 This is Jeff Deist and you're listening to the Human Action Podcast. Ladies and gentlemen, welcome back once again to the Human Action Podcast. The only podcast where we're not afraid of books, even 900-page books from time to time. But this week, we are actually going to take a look at a much shorter book with our great friend and Mises Institute senior fellow, Per Byland, who teaches at Oklahoma State University and is the author among several other titles of our subject today, which is the scene, the unseen, and the unrealized, how regulations affect our everyday lives. So it's really a great and short book in many ways. It's an exposition, obviously a Bastiat's concept, and I think it applies in spades to so much of what's going on in our world and in particular in the U.S. economy today. So all that said, Per, it's great to talk to you. Hey, thanks for having me on. Well, before we get into your book, which I'm going to recommend to people, we're going to link to it. It's available for a few dollars less at Mises.org than Amazon, but you can get it from both places. I wanted to bring up something you and I had discussed offline, which was really the need for a shorter, almost primer in Austrian economics. And so I refreshed my memory. I went back and looked and I had recalled the one by Thomas Taylor called, Introduction to Austrian Economics. The first book is from way back, like 1980. I believe the Cato Institute actually first published it a long time ago. There's also by Eamon Butler, a short book called Austrian Economics, a primer. And then most recently, Randy Holcomb down at Florida State had published with Elgar, a shortish hundred page or so book called Advanced Introduction to the Austrian School of Economics, which was part of an Elgar series. But as a lot of our listeners know, academic publishing houses tend to put a bigger price tag on books than the Mises Institute does. So I think this book is nearly $100, even in paperback form. So Dr. Bylin came to me, B-Lin came to me and said, well, how about if we consider creating a new one, but we'll price it really, really cheaply and make it a paperback and we'll keep it under 100 pages or so. So anyway, that was our conversation a couple of months back and I just wanted to touch base with you, see how you're feeling about that project, whether you still think it's a viable concept. Oh, absolutely. And I'm excited about it too. I mean, what we really need is a short introduction that people can understand and they can give them sort of an overview of what Austrian economics is and mainstream economics is not and how Austrian economics is helpful for understanding the world and for understanding what the heck is going on. The graphs and everything that you learn in mainstream economics, they're not very helpful if you want to understand the world. How do you plan to tackle the sheer size and scope of Austrian economics and distilling it down into something short and accessible? Well, I think it's about talking about themes and talking about approaches and talking about what the point of economics is to begin with. So I remember seeing that Paul Krugman said he had tried to read human action. Human action is not a primer, of course, but he said that he read the first few hundred pages and he said, this is not economics because it's just philosophy and obviously it's way too advanced for Krugman. But what we need is something that gets to the core and gets to the economics right away and talks about why it is important and what we're doing that is different and how we are providing that type of sort of basic economic literacy that people really need, but they don't know that they need. The Austrian school is so good at, but the mainstream economies they've sort of given up on. And do you have some familiarity with the other primers which I mentioned? I have looked at them. Yeah, I've looked at Holkomst book, for instance. And so what's the missing ingredient here? What do you think that we need to do? Well, I think we need to talk about it in a very different way. So talk about it in a much easier, more accessible format. Very often, these primers, they focus on specific issues and they focus on terminology. They focus on almost technicalities. So you mentioned one of the older ones. I mean, that's available at Mises.org too, I think. But it's hard to read. And I've used excerpts from that book in my courses, teaching students. And even seniors in college, they read it and go, oh, yeah. We sort of understand what's going on, but not really why. And they don't get why they're reading this either, because it's not super relatable. They don't know why it matters. And I think that's some, I mean, it's basically the selling of the Austrian school, selling it to regular people, to businessmen, to professionals, to housewives and to kids. Because economics is exciting. It's just that we, typically as economists, would fail to sell it as exciting. So obviously, we hope if people read this book, they will develop an interest. They'll go on and get to some of the more foundational texts or some of the more advanced texts. But is the idea here to create something which could exist as a standalone if, let's just say, that hypothetical person never reads anything else about econ? Yeah, of course. So I mean, it's supposed to be sort of an overview and a crash course into the economic way of thinking, in a sense. I mean, it could... The way I'm seeing it is that it should be able to make economists out of bloggers at New York Times, for instance. Okay, well, you realize now that you've put pressure on yourself because we've talked about this book which yet does not yet exist. Yeah, well... And by the way, you're writing it, so... Yeah, you're right. Yeah. No, I look forward to this. Well, I will say this. You're a prolific guy. You write for a lot of different types of publications and you don't do only academic publishing. You're also an extremely prolific Twitterati and I think your Twitter feed is one of the best out there in terms of using digestible chunks of whatever the current character limit is on Twitter to set out a thread and help people understand what's going on. And so anybody out there who's not following him on Twitter, please do so right away at pair by Lynn P-E-R-B-Y-L-U-N-D. I think you'll find him one of the better accounts and one you actually go look for rather than just wait to see if it shows up in your feed. I know that I do. That said, your book is now a couple years old. I think it's 2016, the scene, the unseen and the unrealized. I guess first and foremost, people are going to recognize the genesis of the title from Bastiat. What prompted this book? What was the genesis behind you writing it? Several things, really. I mean, it was pretty much what we're thinking about for the primer, too, that if you are to introduce someone to the Austrian school and someone to economics and how the economy works, what book would you suggest? What book would you recommend? And very often it's Henry Haslitz economics in one lesson. And I love that book, but it is one lesson over and over again. And I thought it was missing the entrepreneurship perspective, which means that it doesn't really get into the whole process theory of Austrians. So it doesn't look at the economists sort of an evolving dynamic process that is progressing towards satisfying consumers at higher and higher levels. Instead, it's talking about the opportunity cost, but the opportunity cost is sort of static. And I wanted to stress the dynamic aspect of it. So I, well, starting to think about it, I was, well, who can do it? Well, no one is going to do it except for myself. So I better write it myself. And that was sort of the idea. And I got the opportunity to write for one of the textbook publishers. They had a book series where they accepted my proposal and off I went typing it up. Well, for listeners, I mentioned its brief. It's really only about 170, 175 pages. It's perhaps a bit more dense than Haslitz economics in one lesson, but not much longer, if at all. And so I'm going to recommend this book, and again, we'll link to it. If you have anybody on your Christmas list who really needs an excellent sort of introductory treatment, and as Dr. Bailen says, in really a more of a dynamic way. I mean, this book is all about sort of the constant interconnection and the constant change, the constant dynamism of market. So I really liked it. The other thing, Paras, this book is almost completely jargon-free. It certainly has no ideological veneer to it. So I enjoyed it very much. Now, let me ask you this. Did you have in mind, I hope the answer is yes, this is called a leading question, was this intended at all as an answer or a parallel to public choice criticisms of the regulatory state? Well, indirectly, I suppose it was. I mean, it was a lot of things coming together. But I really wanted to stress the how destructive regulations are and not in the sense that, oh, look at this option is just gone now because it's regulated, so you can't do it. But what are the long-term effects? What are the long-term implications of regulating a little here and regulating a little there? And taking my entrepreneurship perspective on it, it becomes pretty obvious that your starting point for any innovation is lower the more you regulate an economy and then you're going to end up with something very different. And that's sort of the story I wanted to tell. And I use this book in my teaching at Oklahoma State. And I think the students like it. They tend to be not very frank when it's the professor's own book, but I think they, at least they get it, they get the idea of what I'm trying to say and how the economy works. So they have a different perspective after they've read the book, I think. So when we look at Hazel's book and just those three or four pages at the very beginning, the lesson is we have to look at the effects of some proposed policy on every group in society in the long run rather than a particular group in the short run. Why do you think we have to keep stressing that? Why do you think that we look at the Krugman's of the world and this seems to still go unheeded all these years later? Well, I think it's getting worse even. I think that's part of what Keynes was trying to do. Keynesian economics is really P in your pants economics. So if you're really cold and outside and what do you do? Well, one thing you could do is to pee in your pants and it gives you a little warmth right away. Of course, it's going to get a lot worse later on, but that doesn't really matter because Keynes was looking at the immediate problems only. And then if that causes more problems, then we'll deal with that later on. And very often, unfortunately, when people are economically literate, they look at the immediate consequences of things and then they just find a solution. It's very easy to be a central planner. If all you need to do is just pick something in the present and you don't have to think about the future and everything that can change in the future. But for an economist and understanding the economic system and our wealth and prosperity over time for our generation, for the next generation and for the next 100 years, then it's important to not screw things up now and not tomorrow either. And so when we talk about the regulatory state or the tax state, people just tend to sort of zone out. They think, well, taxes and regulations are part of government. We can't have anarchy. They don't really think of those two things in economic terms if you know what I mean. Yeah, I think that's right. In a sense, we say taxes and then we think of something other than coercively taking people's funds. So there's some magic to the thinking as soon as government is involved. And one thing that I have been part of the reason why I wrote the book too is people's magical view of regulations. So they think that, oh, if you just can just regulate this, then that will take care of the problem. And there are no implications. There are no consequences. There are no side effects or anything like that. You just regulate and then magically you have solved the problem. I mean, if that was the case, then, hey, then let's go for 100% government. No problem. But as we know, any regulation, they tend to not really create the outcome that they're aiming for and they're also creating other problems that you didn't expect. So regulations are, it's a blunt tool. And well, it's actually a stretch to call it a tool because it's not actually giving you anything of what you're aiming for. So it doesn't get you anything of value. It's more like a sledgehammer trying to solve a very delicate problem. Well, when we think of ownership, we think of control, the ability to control an asset. So let's say you own a restaurant and the government comes along and says what a lot of people, a pair think are very sensible things like, well, you can't be open certain hours overnight. You have to pay a certain minimum wage. You can only serve alcohol if you have this magic permit. A lot of people agree with that. Let's just be frank. But in effect, the government, because it's controlling your business somewhat, not entirely, but somewhat, it becomes sort of a partial owner. In other words, in the Rothbardian conception, which is more hardcore, that becomes a form of actual semi-socialism where I think most people on the left would scoff and say, oh my gosh, that's not socialism. Yeah, I think they would. But I mean, in a sense, you are scaring people away from doing those things that are valuable. In this case, running a restaurant because you're saying you can't really think in new ways. You can't run a restaurant the way you want to run a restaurant or in a way that you think will benefit consumers the most because you have to run it in this way because regulators said so. So I mean, it's really, it's imposing a cost on you as a potential entrepreneur to facilitate value for consumers, but it's also imposing a cost on consumers who do not get these new options. And you can't really figure out how to better serve consumers anymore because you don't have these options. And it doesn't really matter how stupid the options are, because some of the options that entrepreneurs try and become really successful, they're really stupid options. No one else would try it because it was just this one weirdo entrepreneur who tried it. Everybody else thought it was completely crazy, but then suddenly, whoops, there's something that consumers really liked and consumers really appreciated. And that became a blooming business and that completely changed sort of the direction of the market process because they figured out a new way of serving consumers. And with the regulation, you don't get that. With the regulation, you don't get this sort of experimentation and the trial and error. And you sort of circumscribe where entrepreneurs can go with their ideas. And that's going to turn a lot of entrepreneurs off. So they're not going to become entrepreneurs to begin with. So the cost is enormous. So that goes to the unrealized. In other words, the unseen is the cost and the inefficiencies and the problems caused by, let's say, the regulatory state. But the unseen is, let's say, a good or service which literally does not come into being because of this environment we operated. Yeah, exactly. So I thought something was missing there. And I mean, I love Frederick Bastiat. And the scene in the unseen is really important to understand that there's another side to it. But it's sort of short term and it doesn't look at what would have been facilitated and made possible had this not happened. And of course, since the economy is cumulative and we're talking about wealth, for instance, society's wealth, the wealth of nations, as the accumulation of capital over time, over generations. Well, if you start regulating and you have all these seen unseen things going on, that means that every generation is going to start at a much lower level. So the ideas that are possible for those entrepreneurs are much fewer to begin with because there are regulations and they're starting at a lower level as well. So a lot of these options that we would have as consumers and maybe cures for diseases and things like that simply do not materialize. They remain unrealized because we have regulated away our future. Right. And of course, this works to the tremendous benefit of politicians because they can always point out they can take some taxes and build, let's say, a public housing project and then take some homes of people from under a bridge and put them in there and say, see, look what I've done. Whereas Dr. Byland has to say, well, what might have been, who might have been, you know, people only have had more kids. They might have invested more in next. We might have had the next Steve Jobs. We might have had all kinds of things, but we can't, you have to have a couple more layers of conceptual thought to make people understand that. So you see what we're up against. Yeah. And the thing is that we also need to be very nuanced with how we think about this. Because it's easy to immediately fall into the trap of the Chicagoites and other schools of economics that, well, the option is simply perfection. So we'll just draw these curves and then everybody has perfect information. And that's where we could be if we were all gods. But that's not what I'm saying. What I'm saying is that compared to the unhampered market, the unhampered market is not finished. The unhampered market is not perfect. It's just that the unhampered market would have a lot of innovation and a lot of entrepreneurship. And it would focus on serving consumers, not serving regulators. So compared to that situation, which is also sort of a moving target, since it is a market process after all, compared to that, we are not there. And the difference is the unrealized. So all those options that we could have had, and I mean this in a very real sense, they're not there. And we lost out because they were not created and that's the unrealized. So it's not really a comparison with some utopian unreal existence. It is where we would have been had it not been for regulators stopping entrepreneurs, regulators pushing consumers around and things like this. Well, you have this excellent chapter in here. I think titled wonderfully, The Unbeatable Imperfect Market. And of course, we're not talking about utopianism in the Austrian school. We're not talking about some unachievable perfection or equilibrium. If we're causal realist economics, we ought to be talking about better, not perfect. And so you sort of attack this idea of market failure and say, hey, this is the best we have available under current conditions with current information. Yeah, exactly. And I mean, of course, we already lost a lot now through the centuries of government and monarchs and what have you. I mean, it doesn't mean that we have to lose even more. And there is a real possibility of a free market, which of course is not super efficient. It's not perfect, but it's better than what we have. And we would have had a lot of very cool things, very valuable things much sooner had it not been for regulations. And it's that contrast, especially over time, because it means that certain types of jobs, certain professions also do not materialize. They do not happen. So lots of those awesome jobs that we would have had to choose from today, we don't have them because those types of businesses do not exist because those types of products do not exist because some entrepreneur way back was not able to innovate in that direction. So that never happened. What was your Twitter thread the other day? I don't think it was about monopoly. I think it was about the idea when you say, the best ways to point out someone who doesn't understand economics is when they start carping about market failure or something like that. Do you recall this tweet? Yeah, I think that, yeah, there was even a rerun from a few years back, I think. But I think that is, I think that that captures the core of it because a market failure, there's always a comparison with some utopian unreal model. Right. And if that is how you view the world that you're comparing it with sort of a divine existence, then you're not really analyzing anything at all. I'm not sure what you're doing, and it's certainly not economics. I also notice that a little earlier in the book, you go into Say's law a bit, and this is something for which you're notorious on Twitter, and you suggest in the book that we have, let's say, a superficial understanding of Say's law. And I'm sure many of our listeners are familiar with the idea that a lot of people sort of state it is that production creates its own demand. But give us your take on Say's law and where it fits in this book. Sure. So the way I usually summarize it is in two statements. One is that production precedes consumption, which is sort of an obvious thing. Most people would say, yeah, of course. But then they still think that they should consume stuff that has not been produced yet, and they don't have to bear the costs of that either. And the other is that demand is constituted by supply, which is Say's statement. He had the law of exchange or something like that. It was called. It seems that in a market setting, you have to earn the purchasing power to buy something, which is also pretty obvious when you think about it. But that's also not how politicians and the political class is thinking about it, because they think that, well, if you just print a little more money or something like that, or you just forcefully reallocate resources from one group to the next, then you have created a lot of value. But that, of course, is not true. And you have to supply something in order to buy something from someone else. And in the market economy, of course, you have specializations. So we all work with something that we're not consuming ourselves. We don't grow our own food. We don't build our own houses and things like that. Instead, we're focusing on something that we either are good at doing or become really good at doing. So I don't consume a whole lot of entrepreneurship lectures, for instance, but I produce a lot of them. And the same thing with my papers. I don't, I don't tend to sit and read my papers a lot. But the papers are for others. And I get paid for doing this work. And for that payment, I can buy other stuff that some, some farmer has produced a lot of great food. And maybe you have a restaurant entrepreneur somewhere with great food that I can buy from him and so forth. And because we're all focusing where we can create a lot of value for each other and serve each other. And, and that's, but to understand how that works, you have to realize that you have to put something into the economy in order to take something out. And there's some, some sort of disconnect in, in modern quote unquote people when they think about the economy because they just want to get stuff. They don't have to put anything in. Well, I wonder how profound, you know, the reshaping of society has been because this idea that we create a healthy society through consumption and the way to spur consumption is to create more money and credit. I mean, that's, that's exceedingly a profound shift in the 20th century. Yeah, it is. And I, I'm not sure where that comes from, but I think part of, of the problem now is that people have been to use a Marxist term, alienated from the value that they're creating that we, we go to an office and we sit there and warm a chair all day. And then we have earned money because we were there this number of hours. It doesn't really matter what we do and we can't really see the result of it either. So we're not actually selling anything. We're just wasting our time and someone pace, pace for it because well, we need a bunch of people with, with a body temperature of 98.6 degrees in cubicles. And that's not more, more to it. Right. You don't have to work really hard and you just do the minimum. Right. So, so that's like a necessary evil, but you see all this stuff out there with more money. You could probably get some more. Whereas in older societies, you, well, you were working your ass off and, and, and you had to trade directly yourself. So you were always exposed to the market in some sense. So you were exposed directly to selling to someone and negotiating the price and, and so forth. So you had more of a direct connect to how the market functions and the fact that someone will need to appreciate what you're offering and you will need to accept what they're offering in return. But today it seems like we've gotten far away from that. And I'm not saying that that's a bad thing because when we need more specialization and things like that, and we need more specialized jobs, but for some reason we have turned our backs on how the market economy works. And therefore everybody can point fingers and blame the economy quote unquote for everything that is bad, not realizing that we are the economy. Well, in this later chapter in the book, you have explained the market and natural disasters. It brought to my mind COVID, which of course is not a natural disaster, so to speak, but it has some of the same effects in that it created some sudden shortages. It was unexpected. It's radically changed what a lot of people get up and do in the morning. So, you know, speaking of the ripple effect, which you mentioned several times in this book, speaking of the scene, the unseen, the unrealized. Wow, it sounds like we are in uncharted territory when it comes to all these ad hoc mass mandates, lockdowns, various things that not only different countries, but even within countries, different governors, different mayors are doing. Yeah, no kidding. And the solutions to this, since apparently the only thing to focus on is the fear of the virus. This seems like the solution offered, and I saw some comment to that effect by AOC, the Congresswoman, where she said that, well, we need to just lock everything down and then make sure to send people checks so that they can buy what they need while they just sit at home. Well, apparently she's supposed to have an economics degree, but she doesn't understand that production precedes consumption, right? You cannot buy anything unless it's already been produced. So if everybody's just sitting at home doing nothing, but the government is sending them checks, well, they will have to eat those checks because no one is producing food anymore. And if no one is producing food, well, then you're going to have a lot of other problems on your hands as well. So the economy is really, I mean, I talk about it in the book as an organism because I think it's wrong to call it a system or a structure or something like that because that's so impersonal, but it is really an organism that if it changes and if it moves in one direction, if it grows in one spot, it probably follows along from another. So it's constantly shifting, constantly moving and constantly figuring stuff out and becoming better. But what they're trying to do now, it seems like with COVID is to simply ignore the economy and how the economy works. That it actually is a kind of organism. And instead just say, well, there's a lot of stuff out there and the stuff just magically appears. So let's just put everybody in their houses and then send them money so that they can get stuff. And I guess the stuff will just not only magically appear, but it will also be magically transported to the people who want them. And if we just print them more money in some sort of MMT fashion, then everybody's going to be happy. I mean, if it was that easy, then, well, that would be wonderful, but then we should have done it for hundreds of years ago. You know, I can't help but thinking, monetary policy has a lot to do with this mindset, especially since let's say the crash of a 708, that we don't have to consider tradeoffs and scarcity as much anymore because we have this enormous printing press and we have the world's reserve currency. And I honestly think, Pair, that a lot of people, let's say under 30, maybe even under 40, really believe that material abundance is there. And it's all about distributing it correctly. And I think that that could be an absolutely fatal attitude for the West to take. Yeah, I think I hear that pretty much every day on Twitter when people say that there is abundance, it's just unevenly allocated. So what we need to do is simply take the money off of the billionaire's hands and then we can just run around happy and sing for the rest of our lives. I mean, some of them will also claim that the problem, the poverty came through the institutional property because they say that well, before there was this thing, before anybody claimed property, everybody was running around and there was abundance of resources available to them so they could just reach out and grab whatever they wanted whenever they needed it, which is preposterous, but they seem to believe it somehow. Well, ladies and gentlemen, again, if you're looking for a great book, a great gift for anybody on your Christmas lift, the seen, the unseen, and the unrealized by Dr. Pair Bailand is an excellent choice. You can also go to Mises.org to get free copies of Henry has the economics in one lesson if you need a box of those sent to some of your loved ones. We're going to go ahead and link to this book and if you listen to the earlier part of the show, we are going to look forward to and expect a new sort of introductory primer on Austrian economics itself from Dr. Bailand over the next year or two. So we'll look forward to that very much so. And of course, because it's Mises.org, we'll make it a very affordable little paperback, probably five or seven dollars and I bitch will even give away some of them to the to the best people out there. So all that said, Pair, I want to thank you for your time today and hope that the audience has a great week. Thanks for having me on. The Human Action Podcast is available on iTunes, SoundCloud, Stitcher, Spotify, Google Play, and on Mises.org. Subscribe to get new episodes every week and find more content like this on Mises.org.