 So I'll read a couple of the written questions, then I'll open it up to you guys and girls For questions directly of the faculty you can ask questions about specific Lectures specific points or more general points that were not addressed Okay, dr. Block and dr. Murphy In Bitcoin the regression theorem and the emergence of a new medium exchange by Laura Davidson and Walter Block in the QJ AE You discuss That Bitcoin violates the regression theorem. Can you explain your views? It's your article The answer is no gosh, that's nasty. I don't remember Okay, should I do both Walter's position and then my rebuttal? Oh Okay, so I will try to keep it brief. That's a very technical question So, you know what Walter has his article that you could go look and then if you go to Understanding bitcoin.us. I have a it's a website that I'm this guy Silas Barra and I set up It's like a primer on the economics of Bitcoin. So the issue for Austrian economists is Doesn't violate the regression theorem because certainly prima facia It seems like you know, it wasn't as if people were using Bitcoin first for consumption purposes And then later realized oh wait, this could be used as a medium of exchange once it became popular like Bitcoin from its Inception was supposed to be They would say money, but we you know, we as Austrian accounts would first say medium of exchange So that's the the problem that Mises is quite emphatic in several places that it's inconceivable to imagine something that was Eventually served as a medium of exchange that was not first used used for regular purposes So my particular take on that and then I'll let Walter know that I think it's jogged his memory He knows what we're talking about will my take on that is to say If clearly Bitcoin is already a medium of exchange, right? It's not money by any stretch, but people are accepting bitcoins Giving away valuable goods and services not because they want to directly consume the Bitcoin But because they're gonna trade it away again the future. So that's a medium of exchange. So it is so if you think That violates the regression theorem. Well, then the regression theorem is wrong. All right, that's what I would say So in other words, there's no way I think you can use Mises work to say Bitcoins not really a medium of exchange that I think just it is and then you can either say well It doesn't violate the regression theorem There's various ways to do that that I don't think we need to get into I can talk to you later Or you can say it does but I what I don't think works is to be real Obscited and say no, it's impossible. I don't care what happens I don't care for everyone on earth and the year 2100 uses Bitcoin to buy things I still I'm gonna say it's not money. It can't be it's impossible That that's what some people I'm exaggerating a little bit, but some people come off like saying that I think a it's wrong and B It just makes it look like Mises scenes on the internet are obnoxious. So Now remember what's going on. Thanks Bob Manger said if it's if it's a good That's the key and the Bitcoin was a good. So I don't see how it violates the The regression theorem the regression theorem says it has to come from some sort of good And it coin was a good now. I just wanted to make a more general point There's nothing wrong with criticizing Austrian economics. I've done it myself. I don't believe in everything It's we're not a cult. We are open for new ideas if it's demonstrated that it's wrong I just don't think that this one is a good overturn of Manger Okay question number two in my history class we had to examine various Explanations for why Europe and in particular Britain ended up with exponential growth while much of the rest of the world Stagnated we read Bernhardt's or Pomerance who said that it was coal and colonies Emanuel Wallenstein said it was Trade and the profit motive and Robert Brenner said it was the rise of Of labor I'm not sure. What's the real answer and what's wrong with these explanations? I'll make a few comments on that What one one thing I think is important and Ralph Raco would would would say this if he was here is that the the culture of Ideas is important and a lot of classical liberal ideas did come from Europe the Scottish enlightenment in particular Adam Smith John Locke and so forth and that that was an important reason why capitalism prospered there and much more so and earlier than elsewhere and and also You know if you look through history Europe was a System of hundreds of city-states and so government was extremely decentralized The whole trend over the centuries was more and more centralization, but for quite a long time It was highly centralized. So if you lived in One particular city-state that was oppressive in terms of taxation and and government controls It was very easy to go next door or live somewhere else So there was competition between governments and that moderated the influence of governments in Europe and and I would reckon there's another book that wasn't mentioned that question called how the West grew rich by Nathan wrote bird sale in Rothenburg, I think are the two authors and and it talks about the same question but the one shortcoming of that book Ralph Raco has said is it doesn't touch on the whole idea of ideas a classical liberal ideas and their importance to economic development in Europe another centralization versus decentralization Michael Novak writes about why is North America more economically prosperous than South America and he based on religion which is similar to what Tom just said the name of that Protestantism was more Competitive there were more protestant groups and Catholicism It was just one Catholic church at least in the West So again, we get to the same motif that more competition brings about a better product I'd also add to the references given you know the book by EL Jones called the European miracle It's it's a book I think in the 80s, but it's still valid about the theme of send You know how Europe was highly fragmented politically on the on the question of growth it's To add to Tom's points I'd just add that it's probably because over many many centuries in fact that the institutions needed to you know for To generate savings and to allocate those savings in meaningful ways, you know developed and I think on this There are many Including even hikes works. I think are relevant about the what it takes to evolve institutions over time I'll just add When I teach this I mentioned also the the decentralized and somewhat competitive court system in Competitive court system in Britain that made it difficult for the king to grant the monopoly and have that reliably enforced in The courts because there were two or three different courts that you could take your case to if you wanted to dispute the monopoly, so That meant that people were not willing to Pay the king as much of a kickback for the monopoly because then they weren't real sure if it would hold up in court So it wasn't as valuable. Also, I think that the British were Willing to take in some of the entrepreneurial And business class from other countries when the state more or less kicked them out for example the French government Had succumbed to lobbying from the old textile industry and the innovative Largely Huguenot Protestant Textile manufacturers that were producing this new all cotton cloth the French government So objected to the Huguenots and and oppressed them to the point where many of them left the country and Britain took them in so that allowed for Growth relative to France. There was still a lot of statism, but not to the extent that you saw in some other countries nearby You know good example of the power of ideas here I mentioned the Scottish Enlightenment and Adam Smith is Ludwig Erhardt who was schooled in the Austrian school Who was the economic minister of Germany after World War two? It and the when the Americans took over Germany at the end of World War two Well, the Nazi economic controls were basically the same as the New Deal is very similar in a pervasive price controls So the Americans said well, we kind of like this Nazi economic system We're gonna keep it and Erhardt on a Sunday Went on the radio and in broadcast over the whole country and no more price controls and that was the start of the Germany Economic miracle so it took the created markets. It literally created something out of nothing There was nothing on the shelves anywhere and within a few weeks people were selling everything and all he did was free up markets And the story goes by the way that when the the head of the American occupying forces And when you know barged into Ludwig Erhardt's office and And asked him what are you doing? And he's in there the American guy said My economic advisors tell me this is the wrong thing to do and Erhardt said well My economic advisors tell me the same thing But he but he did it anyway and that that was the German economic miracle I would just add one thing that been as well as the exact opposite Situation where they do have price controls of everything and they've got no toilet paper no bananas, whatever it is they don't have What do you expect to happen with Greece the euro and the European community? Well in my if you have been in my lecture I give you the different scenarios that you can can imagine what what might happen The first one is that finally austerity measures and reforms are undertaken Hopefully this happens The other option is that it breaks apart and the third option is it breaks apart because or Greece for example is not willing to do what it is supposed to do or Germany is not willing to put up any anymore with all the transfers and the last option is of course We go forward to the centralization institutionalization of the transfers from north north to south basically So what will have what will happen is of course here the big question nobody knows But these are the options I And over the past years you have you have seen developments in all these directions with Greece They all almost got got out A few weeks ago we have seen directions towards austerity. It worked in some countries quite well In Spain for example, it worked well in Ireland Even Greece last year there was economic growth and this year it was Expected to have to grow again before the new government arose But apparently the population of Greece was too socialistic to show to to socialists too much accustomed to its welfare state to continue on this path so one estimation forecast would be maybe the population in some of these countries Already too socialist to to maintain the euro together without So the austerity option will not Will not be the final solution Again when I wrote the book I thought we would go to the centralization Then it looked first for some time I was more optimistic, maybe it works austerity and In the long run I However, I don't think the euro will stay together for two reasons one is Well, we have then two options. No, or we go to the austerity euro or balance budgets stability and growths packed reforms competitive markets Restriction of the welfare state I Don't see that in the long run Some populations some voters will accept this in some countries and especially I don't I don't see that the French political elite would accept such Such a European Union where they don't have any control on the on the money supply to finance the expenditures So in the long run, I don't think the French would put up with this the other option Of course is is that we go to an inflationary redistributive transfer union And I don't think either the germs will put up with it in the long run I think for many years to come. Yes, they would but at some point they will not anymore. So then It will break apart. I Just wanted to briefly that in Greece I think you can retire with a full pension and either 50 or 55 and you get two or three months holiday And you know, it's a very big welfare state The issue sometimes arises Decentralization versus centralization and usually the Austrians and libertarians go on decentralization here I think there's an exception because not that I favor the euro, but I favor a centralization Well one money namely the gold gold money whenever we've had a free market it was gold And I think the ideal system would be everyone should be on the gold standard and that would be that So I sort of favor the euro over the drachma and the euro But I don't favor the euro because of all the problems with that which I don't think would be in the case of gold Yeah, just on that point, let me make sure you guys understand the rhetorical jujitsu that the Keynesians are doing with this Guys like Paul Krugman and so they're referring to the euro as like a gold standard, okay? And which is just Orwellian being this unlike the you know the mark or the Frank or whatever Which historically at one point were tied to gold and then it was abandoned the euro was a fiat currency designed by Technocrats from the start certainly were any of you guys consulted with on the design of the euro? Yeah, I wasn't either. All right, so this was mainstream economists It blew up in their face and so yet they're now trying to say yeah See this you know these people who believe in small government screwed up yet again When they had nothing to do with with people like us, you know, this is not the failure of the gold standard This is a technocratic fiat thing the other thing just the rhetoric of the commentary on what's going on with Greece What if I said to my bank, you know, yeah, I took out this mortgage to buy this house and I'm making these payments It's kind of onerous. I think instead of paying back in dollars I'm just gonna switch to Murphy's and just pay back, you know in Murphy's that I can print in my basement I think I would find that more convenient what you're objecting to that. What kind of a jerk are you? You see that's that's kind of what's with the commentary, you know, everyone's like Oh, it would be so easy for Greece if they could just go on their own currency and look at a well Yeah, it once you run up huge debts I mean partly why they were able to borrow so much money at lower interest rates was because they were part of this Responsible currency Union, you know more responsible than their history would suggest and that's why they had those rules for admission Because they didn't want some nation to be able to join Borrow money and so on and then have the whole thing and be at risk and get you know need to be bailed out So they had all those rules about balance budgets, whatever that the Greek System was lying about. I think it was sort of like Everyone knew they were lying, but they were shocked to discover how much they were lying like around 2007. So, okay Just one point on the Greek thing touching a broader point I think it raises the question of how do you get institutions to evolve in certain places? You know a lot of the rhetoric about how the IMF and the EU and everyone's imposing certain, you know ways of Doing things in Greece. It's very reminiscent also of the kind of rhetoric which happens with developing countries where you know The same thing happens IMF gives a loan and then you know some developing country doesn't pay it back And then there's the same thing they try to get them to Have reforms and reduce their Expenditures etc in order to pay the loan back and the same kind of rhetoric happens that outside forces are you know causing mayhem in the country Etc. I mean of course the fundamentals are all Obviously out of whack, but the quite broader question. I think as economists is you know, how do you get these? institutions to evolve institutions of private property of you know Seen public finances, etc. I don't think they maybe they can't be imposed from the outside Wanted to offer a slight very slight disagreement just rhetoric I don't like the word developing countries. It's used by the politically correct types They think that if they call them developing that they will be developing In actual point of fact, some of them are developing some of there are in neutral and some of there are retrogressing So I think a much better word would be underdeveloped or undeveloped instead of developing They're all not developing some are like then our friend Venezuela is going the wrong way. They're not developing. They're undeveloping Can you explain the British East India Company and how they became? So powerful and would this kind of thing happen in an anarchist society? Well, the British use in the company is very unique historical phenomenon because you had a company state and the way that happened was It's a very complicated Evolution of how British basically they went there as merchants. There were many many other foreign merchants Trading with different parts of India the Dutch were there the French were there Etc. They got dragged into politics local politics in India itself So, you know the so for example The East India Company the big trading center happened to be one of the big trading centers happened to be Calcutta In Bengal in the east of India and the governor at that time India was ruled by the the Mughal dynasty. So there was a king in Delhi But his hold was kind of loosening on the different parts of the country And so his governor who was appointed, you know, who he had appointed in in Bengal Was kind of rebelling against him the Brits got involved with that So so it's a it's a very messy very complicated kind of evolution of merchants who gradually became Kind of like a company state. So basically they they were they were given the right to To tax which is to, you know, collect land Land revenue, which was the main form of taxation In the part in all parts of India at that time And then of course, then they were also could police Etc. And one of the first things they did Which they tried to enforce but failed to enforce really was to have a monopoly on Indian You know, they had been granted a monopoly by the British crown But of course that monopoly was always being violated by other private Lots of people would come to work in the east India company But then start trading by themselves and make a lot of money And lots of the reforms in fact of east India company happened because of this sort of corrupt The sort of corruption which occurred due to the violations of the monopoly, but There's really nothing to do with anarchy here Except in a in a pejorative sense in the sense of as far as the institutional conditions which were prevalent when the when east India company came to power They just got pulled into Other politics. So it's not like, you know, they went somewhere and then they just set up a state from start or anything like that In the movie Gandhi, there was a scene where they they were going to the ocean To get salt out of the ocean and and the police were bopping them over the head You've seen that movie Gandhi a very famous movie This is a little later in the 19th century. I guess 1946 or 47 Whereas the east India company was a century before but it's the same idea of monopoly If you try to make salt out of the ocean, it's the monopoly of somebody else and you can be arrested for that okay What good is secession if it invariably involves the seceding state claiming a territorial monopoly Over citizens who do not desire to be under this government Isn't this just a substitution of one illegitimate authority for another? Did we talk about that this week? Is that an austrian economics topic? I guess it was aimed at me That's that's an example of uh, you murray rothbard used to hate questions like that because they because they come from libertarians who are purists Who would so if murray would ever murray? No one is more pure than murray, I guess but but but There are a lot of libertarians who think their main object objective in life Is to prove that they're more pure than anybody else on earth as a libertarian But murray would complain about that. I forget what he would call these people He has kind of a nasty name for maybe walter remembers, but if murray would say something like Andrew Jackson That was a good guy to the extent that he defunded the bank of the united states You know, that's a move in the direction of freedom getting rid of the bank of united states But it didn't create a perfect libertarian utopia. So people would jump all over murray. What do you mean? Andrew Jackson he murdered indians. He did this, you know, he did all these bad things He beat his wife, you know, he used bad language, you know, he drank too much You know, you know didn't go to church all this sort of thing Well, yeah, if but but you know the whole history of classical liberalism though Uh, it tells us that decentralized government is much better than centralized government And so uh, and the whole idea of secession or nullification In federalism in general or decentralized government Is to give people an escape route And and if politicians know you can escape from them, uh, they'll change their behavior Because they do all, you know, elections are all about deciding who gets to plunder us That's what an election is all about. It's an advanced auction on stolen goods As a wise man once said But uh, you know, the ones who are trying to steal more from us If we have an escape route, that's a good thing But you're delusional if you think you're going to escape into utopia or heaven You only escape into heaven, at least some of you anyway when you die I don't know how many, maybe none of them, no one in this room maybe, but uh, but that's it So if you want to pretend that there is some sort of perfect solution to all the world's problems out there Have at it, but that's not, I don't think that's the way Murray Rothbard thought and it's not the way I think either The idea of secession I think is always reasonable because the opposite of secession is slavery If you can't succeed And you're a slave you're The law of free association is violated and the law of free association is a key element of libertarianism Now tom is right. This is an Austrian conference. However, this is sort of a free for all the way I understand it and a lot of times I'm in the whole Answering questions and many of them are on libertarianism not austrianism. So I guess that's okay With regard to secession, I spend my summers in canada and I used to be in canada I worked there at the Fraser Institute for a while now take Quebec. Quebec is thinking of seceding and if Quebec secedes That's great because we're moving toward the libertarian ideal of seven billion countries One for everybody will all be sovereign that that would be Libertarian anarchism So if Quebec secedes then Montreal say wants to secede from Quebec and we say fine And if some neighborhood in Montreal wants to secede from Montreal Fine also and if some block wants to secede from Montreal and some house Wants to secede from that block. In other words, where should where should secession in with the individual? So any one secession will not be perfect as tom is saying There are problems, but if you keep seceding and everyone is a sovereign that would be the ideal On this you could also consult mises wrote on A very had very interesting thoughts on how national self-determination and secession Were very important to the classical liberal tradition I think it's a nation-state and economy Whole I think the first part is devoted to addressing. What is the nation? How do you define a nation? What is this whole principle of? You know self-determination of a group of people who consider themselves a part of a nation and various complications surrounding that So you might find your answer there and also he has a section in omnipotent government I believe later in the book So that might help you clarify some of these questions. These are thorny questions Yeah, just really fast also on that. It's I grew up in upstate new york So I'm you know yanking and all this stuff and I was I came down here once and I used the phrase civil war and someone kind of raised their eyebrow and said No, it's a war between the states and I was asking what's the difference and so that's this issue of secession I think it is Important just to clarify that so it's yes, of course Certainly in general any secession in history is not going to be purely libertarian or you know the the confederate states obviously Slavery is bad. That's unlibertarian. There's all sorts of problems with that. No one is saying we love the confederacy perfectly as it was but the point is if How could you not before that principle or in other words? How could anyone deny that people have the right to leave a situation? They don't want and so just talking to regular americans. It's very rhetorically effective if they Rail against you know the the confederacy and so on say oh, so you're you were against on july 4th You you moan that you know the the colonies seceded from great britain, right? Because there were slaves that you know, so that those kind of issues too And it's again just very also it this distinction between a civil war and secession I think is important because it's showing you could be for freedom without wanting there to be bloodshed that If more people just understood the principle. Yes If these people over there want to leave Who are we to say that they need to stay in this the system? So I think that it just shows that you know, there's peaceful mechanisms of resolutions to social conflict Yeah, lithuania and estonia are probably not uh, perfect societies But I bet the people there are sure are glad they succeeded from the soviet union as far as far as that goes But I had a recent blog post on lou rockwell.com Comparing murray rothbard to abe lincoln's ideas on secession And rothbard in his article the nature of the state praised the Some of the ideas of john c calhoun regarding nullification of unconstitutional federal laws And then he was on to say that if you advocate nullification It follows that you must also advocate secession Of an of an save an entire state and then and then murray said that but calhoun didn't go far enough He should have said well, then then it's even better if you have a city secede from a state And ultimately better yet for an individual to secede from this from everybody as walter just said And I compared that to abe lincoln Who who used the words invasion and bloodshed to describe? What would happen to any state that seceded and and he said because well if you let a state secede then Before you know it a city could secede from a from a state and then you know And that would be anarchy and despotism in his view So these were just two diametrically opposed views of the whole idea of secession abe lincoln saying I will kill you if you try it And murray rothbard the great libertarian of the 20th century is saying this would be great if we all did this So you couldn't find two more polar extremes on that issue than that Let me add a point from spain on secession And practices can be complicated for example in the bus country that want There's one party that wants to succeed They are communists. So let's imagine that they secede Introduce their own government communist government, of course This is bad for entrepreneurs who don't want to live in a communist country Um Nevertheless, I will I would uh, I would be in favor even of this secession because for one only then The basque citizens if if will learn Will see the results of There will be a institutional competition They can see that this will not be a solution for the communism for for the problems And also the other point is of course How can we how could we justify to use the spanish army to To uh, save this entrepreneur who says i'm a basque entrepreneur. Please Defend me against these communists secessionists well As libertarians we cannot say It's justified to use coercion to use the spanish army to to help this poor basque Entrepreneur this can only be done by voluntary means to defend this poor guy Okay, let's take some questions from the audience now Yes, sir right here History lesson, I guess history is on the agenda here Well slavery was brought to the united states by the british by the british and uh, it exists that you can go online And there's a there's a website called slavery in the north and it existed in all the states slaves Built the slave ships in new york harbour boston harbour Providence and newport rhod island that was the epicenter Of the the slave ship building enterprise and slaves were used to build the slave ships that sailed to west africa To kidnap slaves and so and then but slavery Became uneconomical because of the short growing season in the north and the high in the expenses of feeding clothing and housing slaves And so when they ended slavery in the northern states The way they went about it was a graduate. They called it gradual emancipation new york for example In the 1790s long, you know very early on they passed a law that wasn't so nice I think it was 1827 actually I think that was the year They said the children of existing slaves would be free upon reaching a certain age. I think the age was 25 So if you started in the 1820s, I mean by the time you get to the mid 1850s that baby born would be free You know, you know once he becomes age 25 So when the baby became the child grew up and became 24 He would be sold into slavery into west indies or brazil or someplace like that So they ended slavery they phased it out over several decades But they did not free very many slaves in the northern states and there were still slaves in new york city as late as 1853 You know just eight years before the american civil war And and of course slavery existed out of the united states flag from the late 1770s until 1866 So it was protected by the u.s. Constitution for for all those years Compared to it was protected under the confederate constitution for four years So all those people who are tearing down the confederate flags They really ought to be taken down the us flag because slavery existed for many, you know orders of magnitude worse than Than the confederate flag some people at the kato institute think that if you favor secession you favor slavery But the first state to want to secede was in 1825. I think historians can correct me And it was abolitionists who wanted to secede from the us on the ground that the us had slavery and they were against slavery Now there is such a thing as civil war the spanish civil war of 35 and the russian civil war of 1917 were civil wars In the sense that each side wanted to run the whole country But the south didn't want to run the north it was truly a war of secession Or a war to prevent secession or a war of northern aggression or what have you Question over here So on the topic of the future of liberty within our lifetime, are you guys optimistic or pessimistic about that possibility within the lifetime of the general attendee here Well, I think judge napolitano hit the nail in the head when he said you guys are either gonna dine a public square or So I think the the central banks around the world have really set economies up for bad times ahead I I don't see how that's going to be good for liberty in the sense When people are scared and they're uncertain economically they turn to the state to help them and so Medium term. I'm not particularly optimistic, but maybe these guys will give you a reason for optimism The palatona said they're probably gonna dine a pub. He said public square pub Yes Oh, you know You know that talk our mystery speaker from last night I mean, he's he seemed awfully optimistic, didn't he that the technology was gonna Start crushing a lot of the institutions Of the state that are out there and You know, there are a lot of us that there were We all knew that socialism never worked as an economic system, but the soviet union Confiscated so so many resources from so many other peoples That it was able to eat up all those resources for several generations until it finally imploded through peaceful secession And so if it can happen there it can happen here Although americans the the russians other they did not have the advantage Of having made a god out of their version of abraham lincoln And so the one one one of the reasons why most americans don't even know the word secession They think it's succession Yeah, they I get emails all the time about the succession su cc They can't even spell the word let alone understand anything about their own history But they but they do but they have brain you know brainwashed into their heads from elementary school on That this is the most evil thing in the history of the planet is is the breakup of the central government Which was attempted by those those the most evil people in the history of the world of course the Southerners in in in the 1860s and so and so they don't have that disadvantage eric foner The the marxist historian at at columbia wrote an article in the nation magazine I think I think it was october 1991 There's a footnote to the exact reference in my book lincoln unmasked where he he opposed the breakup of the soviet union And he says he says it's too bad. They don't have an abe lincoln this gorbachev guy is a softy You know and and he thought it was and so and so we so we have that kind of person who is in the endowed Shareholder at columbia university Educating young americans on this sort of thing And so the breakup of the state is seen as an impossibility by so many people but history says otherwise And and we do our best to encourage people to think otherwise as well The reason the soviet union was able to last from 1917 to 1991. I guess it was or 89 Is they had western prices They had the sears robot catalog. They could look at what was happening in the chicago mercantile exchange during the first five years the 1917 1922 they had pure socialism And they themselves went to the n.e.p. The new economic plan in 22 because they acknowledged that from 1917 to 1921 They weren't using western prices and the thing was a total mess. So even they went to To a quasi capitalism where you had prices and and so mesis idea and socialism only applies If they don't use western prices or if the whole world goes on to socialism and then there are no prices market prices With regard to the question i'm very ambivalent on the one hand the case for optimism is when optimism is when i first met Murray rothbard in 1966. I asked them well, how many austral libertarians are there in the world? They said no 25 or so and you know 25 we've come a long way baby You know the the gays used to say we are everywhere. Well, we are everywhere. We're all over the place and thanks to iron rand and Ron paul, there are millions of people who are libertarians On the other hand, i'm a believer in sociobiology and sociobiology What i get from that is that we're hardwired for socialism Which is why ron paul gets you know one percent of the vote and why people trash ron paul and why The pope says what is it capitalism is the dung heap of Dung of the devil or something like i'm so i i think there's A lot of us are hardwired as we people are mutants We are open to the possibility of freedom and and the invisible hand whereas most people Even if they're very bright I have a daughter who's got a phd in neuroscience total panko and what can you do? A lot of a lot of people are just unable to to grasp this Simplicity thing of the invisible hand and i think it's because we're hardwired for that. So This gives me the case for pessimism. So here i am sort of ambivalent on the one hand We've made great strides and on the other hand. I think we're bucking up against biology Which is tough to buck up against Murray rothbard used to say often that he was in the long run. He was very optimistic in the short run He was always pessimistic and i think i've taken that on myself and it It gives you the proper view of what's going on in the world Bad things are going on in the world right now in the short run the short run prospects are not good But i think the long run case For optimism is very bright Just to build on mark's point on this question You can make that case also because if you compare you know this period to let's say the period of the 30s You know very similar things you could you could make that comparison very similar things happened You had a big worldwide recession similar steps Have been taken or probably more unorthodox steps this time But the big difference is that you know the west is not alone anymore The the fact that india and china have now started moving towards the market And other there are other countries You know in asia who are far more receptive to markets than they were in the 1930s when they were all moving to socialism completely changes the ball game simply because you have more institutional competition You know capital can move Much quick much more quickly You know away from any country which increases controls in the long run So in the short run i agree with bob actually that because of all the tsunami of money that's you know been unleashed That there are stock market bubbles in literally every part of the world And that in the short run we're going to have trouble but i think in the long run the whole picture the whole you know Environment of ideas is is different. It's almost like there is no dominant ideology right now as compared to what it was in the 30s And i think that's a good thing Uh gp nailed it i was just going to add that if you look at the index of economic freedom You see that for example the united states has dropped over the years from a position of maybe number three or four down to about number 12 or so And that's partly i think because the united states has seen some policies moving us in the wrong direction But i think also it's because the rest of the world's been moving and a lot of the rest of the world's been moving in the right Direction so it the answer to the question really depends on where you are uh North korea i predict will do better economically in the next 50 years. Why well it could hardly do worse so uh it but generally though all kidding aside it probably is um It is going to be better worldwide even though in any one particular country you might see a a move in the wrong direction Okay quick question right behind you You guys are talking a little bit about religion and involvement in economic growth and in liberty What do you think of maxa veber's thesis is right or wrong or was he not new on Well the protest what's what's thesis are you That's an ethic yeah mentioned that Just on the broad point of the role of religion in in development and growth You definitely i think it it can play a strong role. I'm not i'm not familiar enough I know whoever sees this Broadly, but i don't know enough about The different nuances to give you an answer on that but if you think of You know cultural moral institutions in a utilitarian framework as means to You know ends That propagate and you know promote the right institutions for growth You would have to conclude Looking at most of the historical evidence that religion has made a big role In creating the the institutional environment that's conducive For growth not only in the west but in other parts of the world as well. So yes religion. I think is very intimately connected In in providing you could say almost like a you know Foundation for the rest of the institutional structure about that Yeah, just real quickly. I mean disclaimer. I am protestant so presumably i'm biased And I like work but And I like ethics there you go I I think there you know just purely secular analysis You know to explain why does there seem to be this correlation of you know economic growth in areas that are populated by the people Who believe this stuff these doctrines I mean part of it is If you believe that there's this god who's just and has laws and so forth the king cannot violate that stuff So I mean so there there is that notion there and I also think even beyond just protestants But the church you know catholic church, whatever I do think you do see strains of Secular authority political figures trying to make people not believe in the church anymore because they don't want there to be anything competing For their attention and their their you know power. This is my quick day and i'm Also protestant, but I would point out that there are some exceptions That are quite notable like for example northern Italy Which was heavily catholic, of course, but was economically quite successful Scotland not terribly High growth as a country, but of course very heavily protestant Notably some of the scots who immigrated to the united states ended up being very successful economically But there are enough of these Exceptions that it starts to poke a number of significant holes in the vapor thesis That being said I do think that the competition That protestantism Was characterized by the theological competition it presented to the roman catholic church the the Ripping into that divine right of kings that you see in some protestant Philosophy that that I think was very important to the breakdown of state power Just one quick point to add to tin A lot of the historical rewriting of the middle ages I think now undermine some of Weber's pieces that the middle ages weren't the dark ages And so you know there wasn't this gap and that would imply that you know Catholicism and Catholic countries in the middle ages weren't complete basket cases either. So okay, let's take a break Come back here