That Hayek-Keynes Rap Video

0:00This is Jeffrey Tucker, and it's my great pleasure to be sitting here with John Papala, who is the maker of that now very famous Hayek-Keynes video with a million YouTube views or something. And the important thing is not so much the number of views, but where it's been viewed. John, your video is in all the classrooms in the world. Thanks for having me, Jeff. I don't know if it's in all the classrooms in the world, but it is certainly in song. You talked last night about how many languages it's been translated to. Yeah, I think it's up to 12, and possibly more, because I noticed that, for example, a French version was posted on a separate website on YouTube, but on Dailymotion.

0:46And it's great. The French one, as of right now, has something like 40,000 views. How does it work? Are they rapping in French? No, not yet. What they're just doing is putting the subtitles up. When you made this video, did you consider the implications of open sourcing it the way you did versus putting it behind a wall, a payment wall or something? Did you think about this aspect of things? I did, you know, in the professional media world, in the mainstream media world that I find my full-time employment, there's a big question about how to interact in this new media space.

1:36So, you know, I'm pretty familiar with sort of the questions of how are you going to find an audience in this world, in this online world, You know, do you put stuff behind a paywall the way Wall Street Journal does, or do you put it out for free? The point of this whole video was to drive awareness and education. So to put it behind a paywall really was exactly the opposite of what we were trying to achieve, Russ and I. So it wasn't even a question. It was, this is going to go out for free. And then, you know, if it's as successful as we hope it'll be, that'll create opportunities. opportunities. So in a lot of ways, this is a piece of advertisement. Right. Yeah, it was for the Austrian School and for important ideas. And people don't charge for ads.

2:22I thought it was intriguing when I first saw it because lots of times on YouTube, you don't see quality original content. You see some pirated thing or some home video or some guy riding his computer as a skateboard and he crashes or whatever. But to see such a high quality thing that was originally posted on YouTube, right, and that's your strategy from the beginning. Well, I think there was a couple reasons to go with YouTube. One was scale. So it's there, it's a very familiar interface for people, it's a dominant platform. So, and it has comments and it has embeddability and all those features. And for us to go with something that's a more targeted platform, like Bright Cove and some of these video services that basically provide a unique...

3:09Yes, right. Vimeo is... Yeah, I mean... I actually recently posted it on Vimeo because Vimeo is more quality-oriented, so I liked having that higher quality option available. But with YouTube, it's just quick. You just go to YouTube, it shows you that hit counts. It's just that sort of just a touch point, it helps, there's a sort of positive feedback loop, the YouTube hips keep growing, that attracts more audience, it attracts more media attention, you know, after one week we had half a million views and that in and of itself created more attention which drove even more viewership. The implausibility of the whole thing. Yeah, so to have gone with a put-it-where-everybody-is approach with something that's so on such a grassroots effort, I think, would have been a mistake. It would have dispersed the numbers.

4:00I consider your distribution method to be ingenious. I mean, it was simple, but it's sometimes hard to come up with a simple solution, you know, like that. Especially when you have a treasure like that video where it is, you think, well, shouldn't this be on broadcast television or something like that, which it may end up being, who knows? This is not an idea that originated, but we live in a new world where getting distributed is not the question, it's getting discovered. So discovery is the new distribution, where it used to be the case that, how am I going to get my movie distributed? That's easy to put on the internet. How do you get a movie discovered? How do you get people to find it in an ocean of content? And, you know, we had a lot of mainstream media help. We had the NPR news story.

4:49And New York Times. And, you know, I think that that was a leg up on top of the video, you know, being sort of unique. Yeah, and of course, every Austrian in the world was all over that thing within a matter of minutes. Can I ask you, what has it meant for your own professional status, for your career? Well, I think this project is a completely separate line of business, so to speak, from my life in the professional broadcast world. But to the extent that that professional world is trying to figure out the Internet, I think that at the very least, anybody with a hit, you know, there's a funny thing. People think that Hollywood and the media world has a bias, and I think that's probably I think that is true in some respects, you know, designers think they can design, which leads them to think that they can design more than they can, and Hayek's got a lot of good things to say about the problems of design and we put that quote at the end of the video.

5:53But at the end of the day, it's about how you get eyeballs, you know, it is actually This is a capitalist system, this media world, and so, this, to have a success like this can only help me. Yeah, people pay attention to success. You know, so that's really, I mean, you know, I'm reminded of, not that there's a correlation, but I'm reminded of the Passion of the Christ film, which despite all of the controversy about that movie and about the, you know, undertones in it and Mel Gibson as a personality, The fact of the matter is, after that movie, you had all of these other biblical movies that came out on TV and film because it's a capitalist system. Yeah, well, I mean, it's true even in the world of opera. You know, you can get a singer who's never sung in any of the major operas but as a big commercial star.

6:40Eventually, the major operas will invite that singer in and he or she will be singing the big parts, you know. So, the respectability often times follows the popularity. I mean, that certainly happened with Keynes. You know, I think his respectability to the extent that he has it definitely followed his popularity. Actually, you know, maybe that's not a fair dig. He had respectability before the general theory. But in any event, you know, you get my point. It was funny last night in your talk. I thought about it this morning. You gave very short shrift to the difficulties of coming up with the text of the rap itself.

7:27I mean, you just said, well, I came up with these rhymes and moved on. But, I can tell you watching it the first time, I was amazed at your capacity for reducing the Austrian theory to just its essentials in a way that so could clearly communicate in these rhyming couplets. I don't know. I don't know what to say. Not to pat myself on the back, but for some reason, I'm good at that. It's weird. My wife said it because, you know, I'm not a rapper, but I will kind of come up with weird songs on the fly. We'll be driving along the road, but I'm not a rapper. I'm not a rapper. I'm not a rapper. I'm not a rapper. I'm not a rapper. I'm not a rapper. I'm not a rapper. I'm not a rapper. and I'll sort of improvise a little thing and so you know I think it's just because of familiarity you know I just got I got bitten by this Austrian bug

8:22and so I've read I'll read things that provide no new information just because there's always a little color or texture yeah to some to each person's exposition of these things that you pick up something you pick up some terminology or some analogy or some insight and so I just read like crazy about it and I think it doesn't really help explain how I came up with the rhymes but you can see the influence in the videos you're watching you know if you've been reading this material you go oh wow that was Mises oh there's Hayek's special contribution oh there's Garrison oh this point made by Salerno you know so you yeah in this very small medium you get a kind of a collapse of like a hundred Years of Intellectual History.

9:10It's funny, Russ and I interviewed Larry White in advance of shooting, we had an opportunity to do so and we did, and so we played the song, because at that point we had the song, and he listened to the song and read it along, and then he said that there's a lot of Garrison in this. Yeah, yeah, yeah, grasping for resources. Yeah, grasping for resources, he pointed that out, and I'm now reading Time at Money, Garrison and sort of textbook which is, you know... But you handle the turning point. I mean, I've been at day-long seminars where people have debated this whole question of the turning point of the cycle. What causes it? How do you describe it? What's actually going on when everything turns? There's some reason in the video you made it all very crystal clear that it's just something that definitely has to happen because what you seem to be seeing is not reality and reality reasserts itself. At what particular point and precisely why is an interesting question, but it's just as

10:10interesting as when the person who's on the inebriated high, you know, turns to being sick. Well, I know Roger brought up, and he was absolutely correct, that we, in presenting it as a drinking story, we're actually co-opting a criticism. When I started to get into this stuff, I said, okay, well, this makes so much sense. Who doesn't it make sense to? Because it seems like it makes perfect sense. And I feel like we're in at least a bit of a Hayekian moment because this boom and bust so matches the Austrian story, the low interest rates.

10:56There are people like John Taylor who are not Austrians, who simply through an empirical review of reality have arrived at Austrian conclusions about the role of artificially low interest rates in creating bubbles and that's, at the very least, I think we're going to come out of this episode with a more Austrian flavor to the mainstream discussion. Well, I mean even Obama himself in an interview I read made reference to the artificial wealth And I think as I was digging into these ideas and reading articles on Mises.org and listening to podcasts, I was like, well, who disagrees with this basic story about cheap credit creating a boom?

11:45Because it seems like it's an obvious, there's a natural, the individual mechanics of the The Austrian Theory, I think, can be overwhelming, because you take it together as a story and it's got a lot of moving parts, but that piece in particular makes so much sense. So I said, okay, well, that's fine if it doesn't, and I came across that 1998 article that Paul Krugman wrote in which he called it the hangover theory, and I think, you know, he completely glossed over the nature of the structure of capital, that during, he just called it, and And I think that my understanding is that this is a pretty common straw man attack on the Austrian theory. Yeah, it goes way back. That it's an over investment theory. That's right. What's so bad about having more quote capital?

12:31Now we've got more capital so we can be more productive. But if you've made a lot of cars and people don't want any more cars, that capital is not worth anything. Hence the line now is devalued capital that makes up the slack. Yeah, that was a great line. So that was a direct, that line is a direct answer to those like Paul Krugman and Brad DeLong and other Keynesians who have what seems to be a sort of superficial understanding of what the Austrian theory is saying, that it's not just which capital, capital is not K, it's not a capital stock. We have specific factories that make specific things and the factories that went into producing housing, caterpillar equipment for housing construction aren't worth as much anymore.

13:18It doesn't matter that they're lying there, underutilized now, we don't need any more houses. We're not going to utilize them. Right. That's devalued capital. You know, John, I'm just sitting here wishing that your video had been around in the 1930s and 1940s. It could have avoided a lot of problems, you know, because it does answer issues that came up between the debates over Lord Robbins' book and Hobbler's struggle with these issues in the 1940s. You know, I think you have something, you could have taught these gentlemen something about the Austrian Cyclope. Let me ask you some personal issues. How old are you? I am 32. And did you ever study economics in college? No. And how long have you been interested in economics? I've always been politically minded. I started off as, you know, I was raised in a conservative Family and so you sort of you you as a young person more or less depending whether you're rebellious or not either adopt or reject the politics of your parents so my dad's sort of like

14:25a populist conservative you know pretty libertarian but not a libertarian not a self-proclaiming not like okay but you could call him like a monarchist libertarian like get the government out of of Everything Except Defense. And I always had an interest in politics and all this stuff. A lot of it was just sort of the enjoyment of argument. I liked the debate. It's fun. But when you become a parent, it changes the way you care about these things a lot. Suddenly, you have a mortgage, you have a family, you're trying to make it in the world, You've lost your job in a downturn as I did during 2001's downturn and these issues have a visceral impact now and you want to know, you want to understand, if only to understand but ideally to help you prepare and to help you see the signs of problems.

15:22And I was fortunate in that even though I hadn't yet dug into the Austrian story yet, The boom was bizarre, and at the peak of it, we had an apartment in Hoboken, and at the peak of it, our neighbors sold their apartment for dramatically more than we bought ours for only a year later. I was like, there's no way that this can make any sense, and maybe I was resting on the labor theory of value a little bit in thinking that, but it's like it couldn't have gone up in value that much, it doesn't make any sense, nothing's changed, not in this amount of time. The only one talking about this stuff was Ron Paul and at this point I had already been exposed to some libertarian thinking and was beginning to move in that direction thanks to John Stossel's books and some other things I had read.

16:21So Ron Paul was the one that turned me on to the Austrian perspective. and once I got turned on to that and started reading and following and then Bear Stearns seemed like a full-blown sham, a bunch of really, I mean, bailing out the creditors, creating weird subsidiary companies of the Fed that did it, and JP Moore, that whole thing is so, you know, I allege that it's corrupt. Is it corrupt? Who knows, but it just appears to be a flim-flam and that just it just continued to confirm what Ron was talking about at a period where he was just being trashed by everybody left and right. Yeah, yeah, yeah. Well, it's a credit to the speed at which your synapses fire in your brain or your natural intelligence or your curiosity or something to have processed all this information so quickly over the course of two years and been able to produce what you produce and I think that in some ways you are already

17:19Legendary, and this video is immortal. You praise too much, Jeff. I'm just telling the truth and it's a pleasure to have you at the Scholars Conference and to sit here with you today. Thank you for taking the time. Thank you so much, Jeff, and I definitely am a big fan of everything that the Mises Institute and that you've done with the site. The video couldn't have been what it is without the knowledge I gained from the resources you provided for free. So, thank you for that. It's a good partnership. Thank you, John.