Taking the Capitalist Road

0:00Perhaps a better title for my talk would be A Personal Odyssey with the Mises Institute. But before I get into that, what I'd like to do, I've never been invited to give a speech to graduates. So you people are going to be my guinea pigs, and I'm now going to make believe you are graduating a four-year university, and I am the graduation speaker. Congratulations on four years of study and hard work, for at least some of you. Graduation speeches invariably exhort students to do charity. Now, I'm not against charity. Some of us friends are into charity. Charity is a good thing. But Adam Smith, who wasn't all bad, despite what Murray has correctly said about him, said, it's not from benevolence of the butcher, the baker, and the brewer that we expect our dinner, but from regard to their own interests.

0:48We address ourselves not to their humanity, but to their advantages. Contrary to most graduation addresses, Look around you, students. See the ordinary basic things that make life enjoyable. Toilet paper, yes, imagine life without it. Wristwatches, cars, gasoline, hot dogs, paperclips, pizzas, soap, celery, oranges, the list goes on and on.

1:11Look, if all of you join Doctors Without Borders, the Peace Corps, the Red Cross, the March of Dimes, who will produce these things? What will life be like without breakfast, cereal, bacon and eggs, watermelons, computers, penicillin, underwear, etc.?

1:24It used to be when I was in airports, people who would speak on phones would go to where the phones were, but nowadays they've got these little things, I don't know, I'm the old school, I don't have one yet, and they sit right next to you and they start talking. And they say things like, yes, we've got to set up a meeting, hire him, don't hire him, if you don't get that delivery to this guy, you know, they'll fire us. When I'm at an airport, I like to read or write, and I can't do it with these guys yapping. But I have a soft spot in my heart for them because they are taking care of business. Without those guys, we wouldn't have all these things that I just read off on our list. These people, these businessmen, these business people are very important to our lives.

2:09And yet we're told that this is the problem of capitalism, and capitalism is evil, greedy, Capitalism is just a capitalist act between consenting adults. Markets too should be allowed along with deviant sex and drugs. Markets too are okay. This is the province of cooperation. This is the way we cooperate with each other. Yet you students, I think, are socio-biologically hard-wired to not accept this because in our gut or in our brain or in our brain stem, which stems from our life a million years ago, when we lived in societies of 10 or 15 or 20 or 30 people, the only cooperation possible was explicit cooperation, you know, you scratch my back, I'll scratch yours, help me lift this boulder, I'll help you catch that deer or whatever, but we live now in a society of millions and millions of people and there's no way, simply no way, In order to cooperate with each other, many of us, that is explicitly, we can only cooperate implicitly through the intermediation of a market.

3:16Yes, the way to cooperate now when in Florida they have a storm is that the prices of oranges or whatever it is that gets lost or batteries or gasoline, water, milk, goes up, which is a signal to other people to bring the stuff to the bad areas or the areas that have been struck by a storm. Yes, profits are the way we get each other to cooperate with each other. There's nothing wrong with profits. My claim is that you people have been bamboozled, you've been fooled, you've been cheated in your education, you've been lied to, you've been undermined, your intelligence has been insulted, you've been bullied and pushed. Who's been doing all this stuff that I'm now trying to undo in a 10-minute speech? Well, you professors of sociology, literature, classics, political science, history, anthropology, communication.

4:06To say nothing of black studies, queer studies, I'm not kidding you, there is queer studies nowadays. Feminist studies and other elements of socialist studies. You have been taught by these people that capitalism equals greed and immorality, that socialism is the wave of the future, that profits are evil, that firms discriminate on the basis of sex and race, that greed is what causes pollution, that free enterprise leads to war, that all men are rapists. This is stuff that's actually taught in school, and it's just horrible. Nor have even economics departments been free of this stuff, although economists are usually better than sociologists in terms of economic liberty. Well, what are you taught in economics, in the typical economics class? First of all, you're not taught economics, you're taught math or statistics.

4:54You learn about market failure, that markets are imperfect, which justifies government intervention and regulation, that there are public goods that only government can supply. Hans just gave you a long list of how government supplies public goods. One of my favorite examples is the roads, which kill 40,000 people a year. Somehow they tell you that it's because of fast driving and drunken driving and vehicle error and stuff like that, and stuff like that, but it's really the failure of the road managers to eradicate this sort of behavior. If we had private competitive roads, they would compete, among other things, on reducing the death toll. So when people take statistics on how many people governments have killed, and they don't include that 40,000 minus the number of people that would be killed on private roads, which would be way less, those statistics are erroneous.

5:45You know, when you go to law school or medical school, they say good things about law and medicine. Other people might say bad things, but at least they say good things. I teach in a business school, and in a business school, we have business ethics. Happily, in my school, it's not so bad. Actually, it's very good. I have Nick Capaldi, a libertarian. But in many business schools, the business ethics is, you know, you're greedy, you're a capitalist pig, things like that. Socialism is the way to go and charity is the only good way to produce anything. And in marketing departments they'll come out with things like, you know, advertising is evil. I mean, you know, it destroys people's minds or what have you. According to the mainstream economists, education is an external economy.

6:32Namely, it confers benefits on people who don't pay for it, so therefore what the government ought to do is subsidize it. I would say, not that I favor the government taxing anything, God forbid, but if they're going to do anything with this public education, they ought to tax it. They shouldn't subsidize it because it's really miseducating people in all these ways that I've been indicating. So I say to you students, look around, realize that without free enterprise, your lives would become uncivilized. Economic freedom is the last best hope for humanity. We have some examples of this, East Germany and West Germany, North Korea and South Korea, the same people, the same culture, the same capital, the same education, the same weather, the same everything were split asunder by an accident of war and then one system went one way and the other, the North and the South and the East and West went one way and the other went the other way and then years later we see in North Korea they're starving. And East Germany is an economic basket case. Now happily in the German case it's not so bad but in the Korean case it's a horror.

7:33even in the Soviet Union free enterprise works the quick statistic on farming there the amount of land that was privately owned in the form of front yards and backyards was 3% and on that 3% they produced 25% of the crops whereas the public land was 97 and they only produced 75% of the crops so even in the bowels of the Soviet Union free enterprise is like a hardy weed you just So, students, as you go out there, look kindly upon business. Business is the lifeblood of the economy. End of my speech to you graduates. Now I'd like to make a speech to you, so pay attention. This you didn't have to pay attention to before. And here's my speech to you.

8:19A ten-minute speech to graduates can't realistically undo four years of our perversity, evil. evil. The only way you can do that is to get professors in the classroom that teach a slightly different version of things. Now have you been, people been given out the thing? Everyone's got copies of successes and failures and all that? Okay. So what's going on with, I think I've got it on the, I think I can put it up here as well. First I'll talk about some of What the Mises Institute does in general, and what Mises University does in particular, is it takes students, and it tries to make them professors of economics mainly, but of any subject really, to instill the message further to students.

9:23Now, when I say successes, first of all, this is just my own list. I never asked Jeff or Lou for a list. This is based on my own recollection. I said to myself, well, which kids did we have 5, 10, and 15 years ago who are now professors? I'm sure this is the tip of the iceberg. I'm sure there are many, many more. And I'm also, so I'm sure that I'm leaving out people. And also, I might have included one or two by mistake. I don't know. My memory is, you know, I'm an old duffer now, and I forget just who was a student. I think most of these people were students of Mises University and also by see I'm defining success very narrowly the success here is does a person who goes through Mises University become a professor later but this is hardly the only success obviously if they become business people and then they contribute to places like the Mises University that's that's a magnificent success it's

10:15just that I don't teach that so from my own bird's-eye view I'm not looking at I see it as a partnership. On the one hand, there are those of us that are trying to get kids to become good professors, and on the other hand, there are business people who support our efforts without which this couldn't be done. Not only does the Mises Institute get kids through PhDs, like here, but it also helps isolated professors. Professors. Now, there are two or three like Sandy Klein and Peter Klein. Peter is one of our speakers. Murphy and Pun Graesic in Hillsdale and Powell and Stringham, who are both here, one of whom was a former student of mine, Ed Stringham at Holy Cross. Not only does it help them get PhDs and have the right attitude or the right perspective on economic freedom, but when they're isolated, when they're You know, the only professor at their school, it brings them together.

11:08It'll have an Austrian Scholar's Conference, it'll have places for them to get published with and without getting published you can't get tenure. Places like the Quarterly Journal of Austrian Economics and the Journal of Libertarian Studies. So it has a web which connects people. And this is very, very helpful for isolated professors. But even places myself, I now have, I'm at a place, Loyola University, New Orleans, where We've got about seven Austrian economists and maybe another seven or eight libertarians in the law school, in the political science, and this business ethics professor. We might have established some sort of world's record at the last Austrian Scholars Conference by bringing about 20 students and eight or ten professors, although I have to admit that the University in St. Louis, without any professor help at all, had about 15 or 18 students, Which was just utterly and totally magnificent.

12:03So the Mises Institute plays a magnificent role in this process. Notice there are no placements at Harvard, Yale or Princeton, but you have to start somewhere. There was a time not too long ago, maybe a decade or two or three ago when people such as Mises and Hayek were musing publicly that with them Austrian economics would die. Well, thanks to the Mises Institute, this is very, very unlikely because of the sheer numbers of people. I think at the last Austrian Scholars Conference, there were 200, 250 scholars, professors who were reading papers to each other and helping each other get published. It's just grown like topsy. So I don't think there's any chance of that. And one of the thrills that I get is when former students of mine send their present students to the Mises University.

12:48We just sent four students off to get PhDs, Jenny Dernmeier, Emily Schaeffer, Eric Matei and Dan D'Amico. I made them all promise that when they get jobs and become professors that they'll send their students to us and maybe one of these kids will become the new Mises Institute people. So I think the Mises Institute is doing a magnificent job in this regard. In addition to successes, there are failures, and I want to speak about two failures. I apologize in advance for talking about failures, but you know, we're all friends here, and if we can't wash dirty linen, then here, where can we wash dirty linen? Now again, by failure, and there are many more failures than these two. Remember, I'm defining failures. Everyone who went through the Mises University, which is 100, maybe about 100 kids every year, something like that, and we've done it for 20 years or so, so it's 2,000 people, minus overlap, and there are not all professors.

13:44So I'm just picking out two quote failures, and I should put the failure in quote. One of the failures is Brian Kaplan, who is a professor at George Mason, where three of my students are now studying. Brian is a magnificent libertarian, but he is, I would say, the most gifted Austrian critic. Why is he a gifted Austrian critic? Well, he's a bright guy and, too, he's been to the Mises University, so he really understands it. When other people criticize Austrian economists, they don't really understand it, so their criticisms are sort of off the point and silly. And we do reply to them, but his are very much on point, plus he's created a sort of a cottage industry of publications. Now, as you look down this list, what I've got here, and there's one mistake, Kaplan wrote articles 1, 2 and 3. One was 99, one was 2001 instead of 2000, and then the other one was 2003.

14:40The first article, his 99 article, gave rise to two articles, one by me and one by Guido. He published in the Southern Economic Journal, which is a semi-prestigious mainstream journal we published in the Quarterly Journal of Austrian Economics. his second one was in the quarterly journal Boston Economics and I have a reply also in there and then his third article also appeared in the QJ and now there are three more articles attacking him so what he's doing in effect is very good criticism in so far as there can be any good criticism or at least insightful criticism about this stuff I want to read a quote to you from David Gordon's Mises' most recent magnificent, well I shouldn't say that, all of them are magnificent, not just this one, but this one is pertinent to my case and what he's doing now, David, as you see I list David on this list as a critic of Kaplan, and what David says is, quote, debate over Mises' socialist calculation argument has been going on since 1920 and one might have thought that at this late date it would be difficult to say something new.

15:49Brian Kaplan has done exactly that, and then he goes on to say what Brian said and why Brian is wrong. But the point is that there's got to be some quality here, otherwise David wouldn't reply to it. And David does give the devil his due, or give the critic his due, and says that, you know, he did come up with something new, and he really did. So this is one of our failures, and what this failure has done is created, oh, six or eight or ten other articles, and there will be more forthcoming, and he talks about things like probability and difference in the synthetic a priori and methodology, and he has called forth a response from other Austrians, and this is one of our failures.

16:36Okay, the next failure is my own son. Now, before I tell you why my son is a failure, boy, my wife is going to kill me for this. He's only a failure in this very narrow sense that he's not a professor of economics, teaching free market economics. Actually, he works for Microsoft. He tells me what he does there, but it sounds like computer babble, I don't understand it, but he must be doing pretty well because he keeps getting promoted, so in some sense, he's a success. But let me tell you the story there. I had a sort of a bi-coastal marriage from 1991, when he was about 12 years old, until, well, still going on, don't ask, that's another problem.

17:27And I could only see my kids when school was out, which was the summers, Christmas, Easter, things like that. So there was a year or two or three when I couldn't go to the Mises Institute because my wife would kill me and she'd say look you're only with us so many weeks a year now you're going to go off to the Mises for a week or two and she'd smack me around so I couldn't go but then when my son became 15 or so I got this bright idea I'll grab him along it'll be like babysitting and Lou was kind enough to let him in and I think the next youngest kid was four or five years older than him so he was like a baby but you know he would sort of do it for a year or two and and then he got into it more and more But in the end he went to the dark side, namely he didn't follow me into Austrian libertarianism.

18:12But he did do some interesting work as I show on this list here. And let me just talk about two of the articles. What happened was, with regard to the first article on Rhodes, Matthew and I, he must have been 14 or so, And I took him to another conference in Vancouver where we lived. And Gordon Tulloch, a very famous economist who almost won a Nobel Prize and might yet win one in the future, tapped me on the shoulder and said, Block, I hear you believe in private roads. I said, yeah, I believe in private roads, but that's all wrong, that's idiotic. Because if I had a private road from Boston to LA and I could cut off the whole country and I wouldn't let people get from one place to the other and this and that and the other. And Matthew and I, for the next two or three years, practically discussed nothing else but, well, suppose you build a bridge over the road, or a tunnel under, well, would you be violating the property rights?

19:06Do property rights extend up into the stratosphere and down into the core of the earth or not? And we went through this, and finally I wrote it up, and now the question came, well, do I just give him credit for it? I mean, I wrote it all, he didn't write it all, but it came out of our discussions. And I finally decided, well, you know, he was an integral part of this, And then he said, well, no, don't put me down because no one will believe it. And then I said, well, is it true or not? And now with what they'll believe, I'm after the truth here. And he said, well, yeah, it's obviously true. So I put him down as a co-author. And Gordon Tullock wrote a reply, and then I wrote a reply to him. The other article Matthew and I did was on gun control, where we talked about whether atom bombs are per se invasive because you can't focus it on guilty people or not.

19:51And our analysis of that was, well, if you live on Jupiter, and maybe one day we'll colonize Jupiter and it's big enough so that you can confine the effect of an atomic bomb to your own area, well, then they would not be per se, but around here, yes. So, he is my second failure. And there are a lot of people who came through and didn't become professors and were failures in this narrow sense. But what I guess I'm trying to say is that even these two failures, my son gained immeasurably from being involved in this. He learned about it. I couldn't get my daughter to come for hella high water. Another problem. She's not a failure, but she didn't come and not. But in any case, Matthew gained immeasurably. There are hundreds of students that have gone through the Mises University, which has been funded by people such as yourselves that we don't know about, we've lost touch with, that are failures in this very narrow sense,

20:46Let me close with a question. Why is Austrian economics important? Because after all, Austrian economics consists mainly the bullseye part of Austrian economics is praxeology, subjectivism, market process, methodology, tax on math and economics. What's that got to do with liberty? What's that got to do with freedom? Lew wrote a magnificent little pamphlet called, I think, something like, The Importance of Austrian Economics, and I recommend that for your perusal. The way I see it, while there are some things that are directly relevant to economic freedom, say the Austrian attack on market calculation under socialism, a lot of Austrianism is a positive field. It's not a normative field. It tries to explain and understand reality.

21:50It doesn't say what you should do. For example, the Austrian analysis of the business cycle is that it's caused by government. But it doesn't say you shouldn't do that. It just says, you know, if you don't want business cycles, then you shouldn't do that. But you know, if you're a masochist or people hater, you could say, well, look, I favor depressions and here's how to do it. So, Austrianism is not really, how shall I say, on the bull's eye of libertarianism. And in my musings on this, the way I see it is, I used to play the violin, I'm sort of like a hit violinist, if you hate your neighbor and you hire me to play the violin next to him, it's all over for him. Scales. Scales have nothing to do I think it's something like that. I think that if you're really immersed in Austrian economics, if you're really into subjectivism, then you don't get weaned away from liberty.

22:43There are non-Austrian libertarians who are very good libertarians, but all too many of them, I find they sort of hype off after a few years. They get into math, or they get into socialism, or God knows what. I don't equate the two. Thank you. So I think that the Mises Institute does yeoman work in promoting liberty directly and indirectly because the Austrian Scholars Conference isn't limited to just economics, it has law, it has even literature, certainly philosophy and other things like that. So thanks for listening to two of my speeches, one to you as graduates and one to you as Mises supporters. Thank you.

23:28Thank you very much.