350 Years of Economic Theory in 50 Minutes | Mark Thornton

[Music] I'm dr. mark Thornton I'm a senior fellow here at the Ludwig von Mises Institute and my talk this morning is 350 years of economic theory in 50 minutes uh you know I'd like to tell you about the whole history of economics how it developed who were the important contributors and what they did when they did it what their books were what were their methods and all the debates that have gone on who made the big mistakes who were the crooks who were the villains but that would take several months to do that and we might hit a little a few low points along the way so the question is what can we do in in our time here well usually people want economists to tell them how to make money right and so that's one of the things we're going to do is I'm going to show you how money is made and I'm talking about lots of money okay not just a little bit of money we're going to give away a little bit of money here today but we're going to be talking more or less the important thing is really big sums of money okay and I'm going to show you how to become an economist in five minutes but before I do that I want to give you an idea of what the Austrian school of economics is all about and how does it compare to other schools of economics and to try to simplify that down to the very basics of economic points of view because there is a very distinctiveness to the Austrian school so we're going to look at two views of money in economics on the one hand you have the Austrian School of Economics which teaches about the market economy on the other hand you have what you could generally call the statist s' and this would include everybody else the Marxist the Socialists the Communists the Keynesian z' the fascists the mercantilist the interventionist which was mentioned on them on the movie here earlier and just about everybody else who even those who people who might consider themselves market-oriented but except in their area of expertise so for example we could have a market oriented economist who worked at the Federal Reserve Bank but only as long as that economist espoused government control of money and banking okay so all everybody else is going to be the status now the Austrian school is the champion of economic theory and the market economy we have found that everything that is worth having is produced within the market economy and available to everyone including money jobs security justice goods and services everything that's worth having is produced in the market economy in addition exchange in a market economy benefits all parties and harms none so in an exchange of goods and services for money both parties benefit and no one is harmed so Austrians find the market process to be not only efficient but also to be a just system as such we are the champions of individual liberty private property and honest money we believe that it is the market economy that produces prosperity and nothing else the statist on the other hand are generally apologists for government intervention and control for you students out there and you parents as well in a typical college course in economics you will be told all of the shortcomings of the market economy in all the possible government remedies for those problems generally the cry is always for more government intervention to cure various social problems more government regulation more government spending more government subsidies more government price controls all across the board Austrian economists have shown that the social problems that the stateís talk about are actually caused by prior government interventions into the economy and act and cannot be cured with more government intervention the bigger and more powerful government becomes the less prosperous the people become poverty unemployment and inflation do appear in the economy right these problems actually appear people lose their jobs people have to pay higher prices people become poor or displaced or homeless seemingly or appearing Li in the market economy but all these problems are caused by government interventions that we don't necessarily see and not the marketplace many of you are being homeschooled because of how bad public schools have become actually when government schools were first introduced more than a century ago in the United States they really weren't that and they were thought of very highly mostly because they were based on schools that had already appeared in the marketplace so that government was just basically mimicking what people had been doing voluntarily however 100 years of government intervention and ever-increasing control over government schools have made these government schools more about indoctrination and very little about education that's basically the problem you look back in history and people thought very highly of public schools at one time that's no longer the case as the homeschool movement grows ever and ever larger the Austrian economists are like David where the statist economists are like Goliath they are much bigger they are much stronger and they control powerful government bureaucracies like the Federal Reserve System they control all the prestigious economics departments you might be taken aback by the fact that one of the most market oriented economics departments in the United States is actually Harvard University the statist economists also control all the important journalistic post in the nation however like David we do have a special weapon and it's called the truth and we regularly use it to bop the status in the head in the hopes of knocking some sense into them now before going on to showing you what it is to become an economist I'd like to share with you a little bit about my personal journey through Austrian economics feasel when I went to college I found Austrian economics independently of the curriculum and I said you know I want to go into graduate school and learn more about Austrian economics so I went searched all over the world all over the country and there weren't any programs in Austrian economics period the only place where Austrian economics had a following was here at Auburn University so in 1982 I got in my little Ford Fiesta with all my possessions and drove from Geneva New York to Auburn Alabama and enrolled in the graduate program here at Auburn University and it was a is a good program back then we had a lot of free market economists in a couple of Austrians but I was told in the course of the first semester that Austrian economics was really a thing of the past that there were only about a dozen Austrian economists left in the world half of those were already retired and the other six were weren't at prestigious economics departments with graduate degrees and if there's no Austrians working at PhD granting institutions then that means there's not going to be any more Austrian PhDs so it was very disheartening I was told by one of my professors that the Austrian theory the business cycle was a grisly embarrassment and so I was very dejected at that time in my first year in graduate school it looked hopeless the the government was growing ever bigger and ever more powerful and this thing that I thought might be able to save us Austrian economics was on its way out it was a thing of the past and so I basically decided to just about decided to drop out of graduate school and I almost didn't show up for one of my final exams but fortunately I did I was an econometrics exam and I I didn't do quite as well as I hope to do but shortly thereafter I found out that the living von Mises Institute was coming to Auburn University that they were going to be on campus that they were going to be providing seminars publishing Austrian economics and they were going to give me a fellowship to stay in graduate school and study in Austrian economics I thought wow this is this is a pretty good turnaround it certainly made my day so Lew Rockwell Marty Rockwell and Pat Barnett showed up a couple months later and I helped them move the boxes in and the Mises Institute at that time in 1983 consisted of a room that was about this big over to that wall and from here to there we had a table four chairs I think and an IBM electric typewriter and that was it so you can see and you're going to see this afternoon how much bigger and how much more effective the institute has become over the last 25 years a couple of things that mr. Tucker didn't point out was that our webpage now is the most visited most traffic most downloaded economic web page in the world and The Wall Street Journal recently visit us this year and wrote up a story about the Institute which appeared in August of this year which showed how much influence the Institute is not just having here in the United States but around the world with young intellectuals so despite our minority status our underdog status we are making gains we are taking ground we are making progress and you're all welcome in - to join in the fight and to that end I'm going to now make you an economist and then we'll go out and make some money almost all economic fallacies result from the fact that people only consider the immediate impact of a policy on a particular group of people The Economist the good ones anyways always consider how a policy a government project or piece of legislation would affect all other groups and what are the long-run effects that we can from those particular policies for example let us say that we pass a law that everyone in this room should get a million dollars okay that's the law everyone gets a million dollars well this is going to allow each and every one of you to go out and get a good education to purchase a nice home to buy great medical care to have the time to develop your talents and skills have time to devote to your family charities public works whatever it happens to be explore your various career choices everything is taken care of all the bases are addressed it must be a great policy because it's positively affected everyone that it was designed to affect but what this leaves out is everybody else it means 25 or 30 million dollars in higher taxes for everybody else it means 25 million dollars of lower take-home pay for the other tax payers it means less food for those families to eat it means fewer repairs on their homes and automobiles it means that they'll have a lower standard of living so that you can enjoy a higher standard of living it means that other people are going to want to become millionaires to write the easy way via a government grant more people who get these government grants the higher tax rates will have to go eventually the government is going to have to hire more and more bureaucrats to collect these taxes to select the recipients of these grants to monitor their behavior because of course if you start giving away millions of dollars to people they're probably going to get lazy and slothful and so on higher taxes in the economy means that workers will have to be fired where prices of goods will have to be raised dramatically and of course if you take this policy to the extreme it gets absurd right we couldn't give everybody in the economy a million dollars and just let them stand back and spend the money I mean somebody's got to do the work somebody's got to produce those goods that's right yes yeah exactly exactly when you understand economics you'll understand why it is the case that everything the government attempts to do ultimately backfires let's take the example of the minimum wage it's something that's currently back in vogue gubernatorial candidates are talking about raising or creating a new Alabama minimum wage and it's actually being discussed and talked about all over the country about raising the minimum wage at state and national levels now if we look at the direct and immediate effect on the group that impacts the impact is positive people who earn the minimum wage are now going to see their wage rates rise in conjunction with that new law if you ask them are they Ford or again it they're going to say therefore a higher minimum wage but if we look beyond the immediate effects and we look at the indirect effects and the effects on other people what do we see happening well a higher minimum wage means that some people who are making the minimum wage are going to have to lose their job because if you're just making the minimum wage and you're you're just producing enough production for the firm to cover that wage rate if we rate if we raise the wage some people are going to have to be let go and the people who are let go typically not always but typically are the least advantage people in the workplace the least productive the least educated minorities in particular can be discriminated against as a result of the minimum wage and so the attempt of the minimum wage is supposedly to help the least advantage people in the economy what it ends up doing is hurting the very least advantaged workers in the economy keeping them out of the workforce and maybe causing a lifetime of living on welfare rolls if we look at the who the policy helps this is a little harder to see but raising the minimum wage actually helps high wage workers union workers manufacturing workers hire skilled workers who compete in some sense with the low-skilled low-wage workers and when we raise the wages of the low skilled workers that creates more demand for the high-skilled workers so we find that unions are actually one of the biggest proponents of higher minimum wages so it actually ends up helping some of the highest paid workers so we have to look beyond the direct and immediate X we have to look at the indirect effects we have to look at the longer-run effects and what it does to people's incentives when you understand economics you will understand why it is the case that everything the government attempts to do ultimately backfires the more it spends on government schools the less education we get the more it spends on research the less technology we get the more it spends on medicine in healthcare the less healthy we end up being and the less access we have to health care the more it spends on NASA the less progress is made in space the more it spends on the military the less secure we become now I realize that some of these statements are going to sound contradictory to you or politically charged as I ask is that you examine them over time with your new economic lenses and see whether or not they are true ok now we're going to do a little bit here about making some money I'm going to ask for some volunteers here from the students and this is kind of be like a game show format ok so I'd like the uber person any Auburn any other Auburn fans here okay there's another Auburn one and there's another Agha one will get you up here in the three chairs and then we need some alternates to help these these three people how about you you and you and you'll stand behind these three contestants now that this game is actually pretty straightforward I have these envelopes we're going to do three rounds the contestants will open the envelopes and choose there's two coins in each envelope and they're going to choose to keep one of the coins and whoever ends up with the most money at the end of three rounds is going to pick up from envelope number one or number two or number three it's a little prize that's it's attached to the game okay so whoever ends up with the most value here after the three rounds is going to be the winner okay so your contestant number one round number one you just open up that and you choose one of the two coins that are in the envelope and they're American coins it's no you just rip them open and whatever coin you don't want you'll hand to your alternate behind you okay round number two [Music] yeah you keep one coin from each round you don't go in between rounds there okay okay let's see what the contestants chose here and you've got a dollar twenty-five dollar twenty-five and a dollar twenty-five let's see that's let me see what you get oh you got now you got two dimes and a quarter what'd you guys end up with Oh but you know you could you actually ended up with the pre-1960 four coins and so a dime is this dime is actually worth a dollar and this quarter is actually worth over two dollars so the winners I guess are the three alternates okay so we'll go ladies first you can pick one of the three cards just to pick just pick one okay and you guys fight over the nother tier okay you can all return to your seats yeah you keep points so yeah the the 1964 silver dime is now worth almost a dollar the the current dime of course is it doesn't have any silver content to it so it's only worth a dime basically and and so the point of this little exercise is to show you the difference between what honest money is in gold and silver and what we have in the current monetary system our original US dollar if you had the original US dollar it would be worth about thirty-five of today's dollars so that our dollar has actually lost about ninety seven percent of its purchasing power and if we look back at American history to say 1890 the 1890 dollar was worth almost exactly the same purchasing power as a dollar in 1790 so a hundred years went by and you have the same purchasing power now the dollar in 1990 was only worth about seven percent of the 1890 dollar so during the period when we went off a gold and stopped issuing silver coins instead of the value of the dollar staines constant it lost 93 percent of its value over that century since 1990 it's lost 50% of that remaining 7% so what this indicates to Austrians is that process isn't going to stop that our dollars are going to continue to lose value and ultimately may become worthless okay that happens very often with paper money is not only does it change in value and lose value but it can actually become completely worthless this has happened in recent times in Bolivia it's happened in Yugoslavia it happened in Iraq it happened in the Civil War and the Confederacy the all those currencies became completely worthless actually the Confederate currency is actually doing much better today than the US dollar the Confederate currency is actually increasing in value and to show you how bad off the US dollar is the Confederate dollar is now worth about eight US dollars now when you look at higher prices it's very important to look at them with an economist I what causes our money to lose purchasing power most people are under the impression that it's just a part of the market process that things are just always becoming more expensive but it's just natural for this to happen because it's been happening that way ever since but that's really not the case and so when we look at the market economy we want to see well let's see in some cases prices are going down okay if we look at clothing computers electronics pencils things of that nature things that are completely in the market place they're actually going down in price well now there's there's other areas where the government is heavily involved where they regulate they restrict they have controls they have taxes subsidies places like education healthcare and energy where the government is so heavily involved restrictive regulated and taxed those are areas where the prices in the market are going up and then there's other areas where the government is completely in charge things like postage stamps based shuttle missions and prisons where prices are skyrocketing across the board so if you look at the level of government involvement you can kind of get a rough idea of where prices are going up and where prices are going down but the reason that prices are going up in general is because of monetary inflation by the government itself they're creating more money and when you get too much money in the economy prices are going to rise overall since we had the Federal Reserve System established in the US in 1914 the amount of money in the US economy has increased 500 times I mean that's 50,000 percent okay from twenty billion dollars to ten plus trillion dollars okay so we've got lots and lots and lots of monetary inflation and it's just a new version of the same old thing in the old days Kings would whenever they get tax revenues in they would clip the coins and they would take all those clippings and make new coins out of them so if the King took in ten coins in tax revenue he would end up being able to spend eleven coins because he made that new coin from the clippings and of course people caught on to that I mean you see a hole in your coin it's pretty pretty obvious that something's wrong here and so what the King would do after that was they started shaving the outside of coins so you just take a little shavings from round be the the outside of the coin not the flat part but the rounded part and then you take those shavings and make new coins so the government would have more money to spend and if you look at our modern coins you'll notice they have a very rough edge to them well we don't really need that anymore because nobody's interested in scraping these things but the reason that rough edges there is to prove that the coin is relatively whole and hasn't been shaved ok that paper money comes into prominence during the American Revolution and the course of civil war and now paper money inflation has been institutionalized since 1914 with the establishment of the Federal Reserve banking system gold was taken out of circulation in the Great Depression silver was taken out of circulation in the mid 1960s and the gold window where our central bank would exchange gold with other central banks was closed in 1971 and we've been on a Fiat paper monetary system that is completely unbanked and is completely disconnected from any kind of gold or silver backing ok we are we are on a monetary system by law ok we are required to pay our taxes with these with this paper money we are required to accept this paper money for any kind of debts public or private and we this is something we're being forced to use and that's why we still use it so we have a Fiat paper monetary system we also have a banking system that is highly leveraged and highly regulated as well but a lot of people are surprised when this leveraging effect is explained to them it makes people feel uncomfortable and they would rather have this sort of fairy tale version of what banking is all about when you think of your checking account you think of your money is in that bank and I can go get that money any time I want and I tell my students do you really think that they have a vault in there with your money and it's like on a shelf and it's got your name written in front of it and that's the way people like to feel it but the money isn't really there we have what's called a fractional reserve banking system and it means basically there's no money in the bank the bank's hold money just like Walmart holds money just enough to make change but they don't have a huge storehouse of bank money most of their reserves especially in the big banks are in electronic format with the Federal Reserve itself and the system depends upon the idea that not everybody is going to want all their money at the same time so the modern form of inflation and this is really the most important thing to understand about money and banking is that it's an electronic form of inflation it's not clipping it's not shaving it's not printing they don't print money inflation nowadays they just create it electronically and how the Fed does this is that they buy government bonds from banks and then they tell the bank we've got reserves for you at the Fed you've got an account we've added money to it we've added we have really added money to it we've just put some more zeroes in there and so that's how they electronically increase the money supply is just by writing money into existence and so when you want to learn what the real secret of the Federal Reserve is that's it they buy government bonds with electronic bookkeeping entries so the government spends money they borrow to pay for and then they buy their own government bonds back with an electronic bookkeeping entry and I teach money in banking courses and we go through this whole thing about money and banking over the course of an entire semester and people come up and they say you know I still don't get it this there seems to be something wrong here and I said there is something wrong here they are ripping us off and so that is one of the secrets of inflation its monetary inflation is causing price inflation and in the modern electronic era that's how inflation is done it's done electronically with a bookkeeping entry higher prices have their problems it's not just that prices are going up higher prices make accounting difficult they make long-term contracting difficult then make entrepreneurs economic calculations more difficult but the first secret of inflation is that monetary inflation at the Fed causes price inflation the second secret which all you can't really see you can feel it you can't see it is that inflation secretly redistributes money from some groups of people to other groups of people some people are hurt by inflation some people are helped by inflation a lot of it depends on how soon you can get your hands on the money as it comes into the economy if you're the person who first spends the new money then you're buying all your stuff before prices go up and so you're getting a great deal but as prices rise and the money filters through the economy the people who get the money at the end or don't get it at all are going to be hurt because they're paying higher prices their real income is drawn down so that the people who are hurt the most are people on fixed incomes people in retirement for example people who work for a living and are on wage who earn wages and salaries and of course wages and salaries only get adjusted to inflation after the fact people who buy things like education housing energy are hurt due to inflation because they go up those prices go up the most who does it help well people who sell housing energy and health care education those areas they tend to get the money before everybody else and the biggest beneficiary is government itself I mean if you can borrow money and then pay for it electronically in this mysterious way it's really great for them I mean they've got trillions of dollars of debt and every time those dollars devalue go down in value it makes their debt easier to pay off so the second secret of inflation is that it redistributes money away from some groups and helps other groups primarily government the third secret of inflation is that monetary inflation causes the booms and busts of the business cycle everybody loves the boom and doesn't think it's a problem everybody hates the bust and think it's and thinks it's a complete mystery Austrians view it is when the Fed gets active in increasing your money supply and lowering interest rates they cause a boom that boom causes a lot of missile occations in the economy which eventually have to resurface as bad investments right now we're in a cycle where we've seen a lot of investment in housing a lot of new home construction in development during a period of low interest rates that existed over the last several years and in some places in the economy there's been too many houses built there's been too many second homes there's been too much mortgage debt that has occurred within the American economy and around the world as a matter of fact in some places and eventually the bust is going to occur the downfall the business cycle is going to the contraction phase of the business cycle is going to set in and some of those bad investments are going to come to the surface in the form of bankruptcies and unemployment hopefully it won't be too severe there have been housing bubbles in the past which haven't resulted in severe contractions because the nature of housing being a consumption good for many people so we've analyzed all the major stock market and business cycle changes over the 20th century and have found that this theory holds up very well in explaining the Great Depression the tech stock bubble of the 1990s the Japanese stock bubble the housing bubble and and other changes in the economy and so the third secret of inflation is that monetary inflation is the cause of the business cycle and with that I think I'll stop and if we have any questions I could be answer a few questions and then we'll break for lunch yes the people that that are invested in this peg keep the system going do they believe one thing and talk another or for the purpose of a good deal whether they actually buy into what they're doing what they're telling both for example for example Alan Greenspan who was the chairman of the Federal Reserve until recently um he knows about Austrian economics he was a student of economics in the 1960s and attended Mises seminar and ran an Rand's philosophy seminar he wrote that the gold standard is the only appropriate honest money monetary system and so I think he understood very well and that listening or reading him was always misleading because he I think he knew the truth but was telling a story to try to keep markets settled and it was interesting in his last year as chairman of the Fed he said that first of all he said there's no housing bubble and then he said well there is a housing bubble but it's a good thing because people are able to take equity out of their house and mortgage and spend it into the economy and then he said that he didn't think that the housing bubble would be a problem and then his first speech after leaving office he said the housing bubble is over and prices are never going to go down so I get the sense that he understands Austrian theory but that he was trying to mislead people others I think believed the story and believed it rather convincingly you know the deal with being a statist economist is that it's lucrative in the sense there are plenty of jobs in government in the Federal Reserve if you buy the party line and you do what's expected of you you know you can imagine being economists working for the government government you mean like how tough is that ah you see that has been in that bubble because they've run out of places to go and true economy they have two things what they have to forge their own so they'll actually the government will be the nice yeah what yeah what comes out of this is hard to tell I mean they they do go through periods where they say okay let's let all this nasty business occur you know other points because maybe election is coming up they'll say we got to continues on until after the election so very often what you do is you think of the Fed behavior in terms of elections so I expect them not to raise interest rates until after the election and even then they might not do it but I certainly don't believe they're going to do it before the next election they might do it the meeting subsequent after the yeah no no this this one this one right here yeah that they're going to keep interest rates where they are until at least after the election so that's another sort of tiny factor that you want to look for is the Fed is considered independent and scientific but it it bends the political pressure for sure if it doesn't Congress would simply and the president would simply step in there and rewrite the legislation as it is mean semi-independent is good for their image and Bernanke will want to demonstrate his independence and his toughness in the first couple of years of his administration so look for those things in particular that yeah well he he Greenspan started the increases Bernanke was there on the board as well and Bernanke allowed a couple of more increases to go into effect before he stopped the increases he wanted to stop those increases going into the election because it was already starting to have a noticeable Don people's adjustable rate mortgages and things of that nature so they wanted to let off a little steam there we'll have to see what happens after the after the election that's right they didn't do anything [Music] gold has B has become a hot topic of conversation because of what's happened in the gold market over the last couple of years and I think the momentum will depend a lot upon what's going on in the gold market and and hopefully political change as well the United States could start a return movement to the real gold standard just by our independent without having any kind of international agreements if we went on the gold standard and with more or less force our trading partners and ultimately the whole world back on to the gold standard but who knows um you know we that those kind of ideological changes and that's what it really is is you know we've got to get people to think right before they do right and some of the good thinking in the world is not necessarily going on just in the United States it's going on elsewhere and so maybe that movement may emerge from some unforeseen place else we're all about some of the Middle East we won't mention the idea of being paid in some form of gold or gold certificate because they they understand the devaluation well one of the things you want to understand is that the the US dollar is a world reserve currency which means a lot of these other central banks hold dollars as part of their reserves and so if the dollars going down they're losing money and so there is been talk about selling oil in the in terms of euros rather than just dollars of exchanges trading oil and euros and other currencies as well as gold I mean the people of the Middle East the peoples of the Middle East the peoples of South Asia India China South East Asia these are people who know the ravages of inflation historically I mean for hundreds and hundreds of years and they keep their wealth not in terms of the local currency but in terms of gold of simple gold jewelry and they wear you know they keep on putting more nor necklaces more and more rings and bracelets and they wear their wealth around with them they just keep on buying more gold jewelry and so these sorts of notions about the honesty the validity and the soundness of gold and silver in these other countries is much more systemic than it is here in the United States anymore and so we very well if we went through a tough world depression or hyperinflation we very mult very well might end up with [Music] metallic money's in some of these other countries around the world no there's not there is not there's a nominal gold backing to the Swiss franc but it's it's it's just a token renumeration or foundation for the value of that money in other words if you if you wanted the gold value to be losing money so it's it's there's no system in place there's only theory in place well we don't know how much they have they suppose they supposedly have quite a bit the federal well nobody has the the Federal Reserve has a lot of gold all the central banks around the world hold a lot of gold we haven't lost gold in circulation there's there's more gold right now than there's ever existed in the history of world of the world there's a huge amount of silver there's a lot of discoveries out there that could be further exploited so I don't really worry about there being enough money as far as Austrians are concerned whatever the amount is it could serve as a monetary system it would just be a different level and the the only problem is the temporary problem of reaching that level but I think that there's enough gold and silver out there to to create a worldwide monetary system without any trouble whatsoever there another ball stopped going you know that's a good question I'm I would specific SPECT there the other countries but I've never never heard one way or the other a lot of countries actually went off the gold standard altogether during the Great Depression but the United States is the only one that I know of that actually said people are allowed to own gold and you have to sell it to the government something Federal Reserve from their empire the depression and then the review you know actually stopping as long as the breath y'all yeah yeah they you know the it's like the whole world doesn't realize that the Fed actually came into existence well before the Great Depression and they actually tripled the money supply between 1914 in 1929 it was the biggest you know one of the biggest increases outside of war that ever while actually part of it was war but it was a huge increase during that period of time and everybody thinks well you know that was the market economy and it really wasn't they had gone through the Progressive Era Progressive Era and the United States have been changed dramatically yeah there's a lot of movements to change the tax code the way we were the way we tax things you know going to a national sales tax going to a flat tax going to the fair tax there's a lot of suggestions yeah that's what I like is the the no tax argument but one thing I think that these movements do highlight is that people are upset about taxes they realize they're unfair they're too high and they're hopelessly clumsy and antiquated so that I think it's a good sign that there are these movements but I always stress the need for lower taxes to eliminate certain taxes altogether and to make the movement downward in every in all cases and not to create inner battles between one group and another and so you know I think I think those movements do highlight the problem but I think the solution is always an everywhere to just think downward and to never let them adopt the new tax with you know with the idea that they'll eventually roll back some other tax you know never do that and you can even vote against attacks than the governor with one more no no no we we don't have perfection and we always want to think in terms of improvement in progress and advocates of the free-market economy you know think that it would do a great deal in terms of cleaning up a lot of what the government's done wrong of putting things back in order eliminating chaos from society and returning liberty and society to normal patterns but we also think in terms of you're going to constantly address new problems and you're also going to be constantly having the ability in the outlet for progress and so you know it's the same way with our economic theory it's not perfect we don't know the answer to everything and there's things that we haven't come across that we need to extend the theory to so it's not really a matter of ever shooting for perfection it's always shooting for what human beings can do and the basic answer is we can do a whole heck of a lot of we're allowed to do it the absence of government intervention well thank you very much for your attention you're all great contestants here this morning and is now lunch time [Music]

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Keywords: Austrian, Economics, Economy, education, free, markets, freedom, Home, school, Mark, Thornton, Peace, property

Id: rI0vZ5jBA9o

Length: 55min 56sec (3356 seconds)

Published: Tue May 06 2008