Rise of the West

0:00Great, thank you. Thanks very much. Good to see you this morning. My talk today is on the rise of the West. Years ago, when I started teaching, many years ago, I used to use, very often in appropriate classes, the Communist Manifesto in 19th century Europe and Western Civ and so on. And I usually took the devil's advocate position, that is, argued the Marxist case with the students. And back then, it really was a number of years ago, even at my school there were some good students, we had good discussions and so on, and it was a useful kind of exercise.

0:49In recent years, not only have I given up any kind of devil's advocate defense of the Communist Manifesto, but I never used the Manifesto. And the reason is that today's students find the Communist Manifesto totally persuasive. They have been conditioned to think of business, the bourgeoisie, as the enemies of mankind. And, there's no possibility of having them read it and then discuss it and counter this instinctive reaction of theirs Because they have no idea, unless they come from Jesuit schools, they have no idea, my students anyway, what it means to propose a thesis and to present arguments for it Instead, it's always a question of their emotional reaction and the pictures in their heads.

1:44This is what appeals to them. And this is, to a large extent, the true of certainly a very large part of the younger population. Whenever they read about some rich merchant or rich capitalist, the first thing that comes into their minds is, Why don't we take his money away from him and divide it among the needy? As Camille Paglia said in a different context, if we'd gone by that principle, then we'd still be living in grass huts. But the idea that wealth is something that somehow magically appears, and the chief function of it is to act as a target for redistribution to the needy, the homeless, or AIDS victims, whatever, this is ingrained in the younger people.

2:38So that what I'm going to be saying tonight is not going to come, this morning, is not going to come as much of a surprise to you, I don't think, but certainly would come as a surprise to students in general. That is how the West arose, how the West grew rich. I will be discussing the West, and this is not in Europe. and Europe's offshoots, above all, America, Western civilization. And in this sense, Europe is not a geographic expression as much as a cultural expression. It is a Europe that extends roughly to a line from Helsinki to Warsaw to Prague to Budapest. That is, a Europe that had, at one time at least, been in communion with the Bishop of Rome.

3:27This is European civilization, this is the Europe that has made its special mark on the rest of the world. So, what I'm going to be dealing with is, of course, essentially and hideously, Eurocentric. This, as maybe you've gathered from your teachers and your colleagues, is a terrible thing to be Eurocentric. Because, just as Professor Higgs was saying yesterday, capitalism is the cause of all evils in the world. Well, capitalism is simply one aspect in that understanding, is simply one aspect of European civilization. It's Europe that is the cause of all the evil and harm that's going on in the world.

4:18And in that sense, the European man of the millennium, of course, is Adolf Hitler. ...standing for all of the atrocities that European men have inflicted on the rest of the world. However, the fact that, and there's no doubt that there were many atrocities over centuries, with the slavery and the conquest of peoples around the world, no doubt about that, but the very fact that European man was able to inflict from these atrocities, besides other things, The atrocities weren't the whole story, obviously, which I'm going to be talking about. But the fact that he was able to inflict these terrible things came from the fact that he had the power to do it.

5:06So the question is, where did this power come from? Why did he have the power and not others? Because when we look around the world, We see that the crimes that European man was guilty of come from and reflect the essentially fallen nature of all men, of all men. Power corrupts and absolute power corrupts absolutely, as Lord Acton said, we'll be talking about him later in the week. And European man happened to have the power to sail ships around the world, starting 500 years ago, with firepower that no other people could match and did terrible things from time to time.

5:51But it occurs to me, what would have happened if it had been the Aztecs who reached Spain and conquered the Spaniards rather than vice versa? Would we have seen some interesting sights in Madrid and Cádiz and so on of the sort that the Aztecs were famous for? or if, by some real counterfactual, the Comanches or Apaches had conquered Western Europe. I mean, we're talking about peoples whose whole lifestyle was spent in killing other Indian tribes and torturing prisoners to death and so on. So my point is that, sure, you can have whole courses, which exist, of course, at every college nowadays.

6:40at my college, and I'm sure that those of you who are familiar with it, hold courses on the history of European crimes and the history of the crimes of Western man. And no doubt you could in the case of other peoples as well. I mean, I remember that Tamerlane, for instance, was not exactly the kind of Mother Teresa type or Genghis Khan. So, and Europeans, but you know sometimes it really gets unbelievably ridiculous and these people have no shame because one of the terrible things that the European man is famous for, notorious for, is his terrible treatment of women, right, in European civilization and in Western civilization women have been brutalized, have been oppressed, well to a To a degree, that's true. Again, power corrupts, and it's men who have had power.

7:40On the other hand, if you want to compare Western civilization with other civilizations, you know, let these people tell us about Sati, for instance. You know, the Hindu practice of the British are suppressed. You're all familiar with this, right? Your professors tell you about this, right? You know? Well, Sati was really quite reasonable and sensible, but when the man died, his widow was drugged and brow-beaten and pressured into throwing herself on the funeral pyre. Because what's the point of living now that the louse, I don't mean the louse, now that her husband is dead? You know, what's the point of going on? So, in other words, the widow had to commit suicide. This was standard among the Hindus, and the British suppressed it.

8:27There was a footbinding among the Chinese, the treatment and the status of women in Islamic countries, everybody knows about that. And I don't know how many people know, but to this very day, tens of millions of young girls in Africa are subjected to bodily mutilation. And even the papers like the New York Times talk about this tension in Sierra Leone, for instance, where they say 90% of the girls are subjected to this. And the tension exists in the fact that there's six radical feminists there who complain about it. I mean, it's not that there's any tension. The society has given over to this age-old practice. That's what started the Kikuyu rebellion in Kenya.

9:13But the British were putting down this practice of bodily mutilation of women. And it went against Kikuyu culture and customs. Well, the point is, maybe I didn't have to spend so much time apologizing for concentrating on Europe and the West with this group, but on the other hand, maybe some of the things that your contemporaries would be telling you have occurred to you, and it's good, I think, to answer that. So, I'm going to be talking about Europe and the rise of the West, and I'm going to be presenting a general interpretation or model or pattern, or, since people in my position and our staff in general like to use quite in fancy words, a paradigm, okay?

10:05The adjective for which is paradigmatic, okay? A paradigm of the history of the West. Now, this is not anything I invented. All I'm doing is taking this from the people who did develop this over a few decades recently. And I'm not sure that you're familiar with it. Going back to the Marxist model, everybody's familiar with that. I mean, that's common currency. But this model has become very well established, and it's the work of a number of scholars. If anybody is interested, you know, on our agenda, I think the list of the staff and speakers is given towards the end, including email addresses.

10:59So if anybody's interested in any bibliography in my talk or in regard to anybody else's talk, just email me, email whoever you might be interested in, and I will provide you with the bibliography, the detailed bibliography. But to give you an idea of the people who have contributed, the scholars who have contributed to this model, which you can call, for short, the miracle of Europe, or the European miracle model, we have Douglas North, who won the Nobel Prize in Economics for doing so, for his economic history theories, Jean Bechler of the University of Paris, Nathan Rosenberg of Stanford, E.L. Jones of La Trobe, and it's Jones who wrote of the book called The European Miracle and many other secondary figures, David Landis who is retired now but was from Harvard but probably the most famous economic historian in the United States, William McNeil again retired from the University of Chicago, Eric Veda from Bonn University and many many others. So that what I'm giving you here is a kind of

12:08a summary and consensus view, not that these writers agree on every detail, not that they agree on every important point even, but this is basically their theory, this European miracle theory. The miracle in question consists of a simple but momentous fact. It was in Europe and outgrowths of Europe, above all America, that human beings for the first time achieved per capita economic growth over a sustained period of time. And in this way, the man and woman, of course, eluded the Malthusian trap of a little bit of economic growth, but then swallowed up by population increase so that the people People are just as miserable as they were before the masses of people, and for the first time, hundreds of millions survived and could grow affluent into the sort of life that people lead in Western societies to get today.

13:11So the question is, why Europe? And the working out of the theory and the use of economic theory to explain these changes is really what is novel about it in the past few decades. Because the theory itself goes back a long time and you can find earlier writers. For instance, in the 18th century, Edward Gibbon in The Decline and Fall of the Roman Empire talked about the constraints of the modern tyrant, modern tyrant versus the Roman emperors he was talking about, and among them the circumstance that, as he put it, the object of his displeasure escaping, in modern times, in Europe, the object of his displeasure escaping from the narrow limits of his dominions would easily obtain in a happier climate a secure refuge, A new fortune adequate to his merit, the freedom of complaint, and perhaps the means of revenge.

14:14He said, that's the way it is nowadays, but it couldn't be that way in Rome because he said, but the empire of the Romans filled the world. So, we already have the suggestion of what's involved. The secret of European economic growth and European flourishing in generally was European decentralization, was the decentralized nature of European civilization. David Landis, whom I mentioned, and you know, he's not any libertarian, he's probably one of those Democrats that Robert Higgs was talking about, but this is his approach to economic history.

15:04He wrote a big book years ago called Prometheus Unbound, and he said in this book, what distinguished Europe? First of all, the scope and effectiveness of private enterprise, and then the high value placed on the rational manipulation of the human and material environment. These are all quotes, as he says, the role of private enterprise in the West is perhaps unique more than any other factor it made the modern world. Okay, so there we have his putting his finger on what's most important, but then still the question, why did private enterprise flourish in the way that it did in Western Europe?

15:50Now, as he, as Landis himself says, a precondition of economic expansion was a definition of property rights and their defense against political authority. And other writers would emphasize other aspects, but he points out the importance of regular taxation, regular taxation, but agreed to by assemblies representing the tax-bearing classes. You understand? Well, I don't know if you know, but in medieval Europe, In Europe, there were the equivalents of the Parliament of England everywhere in Europe. Catalonia had its own Cortes, for instance.

16:36Sicily, Naples, the German states, Hungary, the French estates in general, all of the different components of what afterwards became the Netherlands, Scandinavia and so on. There were these representative assemblies everywhere, Then they included the nobles, the clergy, the townspeople, sometimes the peasantry. Why were these classes included? They were the ones who had to agree to new taxes. You see, in other words, it wasn't what we have nowadays where representative assemblies get together and decide how the wealth of whoever happens to have any wealth is going to be redistributed among the masses of people. It was not a democratic assembly, it was a representative assembly of taxpayers. And it was only in Europe that you found it.

17:23And what does Landis say that's important? He says because that contrasted with the system of what he calls extortion in the great Asian empires and the Muslim states of the Middle East, where fines and extortions were not only a source of quick revenue, but a means of social control, a device for curbing the pretensions of the nouveau riche and foreigners and blunting their challenge to the established Power Structure, okay? In other words, regularity of taxation overseen by the people who have to pay the taxes, that contrasts with a system of arbitrary taxation, whenever you see anybody, a mafia type situation, whenever you see anybody who has any kind of wealth, you pounce on him and take as much as you can from him, which was the tradition in these great empires of the East and in Islam for a large part of the time. Now, different writers I In other words, there were nobles, there were nobles in almost every advanced society, but the European nobles had a status of their own, their position was based on a contract between them and the ruler where they had certain rights and were not simply pawns of the ruler, as against Russia, for instance, where the nobility, the old nobility was exterminated and the new nobility, in my opinion, was exterminated.

18:49in the modern times consisted of state appointees. There was simple creatures of the central government. So that this relatively independent feudal caste was important. As you can see, it's something like the Magna Carta, where the barons of England are the ones, I mean, they have the power. Who else has the power? And they're the ones who force limitations on the royal authority. And these documents like the Magna Carta are also widespread throughout Europe by the end of the Middle Ages. The Magna Carta is just the most famous in the Dutch lands, as was the Joyeuse Entrée of Brabant that was then expanded to all of the Netherlands, whereby whoever ruled the Dukes of Burgundy, for instance, had to promise certain things.

19:41One thing, for instance, not to introduce any taxes without the okay of the representatives of the people. They couldn't simply impose arbitrary taxes. And another important thing, and Deepak Lal, is a well-known economist at UCLA, has also written on this subject recently. And he comes from a kind of Hindu background, so he's very interested in this, the differences between India, for instance, and the West, and he says, as others have said, but he really emphasizes it, the most important difference was that the West had an independent international church. In other civilizations, the religious leaders are totally under the thumb of the secular leaders, if maybe sometimes the other way around, but in other words, they work hand in hand against the people to get as much as possible from the people.

20:37In Western Europe, what you had was an adversarial relationship, as I'll point out what Acton saw so very well. An adversarial relationship between the international church, international church, so it could call on resources outside of the national boundary, the Catholic Church. And there, you had a struggle that lasted for a long time, for centuries, between the power of the secular rulers, especially the Holy Roman Emperors, the German Emperors, on the one hand, and the Church on the other. And in the course of this struggle, in other words, unlike other places, ancient Egypt, ancient Persia, China, where the highest priest was the emperor, or the Brahmins in India, unlike those civilizations, you had an intense conflict between the clergy and the church on the one hand, and the political leaders on the other.

21:36and in the course of this the freedoms of the of the people could flourish and among other things for instance the city-states of northern Italy and central Italy became independent of the German Emperor. This is one of the milestones of the history of the West which I don't know maybe it's never going to be taught But our next speaker, Professor Bassani, is a descendant of the people who fought the German emperors. And it was a question of fighting. Understand, it's like in Perilondra, someone was reminding me of C.S. Lewis last night, when Ransom, the hero, suddenly realizes when he gets his sense he's going to have to fight the diabolical forces, It's going to be a real fight. It's going to be a physical fight.

22:34And this is what happens a number of times in the history of the struggle for liberty. It's a physical fight. And it happened at the end of the 12th century that the Battle of Lignano, the dirty German aggressors, pardon me if I'm getting carried away a bit, were actually smashed by the city-states of Lombardy, led by Milan, in alliance with Venice, and in alliance with the Pope, Alexander III. And here, these German troops who left their forests where they were eating acorns and wearing bearskins and wanted to take over the gorgeous northern Italy.

23:21As a matter of fact, on Lake Como, you can see a tower. It was Barbarossa's tower. And the very idea that he's looking over this gorgeous lake into Lombardy and so on, with total greed in his heart, but defeated. Defeated in an actual battle. So that we have now the beginnings of the whole city-state and the chartered city, Chartered Towns, Culture of Europe. It was so important in the rise of free institutions. And because these new city-states, and they were then in northern France, of course in the lowlands, along the Rhine and in other parts of Germany, they became the incubators of this middle class, this bourgeoisie, that was the engine of economic growth and of the idea of citizenly rights.

24:14So Europe, and you don't have counterparts of this in other civilizations, or to the extent that you do in Islam, they were very quickly smothered. So Europe was something really quite different. And as I say, much of what I'm telling you is simply pretty much accepted. This business about the Catholic Church, for instance, Harold Berman of Harvard, or Brian Tierney of Cornell, great historians of law, This is essentially their point of view. This doesn't mean, by the way, let me hasten to reassure some of our perhaps Baptist students that the Catholic Church was a great champion of liberty. No, no, it was a question of countervailing powers. And from the clash of these two powerful institutions, then developed something which, if it had been left to the German emperor, if it had been left to the pope, it would have been a dictatorship.

25:11Well, it would have been something like the Roman Empire. But the fact that they collided is what provided the opportunity for the growth of liberty. Now, I say liberty, and we should not think of this in solely some abstract sense. The main liberty that they were concerned about was the freedom from arbitrary taxation. Even if you're talking about relatively wealthy merchants after a while, still, most people were living on the margin. That's why the Republicans and the tax collectors in the New Testament are such hated creatures. Because they're taking food out of the mouth of the children, of your children.

25:58Nobody is really rich enough to afford this. By the way, that's when the government was collecting something like 10 or 15 percent of income. Not the 50 percent that they could collect in Germany and the Netherlands today. So when we talk about the freedoms that people fought for, it was primarily their economic freedoms. And as a guarantee of their economic freedoms, also their political freedoms. To be able to choose their own rulers and so on, and to participate in these assemblies. But why? That was a means of keeping down the predatory state. In medieval society, you know, it has a very bad reputation.

26:50But amongst people who know anything of the literature, this idea that it was the Dark Ages, As Leonard Petkoff puts in his book on, I think in that book or whatever, it was a time of, when all of Europe was filled with crosses and gallows, which, something wrong with the meter there I think, I mean such a, such a thuddy, dull, stupid, besides being stupid, statement. Of course, those people, the Randians of all people should understand, we're talking about the rebirth of Aristotelianism.

27:37And we're talking about the church that cultivated and acted as a nursery for the new rationalism and scholasticism, and invented universities. And, again, C.S. Lewis comes to mind. People talk about the Dark Ages. Well, have you ever seen the sun come through a stained glass window of a cathedral? Middle Ages was really quite different from what many people say. And I wanted to quote to you Norman Cantor, who was a great American medievalist. And he has his book, The Making of the Middle Ages, came out a few years ago, In the model of civil society, most good and important things take place below the universal level of the state.

28:37The family, the arts, learning and science, business enterprise and technological process, these are all below the state level. These are the work of individuals and groups, and the involvement of the state is remote and disengaged. It is the rule of law that screens out the state's insatiable aggressiveness and corruption and gives freedom to civil society below the level of the state. It so happens that the medieval world was one in which men and women worked out their Destinies with Little or No Involvement of the State Most of the Time. Now he talks about the state's insatiable aggressiveness and corruption.

29:23I should have made it clear, I'm sorry, I should have thought it when I was outlining this, the basic mechanics of this theory of the growth of the West and economic development. The premise there is that the state is a predatory being, that whoever is in control of political power takes as much as they can, you understand? There has to be something that stops them. What stopped them in the case of Europe was Europe's decentralization that was the result also of this complex institutional system, and the decentralization meant that if your If your prince started to extort too much money, that's what he would want to do if he could get away with it.

30:10That's what they're doing in Ottoman countries at this time, whatever they can get away with. But if he tries to extort too much money, or if he puts into onerous regulations, you're part of Christendom, you're part of Christian Europe. It's not what you prefer, but if necessary, you pick up and you take whatever assets you can, mainly your human capital of entrepreneurship and business savvy, or professional skills of some kind, and you go somewhere else. If the dukes of Burgundy mistreat you in Holland, then you go across the North Sea, to England, or you go down the Rhine, to Cologne. It was that decentralization, you see. The fact that Europe was decentralized and was open to the possibility of exit that kept the princes in line.

31:06Sometimes it didn't, like with the Habsburg kings of Spain who tried to get everything they could, but they paid for it. They paid for it with Spain's decline. Now, one last thing that should be mentioned here, which is not taken into account in these theories so much, but I find quite interesting and quite suggestive. And that is that in Western civilization, for the most part, again in contrast with other civilizations that we know about, there is a social taboo on the expression of envy that very often you don't find elsewhere. and elsewhere. Envy. Now, there's a great conservative libertarian free market sociologist named Helmut Schirk who wrote a book called Envy, which you can get from Liberty Press, and maybe you know about Liberty Press books, okay, they're very well done, they're very cheap, and his book is called Envy, And what Scherck says is this, you study the anthropological literature, the field studies, there's envy all over, everywhere in the world is envy.

32:31It's a basic human feeling. Why should he have something and I don't have something? There are tribes, for instance, I'll take an extreme example, who whenever it comes time to eat, comes time to eat, Everybody takes his portion and goes into the bush and eats it by himself. So that nobody in the tribe should put evil spirits on it, out of envy of the fact that they have maybe a little more than you have. I would not like to see this happen in our cafeteria. I mean, I think that would be really a ridiculous sort of, even as an experiment. But one form of envy is very well known and that's the evil eye, which you find throughout the Mediterranean region, which you find in the Americas, which you find in Asia.

33:32What is the evil eye? The evil eye is possessed by someone who has the power to spoil things for you, okay, as a malicious person. Why would anyone want to spoil things? Out of envy, because you have it and they don't. Make your kids sick because they don't have any kids at all, or your cow not giving any milk. And this occurs sometimes in civilizations that in some respects are close to Europe, but they're not Europe. I think the classic example must be Russia. When I was in Russia some years ago, I asked people, I asked some Russian students, bright young students, whether this anecdote I'd heard would seem to be reflective of Russia.

34:28The anecdote is this. You have an Englishman, a Frenchman, and a Russian, and they're asked, what would your wish be? And the Englishman says, well, you know, knighthood from the Queen, Buckingham Palace, all that sort of thing, and the Frenchman says, an apartment on the Ile Saint-Louis and a million francs a year, and the Russian says, I want my neighbor's cow to die. Now, that's not the whole story of Russia, but unfortunately, I think that it's too much of the story of Russia because it explains the hatred of the net men during the short period of semi-capitalism in the 1920s when some people got rich again, and it explains how the Bolsheviks were able to rile up the masses.

35:27We don't understand really the horror or really disgustingness of what was going on there. I mean, imagine someone like Lenin or Trotsky saying, you know, there's the rich man, he has what you have, what you don't have. Why don't you go and take it? It's like these Trotskyist teachers in the public schools in Britain who take their students to housing projects where a nice condo is for the rich are going to be built and explain to the kids why their parents aren't going to be living in those in those condos their parents have to live in these small council houses where the rich have these and and the point is deliberately exciting envy on the part of people and that's one thing in the West where there's been a relative taboo you know To openly envy somebody else's good fortune, in the sense that you wish that they didn't have it, is considered almost a sin.

36:31And I would think in some varieties of Christianity, it is a sin. Well, what I'm saying is that this basic cultural fact about the West also played some kind of role. Shirk says, it was Christianity in this sense, that unlike the ancient religions, Christianity did not posit a deity who would mock you if you failed. You see, the deities of ancient Greece and Rome were kind of amoral in that sense, but the Christian God was all on your side, just as long as you stayed within the rules. I'm happy that you would succeed. So, what I'm getting at is that this is a real complicated question, obviously.

37:19It deals with the whole fabric of Western history. But I think, interesting, and I think that what these new institutional historians, as they're called, have come up with, is the story, is the key to the whole story. Now, one thing that I find quite interesting is that this new institutional history, or this European miracle theory, works in very well with the work of one of my favorite writers, who thankfully is still alive, and that's Peter Bauer. Peter Thomas Bauer, Lord Bauer as Margaret Thatcher made him, you know Bauer means peasant in German so it's a little ironic, one of the last along with Thomas Saz and just few left, one of the last of the great community of Budapest Jews, You know, besides being evil, the Nazis were also very stupid, it seems to me.

38:32I mean, if you want to make a master race, you don't start out by trying to exterminate the Budapest Jews. But now, maybe you're not familiar with Bauer's name. Bauer is the chief writer in the whole field of economic development, now going on for 40 plus years, who has a free market point of view. And he has been pushing this point of view for 40 odd years against the whole tide of the development school of economics which for generations was ruled by people who took the Soviet model to be just about the best model for underdeveloped countries Now, Bauer is interesting from a number of points of view For one thing, he doesn't call himself an Austrian in the South and Austrian, but his methodology is very similar in many ways to the Austrian methodology.

39:30For one thing, he says, the important factors about development cannot be put into mathematical terms. They have to do with habits, attitudes, cultural traditions, the sort of things that, there's no point in trying to aggregate them, put them into numerical form and aggregate them. He says, what happens is now for all these decades, he's a development economist, have been dealing with the kind of models that you can do mathematics with. I mean, talk about, you know, the old joke of some drunk is looking for his car keys under a lamp post, and the cop says, what are you doing? Looking for my lamp keys, for my car keys. Where's your car? My car is down there. So why are you looking over here? Because the light is over here.

40:19So these mathematical economists, you know, regardless of what the reality of the field is, they use the techniques that they're familiar with and that they're comfortable with, and that they really don't get them very far. And Bauer, just as his friend Thomas Saz in psychiatry was subjected to real abuse as a right-wing nut and so on for decades, Bauer also was subjected by this whole world industry of economic development. But he says, as Bauer wants to say, the European economic growth came out of the whole European tradition.

41:07It came out of the institutions that the Europeans had developed over centuries, above all the rule of law and respect for private property. And now, the interesting thing is that, although Bauer continues to be attacked by people like Walt Whitman Rostow, I don't know if you know the name at one time, he was one of the Kennedy group, you know, the brightest and the best, famous in Kennedy days, but famous also as an economic historian. A few years ago, 10 years ago now, Rostow wrote a huge book on economic development, on the history of theories of economic development.

41:57And it's amazing that in this whole book, none of the names that I gave you at the beginning of this lecture is even mentioned. He hasn't mentioned any of these people, not Douglas North, the Nobel Prize winner at that time, already famous for his own analysis of economic growth, not E.L. Jones, not Nathan Rosenberg of Stanford, none of these people exist in these 200 pages of notes of Rostow's. Instead, he attacks Bauer by saying that Bauer does not realize that the state has to play the indispensable role in any economic development.

42:46However, Bauer has attacked this point of view as a spurious consensus, pointing to the actual history of economic growth that I've given you some idea of today. called it the spurious consensus and thankfully, the fact is that now he's winning and according to some observers has actually won the debate both theoretically and also empirically in the failure of regimes that base themselves on central economic planning and on the models of these economists is obvious the need for the kind of free market arrangements that Bowers always talked about is also obvious and most obvious most remarkable in this whole field now going back to what the economic historians I was talking about maintain most important is that finally people in this field are beginning to understand the real nature In the heyday of development economics, they actually believed that the rulers of the state could be conceived of, and could be best conceived of, as kind of platonic guardians.

44:16That is, they were interested in the welfare and the good of their own societies. So all that was necessary was for these mathematical economists to make up their models of central planning, of export controls, of emphasis on heavy industry, steel industry and Zambia, and so on, and tell the Platonic guardians about it. and then they would put into operation what they saw to be good for the people. The view that the state was predatory, that is fundamental to the actual historians who have examined economic growth in the West, was the furthest thing from their mind.

45:02And here, I have to tell you that we, see, Bauer is always, I mean, he's really tough, And I think I would have to say that here the disregard for reality in their analysis and their interpretation of what the state was like in third world countries passes over into the truly surreal, because what it means, as difficult it is to understand the reality, as difficult it is to understand the reality, as difficult it is to understand the reality, as difficult it is to understand the reality. to grasp, is that for decades these practitioners of development economics, and they were the leading policy economists and government advisors in every Western country.

45:56For decades, they acted as if the Marcosas, the Samosas, the Duvaliers, the Mobudos, the Bucases, the Indonesian generals, the Nigerian military chiefs, the bosses of the Mexican PRI, The legions of Brazilian state capitalists, the many millions of low and top-level bureaucrats living off the confiscated assets of native peasants and shopkeepers and befuddled Western taxpayers, that this whole plundering political class spanning the globe and performing corruption on the greatest scale the world has ever known, that it did not exist. It did not exist, because the people in charge of the government were platonic guardians.

46:43What I've just outlined is the sort of stuff you could read in any newspaper, and what was going on behind the scenes. You know, I said the greatest scale the world has ever known, and yeah, obviously, we're talking about, by this time, certainly hundreds of billions of dollars. And, well, since Harry S. Truman announced 0.4 in his 1948 message to Congress, the beginning of foreign aid, since then, probably, in today's dollars, a few trillion, a number of trillion of dollars. And this is, the foreign aid that the German banks gave to Russia was $50 billion. that has totally disappeared to post-communist Russia, this foreign aid that was supposed to trigger some kind of economic miracle there.

47:37So we're talking about this enormous system of corruption, mind-boggling system of corruption. And these economists, right, the empirical economists, we Austrians are so a priori in our own little ivory tower world and so on, The so-called empirical economist simply didn't recognize that it existed. Well, that's, as far as I'm concerned, one of the good things that's happened, that is the vindication of P.T. Bauer. I know him. He's a very elderly man now, very frail, but he's lucky to have seen himself vindicated. It would have been nice if Mises had lived to see his arguments on economic calculation, by the collapse of the Soviet Union and all his enemies who said it was going to go on forever and it was a radiant future of all mankind and so on.

48:32I've been discomforted, but that never happened. Well, there are a number of things I've brought up, and we have a little time for any questions or comments you might have. Keep in mind also discussion groups tonight. Floor is open for comments and questions. But isn't the politics of envy now on the assumption? Oh, I'm from Florida.

49:21There's something has happened in it and now it's much more acceptable somehow to call on class envy. For example, this weekend in Miami, Democrats had their concrete and the entire topic was how do we get back at these evil Bush brothers and furthermore, they've been denying so many good things before folks. The politics of M.V. is coming up. Yeah, and the tax cuts for the rich. I mean, you don't have to be a tax accountant to know that it's the so-called rich, the top 10% or something, that pay most of the income taxes.

50:08And something is very funny, and of course the Republicans give in on this, on this as Professor Higgs pointed out we're not talking about some great superiority on their part and fewer and fewer people are now now have to pay income taxes lower level income earners are taken off the tax rolls completely and that's supposed to be a great advantage but then we're coming rapidly to the kind of reductio ad absurdum of democracy which is that the massive voters The top 25% pay virtually everything, and it's the mass of a non-taxed people then who decide on the taxes of the others, which is the opposite of what they had in the Middle Ages and which is the opposite of how representative institutions started and the opposite of the reason for being of representative institutions, to keep themselves from being built on the basis of what they had in the Middle Ages.

51:12built and plundered by whoever happens to be in control of the arms of the guns so that the your point about the increase in the in the politics of envy I think is very well taken yes there's also in welfare economics you know it's called no envy equilibrium so distribution is said to be just In other words, envy is taken as a given, as a totally acceptable, and worked into the theory. And we want to minimize envy. But of course envy can never be gotten rid of, and Riddle, even if theoretically you could have some kind of egalitarian society, which again is a pipe dream, it's talking about un-empirical, every communist regime in the world had a nomenclatura, that is the class of pigs in animal form and even before they could institute a full communist society, Danny, what was his name, Danny in Nicaragua, the head of the Contras, Ortega, yeah, sorry, when he came to New York, and there the New York Times reporter showed a little bit of initiative,

52:54Followed him around. He came to New York for the U.N. Followed him around, and I don't know if this was whatever, 15 years ago or something. He was used to wear these big glasses, and of course he had to stop at Nathan's on Fifth Avenue for new frames for his glasses. Well, Nathan's on Fifth Avenue, even in those days, charged $600 for frames for your glasses. So this was a little mistake on his part. I mean, this was the great representative of the oppressed Nicaraguan peasants. And even before they got into power, acting the way Castro and the other guys who have Rolexes in Havana act. So the point is, first of all, you're not going to have an egalitarian society. But even if you could, economic inequality, even by some, is the least of it.

53:43You're always going to have envy on the basis of some kind of advantage one person has over another. You know, I don't know if... Well, for today, one thing that just comes to mind. The only time I ever flew first class was when I was bumped up because there were too many people in economy. So there was a first class seat available. This was transatlantic. And, of course, everybody knew that you'd get somewhat superior food in first class. And the other passengers were bitter about the fact that I was... You know, first of all, anything you make at home is going to be better than anything they serve on an airplane, right? I mean, the fact that I was going to get marginally superior food, and they were gnashing their teeth over this.

54:35And these were Americans. I mean, I can imagine if they were Russians or Syrians or something. I checked. We don't have any Syrian students here. Yes? I sometimes hear that there's a distinction made between maybe the years like 500 to 1,000 being sort of more referred to as the Dark Ages and then 1,000, so you're... Oh, yeah, sure. Yeah, there's no... Yeah, yeah, but... Commerce and the city stage. Right, right. You could talk about the Dark Ages in the sense that the civilization declined, literacy declined, the cities declined, and there was a reason for that. There were the barbarian invasions, the barbarian invasions and then the Moorish invasions and then the Hungarians before the Germans finally slapped them around and taught them a little good manners were going all over the, you know, I mean, they were acting in an instinctive Hungarian way, going all over the place, driving everybody crazy, but it happened, it happened that after about the, and the Vikings, same sort of thing, it happened that around the year 1000, for instance, finally the Scandinavian peoples, the Magyars themselves became Christianized,

55:43The Moorish attacks were thwarted and Europe started to settle down again and the cities started coming back. Cities had never disappeared in Italy. It was already back then known as a country of a thousand towns. But in other parts of Europe they had and the arable land had declined. But the reason they were dark ages was because of the political situation, the invasions and so on. And once those stopped, things started to pick up. But I think that a lot of people consider the whole period, up until the Renaissance, the dark ages. That is the Randian view, there was Aristotle, and then the dark ages, and then the Renaissance, and then the railroads.

56:36Okay, other comments? Any comments anybody has? Yes, please.

57:06Well, what you say is very important, and very much to the point, and I would add that it has to, if you want to think in those terms of an indispensable moral foundation, that then would express itself in the institutions, it can't be just a pro forma, a nominal agreement to Christianity, let's say. Because in South Africa, as far as I know, most of the population, black as well as the white population, is Christian.

57:53That doesn't prevent the terrible rampages that go on and the breakdown of law and order which is now taking place in South Africa. So it can't be just nominal Christianity, it has to be somehow ingrained. How you do that, I don't know. I would point out though that, I don't know if you were alluding to this famous theory of Max Weber that capitalism was an outgrowth of Protestant, mainly Calvinist Christianity, but there's really nothing to it, because as I say, before the Reformation came along, Long, already you had capitalist institutions and you had the respect for private property throughout Europe. Not always adhered to, but at least that was the ideal, and that was what was taught in the schools, in the law schools, in the universities, the rule of law, and that the prince was not above the law.

58:49This was before the Reformation. The Italian city-states, for instance, were of course all Catholic and remained Catholic, And that's where you got many of the institutions. Mises said one of the great institutions, one of the great creations of the human mind is double entry bookkeeping. And that was Florentine, I think. Or maritime insurance or bankruptcy laws. All of these characteristics of a capitalist society developed long before the Reformation. Yes? How do you relate the regime of Byzantium to the encouragement in the discussion?

59:55In the West, around the middle of the 5th century, in the Byzantine Empire remained for another thousand years, another thousand years, a huge period of time. And there you had the continuation of the system of the last years of the Roman Empire, and that was the emperor in charge of the church. And unfortunately, it was that kind of system that was adopted by the Russians. When the time came for the conversion of Russia to Christianity, it was from Byzantium. And that has made a big difference, I think. It hasn't made all the difference.

1:00:40And this is not to say that there aren't great spiritual elements in Eastern Christianity. But as far as the politics goes, it was different from the West. In terms of the fact that you brought up Russia, it seems to make the case that there was, for a while, a flourishing military state that wanted to bring in their intelligence, and the monumental invasion was a thing that was there. After that, even the Russians were following along with Russia.

1:01:21in Russia, and some of the city-states were even associated with the Hasiatic League, but this was a brief period, and they had the, Novgorod, for instance, was famous for this, they had the kind of citizenly rights that you had in Cologne and Prague and Northern, well, they weren't totally independent, but, and there was this, that same kind of development, and then the Mongols and the Tartars came, destroyed all that and destroyed... but the end result of the Mongol dominion was the rise of Muscovy, of Moscow, for various reasons and that became the the leading center of Russianism and then when the Russian, when the Moscow Grand Dukes and then Tsars began expanding, they destroyed what civil liberties existed in the and the other states as they annex them, and that was a terrible story.

1:02:22Any other comments or? Yes, please.

1:02:38Oh sure, yeah. Well that's going to be, that's going to be gone into a little bit, I think, in the next session. But Aquinas, like the other great scholastic thinkers, laid down the principle, which was very important, which was that the prince is under the law. It's not the case, as it was in the late Roman Empire, that the will of the prince makes law. That is, the law is simply an expression of the will of the prince who's the sovereign. But that there is a law that transcends the will of the ruler, and the ruler who does not obey that law is not a true ruler, but a tyrant.

1:03:24And then the followers of Aquinas among the late scholastics, some of them, pushed that even further by saying that the ruler who is not a true ruler, not a true prince, but a tyrant, may be killed. The Glorious Revolution of 1880? In England. When they threw the king out. One of the king above all.

1:04:09The Anglican Church, and they certainly didn't believe in tyrannicide. They got rid of the king. Charles I, maybe you have a better case. But the people who put Charles I to death didn't make that into a system. I mean, into a general principles of the regicides. Well, but Guy, you and I are never going to agree on anything at any of these conferences. So why don't we just have a beer late tonight and not bother decent people with this? I have one more question. Well, very briefly then. The South African situation, the strength of the church was one of the reasons that the progression from the apartheid to the new happened successfully.

1:04:57The Church is a lot different from what it used to be, I would guess. Well, thank you, and thank you very much.