. No longer does a person directly compare the value of one good with another, instead the person compares the value of the item with the value of money. With this shift, we switch from economic calculation to monetary calculation. Every time a manager looks at profits and losses, he's performing monetary calculation. The limitation of monetary calculation stems from the fact that each person values money differently. There is no objective value, even for the same dollar. It is this difference in valuation that prevents us from concluding that markets allocate resources to their highest valued use. The implication is that monetary calculation is an imperfect substitute for economic calculation. However, despite this difference, Mises argues that monetary calculation fulfills all the requirements of economic calculation. Thus, while not a perfect substitute for economic calculation, monetary calculation is an adequate proxy. The market is a system where not only is every dollar a vote, but this system shows which decisions are socially beneficial and which are not. The profit mechanism, albeit an imperfect tool, allows entrepreneurs to make decisions that incorporate the subjective values of traditional stakeholders, the owners, the suppliers, the employees, and the investors. The subjective valuations of consumers are reflected in the output prices. The subjective valuations of the suppliers are reflected in the input prices. The subjective valuations of the employees are reflected in the wages. The subjective valuations of the investors are reflected in the company's share price or equity valuation. Economic profits demonstrate the extent to which the entrepreneur has aligned the traditional stakeholders' subjective valuations. Now, the profit and loss system is a continuous feedback mechanism. There's going to be some error. That is, a deviation from the market equilibrium has seen through the lens of monetary calculation. The entrepreneur who is closest to the right answer, in other words, the one with the least error, gets the largest profit. Entrepreneurs achieve profits by increasing revenue, decreasing costs, or through a combination of the two. To grow revenue, a company must offer value to its customers in excess of what the customer gives up. Thus, in any voluntary transaction, each side is made better off both psychologically and materially. So in summary, the profit and loss system continuously guides entrepreneurs toward solving the problem of allocating resources in socially beneficial ways. Without the profit and loss system, there is no guide as to what could constitute a good decision. As businesses move away from strictly following monetary profit and loss to ignoring profit and losses, higher degrees of inefficiency emerge. In 1968, Harvey Liebenstein attempted to make room for entrepreneurship in the model of perfect competition. Ex inefficiency is where a firm lacks the incentives to control costs. The more ex inefficiency there is, the looser the cost controls. For example, nonprofit institutions need their revenues to exceed costs, but they are not beholden to shareholders. They can deliver their goods and services less efficiently. Without the focus of pursuing profits, there is less need to pinch every penny or to make every effort to please the customer. The profit and loss system places a tight profit leash upon the for-profit decision makers. I love that picture. This leash is held by the traditional stakeholders, customers, suppliers, employees, and investors. The greater the ex inefficiency, the smaller the need to make profit, the looser the leash that binds the decision makers. Now, I'm going to say some startling things. A publicly traded corporation is not owned by CEOs. You know that the company is not the CEO's personal property to do with as they please. CEOs are employees, agents who are hired to manage the day-to-day affairs of the company on behalf of the shareholders, the principals. The principal agent problem applied to CEOs is not a new discovery on my part. I wish, right? Nobel prize right there. In fact, there's extensive research on how CEOs, if left unchecked, will use company resources for their own benefit and, of course, how to prevent these tendencies. They have big CEOs and other decision makers have big incentives to use company funds for their own benefit, such as having the big office, the big mahogany desk, and using private jets to fly across the country. There are numerous examples of CEOs abusing their discretion. The company's elite decision makers would like to go to the big Hollywood gallows. They would like to hobnob and fraternize with the famous celebrities. They would like to see themselves, the media portrayed as heroes who, quote, give back to the community. Now, remember that businessmen are the most typical villain in the Hollywood stories. Now, these activities are expensive and cannot be done on the company dime, unless it can be cloaked as a legitimate expense. This abuse of the CEO's discretion is checked by profit and loss accounting. This profit leash constrains the CEO's ability to obtain perquisites or perks. Wokeism provides the CEO, the management team, the board of directors an excuse to loosen the profit leash that constrains them. The Gala Dinner was sponsored to support the environment. The attendance at the Hollywood Awards night was to promote sustainability. The donations to the city's youth centers were to support community stakeholders. Suppose that the expected rate of return in a particular industry is 8%. At the end of the year, if the company's rate of return is 3%, significantly less than the targeted 8%, unless there's a good reason the CEO would expect to be quickly fired for such poor performance. Wokeism is that good reason. CEOs and other decision makers have personal incentives to adopt wokeism because they can directly benefit from the perks the policies generate, and wokeism provides cover for any failing to contain cost. You know, we would have made that 8% target, but we had additional non-traditional stakeholder expenditures. Since the values of DEI and ESG are so wide-ranging, nearly any expenditure can be justified. Wokeism becomes the X in efficiency within the corporation because it reduces the incentives to control costs. At its extreme, wokeism severs or breaks the for-profit calculation constraint, the profit leash, and replaces it with the simple goal of breaking even. The end result, or perhaps more accurately at the limit, is that for-profit companies will effectively become non-profit organizations fulfilling the Wilson Waldo organizational vision. In the profit and loss system, consumers, the consumer, is at the heart, at the center. Woke decision making displaces the consumer by setting DEI and ESG values in their place, and it's all being managed by the experts. The ultimate goal of business is to serve customers, to serve strangers. In the end, woke investing cannot survive if it runs contrary to traditional stakeholders. These companies, they have to support their customers, no matter what they're saying, right? When customers stop patronizing companies, no matter how large they once were, they cannot survive. Still, it takes time to fail in the private sector. The larger the company, the more cushion for error there is. This cushion allows the company more time to correct its error and return to serving the customers before it collapses. The time lag between implementation of the poor policies and the firm's ultimate failure creates a series of challenges to connect the dots and make the necessary corrections. So what can we do? It's time to start tying together these two lines of thought, teaching sound economic principles to the general public and reversing corporate wokeism. Now, what if we just copy the strategy but reverse the position, right? For example, if AT&T is implementing DEI and ESG policies, then why not counter it with Patriot Mobile? Well, they call themselves the only Christian conservative wireless provider, and they donate a portion of their proceeds to organizations that fight for the First Amendment, religious freedom, Second Amendment, Sanctity of Life, yada, yada, yada. Now, as was pointed out, there's nothing inherently wrong with applying one's values to companies' decisions as long as it's above board and accrued upon by the honors. Of course, it's better to patronize businesses that align with your values than those who actively undermine them. However, this approach continues to loosen the profit leash, albeit in the opposite political direction. CEOs, management teams, and the board of directors have incentives to loosen the profit leash. They will fight the movement towards a free market because it necessarily means a tightening of the leash. There's a steep hill to climb, but I think we're winning. A simple reality is that we cannot impose liberty and that there is no central plan for freedom. Instead of a single central plan, freedom requires many, many little plans. People have their own knowledge and talents to add to the promotion of liberty. Nevertheless, there are some strategies that are more effective than others. I've been teaching economics at the college level for almost 30 years now. Summer of 1993 was my first class. I've noticed a shift in how students view economics during this time. When I started, the students tended to view economics as a tool to learn so that they could get ahead in their careers. Today, many of my economics and business students distrust markets and think that they are inherently immoral. Since the fall of 2016, I've been giving my students in my 300-level classes, economics classes, a political economy compass quiz. I've observed that initial acceptance of markets has been dropping for each succeeding year. Today's economics and business students are less influenced by arguments of allocative efficiency and are much more concerned with the moral dimension of capitalism. In other words, efficiency arguments, like how markets are amazing because they coordinate toward equilibrium, are less influential than moral arguments, like how markets provide service to strangers. They're coming into my class as anti-free market. We need to meet the students where they are. Now, this past semester, I taught for the first time a business ethics class. I've always been interested in teaching this class, but I simply never had the opportunity. Since this course assignment was the result of a summer scramble, and you guys who are in college know what that is, I was just given the predetermined textbook and the assignments. The textbook was an open-stacked textbook maintained by Rice University. Its sole advantage was that it was free, but this advantage was completely outweighed by its extreme bias, the shading of the facts and outright errors. It is one of the worst textbooks I have ever seen. For example, it refers to the problem of diminishing marginal utility. The textbook states, since each purchase a consumer makes yields less utility than the previous one, the consumer will have to, quote, an ever-increasing amount to reach the same level of satisfaction. The textbook defines this as consumerism. I looked up the lead author of this textbook, and I discovered that he is a business communications professor with a PhD in Religion and Social Ethics and MA in Religious Education, a BA in Political Science and History. It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a dismal science, but it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance. Thank you, Rothbard. Sadly, the other textbooks are not much better. They are chock-full of DEI and ESG. In my experience, business ethics courses are typically taught by lawyers. No lawyer should ever teach another business ethics class again. I have several reasons for this position, but let's focus on the issue of corporate social responsibility. On this issue, lawyers and economists generally take opposing positions. There is a fundamental difference in how lawyers and economists view the nature of corporations. Lawyers look at corporations from a legal point of view. Corporations have the same rights as people. They are legal fictions. They can own, buy, and sell property. They can sue and be sued. And very importantly, corporations can engage in making contracts. Now, if corporations are people and if they have the same rights, duties, and responsibilities as any other person, that is the reason that corporations have the same moral responsibilities as any other person. Thus, corporations have the moral responsibility and duty to be charitable. Thus, corporations have social responsibility. Yes, that is how I view economists. Economists, especially those rooted in methodological individualism, do not describe a corporation as a fictional person. Instead, they define a corporation as a nexus of contracts. A corporation does not have a heart, a mind, or a soul. It is not a real person. And as such, there is no it to be morally responsible. General Motors does not have a heart. General Motors does not have a mind. General Motors does not have a soul. General Motors, not even a real general. Who knew, right? Instead, the employees of the company have contractual and moral obligations. The CEO is hired to do a job, which is to manage the day-to-day operations of the firm in order to increase its value, not to provide jobs, healthcare, or promote woke values. If CEOs engage in activities that reduce the value of the company, then they are not upholding their contractual and moral obligations. Put simply, it is immoral for the CEO to not try to maximize the profit and the firm's equity value. The argument can be extended by pointing out that every dollar spent on woke policies comes at the expense of all other groups. There's an easy analogy for you economists. The incidents of corporate taxes are not borne by the corporation because it's not a real person. It's borne by real people. The key point I'm making is that we need more economists teaching business ethics classes. The result of the irresponsible teaching outlined above has disproportionate impacts on students. Business ethics courses are typically taken early in a business major's program. Early classes have a disproportionate impact on students. Students' minds are mostly set by what they're taught first. So by the time they get to me, I've got an uphill climb to deal with. And usually, these classes are open to more than just business students. In fact, half of my business ethics students were not business majors at all. Arguments about how free markets outperform socialist economies fall in deaf ears when students believe the real argument is about justice, fairness, equity, and morality. If students learn early on that capitalism is immoral, later when these students get to the higher level economics and business classes, their minds are mostly set. If we can show students the moral and economic benefits of capitalism earlier in their coursework, then the downstream benefits will multiply. Now, smaller schools look to fill these classes with experienced professors, but since the credentialing to teach business ethics classes is surprisingly light, these classes are often turned over to lesser experienced teachers and adjuncts. According to the ACBSP, and what's that? That's an accrediting agency for business schools. A simple master's degree, like an MBA, is all that is necessary to be credentialed to teach an introductory course. We cannot shy away from this open field. We must make a point of it to teach these classes ourselves. I believe that the winning side is the one that supports individual liberty and the free market. The woke are in control of academia, the mainstream media, most social media, and many large banks and corporations. Yet for all that money that the woke side has spent, have you noticed that they're not really winning over the average person? They've created fear, but this is temporary. Fear cannot last forever. People get jaded. People get used to bad stuff. I think the pendulum is about to move and we need to be ready. There's no central plan for liberty. Each of us has our own talents. For example, do you remember that Hayek versus Cain's rap battle? It came out in 2010. That's 12 years ago. It was innovative, captivating. I would never have thought of doing anything like that. We need more of that. I don't have all the answers, but I can make some suggestions that might appeal to your talents. At many schools and businesses, the HR department has outsourced much of its training. Every year, University of Mount Olympus employees are told to watch a set of sexual harassment videos and complete course quizzes. There are many businesses who see the need to implement some form of training to protect themselves from future liability suits. Can we all see that training in sexual harassment, diversity, microaggressions, racism, and other DEI areas will first be recommended and then be mandated? Do we all see that coming? This is a market opportunity. We need to provide diversity training, sexual harassment training, and wokeness training from the non-woke perspective. We can make some money doing this. What else? What other low-hanging fruit is there? Local municipalities are hungry for recognition. Why not set up an award and apply the goals that we would like to see, such as opening markets, reducing bureaucracy, and so forth? I'm arguing that we need to develop our own standard certificates, contests, and awards for groups outside of ourselves. I think they're of relatively low cost and they can pay large dividends. Now, what if you don't have that sort of time or talent? Then you can get behind and support those who are already venturing down some of these paths. Personally, I try to support the efforts here at the Mises Institute, like economics for business, economics for beginners, the Mises Graduate Program, the Rothbard Summer Graduate Seminar, and of course, the Mises University, which was highly impactful on me. You can go and look at the 1990 photograph. There's a very young guy there. Additionally, I work with the Foundation for Economic Education, which specifically is now targeting high schoolers, because we want to get to them earlier. We are making a difference. I've been teaching for nearly 30 years and sometimes I get something confirming that we are making a difference. So last April, I received a LinkedIn message from a student I barely remember teaching at Campbell University nearly 20 years ago. This kind of came out of the blue. This is what he said. It's been a long time since I studied with you at Campbell. Hope you're well. Your courses were really a cornerstone of my education and thinking that have served me well throughout my career. I never thought I would have a career that touched econ, but ended up managing a macro hedge fund. Sad to see the world financial system deteriorate as it has, and I'm sure there will be consequences. Most of my colleagues through the years have been Ivy League trained, my wife included. And it's very rare that I meet someone who even knows who Mises or Hayek is. It's rather scary to understand that one, most schools teach more econometric based curriculum and two, few offer a survey of the evolution of economic thought. This last point is most important. The implication being that tens of thousands of graduates each year come out of, come out parroting the narrow views of their professors. I find it rare to have a conversation with someone who can articulate why they feel a certain way about a particular policy or reality. Just wanted to thank you for the perspective you provided me. It has been invaluable. Some guy I don't remember, it changed his perspective. He's talking to all these Ivy Leagues and he's a step ahead. Why? Because he got interested in something that I got interested that was founded and promoted by someone back in 1990. There's some big downstream benefits. We're not alone. I know that I'm not the only one who gets letters like these that said you've done a good job that at some point in the past, you did that. My friend Harry Varizer who hired me to teach my first college level class in the summer of 1993 told me that he taught thousands of students over his career and what happened? We had one of his other students today present. It was great. Absolutely great. And what did he do? He went out there and he's out there apostatizing to everyone else. Teaching does make an impact. Maybe what we're doing is not Knight's racket. Maybe it's not simply howling into the wind. I cannot guarantee that our efforts will succeed. I cannot say with certitude that we will do any better than Knight, Cannon, or Mises. Remember Mises' quote where he laments that he set out to be a reformer but only became the historian of decline? However, I can guarantee that if we do nothing, we will surely lose. I absolutely believe and feel in every fiber of my being that the time to act is now. Thank you. Perfect. Just like my students they applaud, they stand up, they leave. It's great. Minus the applause. They just stand up and leave. Do you think that the financial markets would ultimately discipline the companies that are putting wokeism above profits? Investors still want to allocate capital in a way that they're going to get an adequate return. There is that discipline external to the firm even if the internal profit-making disciplinary kind of mechanism that you're mentioning is degrading. Yes, good. There's a couple of things. Number one, as I mentioned in the talk and it's in the paper, if you're a large corporation no matter how big you are, you eventually have to cater to the customer. General Motors went bankrupt. But it was huge, right? So it's going to take a long time for that discipline to kick in. And secondly, there's been a series of papers that have been going around the last couple of years on the growth of passive investing. And so I think that that passive investing is also providing a delay, a time lag, and a cushion to the discipline that we're hoping would come much faster. Yes. That's a great lecture. Thank you. You had mentioned at one point that you think moral arguments are more powerful and persuasive for your students than arguments of rationality and allocative efficiency. Is that right? I think it's shifted, yeah, over the last 30 years. If one were interested in getting that perspective of moral arguments for the free market, what would you recommend consulting? Okay. I was thinking of that question earlier and I have an answer. So I'm happy that you asked it. So first of all, if you read Rothbard's For A New Liberty or Ethics of Oh, shoot. Ethics of Liberty, yeah, of course. And they're both on sale right now. You can get them. That might be a little too high-brow for at least my students. So Haslett wrote a book on ethics and then Bettina Graves actually condensed it and I think it's called Rules for Living. And there's some very simple things in there that we just simply try to need to communicate. That in this, he says Philip Wicksteed, who is a reverend and an economist, and he said, well, you know, the market is value-neutral. So if you want apples, the market will provide apples. If you want cocaine, it'll provide cocaine, it's value-neutral. And in that sense it's right, but Haslett says, time out. Let's take a step back. Okay. And this points out in this that markets are peaceful. They allow strangers to cooperate with one another to serve their fellow man. It is enriching. And these sorts of arguments I think are where we are right now culturally. That's where the zeitgeist is, the spirit of our age. We have to say, look, we can cooperate with one another because if we look at it, right, we talk about competition all the time. And competition is rival risk and it's fun and that's sports and all that sort of stuff. But every time I make a transaction, every time I buy something that's cooperative behavior. There's a whole lot more cooperation going on in the market than competition. And so we need to start emphasizing cooperation coordination working together to enrich strangers before I can enrich myself. And it's all done peacefully, non-violently non-coercively. And so hitting these sorts of themes that Haslett does in his book I think should really help connect with your students or the group that I'm thinking of, my principal students and such. So I just graduated from a public high school last year and it's music to my ears to hear someone mostly aligned with me here to notice the state. Just confirming your bias. Well, it's good to hear someone noticing the state of my generation how bad things are. You're specifically with the example of their very anti-free market biases from a very young age. Something I've noticed is that my generation does not have too terribly much going for it. All the institutions you mentioned have been marched through and basically torn down from any way that any of you guys would have had it previously. Which brings me to question what do you think are the best things that the Austrians can offer to the newer generations? Well, first of all don't lose hope. Okay, that's really, really important, right? Why is, I like Star Wars. You may have noticed that, right? I have Darth Vader up there. But the episode four is what? A new hope. When you lose hope, all is gone. Mises despairs when he leaves war-torn Europe and he comes to the United States and he says, look, I thought I was going to be a reformer. Okay, but now look at all of the people that he influenced. You don't know downstream who you're going to influence or how. So you have to have that sort of internal optimism like Rothbard had as a happy warrior to just go for it, right? And I think that personally that then can become infectious, contagious even. Take that Fauci, right? And I don't know where, I mean I wish there was a magic bullet, right? We've seen this stuff before. Look at a hundred years ago. We rushed headlong into national and international socialism. Mises looked around and he sees, you know, am I going with the Nazis or am I going with the Reds? I don't want to go with either one of these guys. We want classical liberalism. So what do you do? The best you can with the talents and gifts that you have finding the different opportunities that you can create finding and creating as best you can, right? There's no central plan for freedom and you can't impose a liberty. It doesn't work. We have to make people, you know, one person, it might just be logic. Another person, it might be emotional. Another person, it might be a morality tale. One person might respond to pictures and stories and another person might respond to you know, an article, right? Other people it requires a Keynes Hayek rap video. So I don't know. So do you think that it's wrong for corporations to make charitable donations to organizations, say, non-profit organizations in the arts in their communities? I think that if they are above board and they say, this is who we are and it's spelled out in the charter of the corporation, that that's fine. But if that's not in the fabric of the corporation then they shouldn't be doing that. So John Mackie when he founds Whole Foods and he has his personality infused in that corporation or Ben and Jerry, now they're doing the same thing, albeit from opposite positions I think that it's, that's fine. And there should be a market test, right? One company will survive and one company will fail. If that's not disclosed then yeah, that is tantamount of stealing. Okay, thank you very much. I appreciate it.