Alright y'all, welcome back to Anti-War Radio on Chaos in Austin.
We're streaming live worldwide every weekday, 11 to 1 Texas time at ChaosRadioAustin.org and at AntiWar.com slash radio.
Of course you can get all the foreign policy interview archives there at AntiWar.com slash radio and if you're interested in hearing the whole show, interviews and me ranting and raving too, you can find all those archives at ChaosRadioAustin.org.
I'm pleased to welcome back to the show my friend and our regular guest, Thomas E. Woods.
He is a senior fellow at the Ludwig von Mises Institute of Austrian Economics.
He's the author of The Politically Incorrect Guide to American History, The Politically Incorrect Guide to Capitalism.
That wasn't Bob Murphy was it?
Oh well, I might have screwed that up.
And he's a co-author or editor with Murray Polner of the book, We Who Dared Say No to War.
Welcome back to the show Tom.
Thanks a lot Scott.
My pleasure.
Did I screw that up?
You wrote Politically Incorrect Guide to Capitalism right?
No that was Bob Murphy wasn't it?
That was Bob Murphy, but I like his book if that counts.
It's wonderful.
Yeah, all these politically incorrect guides, I get them all mixed up.
He thanks me in the acknowledgment, so you know I have a kind of indirect role in there.
Oh there you go.
Well and that's probably the source of my confusion right?
Yeah, I'm sure.
Yeah, Bob's fault.
Okay, anyway.
So, welcome to the show and here's my problem is I got a secret and it involves Thomas Woods and I want to say it out loud so badly, but I'm not going to.
Oh get out of town, now it's too late.
I'm not saying a thing.
This is maybe the most restraint I've ever exercised in my life Tom as I ask you my first question of the show on topic rather than about my big secret that I'm literally clenching my fists.
Can you tell people when the secret will be revealed?
It might be revealed tomorrow if they're lucky.
Okay, in your program?
Yes, well they'll definitely have to tune in for all two hours, either way won't they to find out.
Sure, yeah, but I'm sure you're not going to wait until the very end of the program.
It could be scattered anywhere in those two hours, right?
Yeah, it could be.
I might not be able to hold it past the first half hour or something, you know, and then just blab my big fat mouth.
We'll see what happens.
Okay, okay.
Anyway, so I've got this chip on my shoulder and that is that I still, I mean literally Tom, I mean in this December of 2008, I hear people telling me that war is good for the economy as the entire thing.
In the words of John McCain, craters and millions of people are thrown out of work.
Stock markets crash and apparently if war is so good for the economy, all we need to do is start another one and then our empire will be back in the black and we'll be fine again.
Yeah, Scott, I mean what, it amazes me that anyone for two seconds could believe this and I'm not necessarily sure the regime actually does believe it, but they figure there, nevertheless, there are enough yahoos in the population who won't think clearly and who will just go along with this idea.
It's a ridiculous notion that by wasting things, by building things that you're just going to blow up and or detonate, that that's going to make you richer.
I mean, why would that, that does not make any sense, but yet here we have Paul Krugman who, heaven help us, won the Nobel Prize in Economics this year.
And Paul Krugman says, and he's not alone, I'd say a lot of economists believe this, that finally, the thing that got us out of the Great Depression, all these years in the 30s, Franklin Roosevelt wasn't willing to spend enough.
Sure, he's spending more than anybody had ever spent, but it was never enough, never enough to satisfy these types.
But finally, World War II produced the need for enough spending that it finally lifted us out of the doldrums and you get that all the time.
Now, so I mean, it's not like, as you say, it's not like this is just some old myth that thankfully, we're a long since past.
I mean, the so-called experts that we're forced to listen to repeat this stuff all the time.
And in fact, Krugman says that this was finally the dose of spending that we really needed, but that no government official had the courage to spend up to that point.
Well, you know, the real expert on this is, of course, Bob Higgs, Robert Higgs of the Independent Institute, and I've very much benefited from his work on this.
So we'll first just say the obvious thing, which is just common sense, which is that when you have a war, I mean, what's the government spending the money on?
I mean, they're spending it on funding people to go be drafted and go fight in the war.
So that's basically just consumption spending.
They're spending it on military equipment that, again, consumers don't buy.
Like you and I, as much as we might want to, Scott, you know, we don't buy tanks.
We don't buy fighter planes.
We don't buy missiles.
So the government is producing things for, again, consumption goods that consumers can't buy.
Consumers buy toothbrushes.
Consumers buy hats and food.
They don't buy missiles and tanks and stuff.
So in other words, the government is producing, and in World War II, basically taking two-fifths of the economy and devoting it to the production of things consumers cannot and do not want to buy.
And where are they getting the funds to do it?
From those same consumers.
So from the consumer's point of view, you now have less money with which to buy fewer goods because, of course, again, the government is taking these productive resources and producing things you don't buy with them.
So what's the combination of that?
It means that, well, therefore, I now have fewer dollars.
There are fewer things for me to buy with those dollars.
There's your big war prosperity.
And so when you look at the war economy, what, in fact, do you see?
You see rationing.
You see appliances not being produced, cars not being produced, new houses not being produced.
All the sorts of things the consumer might want are not being catered to.
Now, of course, the GDP figures are very high during the war because that is, frankly, an inaccurate aggregate for determining how wealthy the economy is because that just looks at – that includes government spending no matter what the government is spending the money on.
If it's spending the money to build pyramids for nonexistent Egyptian pharaohs, that would show up in GDP.
But when you actually look at the share of the economy that caters to the consumer, which is what we should care about, it was much lower during the war years.
So we have all this right in front of us.
And we have the fact that, yes, if you draft 9 or 10 million people into the armed forces, you won't have as much unemployment, a big deal, right?
I mean, do you really need me to draw you a diagram here for what's going on?
So a lot of this is – and then the government can say, look, we got rid of unemployment.
Well, yeah, but I guess you could also – I guess the Soviet Union got rid of unemployment.
They threw everybody in the concentration camp.
But that's not how a healthy economy gets rid of unemployment.
So that's just the tip of the iceberg.
There's much more to be said.
But this common sense should be obvious to people.
But on the other hand, we should at least consider, then, why do people looking back on this time, why do they say those were good times, these were good economic times?
I mean, these people did live through it.
What makes them think that things were good?
Well, I think part of it is they were building up a lot of extra income.
I mean, people – there was less unemployment.
People could find jobs in, let's say, the defense industry – the so-called defense industry.
It should be more like the offense industry.
But so people are finding jobs and they are earning incomes, but these incomes are largely unspendable.
I mean, a lot of the things you need, you either can't get or you can get only in reduced quantities, or when you do get them, the quality has been reduced.
And that doesn't show up in GDP figures.
And also you take – if the government is borrowing money or monetizing debt and creating new money to employ certain segments of the population building a dam here or building bombs there, then they're not seeing whose wealth is getting destroyed.
All they know is they now have a job, whereas before they didn't.
Yeah, that's exactly – yeah, that's all they see.
Yeah, I have a job now.
And yet, as I say, things that are not – that you can't possibly factor in to national accounting statistics, like the ways that various companies, if they can't – if they're not allowed to, let's say, change the price they charge for their product, well, they could just give you a crummier product.
So clothing that you purchased during these years would just fall apart, but it's still counted in the figures as one shirt sold, but it's a crummy shirt.
Or the chocolate bars would be reduced in size, that sort of thing.
It's like a George Orwell novel.
It's like 1984, where people's chocolate ration was being gradually reduced, but yet the newspapers are reporting, isn't it wonderful we're getting an increased chocolate ration?
It's that sort of thing.
That's what's going on with these figures.
Well, you know, what's interesting too there is Orwell was himself a socialist, and yet he apparently understood economics a lot better than these people.
Yeah, I know it.
I know it.
I mean, on a lot of fundamental insights, he basically got it.
I mean, if you look at 1984, there's actually the section where O'Brien, the torturer, when he's still pretending to be Winston's friend, he gives him the book that says, this is how we do it.
And in there it says, the only reason we're creating the floating fortress is so that we can take the people's extra money and dump it into the ocean where they can't get to it.
Otherwise, they might be able to spend that money improving themselves.
They would be too comfortable and maybe have the leisure time to read books and become too intelligent.
So we stay at war all the time just to destroy the quote-unquote excess of everything that the people of Oceania produce.
Yeah, yeah.
I know.
I mean, that is such an interesting insight because it reflects so much of our own situation.
Well, if I can, though, steal a little bit from Bob Higgs, one of the points he makes is that, let's say you want to look at the economy during World War II.
A lot of times people will say, well, let's see how much was being produced.
They'll look at these GDP or GNP figures at that time.
They'll look at these figures and they'll say, look, in 1939, it was at this level.
In 1945, it was at this level.
Therefore, the war was a great time, a great step forward.
Well, one of the many points he makes about these figures is that if that were true, if you just look at these figures and that tells you that World War II was a time of great prosperity, then by the same reasoning, we should expect that 1946 should have been a time of unbelievable depression.
1946 must have been a terrible time.
And in fact, there were dopey Keynesian economists who warned that when all these people return from fighting overseas and they come back, it's going to be, we're not going to be spending all this money on them.
We're not going to be spending all this money on war production.
We're going to have a depression.
Well, instead, common sense, once again, was victorious.
In 1946, we had an explosion of prosperity.
People, I mean, look at the newspapers in 1946.
Everybody's happy.
The economy's booming.
Because if you look at the statistics that actually matter, the private economy, the non-government share of the economy, in other words, the share of the economy that consists of voluntary exchanges, not people having their money ripped off from them to go build missiles, but people voluntarily exchanging money for a new hat, you had the single biggest single-year spike in private production in American history.
So if you're going to use these statistics to tell us that World War II was a time of great prosperity, then you also have to tell me that 1946, according to the same statistics, was a time of depression.
Well, it wasn't.
So there's got to be something funny about the statistics.
And in fact, consider this.
I mean, look at all these men who are going off to fight in the war.
These are people who have work experience.
Now, when they go off to fight in the war, who's replacing them in the economy as workers?
People with almost, you know, no experience.
You've got a lot of women who have never been in the workforce before.
You have elderly men taking over their jobs.
Now, why would we expect, in these years, suddenly to see tremendous prosperity, the greatest spikes ever in production, when in fact the economy is suddenly finding itself subject to the greatest human resource constraints it's ever seen?
All of its greatest, best workers, most experienced workers going off to fight, and the most inexperienced workers taking their place.
If the statistics are showing us that the result of that is a huge spike in output, right away we should say there's something funny about these statistics.
They don't add up.
And what's funny about them is this.
During the war, again, about two-fifths of the economy is war production.
And then the rest of the economy has spillover effects from this.
Well, when the government engages in war production, it sets the prices.
It says, here's the price we're going to pay for a missile.
This is the price.
Well, these are arbitrary prices.
And so when you add up these prices to get so-called national income, all you get is an arbitrary, giant number.
It would be like, suppose the government said, look, from now on, the price of eggs is $10 an egg, and we're going to buy a million eggs.
So a million eggs times $10 an egg is $10 million the government is spending on eggs.
Let's add that to national income.
Well, that's a totally arbitrary figure, $10 million.
The government set that price.
What does that tell us about national output?
It's a totally worthless statistic.
It's this on which people like Paul Krugman rely, and it's geniuses like this who make elementary mistakes in their understanding of the economy who are, heaven help us, going to try to navigate us out of the current economic mess.
I mean, this is really scary stuff.
If you can't see these basic problems with trying to understand the state of the economy during World War II, and yet you think of yourself as an expert who's going to tell us how to get out of the situation now, all you're doing, all somebody like this is doing is feeding into the neocon desire to go to war anyway.
They want to go to war anyway.
So if you can give them intellectual cover and say, look, if this is the only spike to spending that we're going to get that can lift us out of this depression, then I guess maybe it's just sadly necessary.
I mean, if you can give them another rationale to say, look, yeah, war's terrible, but one silver lining is it'll get us out of the slump, would you put it past them?
They'll do it.
Right.
Well, Anton, this is a reason that a lot of people supported the Iraq war, and I kind of heard it said, you know, not as an outright, this is why we should invade Iraq, but people trying to figure out how to convince themselves that there was something legitimate behind it.
And they would say things like, well, you know, war's good for the economy based on the what I consider now to be the real founding myth of America, nevermind, you know, only shoot them when you can see the whites in their eyes and the great American secession from England.
This really is the founding myth, at least of the American empire, is World War II.
And as the savior of, you know, not just America as pure good fighting against pure evil in the form of the Nazis and the imperial Japanese, but also this is what made America great.
America wasn't great before.
America's great now because of that war.
Yeah, it's true.
So, I mean, it's, there are certain aspects of the American, you know, the official version of history.
My new thing, and I've done this a couple of times in my new book, is to capitalize the first letter in each word of, you know, official version of history, and then put a little TM symbol at the end.
The official version of history has it there are certain episodes of the country's history, and there are certain figures like certain presidents who are absolutely unassailable because there is only one version of these events.
And it's all good.
It was all wonderful.
Everything was done the best way it could have been done.
You know, 50 million deaths was the best possible outcome of what faced the United States and Europe at that time.
And yes, it also lifted the country out of the Depression.
Now, this is a slight modification of the older official version of history, which was that Franklin Roosevelt on his own through the New Deal programs got us out of the Depression.
But then when the statistics really, you know, they just don't bear that out, then you did get this slight modification.
Well, his heart was in the right place, but he didn't want to squander enough money.
And we were able to squander a lot during World War II, and therefore you get this.
Yeah, if you go after this, you are, you know, you're not exactly welcomed with open arms.
But I'm happy to say that, you know, Higgs's argument on this and the statistics he brings to bear, and it's just the sheer strength of his logical case, has been such that even some of the textbook authors and the mainstream authors have actually given his, I'm happy to say, have given his argument a fair chance of saying, you know what, wait a minute, we do have to go back and re-evaluate this.
We can't just casually assume because these unreliable national income accounting figures say there was great prosperity, that there was.
Maybe sometimes these statistics don't really give us the full picture of what's going on.
Well, great, wonderful.
It's wonderful that, you know, over 60 years later, we get to the truth better late than ever, I guess.
Yeah.
Well, and by the way, for people who are interested, that's Robert Higgs, Depression, War, and Cold War.
And I think he talks about this against Leviathan a bit, too.
That's right.
And I basically summarize, because one of the reasons I wrote my book, 33 Questions About American History You're Not Supposed to Ask, was to take people like Higgs, whose work I would like to see known by everybody in the country, and just sort of distill it so that, you know, just any old person can just pick it up, get it quickly.
And I've got like 33 topics like that in there, so that's one of the things that I do.
And I say that because, you know, Christmas is coming, you know, people need ideas, Scott.
That's true.
And, you know, Depression, War, and Cold War, it sounds like it's going to be 700 pages long or something, but it's certainly not.
It's only, I think, a couple of hundred pages.
Yeah.
It's short to the point where the average person can read it, and it's basically what he's done.
He's taken a lot of his published work that's been published in the top journals, and then he's embellished it and made the presentation just absolutely bulletproof.
And, I mean, as you read it, you say to yourself, I mean, I am reading something that is, no matter how long it takes, it is eventually going to change the way we understand this period.
And I know sometimes people like Bob Higgs probably get frustrated.
They feel like, you know, am I making a difference?
Is my work making a difference?
His work is absolutely, I mean, it is, I mean, far, far more so than my small contributions, which are really just parasitic on the work of people like Higgs.
He really has changed the way anyone who's honest has to look at a major episode of American history.
And if you can do that, then you can, you know, retire with real satisfaction.
Yeah.
Well, and, you know, by the way, the Pollutantly Incorrect Guide to American History and 33 Questions You're Not Supposed to Ask About American History, those can fit in stockings, too.
Yeah, that's right.
I mean, you have to really stuff them in there.
Well, they're the big square.
They're kind of the big rectangles.
They're not too thick.
And so and they're paperback.
And I think you can probably kind of roll one up.
You can roll them up.
That's right.
Yeah.
Right in your stocking there.
All right.
Now, well, I'm sorry.
I got to play state's advocate for a second here.
That is the devil's advocate.
Well, America is one big company, Tom.
And Roosevelt was its CEO, and he realized that we needed to expand electrical power into the Tennessee Valley.
He put a bunch of factories that had been shuttered and closed from the Depression back into service, even though it was making war materials.
After the war, he had improved the infrastructure inside the country so much that that great boom of 46, et cetera, was possible.
Oh, man.
Where to start?
Well, all the details on the Tennessee Valley Authority question, I would recommend people read Jim Powell's book called FDR's Folly.
He has a whole chapter on the Tennessee Valley Authority and goes into all the specifics and I think really succeeds in sort of overturning the myths there.
That's also a what is seen and what is not seen problem.
But in terms of, you know, he improved the infrastructure or whatever, and he was the CEO and this is a big business or something.
And there were, you know, shuttered factories that went back to work.
Well, one of the arguments that, again, that Higgs makes that he does actually put in that same book, Depression, War and Cold War, which is, again, a path-breaking article, was in which he introduces the concept of what he calls regime uncertainty.
And he says that, you know, let's say you have a government.
I know this is entirely hypothetical, but imagine you have a government that is so erratic in its behavior.
It does one thing one day, one thing the next.
It's threatening businessmen and blaming them for the downturn and introducing, you know, and, you know, maybe be toying with nationalization of industries or whatever.
You don't know what it's going to do from one day to the next.
The tax policy changes all the time.
The regulatory policy is crazy.
And you're a businessman.
You know, are you going to invest in that environment or are you going to hold back and just wait till things stabilize?
And what Higgs found is that if you look at the polling data and you look at – but not just polling data because maybe businessmen are just a bunch of liars.
If you look at risk premiums on long-term versus short-term investment and that sort of thing, all the data points to one conclusion, which is that businessmen didn't know what this nut was going to do next.
They did not know what Franklin Roosevelt was going to do next.
So, sure, why should they invest in an environment in which they don't know what additional controls are going to be placed on the economy?
In fact, even Roosevelt's – a couple of his own advisors and cabinet members like Morgenthau and even Tugwell, they actually – even they said to him, look, you've got to spell out to the economy – to businessmen what your intentions are.
Are your intentions to move toward a full-scale nationalization in some areas?
Are your intentions just to intervene up to this point and no farther?
I mean, what are you going to do?
You have to tell them, because otherwise, of course, they're going to hold back.
And so it's not a coincidence that in 1946, all the tinkering with the economy comes to an end.
All the wartime controls come to an end.
That's when businesses say, all right, now we've got a reasonable expectation of stability.
I mean, that's what business wants.
They want stability, and they couldn't be guaranteed stability in those years.
And you did get – I mean, given that unemployment did decrease during the 30s, I mean, it was about 25 percent in 1933, and then it did hit about 14 percent, so it's still awful.
But the economy was trying, nevertheless, to readjust itself.
There was some investment going on in some quarters.
But everything Roosevelt is doing is making investment more difficult.
He's taking capital away from businesses by taxing them more to pay for his crummy bridge project that he's using to bribe people for votes with.
He's using – there's a – ever since the Reconstruction Finance Corporation, there's been emergency low-interest loans, which, well, again, diverts loanable funds from healthy businesses.
All these sorts of things make it more difficult for people to engage in rational, sound investment.
All right.
Now, one more thing I'd like to get you to address before I let you go here is something that I think is going to be a major worry as we – or seems like we're just at the very beginning of this depression.
Looks like all attempts to inflate another bubble seem to be failing, and we're going to go ahead and have this depression anyway.
And not so much on the left, although, you know, there's some union voices and that kind of thing.
But I don't see the Democratic Party so much doing this, although maybe I'm just not looking in the right places yet.
But I am hearing on the populist right much more protectionist ideas being floated, that the real problem here is all these trade agreements where American companies can move their factories to other countries where labor is cheaper, and what we need is a big industrial base here.
So, obviously, you know, the next step from there is withdraw from the trade agreements, put tariffs on to keep foreign goods out, that kind of thing, in order to protect and build up the American economy.
Is there an analogy to the Great Depression that could possibly be invoked in order to maybe, I don't know, draw a lesson about what to do or what not to do in a situation like this?
Well, although the extent of it has been exaggerated a little bit, it is a fact, I think, that the increased tariffs starting in 1930 didn't help matters by, you know, reducing the scope of international trade.
But just looking at it from an empirical standpoint, from a theoretical one, from an empirical standpoint, a lot of these arguments are focusing on the automaker question, you know, the Big Three, because they are so big in terms of the number of people employed and so on and so forth.
And, you know, if only they had more protection or this or that, then they'd be in better shape.
But, you know, I think it was Bloomberg had a really good, long article and analysis of the Big Three a few weeks ago.
And they went back and looked at it.
And the problems of the Big Three are not, you know, that they have to compete with businesses that are more efficient.
I mean, that is obviously a problem.
But it's not like it's just a matter of labor costs, although that is also a problem because of the unions they have to deal with.
It's a matter of management that has really been behind the curve time after time after time.
And Bloomberg tells stories of, like, when Ross Perot, years ago, because his company, he had briefly had a chance to sit on that board.
And what Perot saw was he said, look, in my company, as soon as somebody sees a snake in the grass, the first person who sees it shoots it dead.
With the Big Three, what they do is, well, first they call in some consultants who know something about snakes.
You know, then, you know, then they debate the snake question, then they spend a year doing nothing.
And then, you know, it moves like molasses.
He says, secondly, look at, in fact, there's a, I can't remember his name, but the biographer who wrote sort of a biography of Toyota and wrote about their senior management.
And their attitude in Toyota was, you know, it's hard to know what the future holds and what consumer tastes are going to be.
So we've got to always be ready to make changes and change on a dime and whatever, see what's going on.
Whereas the attitude at the Big Three was just the opposite, was that, hey, I'm senior management.
You're not going to tell me what I need to produce.
I know what we need to produce.
Again, that's not an attitude that ought to be rewarded, either with a bailout or with special privileges by cutting their competitors down a size.
This is a problem of their own making.
This is not, we should not be looking to scapegoat, you know, other companies and their cars.
It's a problem of their own making because of their own crummy leadership.
And that leadership should pass into other hands.
If Americans can produce decent cars, well, let's give them the direction they need to do that.
But then from the theoretical point of view, I mean, every time you say that we would be better off if Americans didn't have choices in what they buy, and first of all, if you put it that way, right away it sounds like a scam, you know, we'd be more prosperous if Americans had fewer choices of things to buy.
Well, think of it this way.
I love this analogy from Rothbard.
I mean, take it to its logical conclusion.
If all you care about is, quote, jobs, you know, we just need more jobs, well, okay, if I just traded only with people in my own home, you know, and everybody made, we all made our own clothes, we all squeezed our own orange juice, whatever, we all tried to make our own Pentium processors, well, look, we'd have plenty of work.
We'd have no shortage of jobs.
But we'd also probably either be dead or just clinging to life.
And then if I extended it and said, all right, well, okay, I'll exchange with just people on my own street, there'd be somewhat less impoverishment, but we'd still be impoverished, relatively speaking.
The impoverishment would be still less if we traded with people only in our own towns, but it would be less, and then we would become wealthier and wealthier, the larger the market that we're trading in, the more extensive is the division of labor, and so when you look, for example, at wealthy countries today, like Singapore, that are super tiny, I mean, Singapore is a very small place, you know, Malta, Hong Kong, these are all wonderful places to live, very prosperous, but they're prosperous because they've integrated themselves into the world economy.
If they all try to produce everything in the world right in Singapore, they'd be much, much poorer, and my own view is that, you know, the countries of the world right now are much too big, and they're all, and the bigger they are, the more totalitarian they seem to become.
We need to break them up into little bits, and those little bits would not become wealthier if they all try to produce everything on their own street or in their own city or in their own little tiny country.
We all need the international division of labor, because that's how wealth is created.
All you're going to do is create impoverishment by reducing people's choices.
That's all you're going to produce.
Okay, but now let me hit you with this one, because I think, and I'm just making this up, but if I was a communist, I would say to you something along the lines of, that's what all this imperialism is about, is expanding that market for the division of labor, because in the real world, the rest of the countries would have their own kind of protection in order to, you know, prop up this or that business, and would not want to have these kind of free trade agreements with America, and this is why our government is so hell-bent on political and economic and military dominance in every country and every continent in the world, is to expand this free trade capitalist model.
Yeah, I mean, I've sort of heard that, and of course, I don't like these sort of crummy weirdo free trade agreements, you know, that always have some kind of special privilege involved or some mercantilist thing involved, or, you know, so I mean, so that does concern me, but the fact is that just look at, you know, just as an empirical measure, just look at the countries in the world that are the most isolated from international trade, or look at, you know, aboriginal groups, or look at countries in Africa that have the greatest controls on imports, and then look at the poorest places on earth, and you're going to find tremendous overlap.
So in fact, if you actually want to prosper, you have to integrate yourself into this structure, and I mean, if this argument that you're making, you know, for the sake of devil's advocate were true, then, you know, we should expect to find absolute paradise in those places that are the most removed from international trade networks and from trade with the West.
But that is exactly the opposite of what we actually find in the real world.
Well, but also what we do find in the real world, though, is the U.S. government using force to, you know, globalize not just government power, their own state power, but to globalize the economy.
They're using force, so doesn't that prove that they have to, or else they wouldn't be using it?
Well, okay, to some degree, I mean, I in no way would approve of, and I think any libertarian would approve of, any attempt to use physical force to persuade people of their folly.
You know, it's like what Sam Urban said, you know, the Constitution gives every man the right to make a damn fool of himself.
If somebody wants to implement a foolish policy, the only way to persuade them otherwise is through the exercise of reason.
So I don't approve of that.
But you know, look, the fact is a lot of people, because they think in terms of the short run, and they think in terms of only what they can see, a lot of times people have approved dumb economic policies that are against their own interests.
I mean, policies, for example, you know, for public works spending, for instance.
That's supposed to be a wonderful thing.
It gets you out of depressions and stuff, because look at the jobs it creates.
And you know, yeah, great.
It certainly didn't help Japan any after they spent hundreds of trillions, you know, billions of yen on it, or trillions of yen on it.
Because what people are doing is they're saying, well, look, look at these jobs created building this bridge.
So how can you be against that?
But they're not taking it to the next two steps or three steps whereby you think, well, what would those funds have been spent on if they hadn't been spent on the bridge?
They've been spent on things people demonstrate that they want.
And what about firms that now marginally go out of business?
You know, the marginal firms, because, you know, instead of money going to their firm, it's now being diverted to these public works projects.
I mean, in other words, there is no – I hate to say there's no free lunch, but in effect that's the case, that a lot of times, sure, the government will have this wonderful policy where, you know, they'll lower the price on something.
Isn't that wonderful?
Look, you can see we have lower prices.
True, but you have shortages too.
But sometimes people will only focus on the visible result of what the government has done, and they'll say, oh, this is wonderful.
The government has made the domestic car industry more prosperous, or the government has done this, without then looking at, well, what are the long-run consequences for the whole economy?
And so yet time after time, the same economic fallacies, the same thing of, well, the government can create jobs.
The government can so-called create jobs only at the expense of destroying jobs.
They can increase income streams into some sectors of the economy, but now those income streams are unavailable to be spent in other streams.
But yeah, a lot of times people will look only at the immediate run, and that's why, sure, of course they'll institute policies that are dumb and destructive to their long-run well-being, but, you know, that's just, unfortunately, that's the state of the human condition.
Right.
And, you know, I think it's so important that people who are the strongest advocates of free trade are also the greatest opponents of things like NAFTA and the World Trade Organization, the proposed free trade area of the Americas, which I don't know if they've finally given up on that yet or what.
But I kind of think that, well, like in Mexico, where a lot of these people grow their own corn and eat it, and then America comes, and of course we have a totally manipulated corn market here in America or whatever, but we, through these trade agreements, force open their market to our corn for sale and just completely devastate all of their local corn growing, drive the prices up through the roof, and, you know, ultimately kill people, starve people, you know, based on these kinds of policies.
And my point of view on that is, if Mexico wants to be protectionist on corn, it's none of my business.
I guess I would suggest to them that there are ways of moving from there to where we ought to be or whatever like that.
The idea of our government ministers meeting with theirs in order to coerce all the people of Mexico to accept American, very subsidized corn into their market seems to me, you know, to be nothing different than the old wheat imperialism of the old world, you know?
Yeah, I mean, let them make their own errors, even if they are errors, because, you know, for heaven's sake, you could certainly say that Americans are making errors, American government is making errors, although, you know what, I actually wouldn't mind some help on this one, you know, if other countries want to help us on this, getting the U.S. government to behave better.
But yeah, leave them alone.
Let them see, let them compare countries that are doing what they're doing and the level of prosperity there with countries that are doing the opposite and see what conclusions people draw.
I mean, eventually, I think people probably never expected that India and China would make market reforms.
They were so far from that.
But look, I mean, the testimony of experience is so overwhelming that eventually they were led to conclude that this is what we need to do.
So, you know, just give it time and education and, you know, hope for the best.
Yeah, time and education for people like you.
Everybody, that's Thomas E. Woods from the Ludwig von Mises Institute.
He's the author of a great many books, including The Politically Incorrect Guide to American History, 33 Questions You're Not Supposed to Ask About American History.
He's the co-editor with Murray Polner of We Who Dared Say No to War, which is so good.
I mean, if you love somebody, give them a copy of that book as a gift.
It's just incredible.
And can you tell us the name of the new one, or that's still on the lowdown?
Oh, no, sure.
It's the new one coming out in February is called Meltdown, which the publisher gave it.
The publisher gave it this subtitle, A Free Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse.
And there's already an Amazon page, although no front cover has been designed yet.
Awesome.
So if people go and search for that on Amazon, they can already place a pre-order kind of thing?
You betcha.
Oh, that's great.
And again, the name of it is Meltdown by Thomas E. Woods.
Awesome.
Thanks very much for your time today.
My pleasure, Scott.
Really appreciate it.
All right, folks.
Tom Woods from the Mises Institute, and this is Antiwar Radio on Chaos 92.7 in Austin.
