 Okay, so I think we're going to get started. So if everyone could take your seats, I'm very glad to be giving the opening talk on Wednesday, so right after the pool party as we all return back to Earth. And we've got a wonderful, I think a very interesting talk, especially given that some of the other presenters are going to be discussing various medical related issues. So let's jump in, as you guys can see, the title of my talk is cronyism, how the AMA, the American Medical Association, cartilized the medical profession. So what's this presentation about? So what I'm going to do is I'm going to concentrate on the efforts of the American Medical Association in the Progressive Era, which I'm broadly defining as the period 1897 to 1929, to restrict the supply of doctors by lobbying in the individual states for stricter licensing requirements. So medical licenses for doctors really began in the 1880s, but it was really during the Progressive Era that they kind of took on a whole new meaning as they became much more restrictive and exclusionary for reasons that we will get into. And another very interesting way of restricting the supply of doctors is to require tougher accreditation standards for the nation's medical schools. It was really only beginning in the early 1900s that the nation's medical schools, and really for that matter, the nation's universities, started to experience tougher compulsory accreditation standards. And a lot of medical schools for that reason had closed. So you're able to, one, restrict the supply of entrance by requiring tougher licenses, but then you're also able to restrict the supply of schools, which of course are going to train these entrants by requiring tougher accreditation standards, mandating very expensive labs and long training for graduate students, et cetera. So what I want to argue is that the AMAs' efforts were examples of cronyism. So I define cronyism as when the government passes policies to benefit special interests at the expense of the overall public. So when we have a politician advocate some sort of policy, well, we've got to institute a tariff, we've got to subsidize this industry, we've got to do X, Y, and Z. The stated reason is almost always in the public interest. You're not really going to win re-election if you say, well, we've got to subsidize this industry because the CEO of that company, I'm friends with them or they donated my campaign. You're not really going to win re-election that often. You have to dress up whatever you're trying to sell in some sort of public interest garb. You've got to speak in a sort of very highfalutin rhetoric. You have to say, well, I'm doing it for my countrymen, the American people. We've got to protect jobs. We've got to protect workers. We've got to protect the elderly. Something that really captures the emotional gut feeling of your average person. That's how really the special interest policies are camouflaged. That's how the relevant legislature, et cetera, actually passes them. There's always some sort of public interest justification. When the real reason that the American Medical Association was pushing for this was they wanted to secure higher prices of medical services and they wanted to restrict the choices of consumers. They wanted to make sure that consumers only purchased certain types of medical services. Traditional medical therapies will see allopathic medicine as it used to be described in the past. They also wanted people to only be able to purchase them from the most established doctors, the most expensive doctors. A more common way of putting this is we call this a racket. It's basically a criminal-influenced activity. In the modern realm, you could say this should be prosecuted under RICO, unfortunately that's not the case. This is a small story of the book that I've been working on. The tenet of the title is Chronism, Rise of the Corporate State from 1849 to 1953. For those of you who've read my first volume on Chronism, it's Chronism, Liberty vs. Power in Early America, 1607 to 1849. This is kind of the second book. It can be standalone, doesn't necessarily require the first book, and then hoping I finish, basically go up to the present era in one final volume. What I'm really trying to do in this book in the American Medical Association's efforts, we're an example of this, where we trace the development of what was known as corporatism in America, which is circa 1897 to 1953, a very broad period, we could say, of the progressive era and the New Deal era. In our high school history classes, we learned about how great these periods were, so on and so forth, and how you had all these public interest politicians. They were bringing businesses and other sorts of entrenched interests to heal, and they were all fighting for the common man, the average worker, the average Joe, etc. But what they were really trying to do was they were trying to develop a system known as corporatism. So corporatism, really it's related to the word corporation, it's a system where the economy is organized into various governmentally privileged cartels that are monitored, enforced, privileged, etc. by various regulatory agencies. Very broadly, we can say this is almost the economic definition of fascism, or at least the original definition. So the idea is that, well, you can't have this, Confiscate, this very threatening socialism, that was becoming a bigger and bigger thing, and you can't have the free market, that's too unstable. So you've got to have a middle of the road system, and the middle of the road system is going to be able to stabilize economic activity, and we're going to organize all of the economy into various groups. And then those various groups, they're not going to deal with each other necessarily through the price system, but it's going to be through various regulatory agencies. You've got the railroads, the Interstate Commerce Commission, kind of happened technically before this period, but it was really the first major regulatory agency, Interstate Commerce Commission. You've got the banks, they have the Federal Reserve System, so Interstate Commerce Commission came out in 1887. Next major regulatory agency was the Federal Reserve System, really cartilized the nation's banks in favor of Wall Street, as we might briefly talk about, or of course the Interstate Commerce Commission cartilized the nation's railroads. And just to clarify what I mean by a cartel, is it's basically it's when a group of sellers come together and they coordinate a restriction in supply and are raising an increase in the price. And so these fail on the free market, but they can survive in various forms when backed by government coercion. So the railroads were able to cartilize under the Interstate Commerce Commission, the banks were able to cartilize under the Federal Reserve System, you have industry, the Federal Trade Commission, you have financial services with the Securities and Exchange Commission, basically the Securities Act, Securities and Exchange Act, then you have airlines, the Civil Aeronautics Act, created the Civil Aeronautics Board. So each of these regulatory agencies and these laws, what they really did is they grouped together various parts of industry into some sort of cartelist scheme. Well now there's going to be restrictions on what types of prices you can charge, what types of products you can produce. There's going to be certain entry requirements in getting into the business. And all of this, the real effect was to restrict supply into raise the price of whatever service we're talking about. So when we think about corporatism, okay well this can be advocated in the public interest, we're doing this to stabilize the economy. The free market is too reckless, leads to all these terrible business cycles, poverty, child labor, environmental pollution, so on and so forth. We've all been told this. But who the corporatism really benefits is the special interests, as we'll see, and it's really just a new arena for the special interests to fight for various privileges that they want, as opposed to rival special interests. So they're going to lobby the government to influence the legislation, the laws that create these various corporative systems, as well as very crucially as Murray Rothbard always loved to emphasize the personnel. The actual commissioners interpreting the laws, interpreting the mandates, deciding which interests are going to benefit. They're going to try to influence them or make sure their guys are appointed instead of rival interests. So in the Interstate Commerce Commission, the railroads were always fighting against the shippers, shippers being not necessarily people who ran the ships, like on the ocean, but those people who would pay the railroads for their services, as well as unions. Wall Street and the Federal Reserve system would fight basically Chicago banks as well as rural banks. And Federal Trade Commission, you've got large corporations versus small businesses and unions, and so on and so forth. And so this was all happening during this time period, and it was basically almost a free-for-all. Sometimes these agencies would fall in the hands of one group, then they would fall in the hands of another group, and different interests would benefit. They would capture the privileges. Of course, the group that would always lose was the consumer. They were the major loser in this affair. And what's fascinating, and this is how we get into the medical services, is that the very similar phenomenon actually happened with various professions trade associations. During this time period, the American Pharmaceutical Association was basically lobbying for licenses to control pharmacists. Well, if you want to sell certain drugs, certain medicines that consumers will buy, you have to have a license. You can't just be your average Joe trying to sell a product that the consumer wants. You have to have a license, and where are you going to get this license? Well, it's going to be from a state board that is run by the state's pharmacists. So they have a vested interest in making sure only a very small group of people get those licenses. The American Bar Association comes to surprise all of you, but lawyers are interested in cronyism for themselves, is that they were instituting requirements for lawyers in arbitration proceedings for the longest time arbitration was actually a way of sort of avoiding the nation's courts. And businesses would voluntarily agree, okay, well, we'll abide by these arbitration rulings. Starting in the 1920s, it was really lawyers, they started to lobby state legislatures to say, well, if you want to have some sort of arbitration proceeding, you need a lawyer for this, and a lawyer for that. Then you need a stenographer, then you need all this. And what does that do? That jacks up, of course, the demand for certain lawyers. This may also come as a shock for you, but the nation's teachers are also interested in cronyism for themselves. The National Education Association during this time period was lobbying the states for professional training requirements for teaching K through 12. Well, if you want to teach kindergarten, you've got to take a graduate course on some abstract theory. If you want to teach 6th grade math, you have to take real analysis or Calc 5 or something like that, even though you're never going to have to use that when you're teaching kindergarteners or 6th graders, etc. And of course, the American Medical Association, which is really the main group that we're going to be talking about today. So the American Medical Association is one of the standard examples of an interest group that's lobbying for cronies and for themselves under the guise of promoting the public interest. So it's especially a strong argument, promoting the public interest whenever you're dealing with anything health-related, as I'm sure we all know, given the events of the past couple of years. Say, well, we need to have our doctors be well-trained because you don't want people getting poisoned, or we need to have the Food and Drug Administration regulate the nation's food and drug supply because we don't want people getting poisoned. We want to make sure they have the best quality products, etc. Same thing with lockdowns and mask mandates and so on. The public interest argument is always very, very potent when it comes to anything health-related, because it's something that the public has a knee-jerk reaction to. I don't want to be drinking poisoned water or something like that. Well, of course, we have to have the government take care of that. It just seems so simple. Okay, so let's jump in. So when we're talking about medical competition in the late 19th century, there were really various groups of scientific therapies, so to speak. What consumers could use if they have a certain ailment, if they're experiencing some sort of pain. And in many ways, some of these groups are still around, as we'll see. Some of them have reduced influence, but that's largely because of government laws. So the AMA doctors, doctors in this trade organization, practiced what alternative therapies called allopathic care. You don't really hear of this term anymore, but it was used back then. And it basically refers to, you use pain-killing drugs to cure some problem. Now, what's important about these pain-killing drugs back then is they were not the same pain-killing drugs we have now. So these drugs were usually mixtures of cocaine, opium, whiskey, other alcohols, morphine. Just to give you some perspective, aspirin was only discovered in 1899. So back then, if you wanted, let's say you have a child and they're sick, you would call the doctor. You wouldn't go to a medi-merge or something like that. And the doctor would come over and they would come with their little doctor's case and they'd go up to the room where little Susie is and maybe all of the other kids are standing by her. She's in the bed and the doctor would, of course, come out and he'd take out those big lollipops, right? And he'd give them to each of the kids. He was still there and he'd take a look at Susie and he'd say, let's say she has strep throat. And she'd say, open your mouth. And she'd open her mouth and he says, all right. He goes, okay, I'm going to give you a little cocaine for that, right? And Susie would go, okay, all right. But that was the state of medicine at the time. And you could either go to a doctor for these services or you could buy a patent medicine over the counter. And people would always criticize these patent medicines for saying, wow, it's got cocaine or it's just alcohol, but that's what the doctors were prescribing. That's what the doctors were giving you. So it was really very imperfect choices, but you could go with a more expensive doctor or you could go with some sort of patent medicine. That could be cheaper. And really what they were just trying to do was sort of numb the pain. And this was not too far off from the era where if you got shot in the arm, it was in the Civil War, they gave you some whiskey, they gave you a block of wood. They said, chug the whiskey, put your teeth on the block of wood and then we're going to saw off your arm, right? So it's, yeah, it's that fun. It's a pretty rough way to go. So there were alternative therapies. You had the homeopathic doctors practicing what's known as homeopathy. And this is, I'm not a medical expert, but this, this basic, this therapy is sort of like Cures Like, which is that you lose, you use, excuse me, some sort of diluted symptoms of the sickness to strengthen the immune system. So if someone is sick with something, you try to give them some sort of remedy that will, it sort of introduce your body to, or sort of help your body fight the infection on its own. This is generally the therapy of homeopathy. This was a competing alternative. You could take some remedies that could sometimes help instead of taking, say, a pain-killing drug, which is really more of trying to mask the symptoms. You're experiencing pain, so you're taking some alcohol, the alcohol really isn't making you feel better. I mean, it's not really curing you, but it is kind of numbing the pain, so to speak. And then there were the eclectic doctors, the eclectics, and they were giving various herbal remedies. So you've got some sort of plant-based solution or plant-based medicine and all of that. And that's still around. Both of these are still around in various forms. And the important thing is this. It's that different consumers subjectively decided which treatment worked for them, much like today. So some consumers, they would use a traditional doctor, pain-killing drugs. Other consumers would use the homeopathy. They'd go to a homeopath. You'd have the eclectics. They would have various herbal remedies, et cetera. And they would decide, they would patronize the consumer. They would patronize the doctors. They felt they would give them the most relief from the pain or help them with their various ailments. So the AMA did not really like this. The AMA was created a little bit before the Civil War and it was gaining strength over the ensuing decades. And the AMA was mainly the traditional doctors. And by the 1880s, the AMA was lobbying for state licensing boards to restrict the supply of doctors. Basically saying, well, we want all doctors in the state of Alabama to pass an exam and or earn a diploma from a medical school. So you have to pass some sort of exam. You might also have to earn a diploma from a medical school and then you can charge for medical services. That's the key. In order for you to make money, I can offer you medical advice. But if I charge it, then I have to have a license or I'm engaging in something nefarious and illegal. So they would lobby for these various state licensing boards. But the problem was this. It's that the alternative therapies were also very influential and consumers patronized them a lot. So the AMA kind of had to compromise in each of the states. They were only able to get single board systems. So you have one board in the state of New Jersey, in the state of Alabama, in the state of Florida, and it would have representation from all of these groups to kind of give them all a fair hearing, maybe one third representation each. Or you would have systems of separate boards. You'd have a system for the homeopaths in New Jersey. Then you'd have a system for the traditional doctors in New Jersey, these various licensing boards. And so they were able to kind of get this restriction, but they weren't really restricting that much. That's what the AMA was upset about. And this was still allowed for intense competition among the nation's doctors. And just to give you some numbers, if we look at the number of physicians per 100,000 in population, they increased from 171 in 1880 to 173 in 1900. So actually, after despite these licensing laws, the number of physicians in the relative to the rest of the population was actually slightly growing. The AMA wanted it to go down, but it was actually going up. That's bad for business, so to speak. A big reason for this was that these degree granting medical schools, which at the time were largely unregulated by the states, you could basically set up your own medical school and accreditation. You could have your own private accreditation, et cetera, or whatever accreditation standards were required or relatively lenient. They increased from 118 in 1880 to 160 in 1901. So they're pumping out more competitors, basically. That's the way to put it. You're pumping out more doctors, different types of doctors. So you've got your traditional doctors. You've got the higher quality doctors graduating from the nation's elite schools, Johns Hopkins, Harvard, et cetera. Then you've got lower ranked schools with these traditional doctors. Then you also have schools for the heterodox therapies. This is a problem according to the AMA. Also make it worse is that there were new medicines that were coming out. Osteopaths and chiropractors were basically a new type of therapy that were developing at the turn of the century. In the long story short, most people have heard of chiropractors. Osteopaths probably not so much, was that they would use some sort of spinal adjustment or adjustment of the bones to basically alleviate pain. So rather than, oh, your back's hurting. Let me give you some morphine. Oh, your back's hurting. Let me crack your back. Something like that. And then you had the optometrists, the eye doctors. And these were really big competitors for your traditional doctors because they usually monopolized. They thought they would also have all the eye care services of their patients. But instead, some people were going to doctors who just specialized in eye care. And this was the AMA really criticized this. They were like, hey, you can't have a doctor specialize in eye care. We can't have that. That doesn't make any sense. And actually, yeah, you look at some quotes and they call it quackery and all sorts of stuff. So what does the AMA do? The doctors, they could decide to be more efficient, try to innovate lower prices, to try to capture greater supply of the market, improve product quality. Do they do that? Of course not. They lobby for more restrictions, right? Because that's the American way. So circa 1900, the AMA basically creates a new lobbying front. This is the Council on Medical Education. This was composed of various professors for some of the nation's elite schools. And as we know, they all know best. So this is a good lobbying front. They can do research. Then the AMA in the various states can use this to advocate for various types of regulations. So what the AMA wants, they go to the drawing board and the Council on Medical Education basically devises this sort of blueprint. They say, well, we want to have single board systems with only AMA approved doctors. Basically, we want to get rid of these alternative therapies. So we just want one board for New Jersey, one board for Alabama, and it's all got the traditional doctors. We want more rigorous medical schools that require tougher entrance exams, longer academic years, more training required, usually lab work required, higher tuition fees, et cetera. So to make the schools more rigorous to basically cut down on the amount of people who are getting into schools as well as graduating from the schools. And then we want to have tougher licensing exams when you go before these state boards. Now you've got to pass nine tests and all sorts of things, et cetera. And the idea is to, again, make it harder for people to qualify, to be able to sell their services for money. And they wanted to force consumers to only purchase higher quality and higher price doctor services. That was their goal. They looked poorly upon... They looked down upon the lower quality doctors. They said, no, consumers can't have this. We want them to only be able to purchase our services. And this is a very, very elitist attitude, basically. Okay, this was the AMA and they did not withhold their judgment, basically in both public and private, to basically look down upon other types of therapies, lower quality doctors, et cetera. The AMA especially looked down upon black, female, and Catholic immigrant doctors. So these were doctors that maybe had less experience going to more disadvantaged schools, et cetera, and they were serving their various communities, various immigrant communities, female doctors, female patients, African American communities, et cetera. And the AMA didn't want that. They're like, no, these groups cannot become doctors. We don't want this type of competition and so on. We don't want their competition. We also don't want the competition of regular or lower quality white male doctors, et cetera. We need to stop all of this intense competition. So AMA president Dr. Frank Billings, he sneered at those colleges that enabled, quote, the clerk, the streetcar conductor, the janitor, and others employed during the day to earn a degree. People are taking college classes at night. You can't have that. You see, people who are employed during the day, well, they're trying to earn a degree at night or someone who's trying to improve their lot in society, maybe they're a janitor or a clerk or streetcar conductor or sort of a lower skilled profession where they're trying to get a degree. Well, we can't have that. That's not good. And this is a great quote from a doctor at a medical school in Tennessee who's basically protesting against the AMA's recommendations. It's a block quote. He says, true. Our entrance requirements are not the same as those of the University of Pennsylvania or Harvard. Nor do we pretend to turn out the same sort of finished product. Yet we do prepare worthy, ambitious men who have striven hard with small opportunities and risen above their surroundings to become family doctors to the farmers of the south and the smaller towns of the mining districts out in the west while all the elite schools were in New England as they still often are. And he says, can the wealthy who are in a minority say to the poor majority, you shall not have a doctor? And the AMA basically was like, yes. That's what they're going for. Or they say, well, if you want a doctor, you got to pay. But the AMA was very successful in a lot of its lobbying and from about 1900 to 1907, 30 states and territories replaced multiple boards with single boards. They were dominated by the allopaths or is what the herodox doctors would call them. And these boards require doctors to graduate from AMA approved schools. Well, if you want to have a degree, you can't graduate from this college anymore. You've got to graduate from colleges that have standards X, Y, and Z. And yeah, they were producing higher quality doctors along certain dimensions, as we'll see. But again, higher quality comes at a higher price. Someone's sick. You don't always need to go to a formal expensive doctor. You can go to an urgent care or a medi-merge or you could talk to a nurse or someone else, et cetera. You want services quick and you want it cheap. And so the number of physicians per 100,000 decreased by about 5% and the medical colleges decreased by about 20%. It's a big decline because now these medical schools have to adhere to certain standards as we'll get to and this is starting to restrict the supply of medical schools in the nation. And the supply of doctors, of course, is starting to go down. Again, medical school takes a long time, so this doesn't happen immediately. It's really sort of, they're playing the long game here. Now, the AMA, however, wants stronger restrictions. In 1906, the council visited every remaining medical school in the nation and it issued a report, or it basically produced its own report that said only half were satisfactory. So half of the other half just, they got to change or they got to go. And again, a lot of these colleges were producing doctors in poorer areas, disadvantaged communities, et cetera. However, the American Medical Association was smart and they realized this was a controversial report and it would look like too self-serving. They said, oh, yeah, they can only graduate from these schools where we graduated from, right? It's not a good sell. Again, you need a public interest pitch. You need a public interest garb, sort of something that goes over it. And they said, well, wouldn't it be great if we had another agency, some sort of other independent public-spirited institution, maybe some sort of nonprofit foundation to actually issue a very similar report. And that way, instead of having a bunch of doctors issue a report saying we need to restrict the supply of doctors, if we have an institute for the advancement of teaching issue this report, well, then it's clearly disinterested. It clearly comes from people who don't have a vested interest in this. And so the council went to the Carnegie Foundation for the advancement of teaching. And so the Carnegie Foundation, as well as the Rockefeller Foundation, et cetera, these were these institutes that were set up in beginning of the Progressive Era, especially during World War I and World War II when tax rates were really high and there were ways of shielding money. Okay, so just to give you some of the numbers in about 1913, John D. Rockefeller put $100 million into the Rockefeller Foundation. Coincidentally, it's the same year the income tax came out. Right? And this is really, this is a huge sort of slush fund that was, as we'll see, worked with various special interests or worked with various special interests, worked with state governments, et cetera. Right? They're basically able to just use a massive amount of money, right? The Carnegie Foundation agrees and it chooses a Abraham Flexner to conduct a study. Who is Abraham Flexner? Well, he wasn't knowledgeable about medicine at all. He was a teacher. But he was the brother of Dr. Simon Flexner, who was an advisor to John D. Rockefeller Jr., as well as the director of the Rockefeller Institute for Medical Research. I believe he was also a formerly professor at the University of Pennsylvania. U Penn, right? One of these very elite schools in the nation. And Simon Flexner was a protege of Dr. William Welch. So you might not know this name, probably you don't, but he's got a Wikipedia page. So you know, he's cemented his legacy. He was a very famous doctor at the time. He was an advisor to John D. Rockefeller Jr. and he was also a dean of the Johns Hopkins Medical School. So one of the nation's most prestigious institutions, really one of the nation's first graduate degree granting institutions. Most PhDs, economists as well as doctors, they all got their degrees in Germany, right? And they all imbibe these ideas of socialism and interventionism and they say, well, in Germany, they cartilize everything. They privilege certain educators. Well, this would be great. Why don't we do this in America, right? And a lot of our nation's laws and our regulations were heavily influenced by Germany. It's just that we sort of conveniently forgot that after World War I, right? And that was sort of, oh, well, now they're the enemy. Well, we have to go against them. Okay. All right. That makes sense. Yeah. All right. And so Rockefeller, the Flexners in Welch, they were very pro-elite schools. They were very pro-research-led science. They said science has to proceed through the laboratory, right? They said every medical school needed to be patterned on Johns Hopkins, right? Everyone needs to have this big professional lab facility. The only way we can advance science is through the lab. This contrasted with the patient-led science of Dr. William Osler. He's a very famous doctor at the time who basically said, well, that worked good, but it's also just often very abstract theory. Well, why don't we actually learn by treating people? All right, well, there you go. So instead, we'll go visit patients at the bedside of the hospital and we will learn from them, okay, well, if we give them this, are they feeling better, et cetera, or what can we do? And this is less of the research and it's more of, okay, well, now we actually need to figure out what's, you know, why people are getting sick or something like that, right? And Abraham Flexner as well as the whole group, they praised the government subsidized educational system in Germany. This is really, they said, well, we need to replicate this. And they said, well, Abraham Flexner said, the system in Germany is on an aristocratic plane. It's for the elites, right? It's at that level. America, it's to the medical schools are too democratic. That's what he said, sort of a sneer against, well, it's too competitive. Your average Joe could become a doctor. We don't want that, okay? And as I mentioned, this is where many AMA doctors had earned their graduate degrees. And this is a quote from Abraham Flexner, which is a really interesting quote. He said, the poor boy, he'll pined, said, had no right to enter medicine, quote, unless it is best for society that he should. That's a way of saying poor people can't become doctors, right? He's saying, well, it's best for society. Now, of course, you dress up in the public interest garb, what really means is it's best for the existing supply of doctors. We don't want poor people becoming doctors if they're going to lower the prices of everyone else's services, right? We don't want these lower quality, lower price doctors. Everyone's just got to be these elite doctors graduating from Johns Hopkins or other places, so on and so forth. These elite schools, okay? That's how you really will advance the nation's well-being, in their health, okay? So Flexner, Abraham Flexner, he basically duplicates the AMA report. He duplicates their study in 1909 and 1910. He visits every medical school. And these are often very brief visits. So, for example, within three months, he expected 69 schools in 22 states. Some visits were a couple of hours. Again, imagine going in three months to 69 schools in 22 states now. This guy didn't have, you know, he wasn't racking up airlines points or something like that, right? I mean, so he was sort of traveling around and you go a couple of hours and you go look at a room and be like, okay, all right. Yeah, and then he would have his own report. And see, unfortunately, some of these schools naively accepted him because they're thinking, oh, maybe we could get some money from some of these endowments, the Carnegie Foundation, Rockefeller Foundation. But, you know, instead, he was sort of, he was just ready to criticize all of them. And what's sort of most astonishing is when you actually look at the minutes or the private correspondence between the Council on Medical Education, the Carnegie Foundation, they were extremely concerned about keeping this secret, right? The connection. So the Carnegie Foundation, the president, actually spoke at a Council on Medical Education meeting and he said, quote, the foundation would be guided very largely by the Council's investigations, end quote, but would not mention the Council so it would, quote, have the weight of an independent report of a disinterested body. So basically, we're going to follow what you're going to do, but we're not going to cite you. So that way it looks like we're coming up with these conclusions on ourselves, right? Good strategy. Quote, we have been hand in glove with you and your committee. When our report comes out, it will be ammunition in your hands, but, quote, maintain in the meantime a position which does not intimate an immediate connection between our two efforts. Ammunition in your hands. Ammunition for what? Ammunition for restricting the supply of doctors. It was a racket. It was a whole secret. They're keeping this whole thing under wraps. They didn't want to say, well, we're just duplicating this report by the Council on Medical Education. This is this independent guy who doesn't really know much about medicine, who's going to all the schools and is now just issuing an edict on all of them. Interesting strategy. And so this was promoted as a disinterested muckraking piece. This Flexner report of 1910, this famous Flexner report. It was like Upton Sinclair's The Jungle or other stuff. Wow, we've got to clean up the supply of the nation's doctors, right? And Flexner said only 31 of the nation's 131 medical schools should remain open. They basically closed 100 medical schools. That would leave no schools in 22 states. That's a pretty big competitive disadvantage for those regions. They're basically saying, well, these medical schools, they shouldn't be allowed to graduate doctors because then they're going to now compete with these other existing supply of doctors. And this was a very successful cover-up. The AMA connection was quite hidden and people said, well, the state legislature said, well, we've got to do something. All of these schools, they're producing all of these low-quality doctors. We've got to clean up these various programs or institute higher requirements, not recognizing that, of course, this would require a lot of schools to fail. The results were striking. By the mid-1910, so right on World War I, there were single boards in about 43 states and they were dominated by the allopaths. So the alternative therapies were quite restricted, blocked out. They had much reduced representation, if at all. Chiropractors were kind of put in their own discriminated systems. Oh, they're not real doctors, but we'll give them this little part. The optometrists were ended up, they were brought in the cartel, right? They at least kind of benefited it all right. But even then, again, it was still, we've got these much more restrictive licensing systems. And the AMA becomes a de facto accreditation agency. Basically they're the group that more or less approves what colleges are going to exist. And medical schools precipitously decline, not as much as what Flexner wants, but again, you can't always get what you want, from about 131 to 1910 to 76 in 1929. So as the population was increasing, the supply of degree-granting institutions was decreasing. That was the whole point. That was the strategy, basically. That's what they were trying to do. And who were the main beneficiaries of this, of course? Well, it was the nation's elite institutions. It was the nation's prestigious institutions, because not only did they benefit, but they got money from the Rockefeller Foundation and various state governments, right? So it was these top state universities or these private schools, et cetera. So in 1920, Rockefeller Jr. gives Abraham Flexner $50 million, it was through one of his nonprofits, the General Education Board, to basically gift Johns Hopkins, the University of Chicago, and other schools. And then various states matched Rockefeller donations to state universities. $50 million is a lot of money now. It's a lot more money back then. This was only a couple years after the Federal Reserve, right? So the inflation was not that out of control. And this new money often leads to these various research-heavy professorships. Oh, well, now the professors can specialize in research in the lab. Well, we don't have to teach these students anymore. It's like, wow, we've got all this money. We can just concentrate on this. And it was often at the public expense, because, one, a lot of academics back in the day would offer medical services as sort of a part-time gig. Right? Well, we don't make a whole lot of money through the university. So at night or on the days I'm not teaching, I'll go to the hospital or I'm going to go visit people at their houses, et cetera, and make money that way. So the public lost out. And then the graduate students were deprived of hands-on technical experience, because now they were focused more on passing these rigorous exams and learning how to do lab research, even though they might not actually be performing lab research and whatever occupation they have in life. Right? If they're helping poor people or they're providing services to little Susie, they might not need to know all of this in-depth stuff. I mean, it's just like with the math teachers. Right? You want to teach sixth grade algebra. You really have to know differential equations or real analysis. But again, you're trying to restrict the supply. Okay? It's a great quote from William Osler. And he said, this incentivized, quote, clinical prigs whose only human interest was research. Right? And this is saying, well, this isn't what the nation's medical doctors, this isn't what the nation needs. Okay? This is the wrong type of training, so to speak. And so as I wrap up, I just wanted to go through some sort of striking statistics and how this led to a veritable doctor's shortage in the nation. Okay? So the number of physicians per 100,000 in population decreased from 164 in 1910 to 125 in 1929. It's a 24% decrease. And then since 1910, it was a 28% decrease. It's a big decrease. This hit rural communities disproportionately because now these areas were deprived of doctors. To go through some numbers from 1906 to 1923, the number of people per doctors in large cities increased 9%. In smaller towns, it increased 54%. So very often if you go to a small town, there's maybe one or two doctors that can charge an arm and a leg. Bad pun. But they're the only ones, right? And so these small communities are kind of, you're kind of disadvantaged, right? These are the doctors that you could patronize. And very often the hit was for minority doctors, immigrant doctors, female doctors, et cetera. They were often excluded Jewish doctors as well from the nation's schools as well as licensing boards, et cetera. So all these groups are serving other communities. Well, we need to stop that. Now the Council on Medical Education, looking at this data, they sort of smiled and they said, well, quote, we had anticipated this decline and felt that it was a desirable thing because we had an oversupply of poor mediocre practitioners. Here we go. Now, a little bit more to the point was that the real reason the average doctor salary increased from $1,000 in 1900 to over $6,000 in 1929. It exploded over 500%. Average increases in prices was about a little bit over 100%, 110%, so the doctors are really raking in the cash, right? That was the whole point. You restrict the supply of doctors, and then you can jack up the price. And this is when you start to see a lot of push for having some sort of socialized medicine. Why? Because no one could afford doctors anymore. And the AMA has ever since has been always to have a very restrictive attitude and be able to control the supply of doctors. It's examples of cronyism. But you're able to sell it because of the public interest argument. Even though restricting the supply of doctors didn't improve really the quality or compensate for the restricted choice of consumers in the higher prices they had to pay. So I know this is kind of going through a little bit quickly at the end. I can share these PowerPoint slides with whoever is interested. I would just like to conclude during this so-called progressive era, the AMA lobbied for cartilizing restrictions that reduced competition and raised the prices of their services. And the AMA behaved like other special interest groups during this time, and they were very successful because of the public interest arguments they made. So with that, I will conclude. Thank you so much for your time.