The Great Fiction: Property, Economy, Society, and the Politics of Decline

0:00In this book, I collected articles, interviews that I have wrote in the course of a quarter century. They are very interdisciplinary, but there is one unifying theme that goes through all of it. that is property, or more precisely private property, defined as the exclusive control of scarce resources, the origin of private property and its ethical and economic rationale and justification as the ultimate source of peace and prosperity.

0:53And on the other hand, the state defined as a territorial monopolist of ultimate decision making and conflict arbitration, including all cases of conflict involving the state and its agents itself and its origin and its role as the greatest danger to private property, as a permanent source of conflict, and the greatest enemy to peace and prosperity. And finally, the constitution of a private law society defined as a society without a state or any monopolist whatsoever, whether legal or otherwise, and its unique function as the only conceivable guarantor of eternal peace and prosperity.

1:47But there is more to it than just this. There are reflections on social evolution and the causes of the so-called neolithic revolution, the invention of agriculture, and of the industrial revolution, I'll come back to that in a second, on monarchy and on the decivilizing effects of democracy, on war, on centralization, on the cession, on egalitarianism, on inequality and on natural aristocracy, and on the inevitability and virtue of discrimination and on migration and the perils of multiculturalism, much of which is extremely politically incorrect and has made me persona non grata not only among mainstream intellectuals but also and in particular among many so-called left, big government or bleeding heart libertarians.

3:03Some of the pieces that I assembled in this volume are dealing with purely theoretical, value free, philosophical or economic problems. Others deal with normative issues and still others are concerned with matters of politics and political strategy. Some of the pieces are very long and intellectually demanding and others are short and easy. Most of them have been published before, but there are also a few that have never been published anyplace else before. And I want to say a few words about one of those pieces.

3:54It is titled From the Malthusian Trap to the Industrial Revolution, An Explanation of Social Evolution. This is also a piece that is somewhat politically incorrect, I would say, again also and not in the least among libertarian circles. What I want to say about this piece is just a brief indication of what I do there until about 1800, that is until the time when we say the Industrial Revolution began in England.

4:45Until that time, and for most of recorded human history, real income per capita in terms Forms of food, housing, clothing, heating and lighting did not rise at all. That is, average living standards in 18th century England were not significantly higher than living standards were in ancient Babylon, where we have the oldest recorded data on wage rates and on various consumer goods and prices for consumer goods.

5:31So we can also say that until about 1800 there existed little difference in the economics or in the economies of humans and non-human animals because for animals and also for plants It is always invariably true that an increase in their number will encroach upon the available means of subsistence and eventually lead to overpopulation, that is to supernumerary specimens as Mises called them, which must be weeded out due to a lack of sustenance.

6:16Now today, obviously, we know that as far as humans are concerned, this must not be so. No supernumerary specimens who are thus weeded out exist in modern western societies, but for most of human life, this was indeed the case. Let me just also quote Mises to this effect, Mises recognized this quite clearly. He said, the purposive adjustment of the birth rate to the supply of material potentialities of well-being is an indispensable condition of human life and action, of civilization and of any improvement in wealth and welfare.

7:03Whereas the average standard of living is impaired by the excessive increase in population and Human Action figures, irreconcilable conflicts of interest arise. Each individual is again a rival of all other individuals in the struggle for survival. The annihilation of rivals is the only means to increase one's well-being. As natural conditions are, man has only the choice between the pitiless war of each against each or social cooperation. But social cooperation is impossible if people give rein to the natural impulses of proliferation. The question then that I address in this rather lengthy essay is, what did get us out of this Malthusian trap which characterized most of human history?

8:03And the answer that is frequently given, the standard answer, also among libertarians is there must have been some institutional change that occurred around 1800. And what is typically pointed out is there must have been a better protection of private property rights that somehow occurred at that time. But no such change can be found in history. That is simply not true. Private Property Rights were also well protected hundreds of years before and still we did not get out of the Malthusian trap. It is true that the protection of private property rights is a necessary condition for getting out of this trap, but it is certainly not sufficient.

8:54Now, what I hypothesize in accordance with some other sources, I should mention in particular Michael Hart's book on understanding human history and also a book by Gregory Clark, Farewell to Arms, is the variable of human intelligence during the Malthusian age. What we can observe is that those people who are economically successful and do survive are by and large the brighter people and the brighter people have a larger number of offsprings.

9:47And this is in particular true in northern regions on the globe because northern regions represent a more challenging environment and higher intelligence is, so to speak, something that is especially advantageous to have in more challenging environments. And it takes a long time in order to breed a more intelligent population that then makes it possible to make enough technological innovations to allow not only growth of the population, but at the same time also an increase in per capita income of this growing population.

10:37And this breeding of a more highly intelligent population, especially in the north with a gradient going to the south, is responsible for the Industrial Revolution that broke out around 1800. No institutional changes are responsible for this, but the gradual development of a more intelligent population due to the fact that the more intelligent people breed a larger number of offspring and thereby gradually increase the average intelligence of the population. And I also point out that there is, of course, then also the possibility that this development can be reversed.

11:28It can be reversed if it happens that the less intelligent people do breed larger numbers of people and the more intelligent people breed less and less. And that that is a danger you all know already. Thank you very much.