The Podcast of the Lotus Eaters - We Haven't Had Free Markets for 150 Years ｜ Interview with Ryan McMaken

00:00:00.000 Hello, everyone. Welcome to this interview of the Lotus Eaters. I'm very pleased to be 0.85

00:00:04.860 interviewing today Ryan McMaken from the Mises Institute, and he is the chief editor of the

00:00:12.040 Institute. Ryan, thank you very much for agreeing to be interviewed today.

00:00:17.460 It's great to be with you today.

00:00:19.900 Awesome. So I'm a classical liberal and a very historically conscious one,

00:00:25.800 And I think it's good to talk to another person who identifies broadly within that camp.

00:00:33.620 So I would like to ask you to set some order in the conceptual chaos.

00:00:40.180 Because right now, especially in culture wars and in social media,

00:00:45.560 there are people who use terms like liberalism, classical liberalism, modern liberalism, progressivism, anarcho-capitalism, minarchism.

00:00:54.440 They constantly use these terms. Conservatism is another term. I don't think that they know what they mean, or at least I think that they're using frequently these terms in a way that is conceptually untied to their historical meaning.

00:01:12.620 So I would like to ask you to tell me how you understand these notions and how do you understand the history of the movement?

00:01:20.240 well when i talk when i use these terms i'm generally drawing upon a historian that we

00:01:26.940 value a lot at the mises institute where i am and that's a historian named ralph rako

00:01:30.760 and i recently edited a book by him which was essentially a uh a history of political thought

00:01:38.140 and so he uses he uses in fact similar term to you right about conceptual chaos right because

00:01:44.800 if we're going to take a historical view of these sorts of terms, we have to use terms that don't

00:01:51.160 change very much over time. Otherwise, it makes no sense. If we're trying to apply the term

00:01:57.340 conservative today to how people use the term conservative in the 18th century, it's just

00:02:02.000 where we're going to have to clarify a bunch of stuff. And so it is important to have a good

00:02:07.320 historical sense of what liberalism means. And that's what historically would have just been

00:02:11.580 just liberalism, not classical liberalism. We have to use the qualifier classical now

00:02:17.980 and apply to liberalism because so many other groups have attempted to use the term and co-opt

00:02:23.520 the term. But as we use the term, we're referring to this 400-year-old ideology that goes back

00:02:32.220 really to 17th century Britain for the most part, but has even deeper roots in Western Europe. 0.51

00:02:39.820 But most people would say, OK, it really in an identifiable form goes back to John Locke and also the levelers in 17th century England.

00:02:49.600 And these are people who started to talk about freedom of speech, about property rights, about even what later we would call constitutional rights, legal obstacles to state power, those sorts of things in a in a very structural, very movement wide way.

00:03:07.960 They were trying to put together an actual political movement. And so this is then the tradition that we're following up through the 18th, 19th, and 20th centuries. And for Americans, of course, very important, the influence of these ideas then on the American revolutionaries, especially, say, Thomas Jefferson and the Declaration of Independence, which is a nice encapsulation of classical liberal ideals as discussed in that document.

00:03:35.420 And then these ideas continued well into the 19th century, both in the United States, but also in Western Europe, especially among theorists in France and also in the United Kingdom as well, although there were variations among these people within those groups.

00:03:52.500 But all through all of that time, it was called simply liberalism. And people understood for the most part what this meant. This was the ideology of laissez-faire. It was the ideology of very restrained foreign policy. It was the peace party and low taxes, very little in terms of tariffs. It was the free trade party.

00:04:13.420 and that is what that's what liberalism was but in the 20th century then other groups started to

00:04:19.320 co-opt it and you had john maynard canes for example who called himself a liberal but wasn't

00:04:25.720 one and what you'll encounter and i don't know how it is in the uk but in the in america if you go

00:04:30.340 through a political science program in college you're going to get this general narrative you're

00:04:35.380 going to get oh yes you had these 18th and early 19th century liberals uh but then in the 20th

00:04:42.620 century liberalism uh the the natural continuation of liberalism was into what we now call social

00:04:48.540 democracy for example it was the ideology of franklin roosevelt the ideology of woodrow

00:04:54.540 wilson of canes and of his followers later people who started to talk about how it was good to

00:05:00.460 regulate the economy and the focus simply became on social policy right you need to uh um fulfill

00:05:07.420 be yourself, fulfill whatever your sexual desires are, things like that.

00:05:13.280 Those sorts of things became associated with liberalism,

00:05:16.780 partly due to some errors that John Stuart Mill had inserted in there.

00:05:21.340 And this is a reason why modern leftists like John Stuart Mill so much,

00:05:24.740 is he kind of creates this bridge between real liberalism,

00:05:28.720 that is the laissez-faire free market type,

00:05:30.660 and this modern interventionist thing we call liberalism. 0.83

00:05:33.900 So now you've got Hillary Clinton calling herself a liberal.

00:05:36.120 We got all of these people on the left who are anti-freedom, they're high tax, they're pro-regulation, which is basically the opposite of historical liberalism, but that's what they call themselves now, and that's why we have to use the qualifier classical liberalism.

00:05:52.040 But for any historian who's trying to create some sort of real story throughout history, you're stuck with the term liberalism, because that's what everybody understood it was in the 17th, 18th, and 19th centuries, really.

00:06:06.600 And the 20th century messed all that up.

00:06:09.400 So you just have to keep that in mind.

00:06:12.460 And there is a battle now over the term.

00:06:14.700 I find that you've got some groups that don't want to be associated with conservatism, but they want to be sort of the free market party.

00:06:23.860 So now they call themselves classical liberals, but they take a very moderate, mild view.

00:06:32.380 And they, however, are in the same general tradition as the libertarians, as we call them.

00:06:39.060 They're just simply a more radical wing of classical liberalism.

00:06:43.040 So, yes, if you are encountering people who are generally pro-free market, they're free speech, they believe in rights in this general metaphysical way.

00:06:52.960 Sure, those people are liberals, but there is the more moderate wing and then there's the more radical wing, which we would call today the libertarians.

00:07:01.800 And that's always been true for more than 200 years now.

00:07:05.660 So I don't get too much caught up on, oh, is this person an anarcho-capitalist?

00:07:10.440 that's just simply if you had a venn diagram of classical liberalism that would be one group

00:07:16.100 within there just the most radical group perhaps but if we once we start introducing all of these

00:07:22.480 other labels that i'm not sure how constructive it is especially if people are trying to use

00:07:28.960 those labels to exclude themselves from the larger liberal tradition it's better to just

00:07:32.660 accept it as a big tradition that there are certainly better and worse groups within it

00:07:39.420 depending on your own point of view. And so I just accept it as something that exists historically,

00:07:45.120 and we should just be aware of that. Awesome. Thank you very much. I have several things to

00:07:49.800 ask you here because that's a very interesting conversation. Number one, I think, speaking of

00:07:55.940 John Stuart Mill, I think you're completely correct. And I would say that several leftists

00:08:01.860 right now in academia, and I was in academia, I was teaching for six years. I have a PhD in

00:08:07.780 philosophy i was focusing a lot on free will and i was very much interested with respect to the

00:08:13.300 question of how free will ties into politics and the kind of what does it mean to respect the person

00:08:18.900 and the person's freedom so what i saw was that there is a new generation of academics some of

00:08:27.800 them are really young who are trying to look back to the past and completely change do completely

00:08:34.980 revise the perception of the liberal tradition, and they almost invariably cite Thomas Paine

00:08:43.500 and John Stuart Mill. I think one of the problems that I see in this, especially incorporation of

00:08:53.800 John Stuart Mill, is that they take a phrase that John Stuart Mill took from Wilhelm von Humboldt

00:09:01.260 that talks about the self-development of a person.

00:09:05.140 And they sort of start arguing

00:09:08.460 that self-development can be outsourced to the collective.

00:09:14.160 I think one of the most important ways to wake people up

00:09:19.360 is to say that others cannot self-develop you.

00:09:23.440 So self-development can be outsourced to any other group.

00:09:28.100 I think that's one of the things that I see. I don't know if you see it as well. If you see a general trend of argumentation within academia and intellectual circles that present the state as the ultimate agent in self-realization, in achieving autonomy, which seems to me to illustrate the contradiction that you can't self-realize, self-govern, self-develop people without them.

00:09:58.100 doing it themselves what do you think about this line of thinking well i think the whole debate

00:10:04.140 really illustrates uh a strategy that anti-liberals anti-free market people have tried to use for

00:10:11.180 quite a long time it was the same way when i was in graduate school was uh my professors uh if you

00:10:17.660 if they you became known as sort of a libertarian in the department right and and they always wanted

00:10:22.700 to bring it back to john stewart mill it was really quite amazing they viewed on liberty as

00:10:27.260 essentially like the bible of liberalism because it fit into their conception but mill had so little

00:10:36.180 focus on economics that it really sets him apart from most classical liberals is that um he did not

00:10:43.700 favor free trade uh which which in those times free trade included trade with everybody both

00:10:49.660 internationally and domestic this was absolute focus among liberals mill just straight up said

00:10:56.280 oh, I don't really think that's very important. Mill also was bad on foreign policy. He thought

00:11:01.080 interventionism and imperialism was okay under certain circumstances. So this actually really

00:11:07.960 made him the opposite of the sort of liberalism we got from the Manchester School, from Richard

00:11:11.820 Cobden, and so on. And his focus was, as you know, right, it was on this personal development idea.

00:11:19.140 And as Reiko points out in his history of political thought, he thinks a lot of it really

00:11:23.260 just stems from mill's bizarre personal problems so mill was the serial adulterer he had all of

00:11:30.820 these personal problems in terms of trying to reconcile his puritanical personal views

00:11:35.820 with the larger social uh conditions in england at the time so he decided oh what liberalism

00:11:42.640 really means is freeing ourselves from uh social pressure freeing ourselves from social control so

00:11:49.720 he took liberalism away from concentrating on reducing the power of the state which is what

00:11:55.180 liberalism had always been focused on and instead instead saying oh look at these people who have

00:11:59.980 morals that are constraining us we need to get rid of that we need to in fact use the power of the

00:12:06.080 state to overturn social pressure and these institutions that impose on us some sort of moral

00:12:12.680 view when in reality those weren't even state institutions a lot of the time so he had this

00:12:18.560 obsession then with people should be able to express themselves and do whatever they want

00:12:22.560 have sex with whoever they want and that became his obsession and because he was popular and he

00:12:27.460 was a good writer he managed to convince many people that that was actually the proper view 0.88

00:12:31.940 of liberalism when really through most of its history the true liberals have been focused on

00:12:36.700 economic freedom and on restraining the power of the state because that affects every aspect of

00:12:41.260 your life if you can't buy and sell if you can't save money if you can't support your family

00:12:45.440 That is just devastating to you, and something far more important in the liberal view than some social issues, and being free from having some disapproving relatives who don't care for your personal morals.

00:12:59.160 Right. Another thing I see is that lots of people have moved away from liberalism after the 1929 market crisis and the crash because they were sort of convinced that this was a free market failure.

00:13:20.160 And you mentioned John Maynard Keynes before. I think they definitely cite John Maynard Keynes and Keynesian economics as the sort of paradigm that completely demolished free market economics.

00:13:34.500 And there is sort of a general consensus in most people, I'd say most people who are very much against the free market, that Keynes won the debate.

00:13:48.880 and academia now lots of lots of liberals within academia now they they call themselves liberal

00:13:56.820 perfectionists most classical liberals tend to be in economics departments but when it comes to

00:14:03.040 philosophy political philosophy politics they tend to to be liberal perfectionist which more

00:14:08.420 like social liberal or new liberals is the the progressive status so how important is it i think

00:14:15.860 it's important to go back to the to that crisis and give a new the the classical liberal perspective

00:14:23.460 or the liberal perspective on it what caused that crisis and why is k why do you think ames is wrong

00:14:30.120 economic history is very important right in making the case uh because philosophical arguments

00:14:37.460 will help in certain circumstances but as friedrich hayek in a great essay on on markets

00:14:44.740 and the historians notes that so and you see this in your daily life people's ideological views

00:14:51.500 rely very very heavily on their view of history right how do they if they're convinced in school

00:14:56.760 as most people are if they go through public school in america they're convinced that

00:15:01.320 industrialization ruined the lives of western europeans right that everybody was living these

00:15:07.740 wonderful lives on farms these bucolic paradise and then industrialization comes along and makes

00:15:13.200 everybody poor tons of people believe that because that's what they were taught in school

00:15:16.560 so you can you could talk philosophy you talk market economics till you're blue in the face

00:15:21.140 but if they believe at the end of the day that market economics turned everybody into these 0.59

00:15:25.500 poppers working in horrific uh satanic mills as the the term was right in the 19th century

00:15:31.200 then you're gonna have a hard time getting them to support free markets in the same way as the

00:15:35.580 great depression right people believed that uh market economics led to the great depression so

00:15:41.120 it's very important to keep fighting that debate but it's a very interesting thing that happens

00:15:47.120 at least in the american version of history which is that in the 19th century you had this is the

00:15:53.240 way the narrative goes the 19th century you had free markets and uh but then fortunately and that

00:15:58.960 led to the gilded age and extreme income uh inequality and industrialization in america

00:16:06.200 that turned everybody into paupers fortunately then you had theodore roosevelt come along and

00:16:10.720 he broke the trusts, and they instituted a bunch of federal regulation. They got rid of the free

00:16:15.620 markets. They got rid of the robber barons. But then, magically, in the 20s, free markets came

00:16:21.620 back, and America was totally laissez-faire again. And then that caused the Great Depression.

00:16:27.540 And then if you follow that narrative, it keeps happening over and over again. For example,

00:16:33.520 um in the 1980s america was somehow laissez-faire again under ronald reagan and there were no

00:16:40.860 regulations on the market and that caused a variety of problems and then in 2007 you had

00:16:45.980 the housing bubble and that was caused by so much laissez-faire uh because the the u.s economy was

00:16:51.960 totally unregulated this they keep saying that again and again that magically laissez-faire

00:16:56.880 keeps coming back the reality of course is that the u.s has been progressively more um

00:17:03.360 regulated and higher tax and far less laissez-faire every year since the late 19th century.

00:17:11.620 So, yeah, by the 1920s, when you have the situation that is leading to the Great Depression,

00:17:18.820 there's no laissez-faire. What you have created in 1913 is a central bank,

00:17:23.220 and a central bank is absolutely central to the boom-bust business cycle. And so in his

00:17:29.460 economic history of the Great Depression. Economist Murray Rothbard, he's got a book

00:17:34.420 called America's Great Depression, where he looks, he tries to take a nice empirical,

00:17:38.840 hard look at what really did cause the Great Depression. And it turns out that it did,

00:17:43.820 in fact, follow the general narrative that we know that central banks and monetary inflation

00:17:50.600 leads to the boom-bust cycle. And if we look throughout the 1920s, you have a series of

00:17:55.140 bubbles and a lot of monetary inflation taking place that lo and behold then leads to the crash

00:18:01.620 in 1929 now the depression itself wasn't caused by that crash so the depression was caused by

00:18:09.260 herbert hoover and franklin roosevelt both coming in and creating a vast new regulatory regime

00:18:16.440 in the United States that turned what could have been a six- or eight-month crash and recovery

00:18:25.440 into this 10-year ordeal because the economy simply wasn't allowed to function anymore under

00:18:32.260 the New Deal and under Hoover's earlier changes. And you can contrast this then with the 1920-1921

00:18:39.880 recession, which after World War I, there was a crash, but the federal government took no action.

00:18:44.620 and the the u.s recovered from that very deep recession uh within a year and so you can

00:18:53.180 contrast those two things the the federal government takes no action has a quick recovery

00:18:56.700 also caused by the way by monetary inflation on the back of policies from the central bank

00:19:02.780 and then in the but then in the late 1920s and early 1930s the federal government intervenes

00:19:08.960 with tons of new regulation, tons of new subsidies,

00:19:11.840 and that actually creates this long-lasting depression

00:19:15.620 that people remember today

00:19:17.240 as somehow being caused by free markets.

00:19:19.540 So that debate continues,

00:19:20.840 and that is definitely something

00:19:21.700 we have to continue to fight.

00:19:23.580 So how do you think is the best way to fight against it?

00:19:27.600 How best to convince,

00:19:31.760 what are the best ways to convince

00:19:33.920 someone who is totally Keynesian?

00:19:36.460 I mean, I understand. You did say Rothbard's America's Great Depression book and stuff, but could you give us, in a nutshell, one or two arguments that are really pithy and concise and sort of can wake someone up?

00:19:55.740 Well, you simply have to impress upon people that, first of all, the idea that the central bank has saved us from depressions and from major economic dislocations is simply a myth. And so you need to present those facts, right?

00:20:11.580 There's this myth that the Federal Reserve, since it was created in 1913, has prevented any serious economic problems.

00:20:17.960 Of course, the Fed was there for the Great Depression.

00:20:22.020 The Fed was there for repeated recessions in the 1950s.

00:20:25.440 It was there for the mass inflation of the 1970s and the huge recessions of the late 70s and early 1980s.

00:20:34.440 It was there for the housing bust in 2007, and it's been there for what has been since about 2010, an ongoing problem of a continually larger gap of income distribution in terms of, thanks to Fed policies, thanks to the central bank policies, you really are in a situation where you're getting wealthy asset owners getting richer and richer,

00:21:01.520 and normal wage earners are making far less progress.

00:21:05.420 So all of the things that they tell us capitalism causes

00:21:08.080 are things that are caused by the central bank.

00:21:11.180 And the central bank is central to the Great Depression.

00:21:13.040 It's central to the inflation of the 1970s.

00:21:15.860 And it's central to our ongoing decline

00:21:18.660 in overall wealth for normal people.

00:21:21.940 And you just have to take all of those facts

00:21:24.060 and just make them clear over and over again.

00:21:27.220 Because if you're going through public school,

00:21:29.960 if you're watching the media,

00:21:30.820 you just get this constant drumbeat of the opposite so you just have to counter the constant

00:21:35.760 myth making that the the economic left gives you on all of these issues and unfortunately there's

00:21:41.640 no other way to do it you just have to present a different view of history for the most part

00:21:47.160 but at the same time for people who are going to want to get into actual economic theory that's a

00:21:52.140 very small percentage of people i think who want to get get into uh deep economic arguments some

00:21:57.920 will but you have to be able to present that information as well and of course we've got

00:22:03.020 there's the theory is excellent in terms of this is austrian school economics business cycle theory

00:22:09.660 sort of stuff the theory is very very good uh but you're also going to have to demonstrate that it

00:22:14.740 plays out in the historical data as well yes i i agree with you the question is if few people are

00:22:23.240 going to read economic history and most people won't how do we fight against the myth and in

00:22:29.180 what sense in the sense not in arguments but there's a question there with respect to political

00:22:34.660 power because if there is this widespread myth that it's free markets that constantly cause

00:22:44.020 all the problems and this myth is propagated by several parties that have vested interest

00:22:52.240 to propagate it and do control major political institutions because they crave power and they

00:22:59.980 have sort of taken over a centralized state and an increasingly centralized state

00:23:05.820 how are we going to fight back against this is it going to be by elections by winning elections

00:23:14.540 is it going to be by trying to convince the few that will be will listen is it by trying to get

00:23:22.000 trying to get at the power of these institutions?

00:23:25.940 How are we going to dislodge them from that position

00:23:30.460 where they are able to propagate that myth?

00:23:34.720 Well, on the more philosophical level,

00:23:36.700 just in terms of getting people's attention,

00:23:38.460 you do have to appeal to people's sense of justice.

00:23:41.460 You have to explain to them that they are, in fact, being ripped off.

00:23:44.820 This is a slogan we have at the Mises Institute.

00:23:48.140 People are like, why do you study economics? It's so boring.

00:23:51.120 The reality is we study economics so we can learn how we're being ripped off, right?

00:23:55.920 You can only see the way the regime is ripping you off, impoverishing you, destroying lives, stealing money, essentially, from ordinary people, if we understand the economic mechanisms by which the regime does those things.

00:24:08.300 So you have to explain that, but you do have to then appeal to people's sense of justice, right?

00:24:14.700 People don't like to be ripped off, and also people don't like to see innocent people being ripped off.

00:24:19.540 But they don't appreciate that the state is doing all of this ripping off because they've been taught their whole lives that the state saves them from criminals and bandits who are ripping them off.

00:24:28.840 When in the reality, the most wholesale criminal in this kleptocratic regime that most Americans live under is, in fact, the central government.

00:24:39.060 And so that's going to be something very difficult to overcome because the U.S. government is one of the most powerful governments in the history of the world.

00:24:44.880 probably the most powerful government in the history of the world, and relies on the two

00:24:49.720 things that governments rely on most to keep their power, which is propaganda and just outright force.

00:24:55.780 So to go against that is very, very difficult. You can go against the propaganda very well,

00:25:00.480 since there is, at least in America, some semblance of free speech still tolerated. But of course,

00:25:04.840 you don't have nearly the machinery that the regime has through the school system,

00:25:08.940 through media and so on. And then, of course, just their monopoly on force is just so huge.

00:25:14.880 because Americans for so long in the 20th century had so much faith in it.

00:25:20.040 How are you going to overcome that, though?

00:25:21.900 Well, elections will be of limited help,

00:25:24.120 at least as long as most Americans' ideology is currently what it is.

00:25:29.100 For the most part, most Americans believe that U.S. government is illegitimate,

00:25:32.940 that it does good things, and that you have to support it.

00:25:35.820 And you can even see that now.

00:25:38.540 It's not nearly as bad as it was during the old Iraq War days,

00:25:41.920 but now to oppose the government you'll still encounter certain conservatives who will say you

00:25:47.580 hate america if you oppose the government basically when they say hate america what they

00:25:52.620 mean is hate the government right when they say love america what they mean is love the government

00:25:56.160 because they're still so wedded to this idea that the government is this mad this miracle worker of

00:26:01.840 wonderful things and we must uh support it at all times uh what's this it's like a certain

00:26:07.700 conservative sickness that you will encounter. Well, they'll say, oh, the U.S. government can't

00:26:11.960 do anything right. It can't run a hospital. It can't regulate markets. Then they'll turn right

00:26:15.520 around and say that the U.S. military is this paragon of virtue and the most wonderful thing

00:26:20.760 in the whole universe. So very unclear thinking there. But in the end of the day, they're very,

00:26:25.620 very supportive of the regime. And most Americans, I would say, for the most part, are. They just

00:26:30.120 don't think that the government itself is a problem in a meaningful way. They'll complain

00:26:35.940 about it all day but at the end of the day they absolutely think it needs to be very very powerful

00:26:40.720 and should be more powerful in order to fix all of these problems in society so we've got our work

00:26:46.380 cut out for us you because elections aren't going to change anything if people go into elections

00:26:52.340 and vote for people who reflect their ideology if their ideology is oh the government's a problem

00:26:57.500 solver it's going to make our lives better off they're going to go in and they're going to vote

00:27:00.520 for people that that think that yeah there's going to be some variations on some social policy some

00:27:04.760 people are going to be pro-abortion, some people will be anti-abortion, they'll be pro-gay

00:27:10.580 person, anti-gay person, those little things that are tolerated in terms of actual debate.

00:27:15.740 But when it comes down to it, the things that would really weaken the power of the state,

00:27:20.740 getting rid of cutting taxes by a massive amount, for example, getting rid of the surveillance

00:27:26.740 state, and getting rid of all those pillars that underlie what has become a national security

00:27:32.200 state in the united states massively cutting the american uh regime's war powers those sorts of

00:27:38.940 things which would threaten regime power in a real way there's no real debate over those things

00:27:44.280 there's only just a small minority of libertarians uh that oppose that so i in order for people to

00:27:50.780 actually come around to seeing the real nature of the regime you're going to need to have some

00:27:55.200 sort of major crisis you're going to need to have people uh there's going to need to be major

00:28:00.060 economic dislocation there's going to need to be a significant decline in the standard of living

00:28:03.780 there is going to need to be some sort of major foreign policy disaster that opens people's eyes

00:28:10.300 to this because you can argue philosophy till you're blue in the face but most people when

00:28:15.800 they're thinking about what is the legitimacy of this regime they're looking at the immediate past

00:28:21.380 they're looking at what is their personal economic situation and as long as things seem okay

00:28:28.480 then they're not going to demand any significant change there so to implement all these changes

00:28:36.600 such as slashing taxes um you know destroying the surveillance state and etc one would require

00:28:44.620 to possess political power so what's the best way for libertarians to gain that in order to fight

00:28:51.200 against this regime that becomes progressively less respective of our liberties and your liberties?

00:29:00.560 Well, the only real strategy I've seen that's actually worked in the last century or so

00:29:07.600 has simply been breaking up large regimes into smaller pieces.

00:29:11.020 The best case scenario is something along the lines of the breakup of the Soviet Union.

00:29:15.540 I can see no examples of a centralized state that just magically gives up a lot of its power. I looked and I haven't found really examples of this where, oh, we'll voluntarily break up into smaller pieces.

00:29:31.380 Oh, we'll give up a significant portion of our power and just we'll do less.

00:29:37.180 That virtually never happens.

00:29:39.500 The only times it does happen is when the central regime itself collapses, essentially, and is broken up into smaller pieces. 0.87

00:29:47.780 And I say it's the best case scenario with the Soviet Union because that was so good for a lot of the pieces that broke off. 0.82

00:29:53.820 Moscow's power collapses. 0.89

00:29:55.020 You get, for example, all the breakaway Baltic regimes where the standard of living is far, far higher today.

00:30:01.380 than it was under the Soviet Union. You have, for example, and then while they weren't formally part

00:30:07.960 of the Soviet Union, you had all of the puppet states of Eastern Europe, Poland, Hungary, etc.,

00:30:13.120 all of which are far, far better off today after the collapse of the regime and its collapse into

00:30:18.000 smaller pieces. And none of those modern pieces, I know we villainize Russia a lot today, but modern

00:30:23.860 Russia is nothing like the Soviet Union in terms of its power, in terms of its control over its

00:30:30.220 own people. It's a pretty standard authoritarian state today, which is nothing like the totalitarian

00:30:35.200 state of the Soviet Union. So the overall effect on freedom has been immensely good

00:30:40.220 since that state collapsed. So in terms of actual practice, this piecemeal, oh, we'll just ask real

00:30:50.140 nicely and we'll have some elections and then the U.S. will cut defense spending by 50 percent.

00:30:55.860 I can't find an example where that's ever happened unless there was some sort of intervening

00:30:59.800 economic collapse in the meantime and a political collapse into smaller pieces. So at least on the

00:31:06.700 American side, because at least the Americans have some tradition of this. And remember,

00:31:09.800 the U.S. was itself founded on the idea of secession, of breaking up one regime into

00:31:15.560 smaller pieces. That's pretty much your only hope is that hoping that you can assert some sort of

00:31:22.240 local control, some sort of breakaway status, even if it's not totally formal, even if it's

00:31:28.900 just de facto secession in that, oh, we're a self-governing region now of this country,

00:31:34.760 which you can find examples of that occurring. But I just think it's mostly sort of a fantasy

00:31:40.620 where, well, we're only a few elections away from massively changing the nature and size of the

00:31:47.220 state. So the question here is about, you could argue this about foreign influence. If the U.S.

00:31:57.140 state broke into several states wouldn't it be easier for the geopolitical rivals of the u.s

00:32:04.340 to play divide and conquer with each of these states and in a way and in a way try to exercise

00:32:11.700 an influence on them that is going to be much more negative than the influence that the federal state

00:32:17.640 is um exerting upon them right now sure because history does afford us uh many examples of states

00:32:27.800 that do try to you know just uh conquer each other and um they also try to engage in divide and

00:32:35.480 conquer well first of all it should be noted and i'm mostly going to talk about this from the u.s

00:32:41.720 perspective um which in the u.s of course is especially geographically gifted in the fact

00:32:48.240 that it doesn't have to deal really with uh much foreign intervention in any sort of meaningful way

00:32:53.980 because uh as much as people talk about china china is not going to be sending a flotilla

00:32:59.060 across the pacific ocean to invade san francisco this they can't even invade taiwan so the idea

00:33:06.340 that if the U.S. breaks up into two or three pieces, 0.70

00:33:12.000 then the Chinese fleet will be there waiting 0.93

00:33:15.260 to somehow conquer the inland of North America.

00:33:18.800 These are not serious claims.

00:33:21.560 Also, why would the people of Boston decide,

00:33:24.560 you know what, we're going to ally with the Chinese

00:33:26.180 against the Floridians. 1.00

00:33:27.260 That sounds like a good idea. 1.00

00:33:29.300 For any reason, why haven't the Canadians

00:33:32.880 decided to ally with foreigners against the United States. 0.92

00:33:37.560 It's because there's obvious huge downside to that, 1.00

00:33:40.860 and there's obviously huge benefits

00:33:42.400 toward working with the United States closely.

00:33:46.060 And we might know, by the way,

00:33:47.580 that the United States has been at peace with Canada

00:33:50.740 for more than 200 years,

00:33:52.240 in spite of it being its own sovereign state

00:33:54.980 right next to the United States.

00:33:56.860 This is something that has to be acknowledged

00:33:58.140 anytime someone talks about,

00:33:59.340 oh, well, couldn't the United States break up into two pieces?

00:34:02.100 oh well then they'll be constantly at war with each other really why uh americans and the canadians

00:34:07.460 haven't been constantly at war with america and nor can you claim oh well the u.s just dominated

00:34:12.820 canada during all that period not true since canada wasn't even a sovereign state until the

00:34:17.140 1930s so really most of that history was the u.s having a peer state on its own border which was

00:34:24.340 the british empire which of course governed the foreign policy of canada well into the 20th

00:34:30.100 century. So none of those arguments really work. And also, we can't assume, why would we assume

00:34:37.460 that Americans could in no way enter into some sort of mutual defense pact in North America,

00:34:43.920 as the United States was originally founded as? The first constitution of the United States from

00:34:49.280 the 1770s, not the one currently allegedly in effect, was simply a defense pact. Overwhelmingly,

00:34:55.860 It was, hey, the states are going to work together for mutual defense. And everyone recognized that that's helpful. People who promote NATO can see the benefits of that. And in order to have NATO, you don't need to have a unified state in order to get the benefits of that.

00:35:13.100 So this is just the knee-jerk reaction of anyone who is in favor of a very strong government.

00:35:20.860 What they always revert to is, oh, there's some foreign boogeyman who wants to take over the country,

00:35:27.140 so therefore you can never have real freedom.

00:35:30.800 You can never have anyone free from the boot of Washington, D.C., 0.91

00:35:34.540 otherwise the Chinese, the Soviets, whoever you want to name, are going to take over. 0.78

00:35:38.460 And this is why William F. Buckley, the leader of the conservatives in the 50s and 60s in America, outright said that defeating the Soviets is so important that Americans, if necessary, should institute a totalitarian government within their own shores. 0.99

00:35:54.100 This is the view of the hysterical foreign policy cold warrior sort of thinker is, hey, if totalitarianism is what it takes to keep the foreigners out, I'm all for it. That's essentially, that's been their position since the 50s. And that's what underlies this whole America can never, we can never substantially reduce the power of the central government because then the Chinese will take over. 0.63

00:36:22.580 even though they never present any actual means by which that would take place since, first of all, they're not on our border. 0.99

00:36:34.020 They don't have even the ability.

00:36:37.380 There's a great book on this called Unrivaled.

00:36:40.740 It looks at how, yeah, Chinese GDP is close to that of the United States, but China has a billion people, 0.64

00:36:49.400 which means that, and that their standard of living is much, much, much lower, which means

00:36:55.840 that this idea that they are actually a rival of the United States in terms of military power

00:37:00.560 is simply untrue. That it's, where are they going to come up with all these funding when

00:37:07.600 much of the population lives near subsistence level anyway? Whereas Americans, because of 0.55

00:37:13.400 their free market history, have an immense amount of wealth with which to fight wars,

00:37:17.840 even with countries that are larger. And the book does a lot of empirical analysis on this,

00:37:22.020 showing that smaller countries defeat larger countries all the time when those smaller

00:37:26.060 countries are more wealthy. The Japanese beat China on numerous occasions in the 19th century,

00:37:32.400 for example, even though it was a much, much smaller country with much, much lower GDP.

00:37:37.620 And you can see this in a variety of examples. Yes. So another thing I wanted to ask you about

00:37:44.700 is about is has to do with mass migration and we could tie this to the previous discussion we were

00:37:51.260 having because when i mentioned threats you you mentioned hard power a flood you said that chinese

00:38:00.380 are not going to send the flotilla across the pacific ocean and uh yeah for fair play but

00:38:07.260 when it comes to soft power examples it seems that there are such efforts and let me just say

00:38:14.700 it has been found that qatar is one of the major founders of u.s universities so can you say that

00:38:22.740 in in several respects um there is an issue of people trying to affect the u.s from outside

00:38:32.100 to to a to an extent that is going to have a negative effect on its culture and instead of

00:38:41.460 And instead of directing the culture towards where you want it to go, they're directing it towards more totalitarian or authoritarian regimes, in which case this kind of foreign interference is not going to be pro-liberty, but it's going to be against liberty.

00:39:01.720 because in Europe right now we do have a problem with multiculturalism

00:39:07.200 and there seems to be a very bad combination of relatively open borders

00:39:13.580 and border policies that don't seem to be aiding each nation

00:39:21.980 and the national interest of each nation we're talking about in every country

00:39:26.700 and huge extreme willfarism.

00:39:30.260 There are stories about the kind of welfare tracks and the social benefits that people in Germany get, non-Germans, people from Syria, for instance, that you'll say they're getting many times the amount of money that a worker gets.

00:39:49.860 So culture is important, it seems to me.

00:39:53.620 So could you say that, what's your possession on that?

00:39:56.180 On the combination of welfarism and mass migration?

00:40:02.460 Well, there's a couple of different issues that need to be noted in mass migration.

00:40:06.240 There is just simply, are people physically moving to your country, right?

00:40:10.860 There is, how much welfare are they getting for free when they get to your country?

00:40:16.140 And then the third issue is, are they given the right to vote? And how quickly? Libertarians, I've noticed, this is a very controversial topic among libertarians because they'll say, oh, well, you have to have just open borders because to be a truly free market, you have to just allow people to move wherever they want, whenever they want.

00:40:36.800 uh but they they secretly insert other assumptions there as well they secretly assume that you should

00:40:44.300 also give citizenship to these people almost immediately most of the open borders libertarians

00:40:49.220 have actually no theory um no and no consistent position whatsoever on the issue of naturalization

00:40:55.300 and citizenship it's just always oh people should move here and then a few years later they get to

00:40:59.540 become voters here. So that's something that needs to be pointed out. And there should be no

00:41:07.880 assumption that people who are just physically present in a polity, a city-state, a country,

00:41:14.800 whatever, that naturalization and citizenship follows from that necessarily. And this is

00:41:21.260 something I see that the open borders people still haven't grappled with. They almost never

00:41:24.600 mention it it's just assumed all those people should get citizenship and soon and then if you

00:41:29.840 try to ask them about it they don't have any particular real explanation other than oh if

00:41:34.500 you live somewhere you should be able to vote so the government can't oppress you as if voting

00:41:38.740 somehow kept the government from oppress you as kind of a ridiculous position anyway your one

00:41:43.300 100 millionth of a vote will protect your rights absurd position uh so you could have significant

00:41:51.560 amounts of immigration without granting citizenship in any way. In fact, you do see quite a few

00:41:56.700 countries that function this way, especially, say, countries in the Middle East that rely a lot on

00:42:03.040 foreign labor. Now, I'm not saying those should be models for the United States, but what I'm

00:42:07.460 saying is that you don't have to have a connection between citizenship and immigration. And then,

00:42:13.700 obviously should cut out all uh subsidies for immigrants whether legal or not uh this is what

00:42:22.700 you're doing is you're creating a system that's subsidizing immigration so if you want if you're 0.68

00:42:27.480 going to claim that immigration should be totally free market then migrants should not be able to 0.96

00:42:33.640 access government subsidies in any way it's bad enough that native-born citizens get free stuff 0.71

00:42:41.400 all the time at the expense of the actual productive people, but it's especially bad

00:42:46.260 that you're holding it out as a reward for people who move to the United States.

00:42:51.340 So just as a very simple sort of issue to address that is, you could simply say that

00:42:56.560 anyone coming to the United States would have to sign a piece of paper saying, I disavow

00:43:03.260 access to any sort of welfare or public subsidy for the rest of my life.

00:43:08.720 And they say, okay, you can come in.

00:43:10.300 But anyone who doesn't do that is not allowed in. And the legal, illegal immigrant distinction shouldn't even matter. It should just simply not be there as a possible subsidy. And then in a certain way, in a certain non-economic way, offering citizenship is a subsidy as well.

00:43:25.880 And in the U.S., it only takes five years. But you've got countries like Japan where you could live there for decades and citizenship is not considered a viable option. So these are all things that need to be considered. And certainly, yeah, what that means, that's just taking into account the realities of political culture that exist.

00:43:47.500 And this was a point that Ludwig von Mises made, the leading Austrian economist, the namesake of our institute, is he noted that ideology matters. And Mises doesn't say this explicitly, but I think he understands it, is that ideology comes out of a complex historical development.

00:44:05.300 It's not just something that people just kind of learn in a few months in school. And so then to have a situation where you're inviting and say your whole population is 10 million people, you invite in a million people that have no grounding whatsoever in this in this similar history, in this ideology and an understanding of how societies are supposed to work from a liberal perspective.

00:44:28.980 you're essentially what you're doing is you're courting the destruction of your whole ideological

00:44:34.280 system and your whole cultural system these aren't things that can just be denied you have to

00:44:38.600 actually accept this and it's unfortunate that in the united states what you've got is an extremely

00:44:43.840 centralized regime that dictates immigration policy to everybody else they're telling small

00:44:49.560 towns 2 000 miles away from the u.s capital what people they have to accept in their community how

00:44:55.380 much money they have to give them, those sorts of things. And that's just, in my opinion, an insane

00:44:59.480 way of doing things. So in that respect, you'd be in favor of relatively close borders or just

00:45:06.600 against the combination of open borders and welfarism, which I mean, welfarism.

00:45:12.600 Yeah. The absolute first thing you have to do is end the welfare. Right. And you have to extend

00:45:19.640 the citizenship requirement up to something that's going to be much, much longer than five years.

00:45:24.420 right because people have to be integrated then if they're going to become political participants

00:45:29.000 in the regime this is this goes far beyond simply showing up and getting a job for a few years so

00:45:36.200 those two things have to work have to change first the reality though is that yeah in terms of

00:45:41.780 uh physically stopping the movement of peoples i don't see how you can get around the needs to

00:45:49.620 have some sort of limits on that you've got two countries in the world where combined they've got

00:45:55.280 two billion people and if you just say hey totally open border just come on over that's going to be

00:46:02.800 just from a pragmatic point of view even if you didn't care about american culture or liberal

00:46:08.500 ideology or any of that stuff the amount of political instability and conflict that would

00:46:15.740 result from 200 million Chinese and Indians and Asians or of whatever type moving into North 0.98

00:46:22.600 America, the sort of violence that would result would be shocking. And so just as on a prudential 1.00

00:46:30.000 level, you can't allow that sort of thing to happen. So clearly there has to be some sort of

00:46:34.360 limit. I think you can let the market to some extent lead on that. You could have a situation

00:46:39.660 where, okay, if people are going to move here, they have to have like an affirmative invitation

00:46:44.420 from an actual employer from someone who's going to actually support them here and we need to

00:46:49.080 document that and do that so then you're minimizing the amount of uh regulation you're doing on

00:46:56.140 domestic businesses small business owners right lots of small business owners rely on foreign

00:47:00.780 workers we have a whole foreign worker program where these people come up and they do a circuit

00:47:04.340 throughout the western united states in terms of farm work and that's where at least it did occur

00:47:08.220 before trump i'm not sure what the current status is and they often just go back to their home

00:47:12.240 country i mean small business should be allowed to do that sort of thing but if you're gonna say

00:47:17.300 hey show up whether you have a job or not just squat in the streets right no connection to the

00:47:22.800 actual domestic economic situation that that strikes me as an insane policy i i i agree with

00:47:30.320 you on this and um there's a there's an objection i frequently encounter where people say well if

00:47:37.420 you are in favor of a sort of controlled border, you can't justify that in terms of a liberal

00:47:43.800 approach, because liberalism is pro-freedom of movement, and you are raising an artificial

00:47:51.260 barrier to freedom of movement with the border. So what is your response to that? Is it that

00:47:58.380 from a pragmatic perspective, you have to make some concessions and restrict freedom of movement?

00:48:06.420 is that a pragmatic argument or is it another sort of argument well there's a two couple of

00:48:13.960 things that need to be considered first of all as if you're going to be a hardcore liberal in the

00:48:18.100 old style in the 19th century style you do have to always wonder what is the effect of a policy

00:48:23.180 going to have on the central government right centralization of power is always something that

00:48:27.020 the government wants for good reason because centralization by itself increases state power

00:48:33.620 So you want to avoid that.

00:48:35.480 So first of all, what you want to do is decentralize immigration decisions, right?

00:48:41.280 This idea, the central planning that goes on in Washington about, oh, we're going to accept these immigrants here, we're going to accept those immigrants there.

00:48:47.960 We're going to dictate the same immigration policies to Montana as to California and so on.

00:48:54.220 That's just the sort of thing where you're letting bureaucrats decide things for 330 million people.

00:48:58.740 historically also in the united states immigration did was not a prerogative of the central national

00:49:05.200 government until really the 1880s if you go delve into the history of it you can see that it was

00:49:10.640 state policy that attempted to deal with whatever cost you might have of public charges that is

00:49:19.000 people who immigrated here and then went on welfare centers because there was some welfare

00:49:22.000 in the 19th century they'd come here they'd become paupers right this was a real problem that you had 0.63

00:49:26.080 to address but that was done all at the local level the federal government was was in charge 0.90

00:49:30.480 of naturalization and citizenship but that's not the same thing as immigration as as we discussed

00:49:37.280 so first of all yes i i want to make sure we're not just giving the federal government control

00:49:43.060 over everything right i don't like this idea of sending federal troops into every city across

00:49:47.960 america to round up immigrants and arrest people and oh they're ice agents they can do whatever

00:49:54.940 they want and by the way if you're not a citizen you have no rights that's actually not what the

00:49:58.580 bill of rights says right your rights are not contingent on citizenship uh so those are things

00:50:05.040 that i do not like to see however at the same time if you're going to have a community that is going

00:50:11.460 to accept people in and they're going to become political actors within the community just as

00:50:18.220 a reality and i guess you could call it a concession i mean a concession to reality

00:50:22.580 that the point there is not to regulate free movement.

00:50:27.400 The point there is not to regulate economic exchange.

00:50:32.140 The point there is to prevent political actors

00:50:36.000 from taking part in a political system

00:50:40.300 where they have never actually invested themselves in any way.

00:50:44.960 Historically, classical liberalism,

00:50:46.780 going back to the levelers and well into the late 19th century,

00:50:49.900 there was a recognition that if people were going to be political actors within your system they

00:50:55.040 were going to participate politically usually through voting by the 19th century is what they

00:50:59.180 meant they needed to be invested in the system some way they needed to be a net taxpayer right

00:51:04.840 they needed to be someone who was paying into the system not taking out and if you were a pauper a

00:51:10.720 vagabond these are the terms they used uh you are someone who was a public charge then you weren't

00:51:16.420 allowed to determine what the political system was for everybody else because you were essentially 0.96

00:51:21.100 a you were sucking resources out of the system so you show up as a a new immigrant and they haven't 0.99

00:51:28.840 contributed any to anything to the system they also they probably don't even understand how the

00:51:32.600 system works just as a general liberal position going back centuries you don't give political

00:51:40.760 power to those people so that's really what needs to be the real purpose of immigration control is

00:51:48.840 controlling uh the way that people participate in the political system because then the state

00:51:55.200 can be used against everybody as a tool as a cudgel so it's it's not about economic control

00:52:01.580 it's about preventing a takeover the political system so they can be used against people

00:52:05.700 Yeah, you don't want AOC's voter base to increase artificially. It's already large. It shouldn't be that large. The question that would be that even if all these issues are approached in the way you are saying, if a massive influx of people would eventually down the line lead them to say, well, we're many here, you have plummeting birth rates, we're increasing our numbers here.

00:52:35.000 So, yeah, we signed those documents, but it's time for us to revise the previous agreement we had.

00:52:41.780 So we want citizenship now.

00:52:43.620 But I think you have covered it.

00:52:46.200 You have covered the issue.

00:52:48.820 So last thing I wanted to, the last topic I wanted us to talk about has to do with Trump.

00:52:54.880 It's about a year, a bit more, since the liberation tariffs were implemented.

00:53:01.300 What do you think are their effects in the U.S. economy and in the global economy?

00:53:06.180 Well, the effects have been bad.

00:53:08.220 Liberation Day, if you just look at the employment data, you look at the economic growth data,

00:53:12.420 no evidence whatsoever that Liberation Day, I can't even believe we're calling it that, right?

00:53:17.960 Such an absurd...

00:53:19.240 It proves what a master Trump is in terms of public relations.

00:53:23.380 It just calls every bad thing liberation or wonderful.

00:53:27.500 and you look at manufacturing employment has only gone down since april of last year uh total

00:53:35.760 employment growth has stagnated since april of last year there is there is really nothing we

00:53:40.960 can point to that says oh look uh the economy has really improved since they slapped all these

00:53:46.680 tariffs on everything and let's keep in mind the tariffs are just taxes they're it's it's

00:53:52.840 unfortunate we call them that they're just sales taxes the sales taxes on imports and who

00:53:57.420 pays the tax. It's actually the importer. It's the American importer who imports the goods and they

00:54:01.940 have to show up with money in hand to pay the tariff. Then this idea is, oh, well, they'll

00:54:07.020 somehow force the real cost onto the foreigners who are importing the goods. First of all, it's

00:54:12.300 the Americans that are importing the goods because they want the goods. Because American goods are

00:54:16.820 either unavailable or they're expensive. So they look to foreign goods to buy. It's Americans who

00:54:22.180 initiating this. You can't just show up and force people to buy things in America. And so

00:54:29.540 Americans are trying to get these goods, but they're all made more expensive. One of the

00:54:33.200 major points of protective tariffs is to make foreign goods more expensive. The whole point

00:54:37.400 is to increase the cost of living for people. This is the purpose of protectionism. And it's

00:54:42.260 to increase the cost of living for the overall population to benefit certain politically well

00:54:46.420 connected industries and persons. Also then that whole system can be used as a way of rewarding

00:54:51.240 and punishing political enemies,

00:54:53.200 which the administration is pretty clearly doing as well.

00:54:58.040 And this is part of why liberals always,

00:54:59.520 one of their key central issues was opposing tariffs

00:55:02.360 and opposing controls on international trade.

00:55:05.100 It's always been absolutely central to freedom

00:55:06.620 that you allow free trade in this manner.

00:55:09.900 And so that's always been bad.

00:55:11.500 It's always been bad for justice.

00:55:12.680 But yeah, in terms of actual economic history,

00:55:15.980 in terms of the actual statistical data,

00:55:18.280 no, there's no evidence that is done

00:55:20.280 any good. And also empirical studies have shown, have confirmed that Americans are paying the

00:55:27.460 overwhelming share of the cost, the additional cost imposed by these tariffs. This is not a

00:55:34.640 case where the Chinese are paying the tariffs somehow. Americans are paying more in terms of

00:55:39.660 the cost of living, in terms of the actual payment that has to go to the federal government. And

00:55:44.620 they're even bragging about it. Trump's bragging, oh, look at all this income I'm bringing in. What

00:55:49.200 he's essentially saying is, look, I've taxed Americans to the tune of $100 billion. Isn't

00:55:53.940 that great? He's bragging about how much money he's stolen from Americans for his new tariff.

00:55:59.760 Whoop-dee-doo. So it shouldn't be surprising then that GDP growth in the fourth quarter is revised

00:56:04.820 down to 0.5%. It shouldn't be surprising that Jerome Powell, chairman of the Fed, comes out

00:56:11.120 and says, yeah, essentially we're entering into 2026 with zero job growth. If you look at recent

00:56:16.720 months, you're seeing that job growth is essentially nothing. In the most recent revisions,

00:56:22.380 you're talking about a few thousand new jobs created every month, which in an economy this

00:56:28.100 size is basically no job growth. So that's the situation we're looking at right now. And then,

00:56:33.160 boy, the global economy, it's not just, of course, the restrictions on international trade,

00:56:37.840 but it's now Trump's, the Trump-Israeli war on Iran, which is resulting in the closing of the

00:56:43.960 Strait of Hormuz, resulting in the destruction of oil refineries and such in the Persian Gulf

00:56:50.920 that is greatly curtailing the productivity of farmers and a variety of other producers

00:56:56.260 throughout the world.

00:56:57.540 So what you're going to get then is more price inflation, because naturally, under Trump,

00:57:02.340 who's always been an inflationist, has allied with the central government to inflate the

00:57:06.660 money supply at significantly high levels.

00:57:10.780 Money supply growth is now at over 5% year-over-year, which is a 44-month high in terms of growth in the money supply.

00:57:19.140 And so it's no surprise that now the official inflation rate, the price inflation rate, is up around 3%, even though the Fed's own target is 2%.

00:57:28.560 This comes after, of course, historical price inflation, 40-year highs back in 2022 and in early 2023.

00:57:34.120 And Americans have never recovered from that

00:57:36.640 In terms of they lost 25% of their purchasing power

00:57:39.240 Since COVID, since the COVID freakout in 2020

00:57:42.920 And they're never getting that back

00:57:45.020 Because Trump insists on even more inflation

00:57:47.500 In all of that time period

00:57:48.840 And the war in Iran, that's not helping

00:57:51.060 The tariffs aren't helping

00:57:52.260 Really, it seems like he's committed to raising

00:57:54.960 The cost of living for most Americans

00:57:56.860 And so Liberation Day has hardly been liberating

00:57:59.760 Many people warn about the massive debt

00:58:03.460 of the U.S. government. What do you think Trump is going to do about it? And do you think that's

00:58:08.760 going to be good or bad? Well, Trump's solution to the massive debt is to make it a whole lot larger

00:58:14.160 when we look at just what are what is fiscal policy right now? We just talked about monetary

00:58:19.680 policy. What's the fiscal policy? The fiscal policy is clearly to spend more. We're now looking

00:58:25.020 at even if we adjust for inflation, total federal spending is near an all time high. It's even now

00:58:33.440 looking higher than it was back in 2021 when all bets were off and the u.s just started spending

00:58:39.040 money all over the place to essentially convince people to stay home and not go to work right these

00:58:42.720 were historically high levels of spending and now after that went down a little bit under biden uh

00:58:48.960 not because biden's uh you know a great fiscal guy but uh just because it had to because spending was

00:58:55.520 so insane uh now it's all going back up and trump says he wants 1.5 trillion dollar defense budget

00:59:02.320 which is a 50 percent increase over its current trillion dollar defensive budget this is insane

00:59:07.500 sort of spending and that's what he wants and we're only six months into the fiscal year we're

00:59:12.420 looking at about a 1.6 trillion dollar deficit so far that's i think the third highest in history

00:59:18.240 even and that's if adjusting for inflation if you don't adjust for inflation is basically the

00:59:23.340 second highest in history behind only 2021 the covid time and so all that talk about doge are

00:59:31.100 they were going to cut all these federal programs and they were going to slice spending, all

00:59:35.400 nonsense. This administration is all about massive amounts of new spending. There's not going to be

00:59:40.560 any cutbacks. And what it also means is it's going to drive more price inflation. It's going to drive

00:59:46.100 more the need for more easy money because as they're dumping trillions of new treasuries

00:59:50.920 onto the market, that if left to itself would push up interest rates, which Trump doesn't want.

00:59:56.620 So you're going to have to have the central bank print up money to buy up some of those treasuries

01:00:00.220 to force interest rates back down.

01:00:02.920 And that extra money creation

01:00:05.120 is going to lead to higher prices.

01:00:07.560 And so the whole thing

01:00:08.780 is just a self-reinforcing system.

01:00:10.280 It's more of the same.

01:00:11.180 It's what we got under Biden.

01:00:12.240 It's what we've been getting

01:00:13.100 every year since the housing bubble burst

01:00:16.980 and the central bank

01:00:18.420 started bailing out companies.

01:00:20.160 I mean, look at what Trump's trying.

01:00:21.140 He's talking about

01:00:21.700 bailing out Spirit Airlines.

01:00:23.340 They're already buying up

01:00:24.760 tens of billions of private companies

01:00:27.440 and industrial policy,

01:00:28.740 the sort of thing

01:00:29.140 that had mostly gone away. But this is New Deal sort of corporate sort of corporate capitalism,

01:00:36.760 corporate welfare sort of stuff that Trump is now doubling down on. And yeah, we just have to

01:00:42.180 accept this is a guy who hates markets, hates laissez faire, loves taxes and loves federal

01:00:46.940 spending. And that's just what we have now. So for a final question, do you think that overall

01:00:53.040 he has been a net negative influence for American culture. I'm talking about Trump.

01:00:59.780 Well, I was real hopeful there in the early days of this administration. I was thinking,

01:01:05.000 okay, well, maybe they're going to actually cut some stuff. There's only been really a couple of

01:01:09.460 places that the Trump administration has been particularly good. First of all, I guess a third

01:01:16.300 thing is that they appointed some good judges to the Supreme Court, but that's not unique to Trump.

01:01:20.500 He just appointed whatever judges any Republican would appoint.

01:01:23.500 These are just standard Republican type appointees.

01:01:26.100 So that's nothing special about Trump.

01:01:28.520 So there's that.

01:01:29.600 And so that's actually been good in unwinding some aspects of the federal regulatory state.

01:01:33.540 And that is very, very important.

01:01:35.500 And Trump has taken some actions as well to, for example, make it easier to drill for oil

01:01:41.860 and to engage in market action on private property.

01:01:44.980 That's all good stuff.

01:01:46.320 But is that enough to really... 0.74

01:01:48.060 And then the other aspect of it is the election of Trump kind of brought to an end some of the more extreme, crazy DEI stuff, like all the LGBT stuff that was just absolutely bonkers in the last couple of years of Biden. 0.92

01:02:01.100 And that's a minor cultural thing, but I think it was good that the voters sent that message that, hey, we're more interested in paying our bills than in trying to create a society where drag queens are running things. 0.95

01:02:17.800 Right. So, I mean, that that was that was a good development as well. But I don't see how that's enough to cancel out the insane Iran war, which is going to cost a lot of people a significant amount of their real purchasing power, also creating all sorts of global instability. 0.97

01:02:35.600 that's probably going to touch off an arms race in the middle east if you're saudi arabia if 0.93

01:02:40.400 you're turkey if you're iran you all have very good reason to pursue nuclear weapons now especially 0.52

01:02:46.700 with israel out there talking about how once they get rid of iran then they're going after turkey 0.60

01:02:51.000 they're actually saying this so that i would expect a new arms race now thanks to uh trump's

01:02:59.100 uh destabilization of the region and one thing to add there though is that uh it's also erdogan's

01:03:07.580 who is the turkey's president who has also said that he is going to go after them

01:03:13.580 so it's it's not entirely unprovoked in that specific case yeah sure but i think this just

01:03:20.860 seals the deal all the more uh and then you can just look around you say hey what's a country

01:03:25.180 that the u.s isn't going to invade anytime soon it's north korea so you can see the benefits that

01:03:29.380 of getting getting nukes in those cases right he has a he has a sort of personal friendship with

01:03:35.320 kim perhaps uh but the you look at all of that you look at the ongoing uh tariff situation

01:03:45.400 which we have no hope of just undoing once trump leaves office because you'll notice that trump

01:03:51.460 raised tariffs in his first administration and biden didn't get rid of them so what what trump

01:03:57.340 is doing in many ways especially since he's also supporting continuation of the fisa courts and

01:04:01.360 other means of violating american civil liberties because trump is going all in on the national

01:04:06.880 security state he's all going all in on more militarism both within and without the united

01:04:11.500 states uh it's basically just the worst of the george w bush years that we're getting out of

01:04:17.540 Trump? I mean, you could say it's like Bush's third term is what we're getting now. All the

01:04:22.700 spending, all the police state stuff. And so is that enough to undo the little bit of progress

01:04:27.860 he's done with regulation? I think it's a net negative. Right. So thank you very much for this

01:04:37.060 interview. And I really enjoyed it. And I really think that we should be in touch. And I will send

01:04:46.240 you some of the some messages if you'd like to to give me some of the sources for the economic data

01:04:53.240 because this is a an issue i'm really interested in finding more about and i do think that there

01:04:58.940 there is a sort of cultivation of sort of climate in the mega sphere that says everything's going

01:05:07.020 perfect and everything's going to be perfect i don't think economically speaking this this is

01:05:13.180 justifiable

01:05:14.400 No, I

01:05:17.200 think it's a lot of very positive

01:05:19.800 talk that's just not going to reflect

01:05:21.860 the realities going forward

01:05:23.300 Right, so

01:05:25.040 to

01:05:27.720 our audience, definitely

01:05:29.680 check out the Mises

01:05:31.760 Institute, Ryan's

01:05:33.820 page, and I think that

01:05:35.840 there is a sort of

01:05:37.080 wealth of information

01:05:39.660 there in your website and your institute

01:05:41.740 And I think for a final question, I know I said before it's a final question, I would like to just ask you, what is it that you do in a nutshell in the Mises Institute and why is it so important?

01:05:55.060 Well, I'm the editor in chief here. So we're primarily an academic organization. We have PhD faculty that put out academic journals. We have academic conferences, that sort of thing.

01:06:03.500 But my side of thing is to take that sort of information and package it for just the intelligent layperson, right? So if you go to the front page, M-I-S-E-S dot O-R-G, you're going to encounter short articles that take a lot of this economic history, economic theory, as well as some foreign policy.

01:06:20.360 that's not really our focus, but there's some of that, especially since it impacts the economy so

01:06:24.020 much, that is going to be written in such a way that it's going to be easy to read for a normal

01:06:31.020 non-academic person. So that's primarily my job. We also try to make our work accessible just to

01:06:37.460 members of the general public as well. Right. Thank you very much. And to those who view the

01:06:45.420 interview, definitely check out

01:06:47.680 mises.org

01:06:49.600 and Ryan's work.

01:06:51.920 Ryan, thank you very much

01:06:53.680 for this. Thank you.

The Podcast of the Lotus Eaters - May 07, 2026

We Haven't Had Free Markets for 150 Years ｜ Interview with Ryan McMaken

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