Cycles, Business and Otherwise, in the Austrian World View

0:00I want to thank you all. I was doing some research anyway up in Tallahassee with respect to... We've got a bibliographical stuff to add to the third edition of History of Florida and it will be out in a few weeks at the University of Miami Press. I've added a whole bunch of free market stuff in it, gave a paper I was telling a couple of you about a couple of years ago on Wayne Huizinga. It was called The New Entrepreneurship and Implications for the 21st Century. Mr. Heising, after he read it, it was in the newspaper, after my paper tried to get me fired, the president told him I had tenure, and he's been at it recently while I was in Europe, trying to get a new subsidy for the stadium, and this time there's enough public indignation to turn him down, but I differentiated between, I don't know if you're aware of the fact that with Russia and Israel, they've made a differentiation between entrepreneurship and what they call

0:58Entrepreneurship, which is hard to say, and I added an I, so it's politifunership, and we'll talk about it later today, but it seems to me one of the dangers is that under the guise of what we would call entrepreneurship, which means seeing an opportunity and risking your own capital, that there are a number of people, and have been, when they used to honestly call it mercantilism or something like that, that by entrepreneurship they mean and Risk in Government's Capital, and those are really polit-preneurs, etc. So I'll be giving a paper related to that also for Florida Historic on Friday in Jacksonville, after going over to Savannah tomorrow to see my old teacher who did the original history of Florida, who was 93 yesterday, and still going strong, a really brilliant guy, Charlton Tebow. But it struck me that you might find some interest in the idea of cycles, After all, Austrian theory, at the very heart of it, is the idea of the business cycle.

2:02We all know that. I think the best summary of that is in Murray Rothbard's America's Great Depression, where he very succinctly points out the difference between some kind of monetary Milton Friedman idea of the business cycle, or some Keynesian idea of the business cycle, where it's government's and the Austrian view that the business cycle is an important part of the whole process of the market, lack of knowledge, etc., etc., whereas whereby the system wrings itself out. And since, I think that gives a clue as to why Austrian economic theory is so time or historically oriented, rather than mathematically oriented.

2:52Because after all, the business cycle takes place in time. And if you learn very much about that cycle, you're forced to be a historian, aren't you? So that raises an interesting question. What kind of a theory of history, if anything, does Austrian economic theory have? And if you go to Mises' Theory and History, you don't find very much of a theory, because the book is primarily directed against German historicism, and trying to cut, you know, against that idea, which was a very deterministic, in its worst dimensions, view of history. If you go to Murray, Murray never spent much time looking at some kind of a theory of history.

3:41The closest I found is in Roman numeral 9, an introduction that's in both volumes of his work on economic thought. And he talks about the great man theory and how that kind of was combined with a progress theory which he calls Whig Theory. And one gets the impression, though he never quite says so, that he was something of a Whig viewist himself until he came across Kuhn's book on the structure of scientific revolutions. And so Murray argues against that kind of progressive view. And so that's about the extent of it. And what I would like to suggest is that, apart from some very deterministic German kind of cycles in history, that there is a much richer, open-ended tradition of cycles in History that Austrians might consider looking at, and most especially this book, which I did the bibliography, a bibliographical essay to, when I was Liberty Fund research scholar and they were starting Liberty Press, they asked us to recommend a book, and it's the

5:01only book I ever recommended, Carol Quigley, The Evolution of Civilizations. How many of you are familiar with Quigley? This is Clinton's mentor isn't it? That's right. One person. Well, Lew is to some extent. I notice he has tragedy and hope. That's what I call one of the iron laws of discipleship. It didn't happen to Mises, thank God, but in most cases a disciple picks up, I'll leave it to you whether you think Paul did that, but the disciple picks up on some obscure point of the Master and that becomes the master's message and that's what's unfortunately happened to Quigley. This book Tragedy and Hope where he had a little bit of a mention there of elites and their role was picked up by the the Burchers and and made the substance of Quigley and when he when for example as Lew mentioned and you were mentioning in Quigley and Clinton's acceptance speech, July 17th, 1992 in Houston. He had also mentioned Quigley at Georgetown in the

6:13previous October, but he ends up the speech by saying that his idea of the covenant, whatever that is, came from Quigley. And the next day the New York Times had a little blurb on who Quigley was, this lecturer at Georgetown, a fabulous lecturer that had once failed half with his classes of 300, with regularity did, and got into the same bircher stuff without ever mentioning that this book had been reprinted with an introduction by one of Quigley's friends and was in permanent print with the Liberty Fund. It's only $7 and I recommend, if you're at all interested in cycle theory, that you get it. I know. After I had written, and I'll I'll draw on my own essay, egalitarianism and empire, that's in here right after Murray's essay. They were both given at this conference in Switzerland in 72. His is, you know, is egalitarianism as a revolt against nature and mine is called egalitarianism and empire.

7:15It was printed in a pamphlet by the IHS in here. An earlier version called the E-factors in history was in modern age and most recently I understand it's been pirated in Venezuela When I read the Evolution of Civilizations, this 1961 version, and after I had written my essay, I wrote Quigley, and he was at that point already ill and dying. He died in 77. He sent me a critique and it was four pages, single space, no margins. And I got this pomposity that they talked about. Because he started and he said, I hope you won't mind if I really criticize you severely for your work, but you must understand that I don't usually bother with such people. And I see you as a promising young historian, so I had to start to live Cycle Theory, Social Change and History Book. I used to also use that in teaching history. The cycle is one of the oldest metaphors that we have. And if you go back to Chinese history, or you go back to the ancient Greeks,

9:00the idea of the historical cycle, the life cycle, today we call it the product cycle in business schools where I taught for 12 years at FAU before going back to history. The cycle's been with us longer than any other idea in history, in trying to explain history. So it's not just a business cycle. The business cycle is part of a larger historical cycle. And I think, unfortunately, when most people think of the historical cycle, they think of Toynbee, or they think of Spengler, or even the best neo-Spinglerian that I know of Armory de Riencourt. If you want to look at some interesting neo-Spenglarian, the soul of China, the soul of India, civilization and the Caesars and the American Empire. And then they're kind of neo-Spenglarian de Riencourt. Anybody heard of Armory de Riencourt? One.

9:59Lou has. I ought to mention, I guess Lou and I go back 26 years to when he edited the book The book I did with Nathaniel Weil, and he did a beautiful job with Arlington House, called American Statesmen on Slavery and the Negro, I was reminded of that, I see you have an essay coming out, I haven't read it yet, David Gordon's, on this crazy Conor Cruz O'Brien book on Jefferson, I have not read the book, I read some reviews, but I read the original essay in Atlantic Monthly, and the guy is just nuts, I mean, he puts Lincoln, at least in that essay, forward as is a great kind of hero, you know, of non-racism. And as we pointed out in our book, of course, Lincoln was a student of Henry Clay and wanted, like Clay, to remove all blacks. At the end of the Civil War, in 64, 65, he's still trying to move them to Cowle Island in the Caribbean as some kind of a solution. So I don't know how you pull Lincoln forth as a figure of

11:05The problem with most cycle theory that causes people to turn away from it is because it's so deterministic. It predicts there's going to be a decline and there's no way to get out of that, right? The untagang das abenlandes, the nicest translation you can do is the twilight of the evening lands and hope that it's a long twilight, right, before we go under. And Quigley, in effect, says that's all nonsense, it's all nonsense.

11:53And in the Quiglian model, there are seven phases to the process that a civilization can go through, and I'll quickly list those. One is mixture, gestation is two, expansion is three, age of conflict is four, universal empire is five, decay is six, and invasion is seven. And, of course, that invasion and that cycle has occurred in a number of civilizations. There's a chart in Quigley on page, let's see, 82, 83 in this version of the book, that little chart, which shows some civilizations.

12:42And Huntington has just published this book, it's getting a lot of play, the clash of civilizations and the best thing in his book is Neo Quigley and he prints this chart but I think on the whole the book is a bunch of balderdash that one would expect from a trilateralist as he is at Harvard but the best stuff that's in the book is at least what he puts in from Quigley in a haphazard kind of way. It's too bad he doesn't have a little more Quigley in there. But when I was writing Egalitarianism and Empire, when I published it as the E-factors, I had four. But I'll give you my seven E-factors that correspond very closely to Quigley's.

13:30And I would suggest that civilizations go through the following phases. Equality, expansion, Envy, egalitarianism, empire, entropy and extinction. And so, it's very close to the Quigleyan cycle there, if you understand cycle theory. But what is neat in Quigley, and it relates to Austrian economics, is that he suggests that part of what a civilization, when it develops, by the way, his definition of a civilization is that a civilization comes into being when you develop enough of a surplus to have urbanism and right thinking we've had over 4,000 societies on this planet the women's movement these days argues that there are all these matriarchal societies I don't know if any of you are familiar with sociologist Stephen Goldberg's book, The Inevitability of Patriarchy but he points out in those 4,000 there is no indication of that there is no metrolinearity and some other things but at 4,000 societies we've had no more than about two dozen civilizations that is entities that were capable of urbanism plus writing

14:56And the kind of writing you get into is very sociological. As I pointed out in my paper here two months ago with respect to China, once you adopt an ideographic system, it almost deterministically means you're going to have rule by a group of old patriarchs because of how long it takes. You separate the written from the verbal and somebody then has to spend for years, learning the written. Now, there's a great deal to be said for ideographs, you know, our word for unhappiness is a very abstract kind of concept. If I mention it now, we get 13 or 14 different images. The Chinese symbol, if you go back to the Shang dynasty, is beautiful.

15:42It's like this with two little figures with dresses. And what that means is unhappiness is two women under the same roof. We all know that's true. You know, and you get an instant Image of Unhappiness, try that, two women under the same roof. But the problem with the idiographic language is it means that you get a whole bureaucracy running the show and the adoption of the idiographic language by the Chinese is critical, critical. And the fact that we took the phonetic was an incredible step toward the free market, which which we can't be duplicated again of the fact that we did that. It's absolutely critical. But Quigley introduces the idea of an instrument of expansion. And what he means by that is that in every civilization, you have to create this surplus, and it has to be distributed other than in an egalitarian and segmented way if you're going to have progress.

16:49And every civilization has had at least one instrument of expansion. If we take Greco-Roman, for example, what he calls classical civilization, anybody guess That's what the instrument of expansion was that made classical civilization possible. In the case of Egypt and Mesopotamia and early China, what was it? The rivers. Right. Toynbee's challenge and response. But neither Greece nor Rome has these rivers. So what was the institution that they elevated as an instrument of expansion before it itself became institutionalized, which is really inexorably woven into the decline of the system, of the cycle.

17:39Is it democratic? No, slavery. Slavery. Slavery has two phases. In phase one, it is an instrument of expansion. In phase two, it has become an institution and bureaucratized. By the way, you understand what a definition of a bureaucracy is. When something becomes an instrument to solve a problem, it becomes bureaucratized when it thinks no longer of solving the problem, but its main fundamental objective is simply to sustain its own existence. And that's a good definition of bureaucracy as you can get it, because that's ultimately what bureaucrats want to do, isn't it?

18:27They used to be concerned with solving some problem. My son is in the FAA, he's a computer scientist, and he's got to either get out or blow the whistle at this point. I mean, it's become a real problem because of what's going on in the FAA, you see. So, in the first phase of slavery, you have the quality control. If you remember Cincinnati's at the bridge, he is obviously out in the field working with slaves, so you have quality control. He is not asking a slave to do anything he won't do. When you get lack of fundia, or whether it's people coming into Charleston to live and leave an overseer out there, you have what in business we call a quality control problem.

19:15Because there is no incentive for the overseer, who isn't getting a piece of the action, to really increase productivity, because he catches hell. So he will keep productivity along here, and the system has begun to be institutionalized and bureaucratized, and its decline in productivity will follow along the same line. So the way a civilization has saved itself, in western civilization it seems to me, has saved itself at least twice. The first one of these, are any of you familiar with books like Jean Quimpell, The Medieval Machine, The First Industrial Revolution of the Middle Ages? Well what Quimpell argues, it seems to me, persuasively is, that there was, that this This idea of the dark ages, and again, here's that progressive view, it's a bunch of crap.

20:12It's clear that by the 13th century, 12th, 13th century, there was already a crisis in western civilization. An example of that crisis were the peasant wars. In one of my essays, it was published by Pacific Institute, it's on firearms and violence, if you've seen Don Kate's book. My essay in there is called Weapons, Technology and Legitimacy, The Second Amendment and Global Perspective. And I go back to the Greeks, et cetera, to show that democracy springs out of one sphere equals one vote in the phalanx. All this philosophical stuff is a bunch of crap. If you fought with a spear by the next guy, nobody was going to deprive you of the vote. And of course, the emperors in China always wanted to melt down the peasants' weapons and make a statue.

21:01It's the way you disarm the peasantry, you see. And going on back, and it's clear that the peasants revolt in England was a bourgeoisie revolt, where the radical priests turned it around, the bourgeois then went with the king, because Richard II, if you read Shakespeare, had brought in his idiot wage and price controls to try to deal with government manipulation of the shortage of labor brought about by the Black Death, etc. which was raising wages and the aristocrats didn't like it. So there was this crisis in the system back then that Jim Pell talks about. You had pollution, ecological damage, all the forests were gone by that time. There are more forests now in Europe than there were in the 13th century.

21:48I got in a confrontation with a woman on our campus, one of these Econuts that they bring down to talk and she was going on, she had a symbol of the Indians there and how they Preserve the Forest. And she was in total ignorance of Indian slash and burn techniques. There are more forests in North America now on the East Coast than there were when Columbus landed. So there's all this idiocy out there that we have to try to deal with in changing people's perception. But there was this crisis and we got out of it. There was a cycle and we managed to move out of it and there was another cycle probably by the 15th century. And these cycles, if you don't have some new instrument of expansion, the cycle, as in China, is about 300 years, once a civilization is set.

22:36If you look at Chinese dynastic cycles, and then you get a new dynasty comes in, there's no real change, but you get a redistribution, and the game starts over, again, after that redistribution, and then some able people start accumulating, etc., etc. What was the instrument, by the way, that got European Western civilization out of that 15th century crisis? An obvious one. The New World, as John Locke said, in the beginning was America. This huge new instrument to open up expansion again of the system.

23:22In Europe, what was occurring? What occurred in Eastern Europe? A refutilization. A refutilization in which the peasants got tied into the land. Let's see, feudalism is a very complex social structure and the Russians had to take all that land, potential land, away from the presence, potential to open it up and develop it. And the best explanation I can give you of the American Revolution in one sentence is that it was a reaction against an effort to reinstitute British feudalism.

24:08in North America. And the best evidence is that this will shock you if you're unaware of the data. In the decade 1765 to 75, quit rents, which could now begin to try to be collected on North American land claims by British aristocrats, exceeded the amount of money being brought in by British aristocrats on and Quit Rents on Land and Inland. That's an amazing statistic. So the potential for America as just the world's greatest milch cow for British aristocrats and British feudalism, in their eyes, if they could bring bayonets there, was just unbelievable.

24:56And only one thing stood between them, that they smashed Ireland and did that, reinstituted a degree of feudalism, and what prevented them in North America. Because the Americans had their own instrument of expansion, the long rifle. As a British soldier said, they are numerous and armed. And they were! And the British did not come out in less than battalion strength after dark. Nowhere in North America. I think all this stuff, if you've read some of my essays on the American Revolution, this stuff about the French alliance and the necessity of it's all a bunch of crap.

25:45The British never held very much of North America at all. They held Boston for a few months and they left. They held New York City for most of the war and that's about all. And it's sort of like Saigon. We let them hold it. I did an essay for Gary North. It's obscure, although it was reprinted in the militia in 20th century America. It's a case study of the only place there was actual guerrilla warfare in North America. Anybody know where that was? Bergen County, New Jersey, because the only place the British held for any part of the war. You can't have guerrilla warfare if the enemy doesn't actually hold the territory, right? As Tom Paine pointed out, the British only sent armies into the interior twice, right?

26:35What happened to the first one? They got surrounded and annihilated at Saratoga. As Tom said, let them come into the interior, by God. Let's see what happens. And the next time they brought an army in, where did it end up? How far did the British Army get in the South? Anybody know? They got to a place named Charlotte, North Carolina. And it's aptly, the basketball team is aptly named. What is it called? The Hornets, and the British soldiers referred to Charlotte, North Carolina as the Hornets Mist, because they were surrounded by these young American kids on horses, sort of, you know, tanks at the time, cavalry, later on the cavalry became the tank corps, and they just cut the British ribbons.

27:21Cornwallis had a retreat across to Virginia to try to get extricated, which he was unable to do. And he left equipment all along the way, which the Americans picked up. And when the British got there, by that time a regular American army had come, and a deal was made so the British surrendered to the regular army, rather than the guerrilla militia, the partisan militia, you see. So, you have this total rewriting of American history we've got to get into, where you see the pressure points of an effort to re-establish old world feudalism in North America is the greatest key to understanding the American Revolution, and it's not theory, the quick rent prices are there.

28:06That's undisputable economic data about what was happening with respect to quick rents in terms of explaining the American Revolution. So the question becomes now, if you look systemically in terms of cycle theory, Quigley argues that since early in the 20th century, you could say World War I, because we got off gold, didn't we? We had a double dose of cutting back on the growth of the system. The Federal Reserve system in the United States and it going off gold in general because of the inflationary pressures to the governments of World War I, right? And you can build a very good argument that it's been touch and go in the 20th century about expansion of the real system.

28:58And the question becomes what happens now at this point? There's a wonderful passage toward the end here where Quigley is talking about guerilla warfare. He wrote this in 61, it was so praiseful. If American policy makers had read that, they might not have gotten involved in Vietnam if they had any brains, you know, but if they had read quickly at that point. But in egalitarianism and empire, I have three sources of value I talk about in civilizations. It depends on very much whether the value system, you see, if we take a value like equality, We live in an age where everybody's for that. We won't distinguish between equality and egalitarianism for a second.

29:47But if I were to say to you, why, why are you for equality? That's not an ultimate value. And you are going to have to fall back on what I think are only three sources of ultimate value. You have to say some supernatural entity gave it to you, God or whatever you want to call it. Nature, Natural Law, or Statist Positive Law. And if you look at films like A Man for All Seasons, what's fundamentally at issue there is the balance between God-given law, and Thomas More, and the state, Henry VIII. If you look at a movie like Judgment at Nuremberg, it's between the American judges' concept of natural law and the German judge's concept of statist positive law.

30:42And at the end of the movie he says, I'm giving you this manuscript. I don't understand how I went wrong, how I got into this thing with the Nazis because I used the best sociological jurisprudence. The stuff we wrote came right out of American sociological jurisprudence from the 1920s. And what does the American judge say? You went wrong the day you condemned your first innocent man. Natural law theory, you see. So you have to have those three sources, and they emerge as civilizations do the cycle. I was arguing against some of Murray's views on my thing in China a couple months ago, as I think Murray misunderstands the nature of the battle. He's a little anti-Confucian

32:00the French Revolution would have been impossible without China. But that's too far. It would have happened anyway. But it is true that for an age that was fighting feudalism, as Tom Paine and the boys were, the Chinese idea of losing the mandate of heaven was a wonderful cut at the divine right of monarchy, you see, and was picked up in that fashion as a way to undercut it in the West. So Chinese ideas did come back and were influential in terms of getting rid of that feudal economy ultimately. But I would suggest that if you take two billiard balls and you call one the state and one the government, that there are only four possibilities for political economics. One is the free market where the two are separated and it's government's rules, ideas to set up some rules to function.

32:58Here is mercantilism where the two are combined and supposedly the idea is that government is directing this for the good of the people. You have socialism where the two billiard balls have been totally intermeshed and you see in the mercantilist model the intermeshed is where government is supposedly directing things. And then a fourth which I call corporate syndicalism where the two are intermeshed but the direction is coming from interest groups using government. And I think in the 20th century or the 21st century, the great problem, I gave a paper on this, I was trying to get it reprinted, give Lew a copy a year and a half ago in Costa Rica on a conference on Latin American economies, and I was trying to show that under the guise The rise of privatization in Latin America. What you're really having is favoritism to these economic interests in the way things are being allocated.

34:02And that's the thing, those of us who believe in the free market, when you see privatization going on, you have to look at it very, very closely. Because it's usually some economic group getting access to what's being privatized for themselves, and what they really like to keep is a monopoly on whatever it is that's supposedly being privatized.

34:51In an egalitarian race, let's do an equalitarian. The equalitarian, as I conceive it, is a race where you conceive that not everyone will finish together. But you want to try as best you can to equalize the equipment that everybody has.

35:21Everybody starts at the same time that the track itself is as equal as you can make it. Everybody certainly runs the same length, etc. So there will be winners and there will be losers, and the thing you cannot compensate for is motivation. I was an athlete in the days of yore before I gained weight. I had a football scholarship to the University of Miami, but I got an academic instead. There are about a dozen schools in the South, not Auburn, but Florida State, Duke, Tulane, Vanderbilt, etc. that offered me scholarships. One of the things that athletics taught me is that there are people in the fourth quarter that suck it up and want to win, and there are people that don't.

36:07One of the reasons I got a football scholarship offer is because one of the Miami coaches was refereed in the Orange Bowl for high school games, and he saw me not kick the butt of one of my own tackles on defense. He was whining and sniveling, you know, and you've got to suck it up. And that's the thing that can't be compensated for. The egalitarian model is everybody should finish equally, right? So how do you run an egalitarian race? You yoke everybody together. And that means a very slow race, as the stronger drag the weaker or the slower. And there's always a group, it doesn't matter what they call themselves, the referees, the party, you know, the elite, whatever. What do they do? They extricate themselves from the race and say, don't worry, the rest of you can run, we'll be the referees.

36:59We'll fire the starting gun. We'll take care of yoking everybody up. So egalitarianism Egalitarianism, of course, as Murray said, it's not only a revolt against nature, it's a contradiction because somebody has to enforce the egalitarianism, etc. and that gives the whole ballgame away. So what I find is that there are a lot of people today who are egalitarians using equality and a lot of inequality and we have to differentiate between them and people confuse the issue. Some years ago, California, Nick von Hoffman, a great columnist, was giving a talk. He castigated the libertarians in the audience that we had evaded the two great issues of the 20th century.

37:49Those are the equality issue and the race issue. When he finished his talk, I raised my hand and said, Mr. von Hoffman, I personally have not evaded either issue. I've written The race issue is a subset of the equality issue, just as the women's issue is. And he looked at me and he could hear the gears grinding and said, By God, you're right, and I've been giving this talk all over the United States. So you can't be for women's rights. Rights. It can't be for Blacks' rights or Hispanic rights, since my mother's family is from southern Alabama and Dothan, but I'm also half Spanish. You can't be for Hispanic rights. You have to be for equal rights for everybody. It's a contradiction. If you pull out a subset, the enemies of real equality will immediately try to co-opt you. You see, But a friend like Nicholas von Hoffmann didn't even understand the way it's one really big issue.

38:57And so I think that the new instruments of expansion, the newest instrument of expansion, it's a very old one, but the one which has the potential to rejuvenate civilization in and Equiblian Manor is what? What's the name of your newsletter? It's the free market, for God's sake! This is the ultimate instrument of expansion. We know in the command economies, I quoted this in one of my essays, I think it was in Reason, called Surviving in the Interstices, We know from fairly good analyses of the economies of the ancient world, as command the economy as they were, that at least 10% of Rome was essentially in the market.

39:52So, from that, we can deduce that even if you have 10% of a market economy, its ability to keep a civilization from going down the tubes is amazing. So if you get 20% or 30% or 40% of the market, the rejuvenating qualities on a civilization are beyond belief, as we can see from some societies that have turned themselves around. by Introducing the Market. So I would suggest to Austrian economic theory that it's important to take your economic insights and put them in a larger philosophy of history and understand how the market has operated in various civilizations as an instrument of expansion. Because the cycle we have with us forever, not only in economics but anywhere else. And it's important that people understand that a cycle does not inherently mean some kind of toinian determinism of inevitable decline, that through instruments of expansion.

41:03I think I'll just mention one other thing we might talk about. Quigley says when there's a tension or a crisis in the system, there are three options a society can choose. One is reform, of which revolution is the most radical. A second is very interesting, and you never hear it discussed, circumvention of the system. In a modest kind of way, that's what Richard Nixon was trying, it seems to be, in the 1970s, in a very foolish way, in fact. And then thirdly, reaction. And when I said that people, this corporate syndicalist idea is returning, what we really mean there is it's reactionary in the sense that people who are essentially fascist are for privatization and acting like they're for the market.

42:06And we have to expose those people, those reactionaries that are in some ways trying to circumvent the market, because that's part of what's happening in the 21st century. In this paper in Latin America, I went country by country to show those countries where things do not look very good, like Venezuela, where maybe some things are changing there, and other countries where in fact there were better chances for the market. So I hope we'll have some questions and some discussion now about what I've dwelt on in these ideas. I have a definitional question. Sure. What is a quit rent? What is a quit rent? In feudal theory, it's something that you have to pay to the Lord to demonstrate that he is the Lord. It can be in the case, they got very ceremonial, it can be a feather, you see.

43:06See, when it happened, all these lords got, if you know John Locke's feudal system in the Carolinas from the late 17th century, there were all these feudal land claims that were given out, you see. And America was so primitive, not feudal, in the 16th, 17th century, that you can't have feudalism out in the woods with a few Indians and some farmers. But once you begin to get a segmented civilization with hierarchy, then feudalism becomes a possibility, you see. So these people with all these claims were now saying to American farmers, Well, you think that your grandfather died killing Indians and you're fighting Indians and you thought you purchased this land in some fashion, but I'm here to tell you that we really own it, you see, and you're going to pay a quid rent.

44:05It's not going to be a feather that's going to be in pounds sterling. What frightened the Americans with the Stamp Act was it's not only that they were going The British said, you guys are not going to pay in any deluded script. You're going to pay in pounds sterling. The Americans said, what? It's not just his tax, but the way they're going to collect it, etc. So America looked like the world's greatest milch cow out there, if you could re-institute feudalism. Utilism. And I don't think we appreciate, given what happened in Eastern Europe and Poland, Charles Lee, who was one of the great guerilla theory here, Murray's hero of the American Revolution, he went on nuts, clashed with Washington, but he was a British army observer in Poland in the 1760s when the Russians were just overrunning Poland. And he said, My God, it's so horrible to see these brave Poles fighting, literally, with pitchforks and being bayoneted down by Russian infantry and shot, and he came, it's what a quit rent.

45:15I am amazed that we no longer teach these terms. At the recent Institute meeting, there were three of Clyde Wilson's students giving a very good paper about Jefferson and others, and I mentioned something about Elodeo land claims, and he thought I meant alluvial or And it turned out they were unaware of it. Joe Stromberg later, I understand, is going around saying we ought to have a session on allotial lands next year. Maybe that's a good idea if people don't understand these terms. But in Jonathan Hughes' book, The Governmental Habit, he argues, and I agree with him, that the betrayal of the American Revolution occurred when instead of going back to allotial land claims from the Middle Ages that had been destroyed by the emergence of a centralized state in the early modern period.

46:04But the Americans settled for taking the simple from the king and giving it to the American states. Now, I'm a builder on the side and I've developed a dozen properties and held various pieces of land. I never had one that didn't belong to Henry Flagler shortly after, you know, in the ways that he manipulated land in Florida with a railroad giveaway. I always go back to the Key of Spain in Florida, but fee simple is a joke. Anybody who owns land in fee simple, and if we own it, we all do, you rent it from the state, don't you? And if you don't pay your taxes, even Wayne Huizinga, who I've attacked, his computer got screwed up, he owns so much land that they didn't pay taxes on a piece of land that was worth about three-quarters of a million.

46:52and somebody bought it at a distress sale for $75,000 and Heisinger protested and they were going to try to settle it. But that's how quickly you can, quote unquote, lose your land. And I was telling somebody, we were talking over coffee a little while ago, we got on that question. I would love to go before the Broward County Commission in Fort Lauderdale sometime, maybe I'll do it, and say, To say, guys, I want to know what it will cost me to buy out of the system, to buy allotial land, you know, give me a price instead of 3,000 a year tax for my land, I want to go back to medieval allotial land. And I think we ought to start resurrecting the consciousness of the American people to the virtues of allotial land holding.

47:44It's not a new idea. It was the way people owned land in the Middle Ages. And you couldn't get the national state started at around 1000 A.D. until you smashed all the Lodeo land funds and came in with this fee-simple crap. Lodeo meaning you can never be taken away by that. Yeah, you own it and you really own the land. You do not, in fee-simple, get it from the state. And all the American Revolution did, as John Hughes points out, is to substitute American states, and then later the federal government, with all this huge land, for basically allodial land claims. But what's wrong with allodialism? The only problem is it undercuts the power of the state.

48:29It makes it impossible for the state. When I mentioned this quote of Quigley's, he talks about new instruments that may come out of solar energies and all kinds of energies. But when I was an economist with the Joint Economic Committee, that's a joke, you know, I was a senior economist, someone once asked me how could you be a senior economist with the Joint Economic Committee of the Congress as I was, well you saw the movie because I never had a course in economics, no I did one freshman course, but I said well you all saw the movie Miracle on 34th Street, didn't I said, yeah, I said, well, the post office declared you a Santa Claus. So if the Congress declared I'm an economist, you know, what the hell, you know. But what I was doing there, looking at affordable housing, and the technologies that we now have, inappropriate technologies that anybody can bring to bear to free yourself from the state, Not some kind of primitivism that frees you from the market, but frees you so much from the state, in terms of building your own house quite comfortably, freeing yourself from the banks that are creatures of the Federal Reserve, by building a house very cheaply, etc. etc.

49:49If you had a lotio added to it, you could achieve real freedom and not some kind of primitive stuff. And that's of course what the state doesn't want. So we're going to have a global kind of coming together on this, and the statist environmentalist ecologist are afraid of this ultimately because of the potential it has for advocates in the market, appropriate technologies and other things, because they don't really understand this on a global scale in the way market people can and do. So I think it's great potential. It's been some time since I've read Hughes. When you say that that ends here in the United States, is that the Jeffersonian Ohio Valley policies of some sort? Oh, no, no. Jefferson was an absolute boob on this.

50:35Give me the time frame. Well, Jefferson had this crazy progressivist idea. There's a real status to Jefferson. If you look on his theories of education, and I pointed out in my paper on China, they're neo-Confucian, as Quigley, Creel suggests, he got them from Confucius. And John Adams is much more liberal. Adams pointed out Jefferson's ranting on about the natural aristocracy and taking this rabble and putting it into state schools and the equivalent of IQ tests. And And Adam says, Tom, stop. You know, there are other kinds of talents other than this academic IQ stuff. And, you know, the Queen, the King's mistress, after all, Adam's is quite funny. So the King, the King's mistress has a certain talent, Tom. You know, has nothing to do with IQ. You know, and so Adam's was much more free market. And with Jefferson And in the Northwest Ordinance, he took this 160 square acre thing and rolled it out like a carpet.

51:46And we have some studies of parts of the Ohio Valley, and it took 50, 60, 70, 80 years of property transfers in the market to get a decent market allocation of property use, because of this stupid Jeffersonian square stuff. And it begins to look, by the way, more and more medieval, as you get that way. Have any of you read Jane Jacobs? Nobody's heard of her? Oh my God, she's one of the great free market people in the whole world. A few years ago, I was using her stuff in my classes, and my dean had not heard of her. She was a woman, an English major, and no reason she should.

52:34But then the New York Times book review had a piece about her and it showed how clearly the public administration people hate her. And anybody who has that, you know, must be good. But her book, The Birth of American Cities, The Economy of Cities, shows how marvelous market cities are. I mean, one insight alone is worth the price of the book. She points This should be added to your stuff on Marxism, that Marx deliberately chose the most statist planned city in England for his critique of capitalism, Manchester. And she said, if he wants a market city, for Christ's sake, choose Birmingham. You have 20,000 Jewish merchants there competing and tearing the city apart and rebuilding it, ongoing.

53:24The last thing Marx wants as an example of capitalism is Birmingham. He wants the most planned city in England by status planning, Manchester. The woman has such great insights. She's one of the great heroes of market urbanism in the world. It's clear why public administration hates her guts. She immigrated to Canada and she got fed up. She has a wonderful book,

54:21We appreciate it. We appreciate you being here. We'll call it officially closed if those of us who want to stay around this time talking. And we thank you for coming today.