tv Book Discussion on How Capitalism Saved America CSPAN April 3, 2016 1:00pm-1:58pm EDT
instead of sacrificing it in the light of. money or bipartisanship. >> we need to get back to constructive discourse. when you get back to respecting americans to matter what their backgrounds and making this country a more respectable place. >> tonight at 8:00 eastern on c-span's q and a. up next on history bookshelf, economics professor thomas to lorenzo talks about his book, how capitalism saved america -- he argues that capitalism has positively affected the development of the noted states over the past 400 years and that it's often inaccurately blamed for economic setbacks like the great depression. this program was recorded in 2005 during freedom fest in las vegas. i am currently a jr. at the george and to the technology in atlanta, georgia and i'm also a
member of the young americans foundation where i've worked with them to bring conservative speakers to campus. lorenzo -- to to introduce our speaker, thomas taylor renzo. -- thomas delorenzo. is the author of more than 10 books, including underground government, destroying democracy, how government funds partisan politics. official lies, how washington -- how washington misleads us. the food and drug police, america's nannies, busybodies and petty tyrants, unhealthy charities, hazardous to your health and well. from technology to politics, public health in america, the
real lincoln and how capitalism saved america. positionsd faculty within the university of tennessee at chattanooga and the state university of new york. he is currently an active scholar. thank you. [applause] thank you for coming. is my book, how capitalism saved america with a picture of the mayflower on the cover and i will explain why that is on the cover. in the genesis of this book, was right after my previous book, the real lincoln came out, my editor at the time and i were talking about the enron accounting scandal, right in the middle of this and we agreed that what was going to happen was that everything the academic world, looks around a written
and articles making the argument that since some business people are crooked, all businesspeople are crooked and its inherent in the system of capitalism that thievery is inherent and this is of course ridiculous, sort of like saying some people are left-handed, therefore all people are left-handed, there are sinners in all walks of life, including business, church and government. sure enough, there have been a state of books like that and i were in the academic world and i know a lot of my fellow academics and then working diligently the past couple of years and enthusiastically and these arguments that all business is like this and this supports its things as laws which punish every corporation in america for the sins of one or two companies -- not even dust of companies, just
a small handful of people -- not even two companies, just a small handful of people. that is the genesis of why i said about to write a book that is more or less a dissent that defense of capitalism based primarily on the lessons from economic history. that is sort of my take on it. after i wrote the book, i ran across the rotation by congressman ron paul that perfectly states the purpose of the book and it was perfect timing. i finished the manuscript and i read this article on the internet like congressman paul and i put it on the top of page one. endurance, as well as disapproval for the natural restraints placed on market excesses that capitalism and some markets impose, cause our leaders to blame capitalism for
all the problems we face. if this fallacy is not corrected and capitalism is further undermined, the prosperity that the free market generates will be destroyed. it should be bothering anybody who is concerned about the future of america at how easily and in such a haphazard way our politicians enact laws and policies that sometimes impose hundreds of millions of dollars of cost on corporations, which are all ultimately paid by you and me as the consumer, one way or the other or how lawyers will drive companies out of business, primarily for their own financial benefit through class-action lawsuits or how so many academics are sort of vicious attack dollars when it comes to anything regard -- regarding business. i don't have to explain that to this crowd, i will give you one and it wrote.
i was on a committee to pick a book that all the freshmen in my school were to read. it was a business school where i teach. my bottle here is my chance to get freshmen to read a book history,rican business entrepreneurship, something like that that 18-year-old would be interested in. i picked a book by john steele gordon who had a book on the history of entrepreneurship and i went to the committee meeting and i was pretty much shouted down and condemned as a immoral character for suggesting a book that was about making money. this was in a business school. if it's like that in business school, you can imagine the arts and sciences. i did not give up the battle. winded up adopting a book that is not that bad.
that is sort of the genesis of this. the first thing i do in this book is explain what capitalism is. most people don't understand what capitalism is and a big mistake that is made in is toture and television equate capitalism with something that is not, which is 100 some years ago which is called mercantilism. smith railedadam against in his book wealth of nations which is a set of government policies that essentially benefits the producers at the expense of the consumers. that is what mercantilism is and that is what adam smith was against. capitalism is consumer-oriented. ise-market competition wholly oriented toward benefiting the consumer above all else. when you see government corporate welfare, government
money going to corporations, protectionism, various laws and regulations that benefit a corporation or a group of corporations at the expense of the can number, price reports on agriculture, these are all mercantilist policies that are not capitalism. sometimes, they are called corporatism or crony capitalism. they are too often conflated. i will give you a definition of capitalism from adam smith. it is a short, one sentence definition. quoting adam smith, give me that which i want and you shall have this which you want. that is is. that is how -- that is it. that is how a real capitalist makes money. give people what they want in a way that they are willing to put their hand in their pocket and give you what you want in return. all voluntary trade and is mutually beneficial.
it is channeling self-interest into desirable ways. callsend walter williams dollars certificates of performance. having them in your wallet proves that you in one way or another work together with somebody to produce some sort of service for your fellow man. that is how you got those dollars. how else would you get them? you had to provide some useful service. another thing that is under -- misunderstood or not even a knowledge is that historically, all the things we take advantage of, having a refrigerator, having a car, all of the consumer goods we have invariably started out as things only for the very wealthy and the aristocracy. whoever invented these things.
i river buying my first pc sometime around -- i remember buying my first pc in 1982 and did not have that much money to buy a $4000 ibm pc that was a piece of junk compared to today's palm pilots. the thing about capitalism is, these things start out as the domain as -- domain of the wealthy but capitalists know you cannot get rich by only selling to the millionaires. is to make at rich cheap enough so that everyone can buy one. all of these things started out very expensive but then capitalists the out how to mass-produce them cheaply enough so that the average working person can afford them. that is something that is always overlooked the critics of capitalism. in consumer sovereignty, mentioned at the beginning that capitalism is his system was against number is king.
there is a great quote i would like to share with you by the austrian economist. he was the teacher of -- who won the nobel prize -- nobel prize in economics. someone was selling a t-shirt with his picture on it downstairs. is of my favorite quotes called human action and is about the consumer. neither the entrepreneur nor the farmer nor the capitalist determine what has to be produced. the consumers do that. if the business man does not obey the order of the public as they are conveyed by the structure of market prices, he suffers loss as he goes bankrupt. other men who do better at satisfying the demand will replace him. -- concern with that consumers are merciless egotistical bosses, unpredictable, they did not care for past marriage and invested
interest and their capacity as buyers and consumers, they are hardhearted ann callis without consideration for other people. that is you and me he is referring to, it is very true. if you buy a pair of sneakers you've been buying for the past couple of years and nike comes out with a superior brand, everyone of you would dump the old brand and by the newer brand, especially if it is cheaper. think of all the peoples whose -- all of the -- think of all the people whose jobs you may have cost. it is ultimately the consumer that is in charge. that is what makes capitalism different from the alternative system cap -- system of or theilism or socialism wind of the ruling class control things. capitalism relies on property rights. you can't have capitalism without private property and you cannot have it without a price system where prices are
determined by buyers and sellers, supply and demand. you have to have freedom of entrepreneurship. people have to be free to fail and to succeed. i have a chapter on anti-capitalism that i try to explain why it is there is so much animosity towards it and i don't have time to go through all of the various reasons i discussed in the book. you'll have to buy the book. one thing i mention is utopianism. one way or another, the critics of capitalism are utopians and they tend to paint some sort of unrealistic -- unachievable nirvana and say this is what we want, and then they compare that to the real world and say the real world stinks and we need to condemn it because it is not like our nirvana. sometimes, utopians will look at what they inc. is there nirvana
and will be disappointed and then lie about it. i could give you a number of examples because there is a fascinating book that was published 20 years ago by paul hollander called local pilgrims and i highly recommend it. he looked at the western journalists and professors and writers who went to russia, china, cuba, all of the nirvana's of the planet, all the socialist utopias and came back and lied about it. i will review a few of these. theodore dreiser, the writer, said, talking about russian communism. in moscow, there is poverty. there are beggars in the streets. multicoloredue the and voluminous rags of them.
john douai, one of the founders of the american public school monopoly said this, soviet communism is intrinsically religious and has the moving spirit and force of primitive christianity. christianity was outlawed in russia. walther directly of the new york times went to russia and said the russian granaries are overflowing with grain and the cows are plump and content. said thereard shaw was not and could not be a few -- food shortage in the ussr and this was right after stalin's forced collectivization of agriculture killed 6 million ukrainians and these people went over there. although stalin was a perfect gentleman who
asked for neither adulation nor vengeance, he was reasonable and conciliatory. when i was the age of some of the students in the class and i took a course on comparative economic systems and two of the writers were paul baran and paul sweezy and they were marxist economists. baran, the most influential marxist economists of the 20th century and he said this, he described cuba as a paradise garden where agricultural problems would not away with a gigantic economic surplus. saidsweezy, his compatriot about cuba, you come away from with faith inst the human race restored because of their purifying and liberating experience is. the final quote i have is norman
mailer, who just swooned when castro went to new york city. announced to the city of new york that you gave all of us some sense that there were heroes in the world. you were the first and greatest hero to appear in the world since the second world war. i also have a quote from david rockefeller. these are movers and shakers, important people with old opinions who said these things and i call them utopians because they had some vision of a utopia, some kind of socialist utopia and a condemn capitalism by praising these alternatives and they are imaginary. they weren't the real alternatives, they saw what was going on in russia and cuba and elsewhere and they lied about it , but they got away with it for a long time.
the bulk of my book is how these enemies of capitalism have concocted a long series of myths about capitalism that pretty much holds sway in the academic world and have for many generations. beginning with the pilgrims. i mentioned earlier that there is a picture of the mayflower on my book and that is because one of the early chapters is on how capitalism saved the pilgrims. i mentioned that private property is one of the -- a prerequisite to have a we call capitalism and when the pilgrims first came, they almost start to death because they adopted communal agriculture. agricultural communism, where each -- whatever was produced was shared equally among the families. that was the arrangement that was made by the mayflower.
as a result, work incentive was stifled that massive starvation was there. william bradford wrote about how it was not a matter of having an energy or work ethic or ability, because there were people playing games. they were engaging in sports. it was not that they could not work, but the incentive was not there. how the pilgrims saved themselves was to adopt the primary prerequisite for a capitalist economy, private property. they created private plots for each family that they could produce and sell on the open market and that changed everything. it is worth reading. he said here is how they solved the problem. shouldst -- every
man set corn for his own particular and in that regard, trusted themselves in all other things to go on in a general way. assigned to every family, a parcel of land for present use and ranged all boys in youth under some family. this had very little success for muchands very industrious, more corn was planted in otherwise would've been by any means of a governor or any other could use. that is how they saved themselves, private property, but there is the story in the literature that the reason for the starvation was the corporation that was set up to finance the whole enterprise, doing what corporations were doing, exploiting the workers, exploiting the pilgrims but it was really private property that saved the day and it was the absence that was the problem. the beginning of
america, the arguments about market will your were made. out of cinder hamilton was one of the first to articulate the notion that rhodes had to be ,uilt by the government otherwise you would not have adequate roads and canals. this might have seemed like a reasonable theory. andailed with that argument it did not adopt any government-subsidized roadbuilding and canal building during his time, but this was a very powerful argument. in my book, i quote an economist who may have spoken at freedom fest before. he is a pretty well-known free-market economist who did early research on american roads and found out that hamilton was just plain wrong. communities figured out ways to the free rider problems and financed privately, roadbuilding.
the private roadbuilding movement built new roads at rates previously unheard of in america. he is talking about 1800. over 11 million dollars was invested in turnpikes in new york, it's $.5 million in new england. 238 private new england turnpike companies built and operated about 3750 miles of road. you go state-by-state about how many thousands of miles of roads were built by private investors. it was self interest. the people in these communities decided they will all prosper if they connect the towns and can trade with them. even though it was not a great investment, only paying about 3%, but buying bonds in these turnpike companies, there was more to it. you might've gotten a 3% return, but if you were a merchant, you
would sell more goods to the connecting towns. they understood that fairly well and it is an interesting story about how social offices in -- people-- ostracism -- contributed and got ostracized if they did not. there was no government involvement. you do not have to threaten anybody with prison. it worked and private roads are always built better and manage better than socialist roads are. another big myth that you are all familiar with is that when capitalism developed, the working class was abused by it, exploited. the opposite is true. the capitalism enrich the working class. that is one of my chapters. when all those people moved from the farms to the factories, where they stupid? going to be i'm
abused and exploited and paid less than i am now and take the job in the factory? the factd be insane that they left, the fact that they moved to the factory from the farm is proof that in their mind, they were better off and they were. compare factory job in the 19th century to my job abusive anduld seem expletive -- and to ours of compared backbreaking farm labor, it was pretty good, back then. capitalism is mainly responsible for the higher wages and the cheaper goods. the working class are big free riders on the capitalists. took the risk, may the investments and came up with the ideas and manage the company's and the end result is higher and higher wages, year in
and year out and cheaper goods that the workers bought with those wages. they benefited double he from all this and of course, the main reason for the higher wages is capital investment. investment,ital workers becoming educated, better trained, and so forth, but primarily, it is capital invest that increases productivity. the average american middle class lives better than the kings of europe did, 200 years ago. kings of europe did not have air conditioning or cars or ipods. capitalism is the reason for this. capitalism is the reason for the shorter work week. how else could you work less and get paid more than if productivity improves which enables you to produce more for -- per hour? that's the only way you can have
more money and less work is if you produce more per hour and when you as a worker do that, you get paid more because it is a competitive labor market. if your employer does not pay you more because you are more productive, one of his competitors will and you lose your best employees so competition is what forces up wages in a regime of capitalism where you have capital investment feeling productivity growth. the shorter work week did not come from labor unions or government or laws or anything like that, the only way we could possibly have that is productivity improvement through capitalism. the same is true of child labor. child labor was on the wane long before laws were passed or labor unions got into the act. labor unions historically, their interest in child labor laws was to kick nonunion child laborers out of work as a form of protectionism for adults in unionized labor.
it was not concerned over the children that cannot pay dues to their union, it was concerned -- the phony concern about sweatshop labor in indonesia, unions think the afl-cio is really concerned about children in indonesia more than its concerned about its dues paying members? the reason it's concerned about that is because it wants to eliminate competition for its dues paying members, whether it is -- besides that, i've had a lot of manual labor jobs in my time and i have sweated in every single one of them. what's wrong with sweat, anyway and being a shop is not bad. sweatshop language was always confusing to me. the reason why capitalism reduced or eliminated child labor is that as productivity more,people were paid
therefore they can afford to keep the kids home and send them to school. previously, they couldn't because it was literally a matter of life and death in many cases in the early days of capitalism children had to work to help feed their family. in a lothe case today of third world countries where the alternative is to kick these young people out of their jobs at the nike factory. the operatives are prostitution, begging or starvation. the alternative is not going back to a nice public school. those are some of the things i touch upon on my book. house and have a chapter on the truth about the robber barons and i recommend that to everyone here, maybe you know about the work of burton fulsome. eyesight him extensively and as the new material -- add some new
material to that and what the , isis -- what the myth is that some of the early entrepreneurs, john d rockefeller and cornelius theyrbilt, james j hill, were genuine entrepreneurs, they made their money by providing the masses with better products and cheaper products, but there were others who made their money anymore dishonest way, such as alien stanford who used his political connections, he was a u.s. senator who had a law passed that essentially made competition in the california railroad business you legal. make money bit -- in business if i have a lawmaking competition you legal. even though i am a college professor. these are what you call political entrepreneurs.
they look to politics and became ridiculous. lists.became mercantile you have people like john d wealthyler who became by reduce the price of oil he became the cheapest producer of refined kerosene, refined oil, and he drove down prices for decades of these things. americanshink of it, -- low-income americans could not even like their homes of the post-civil war era because it was too expensive. rockefeller at least given the means by which they could have afterfter sunset -- light sunset. just that, i think, is more
benefit to the american people than all the politicians and the history of the republic, in my opinion. cornelius vanderbilt got his start by driving robert fulton out of business. robber fulton, steamship operator, had a government monopoly on the hudson river. been,anderbilt, as it had came around and figured out a to compete in illegally with rubber fulton by charging anding for transportation making transportation by selling food on his boat. the state police chased them up and down the hudson river until they just gave up. and he drove rubber fulton out of business. the fulton was the mercantilist. he thought he had a protected monopoly, but vanderbilt drove them out.
so the story of the robber barons deuce sherman untrue. free market, you cannot rob anybody. we only way to make money as to persuade people that it is in their adjusted take your product and your service in return for some of their money. hill belt ofes j the transcontinental railroad without a dime in government subsidies. railroad. better he built a fter. had better service. he subsidized the towns along the way because, if they did not prosper, he would not prosper. he gave them free grain, free education about farming. he paid indians for the right away across their land with livestock or money. todid not call in the army kill them, like the government-subsidized railroads dead.
he even found passage through the rockies that lewis and clark had found and no one had found since then. he found an car off 100 miles on his railroad route. he was a tenacious businessman. so that is happiness. myth.t is half a a couple of chapters on the franklin d. roosevelt myth, it is connected to the hoover myth. the myth was that herbert hoover was an advocate of laissez-faire and his policies caused the great depression. fdr came along and enacted a massive interest science -- interventionist state and saved us off the great depression. totally opposite of the truth.
herbert hoover was not an advocate of laissez-faire. after he got out of politics, i read some of his speeches and things. rhetorically, he was great as an advocate of laissez-faire, freedom out so forth. politician, he wasn't. the first thing he did in office was pressured businesses to raise wages in a recession. that is awful and economics. that is bad economics. when a recession, when consumer demand is down from income is down -- a lot of businesses are in a position in that the only way they can stay in business is temporary pay cuts because wages are 80% or 90% of our total costs. so if they go to the workers and say, we will show you the books even, we can survive unless we have a temporary pay cut. when things get better, we will pay competitive wages again.
hoover pressured them to do the opposite. was recently the agenda of labor unions that he was promoting. he was a massive public works spender and a massive tax biggest or, among the tax increases were under hoover to pay for public works. he implemented the farm cartel, the policy to pay farmers to not grow food because that would cause higher prices for food, which would help farmers. we still have these programs today. maybe some of you would remember a couple of years ago the great american farmer sam donaldson having received i think it was $2 million for not raising sheep
on his sheep ranch in new mexico. he had a sheep ranch. i guess he to run the sheep ranch. pay sheeprogrammed to ranchers in order to not raise sheep to drop the price of sheep and will so they could make more money in general. williams, oneter of his columns, he demanded $2 million from the irs by saying i, too, do not raise sheep. [laughter] so why did i not get this money? -- herberter humor hoover was the initiator this. he raised the average tariff the sales taxs, on imports from foreign countries, to about 60%.
this devastated american farmers. because now they exported a great deal of their produce. put bigut -- if you terrace like that on goods, that means people in foreign countries get less dollars because they can't buy their goods. we can't buy their goods because it's too expensive. but, since the europeans have fewer dollars, they have less of an ability to buy are good, our desta to buy our goods, and our exports, overwhelmingly food. andollars going to europe other parts of the world dried up because of this. had far fewerhey dollars with which to buy american goods, especially american farm goods. they retaliated.
they put high caps on american goods coming into their countries on the great depression broke out, the first big banking crisis was in the farm areas. farmers would devastated by the food holly hoover tariff. that was really one of the view, that, in my instigated the whole great depression, one of the misguided policies and that was the hoover policy. to say that he was a laissez-faire advocate, that is just not right. the toptold well was man for a long time. here's what he said about hoover. idea is embodied in new deal legislation were compilation of those who had come to maturity under hoover a posture yes he just.
we all of us so much to hoover." on fdr himself, he did not end the great depression. before theyment rate great depression was 3%. that was normal. by 1938, it was still 19%. 1939, it was still 17.2%. the great depression never ended before world war ii. personal consumption, which is a major of how well-off consumers in 1940s still well-off than in 1930. the depression did not end by woodward to either. sending 10 to 12 million men to serve in the military is not a way to in the great depression. depression means greater prosperity for consumers. and we do not have that during the war. there were greater set ices during the war.
the depression did not really in until after the war when the federal budget was cut in absolute dollars from $95 from 1945 $35 billion to 1947. the economy took off. all that money was put back into the private sector, back into private hands, back into private investment. were horrified. they thought this big reduction in government spending was going to cause an even worse depression. but they were wrong. they never paid attention to that. so they just went about their way. roosevelt's policies unequivocally made the great depression worse and made it last longer erin there's no doubt about that. the first new deal, they called it, the first couple of years, was essentially a scheme to caramelize the whole u.s. economy. the basic theory of the first new deal was that low prices
cause the depression. therefore, high prices will end the do present -- the depression. the industrial recovery act imposed price supports throughout the whole economy and were policed by thousands of price police who arrested people for cutting their prices. there is a famous story of a taylor new york city who is actually imprisoned for hemming a pair of men's pants -- i think it was for $.35 instead of the official prices around $.50 or so. he was actually put in jail. storm troopers were sent around to harass people. the farm sector, the same thing happen. the lower -- if low forming come as caused by low food prices, then let's jack up food prices by law.
originally sent government agents to destroy livestock. farmers.permission of they thought, if we go out and kill all of these cattle and hogs and animals, that will reduce their supply and drive up the price of meat. therefore, the farmers will be happy. this was a period when there were long lines and soup kitchens. people literally starving in places like the mississippi delta and here's the government destroying food. it was a public relations disaster for fdr. of notvised a policy growing food or livestock in the first place. they expanded it passed with hoover did in that was all ruled unconstitutional. the first new deal essentially gave the nationally ripped -- the national recovery at was ruled unconstitutional as was the agricultural adjustment act.
restriction production is not the way to help the economy. but that was a whole purpose of the first new deal. the second new deal was even worse. deal, probably the hallmark of it is labor legislation that greatly toowered labor unions increase wages by 17% in 1937 in the middle of the great depression. -- someone iseant waving at me back there. time? to takee going questions in about two minutes. prices inlly raising a recession or a great depression will cause greater .nemployment to economists have written a great book called out of work. the history of unemployment in america. they estimate is statistically that, because of these policies of forced up wages in a recession, a deep recession, that the unemployment rate was probably at least a percentage
-- at least eight percentage points higher than it was otherwise. so that is the fdr myth. my final chapter is called "the never-ending war on capitalism." i touch upon such issues as political extortion. another great book is called "money for nothing," about how politicians will propose an and then they will sit back and wait for those businesses to send them campaign contributions. and then they will forget about the law and they will rescind it. they did that with pharmaceuticals when the clintons were in office. they proposed price controls on pharmaceuticals. the pharmaceutical industry poured billions of dollars into washington, d.c. and they said,
we will not do that. it was bad for the goose that lays the golden eggs. i mentioned the war on vice in my final chapter, the nonchalant 400 pound teenagers can find a lawyer to sue mcdonald's because of their condition. win sunday, it will impose great economic harm on a lot of people. a lot of people will lose their jobs. i also talk about some of the authors of the more popular anti-capitalist locks, such as michael moore are barbara aaron reich. michael moore, the great economic scholar, in his book " stupid white man," which is a good title for his book, blamed the faith of indian -- the fate of indian reservations on capitalism.
of course, indian reservations are pure socialism. -- he rails he does against stupid union leaders who negotiate temporary wage cuts to save the jobs of the members. the smart ones are the ones who do not do that. the company goes bankrupt and everyone loses their job. those of the smart ones. and this is a guy who has a book called "stupid white men." and then there is the book med."d "nickel and dine on has been a big celebrity college campuses. her book is used for freshman seminars everywhere and she makes these remarkable fasttific discoveries that food job soon up a very much. that is pretty much what she says. he in the end, she makes a pitch for the wonderful program of more public housing subsidies,
higher minimum wages, and all the things that have been proven to be failures for many decades now. end the book with a discussion of some of these ongoing attacks on capitalism. maybe that is all i have time for now. maybe will have some time for questions. [applause] >> if you have a question, we have a microphone over here to yes, sir. >> first of all, thank you for your presentation. it was really good. about georgeecdote mason, when they were doing selections of some books of the business goal. i'm just curious, the book that you have written now, have you gotten any feedback from college professors that perhaps your book is they bought en masse for classes? >> it is being used at the
university of georgia, san diego state. i will use it myself and semester. [laughter] georgia is using 600 cup is a year. so a big class, to susan -- two semesters, something like that. it is coming out in paperback in about a month. so it will be much cheaper. the reason random house decided to do that is that is being used by more more colleges. although i say students should buy the books because your parents pay for them in a the end of the semester you can take .hem back for cash med" is -- di
i get into debates about capitalism. one of the standard fares of people arguing against me is this question of authenticity. butamily's injuries, because i don't come from the economic underclass, -- my family isn't rich, but because i don't come from the economic underclass, people argue with me that i am incapable of making effective arguments because i don't understand what it is like firsthand. i don't understand the personal economic problems that the underclass to experience in the united states. and what do i say to people like that when they bring up this kind of comments? >> you say you have never had cancer either, but you understand the cancer is a very bad thing. [laughter] are you could tell them that you have never personally met george washington, but you know a lot about him because you have read several biographies about george washington. by peoplec is used
who know they don't have the arguments on their side. if you don't have the logic and facts on your side, you argue a motion or bs. that is what you argue. what their socioeconomic statuses. i've heard the same argument when i was a student, when i was your age and became a professor. my father was a construction worker. i don't come from a rich family either. ie most of the academics debate with do come from acted damage or what -- from academic or wealthy families. one professor were inexpensive three-piece suit every day with workboots. he was showing solidarity with the working class. phony authenticity. because my friend about this guy
and he inherited a lot of money. he was a millionaire and teaching at uva law school. but solidarity. so use the logic of you don't have cancer, but you know it is a bad thing. let's notis saying use our brains. let's use our emotions here in ways that we defined. that is an illegitimate way of arguing in my opinion. the other argument is that it doesn't account for the emotional and human side of the equation. >> sure it does. called a course capitalism at its critics and i use the county nest manifesto land criticisms of socialism -- of a communist manifesto and criticisms of socialism. one of the things i do is i have my students read the road to serfdom explaining why socialism doesn't work and why interventionism leads to socialism. then i have them read the black book of climbing is him, which i recommend.
and i asked them to write a idea in theng any black book of communism. learn, one, to have socialism or whatever it is called, interventionism, it requires: version. in these cases, -- it requires .oercion in these cases, it kills many millions of people i made them isabel, even if they were not killed. that is the moral high ground that your fellow students and leftist professors are taking. they are taking the moral high ground that we are on a side of socialism because capitalism has been bad for the people. the truth is the opposite. it is easy to prove with this kind of information. that is why your friends don't rely on books like this. >> thank you for your answer. i appreciate it. >> in my school and a come i went to work and everyone was walking around in wheelchairs
and it was the same thing came students had this project on how can you understand how people in wheelchairs feel if you're not in one yourself. they also had an overnight sleep solidarity with the homeless. a big pajama party by these spoiled rich kids in my school. solidarity with the homeless. >> earlier in your lecture, you mentioned are sessions. economist by any stretch of the imagination, but i have .ead some other works i pureriter writes about market recessions are a natural and are caused by government regulation. optnted to know what your -- what your opinion is, whether they are a natural occurrence or a consequence of government intervention. >> i think the central bank is
the main generator of recessions and business cycles. i don't think it's totally an accident that we -- the fed came .n in 1913 and we had the great depression not too long after that. i think the best excavation for onegreat depression is the that the austrian economist forth. there are a lot of investors now. this theory is also the expedition for the nasdaq plunge a few years ago. basically, monetary expansion by the fed makes credit cheap. and it results in over capitalization of a lot of businesses and and a lot of businesses are created that shouldn't be out there. but cheap credit capitalizes them. furthernesses expand than what they should. that goes on for years. by liquidation it has to eventually occur because there's
too much capital and not enough products.to buy the so there has to be liquidation of this capital. and that is what causes the , the depression. some pretty highly regarded investors now who believe this is what happened with the crash of the nasdaq. i think it is also a major cause of the great depression in the 1930's. had arse, the 1930's, we combination of really bad policy , the smoot-hawley tariff, misbehavior by the fed, big tax increases by hoover. they just -- they did just about everything wrong. you can read my book and find out more about that. time for one more. the man in the back is holding the big numbers up. thatu mentioned before people would use tax on
capitalism to export children. we talk about a glass ceiling for women salaries. inherited cottage industries. workthe women went out and in the factories, they were paid firsthand. in new zealand, we had high import tariffs. ordway liberalized, women were able to buy cars and enjoy life. positivelk about the benefits of capitalism for women in your book? is there anything you would like to expand on the? i don't know how you can say that a married woman benefits or doesn't benefit from capitalism apart from her husband. part of a family unit, it
doesn't make much sense to talk about how one benefits versus the other. they are aided as a team as far as that goes. developmentsggest in the past 30 or 40 years in the labor market is the increased labor force participation of married women. that's because of higher and higher wages. and that's because of capitalism. and they voluntarily chose these roots. student,s a college the statistics i've seen of law students was probably about 15% of them were women. now it is over half. the same is true for engineering schools, computer science, economics. i think capitalism has driven that. whether you think that is a good thing or not, it's not for me to say. women benefit from capitalism as much as anyone else can. i guess our time is about. thank you for coming. [applause]