The Civil War and the Growth of Government

0:00This is our last class on the economics of the Civil War, and we have just a few topics to cover, but there are three very important topics I think. The first is Black Reconstruction. In the book we don't go into detail about the era after the Civil War from 1865 to 1877 known as Reconstruction primarily because we didn't know much about it and it wasn't is not the topic of any of our research, but the topic of black reconstruction, I think, is very important, is a very important topic, and it's something that social scientists have said, you know, it's not just slavery, but it's the impact of reconstruction on the subsequent development of the African American or black population in the United States.

1:26And what we did was we took the research of Robert Higgs, an economist and economic historian, who looked at the impact of the former slave population from 1865 to 1900. And so we just sort of detail some of the main general results on that population. The first one that is pretty much a no-brainer, we all would suspect that the black population suffered tremendously during the Civil War. The economy of the South, that's one of the things that we've been pressing on the entire class, is the economy of the South was collapsing on the weight, because of the weight of all this government intervention, and it was essentially The capital stock was gone, the labor supply was severely restricted, the output for the South's most valuable product was cut off, and things like the food supply were drying up and being reduced throughout the South.

2:38So all Southerners were suffering hardship. Black Southerners were suffering in particular. They didn't have any ability to adapt to changes as a result of the war because they were slaves. They couldn't move unless they were allowed to. They weren't allowed to make their own production decisions very often, and so their lot was severely compromised as a result of the Civil War. However, they did get their freedom. and that is the big and really only wonderful thing we can say about the Civil War is that as an unintended consequence of the people who started the whole thing, the black population got their freedom. However, at the outset, the end of the war, the beginning of the peace, The Start of Reconstruction. Predictions for their future were very dire. Not only were they in difficult circumstances, but northerners and southerners alike, and you can see this in newspapers, particularly in the north, was that many people believed that the black Black population would not survive, that it would simply die out and given their freedom

4:06that they wouldn't be able to manage themselves, manage production on their own, manage their lives and that they would quickly starve to death and essentially disappear. In contrast to those dire predictions however, the black population recovered very quickly After the end of the Civil War, they began producing as farmers and other jobs after the war. Many of them moved into urban areas and took up jobs in the city. The fertility or the number of births accounted for in the black population did decline, but that could be expected.

5:05Hayek sort of explained that as more and more of the former slave population moved into cities that it was typically the case that people who went from rural areas into urban in areas had fewer children. There was a decline in mortality in the black population and increases in income. Of course, slaves technically didn't have income, but there's a level of income that can be attributed to them in the sense of how much food, clothing and shelter did that they received as slaves, well, that level was set before the war, and then after the war, their level of income, monetary income, began to increase.

5:57So there's a decline in mortality, the number of people dying in this population, higher incomes, but of course those two things are very much related. There's better food, better clothing, better shelter. Very often we associate longevity with health care. But actually health care doesn't correlate very well with longevity, mortality, infant mortality and things like that. Income is actually the best determinant of how long a population lives, how quickly they die, infant mortality rates and that thing. because food, clothing and shelter are really the things that keep us healthy.

6:47It's only when things go awry that healthcare comes into play. This population, the former slave population essentially received no government assistance. There was no big government program of reconstruction in terms of benefiting the former black slave population. There was some efforts at providing health care, there was some efforts at providing some education in localized areas and things of that nature, but there was no big government program to help this huge population of former slaves. The population essentially went out and worked. They did more More homemaking and education, so women were less involved in production with freedom and they spent more time as homemakers and more time educating children and themselves after freedom was won.

8:02In terms of farming, where most of the former slave population was working, initially, after the war ended, most of the former slaves engaged in what's called share tenancy. They basically became renters of farmland from the large farm owners. So the initial arrangement, the The idea of paying the slaves to work on the farms wasn't a really efficient system because that would require the landowner to monitor the entire workforce and usually the landowner didn't have enough cash available to pay out workers throughout the growing season before the crops were harvested and sold. So they very often resulted in this share tenancy where the land would be given to the slaves, former slaves, and the owner and the former slave would split the crop at the end of the season. So it would be a 50-50 share at the end of the season.

9:17However, over time, Blacks achieved more ownership of their own land, despite long odds.

9:32As a matter of fact, the next development from share tenancy was a fixed share tenancy, where the the blacks would make arrangements with the property owners to rent the land for a fixed share so instead of a 50-50 cut they would agree to so many bales of cotton or so many bushels of wheat or so many years of corn things of that nature now what does this tell us Well, it tells us a little bit about the way each side of the transaction thought of the other side. Initially, it's a 50-50 split.

10:18Whatever comes up, we'll just split it. But now, the renters are agreeing that we'll pay you a given amount, and then the owner So that the renter has confidence in themselves that not only can they produce that amount to pay the rent, but they can also produce more, and anything above that fixed amount, they get to keep. So there's more profit opportunities for the renter, the former slaves, and less risk undertaken on the part of the landowner.

11:04So instead of them sort of splitting the risk 50-50, each of them being kind of an entrepreneur, Now, the landowner has essentially become a fixed income receiver, is not really involved in the project to any great extent, and the tenant now is taking on all of the entrepreneurship and can therefore say, well, if I bring in some new tools or if I improve this land, If I provide some irrigation, if I find new ways to use this land that will make the total crop grow, then I'll get all the benefit. So this change in systems is an indication that the black population was not going to disappear.

11:57The black population was doing very well in managing the farms themselves. Increasingly, they were getting non-agricultural jobs in the market with equal pay with whites.

12:15And ownership of land, actual outright ownership of land by blacks, former slaves, increased significantly in the 1880s, 1890s. in the United States. So the the era of reconstruction in its aftermath from roughly the end of the civil war to nineteen hundred the southern black population did extremely well and its income growth rose at a higher rate than that of the white population. Now that still left income in the black population below the white population as a whole, but it just shows you that the growth occurred at a faster rate and that the catch-up in income was significant.

13:15So if we were to look at the end of the war to 1900, we'd see the income of blacks started out much less than the white population. And both groups had some prosperity after the war, throughout this period. But the catch up in the difference was significant.

14:01So there was a huge difference in income at the end of the war, but that income difference shrunk considerably by 1900. However, as we get to the end of the century, some countervailing forces start to take place. You've got Jim Crow laws, all sorts of laws that put blacks at a disadvantage against whites in the workforce.

14:48These were a growing of growing power in this time and they often were in part set up to provide a benefit to whites and to keep blacks out of certain professions and in certain Professions, blacks were essentially kicked out of those jobs. So we have all these forces, this is unions as in labor unions, not as in the union government, that were really providing roadblocks. The blacks had moved into agriculture, had had done very well there. They had moved into certain professions and had actually gotten equal pay in certain professions.

15:40They'd moved into, they started moving into more advanced professions with unequal pay. And that's when some of these legal barriers started to develop. In 1896, the Supreme Court decision, Plessy vs. Ferguson, essentially allowing these types of legal restraints really put a stop to this process. The process of economic catch-up or economic convergence of one race's economic performance with the other.

16:36There's no telling as to whether or not they would actually have converged to perfect equality or anything like that. But the process was at least headed in that direction in the post-war experience. Yes? What marked it, let's say, specific to Hayek, what was Ferguson's? That upheld Jim Crow laws. Segregation, separation but equal, wasn't it? Before it got in. These first three categories there, did this have general application throughout the country, both in the north and in the north, That's a good question, Jack, and I can't actually answer you concretely about that.

17:36Like I said, I'm treading on thin ice here. I really don't have a tremendous background, but the... Right. Yes, there's definitely a migration from the cotton-growing areas of the South into the cities, both southern cities and, of course, northern cities. and and then during the wars and that kind of thing there was also big pushes at that time. Yes. The first thing you need to know is, did you make distinctions between the graphic unions and the industrial unions?

18:24Did the graphic unions tend to be, not necessarily racist, but a particular job would be all Italians? Yes. And all Irish, something like this? Yes. And did the industrial unions be much more open in terms of hiring? Yeah, that I'm not really sure about. There was a tendency on the part of employers to discriminate, so that if they had, you know, certain jobs would be all black, other jobs might be all white, and then you might even find that you've got one job where they're all Irish, and another job where they all happen to be Italian, so there was a natural discrimination, and sometimes it didn't really can really get reflected in in terms of wage rates even you know a lot of these a lot of these cases the the black workers were receiving the same workers same wages as is whites although sometimes they would be physically segregated at the workforce

19:45Well, that's very, very likely. They were trying to find work and, you know, a slave A slave on one plantation would very easily have relatives in neighboring and adjoining plantations. But there was also the case where owners would sell off some of their slaves into marketplaces.

20:33Now typically slave owners would try to sell their slaves either into the local market or in large groups. When they moved the slaves, say, from Virginia to Alabama, you know, because the opportunities were better for growing cotton down here, they would move a whole bunch of them at a time. So whole family units would move. But there was one problem where families would get broken up on a regular and large scale, and that was bankruptcy. If a plantation, and this happened, you know, even though there's a lot of prosperity, there were still business cycles and that kind of thing and plantation owners borrowed large sums of money to finance their operations and so when a plantation would go bankrupt because of the business cycle or because of tax burdens or maybe even just the death of the owner, the slaves would have to be sold off at auction to pay for the debts Because the slaves actually were the collateral for the loan, and so when that happened, and it happened quite often,

21:50your family members, you know, could be dispersed anywhere. You know, they'd be sent to a slave market, and then, you know, so they all get sent to Mobile, and they're auctioned off to different owners, some of whom may be planning on re-shipping them over to Louisiana. The slave family was broken up in that manner. Naturally, a likely thing is to go look for your parents or to go look for your children. You might have some idea of where they were. You might know where they were, but after the war, the plantations were being dispersed, Didn't some of the more humane slave owners and plantation owners have some kind of arrangement where they might be able to keep track of their, like a slave who's part of this family sold, to keep track of those?

23:07You can keep track, for example, if you've got a wealthy Virginia family and the eldest son gets married and decides to go to Alabama to start a plantation down here and is given a group of slaves in order to establish that plantation, well, they would take whole families, but those families would still be related to the families up in Virginia, so they would keep track of one another between the slave-owning families and also travel with the owners. The owners would always travel with slaves as assistants and that sort of thing and so there would be contact directly through that way.

23:56But yes, so there would be ways of keeping in touch and of course the slaves would run

24:33One other comment, it's kind of stupid to hang on a masquerade. The father, an average of ten children, was a slave, so I'm just thinking this might be one of the reasons why they went from the agricultural industry to the agricultural industry. I recall from into the city that the birth rate was dropped down after being given those proofs.

25:12Because there'd be no statistics on that, like how many, because it was approved. You know, it was a ongoing thing, and when you owned a slave, you were allowed to use them anywhere you want. So, that was the number, like the average number. Could be one of the reasons, yeah. I don't really know. I've never heard that number before. That was on that same PBS thing on slavery. Building of America, slavery. Did you hear the episode where they said most Americans were inclined to discriminate against slavery?

26:04That outfit is no good at a PBS. That is the most unfair documentary I ever listened to. I only heard two. I made sure I didn't hear any more. I just heard the last one, but this is the one where they were showing the relationship between some of these slaveholders. I mean, it was sort of an economic arrangement. Someone would let their slaves work in the city for a certain kickback. And so it wasn't my ball, negative. It's just for trying to explain the situation between the master and the slave. Yeah, well, and as I said, you know, this population was so large and so difficult to control that there were a lot of different ways that the masters tried to control the slaves.

26:55You know, they used the carrot and the stick. They didn't really like to beat the slaves because if the slave had whip marks on their back, they were of no value to sell because no one would want to buy a problem slave. So they were inclined to use incentives. They They were inclined to use self-management so that the slaves managed themselves in many aspects of their lives such as making their own food and growing their own food and incentives for good production, things of that nature.

27:42To Ozzie's point about that in terms of the north and south, there was a lot of black, anti-black view in the north as well and many of the states in the north actually prohibited People from bringing their slaves to the North or freeing their slaves to the North, they pass laws to prevent that kind of thing, which is the primary reason in addition to the laws that required the returning of runaway slaves, that the Underground Railroad ended in Canada was because it really wasn't possible for slaves to seek freedom in many of the northern states. They just weren't allowed to. Now, there's a little section in here which I think was kind of a neat little discovery called Lincoln and the first New Deal. That was one of the things that we, I mentioned at the beginning of the class that we were going to come across where the term the New Deal came from.

29:02and the first time that we know the term new deal was used was that a newspaper man from North Carolina used the term to describe Lincoln's policies and how they were beneficial and that Lincoln was going to be providing you New North Carolinians with a New Deal. And that's why we need to get back into the Union essentially. The newspaper ran was arguing that we need to, the war was over but we need to lay down our weapons mentally as well, get back to our lives, accept defeat, accept the Union And here's Lincoln, he's a good guy, and this is all the stuff that he's going to give for us.

30:00And he described it as Lincoln's New Deal. And then in the book, we list all of the things that Lincoln provided and which were passed on his watch during the Civil War. The Morale Tariff, the First Income Tax, an Expanded Postal Service, the Homestead Act, the Morale Land College Act, the Department of Agriculture, the Bureau of Printing and Engraving, the Transcontinental Railroad Land Grants, the National Banking Act, the Comptroller of the Currency, the National Academy of Sciences, Free Urban Mail Delivery, Yosemite Natural Federal Reserve, Land Grant, Contract Labor Act, the Office of Immigration, the Railway Mail Service and the Money Order System.

30:51And there's a lot more, of course, that was passed during this, but we just sort of list some of the main ones to sort of give you a flavor of how Lincoln's burgeoning of new government, new governmental services, new governmental agencies, new regulatory bodies is very similar to what FDR and Roosevelt put into place during his time in office with all sorts of new offices and new legislation and new regulations providing all sorts of tangible governmental benefits to everyone. So I thought that was kind of a good indicator of where we go with the sort of the last main point, the last point of the book, which is the overall impact of the Civil War on American Society, in particular in terms of the growth of governments.

32:22The Department of Agriculture was pretty small and not really involved to any extent but there is a good point in the sense that the one thing that people note is that there was no There was no redistribution of land at the end of the, the reconstruction did not say okay, reconstruction we're going to take this plantation, which was owned by one person and worked by 200, we're going to divide it up amongst 50 different families.

33:09There was no land distribution. As a matter of fact, the only cases where I've heard of big land giveaways on the part of the federal government in the south after the war was a few cases where white people from the north were given a big huge track of land some place in Florida or Georgia or some place like that. And I only heard of a few instances of that. I've never seen any systematic study. But we know that the former slave population didn't, in almost all cases, they didn't get land grants from the government. They honored the land known by the southern...

33:55That's right. In most cases... ...after the war as well. in most cases there were a few cases I think in the where this the slaves were essentially given control of the former plantations but again that's just a few isolated instances that I know about

34:28The Land of the Vigilantes, Plantations of the Plants, and with the market push-up, nobody could lift the land except for the plant. We kind of freed up our right-wing market for the real estate. And then the crisis, it seems to me, was within the lack of problems for the city operations, or for restart operations that were out and upset for several years. Was there not a larger chain of land, were there not a larger number of microprocesses in the business, a distinction about the carter category and the other category where the group was coming down and buying land and the kind of thing where the landowners and the travelers had to do the best they could?

35:25to the idea, basically, the agricultural sector could get restarted, the, you know, basically, they would just, between the landowner and the former slaves, they agreed to, you know, share the output, so that the amount of inputs, necessary for The things that were necessary to start up agriculture were fairly minimal. The owners didn't have to sustain the workers. The workers sustained themselves and that kind of thing. The problem occurred when the reconstruction governments started imposing property taxes on the landowners.

36:21and the landowners couldn't, they could barely sustain themselves and they couldn't pay their property taxes and so those property taxes actually caused a lot of owners to go into bankruptcy and for their lands to be sold off at auction and the problem there of course was that nobody had, I mean there wasn't a lot of money, there was no savings left left, Southerners who put their money into Confederate bonds had lost everything, Confederate currency wasn't worth anything, and so there was no savings, there was very little medium of exchange money circulating in the economy, and so the inability to pay those property taxes meant that the lands would be sold off, and they would be sold off very cheaply, and So this is what provided an avenue for wealthy northerners who had plenty of cash to come down and exploit that situation.

37:30I don't know what the extent of that was, so I can't really accurately characterize it, but I know that that was the process that essentially pried this land out of the people who had owned it for a long time. So that kind of reconstruction is a little resemblance to what we think of as being a reconstruction today. Oh, and it's funny when you go into Iraq, where everybody's came up with this huge amount of money, they all kind of just push it to get it out of the budget. And that kind of thing is kind of a good way to modify and change and create new institutions.

38:24was certainly a military occupation, primarily, and that's basically the way it was, and it did transfer ownership from Southerners to Northerners. The market provided an avenue where it transferred some of it from white to black and there wasn't really any significant program to help the people get back on their feet. It was more or less a military occupation of enough significance to get the cotton flowing into the northern mills, just as the Iraqi occupation seems to be only significant enough to get the oil flowing, but no big program to help the local people directly.

39:39Not that I think that they could come up with a program that would actually restore either or southerners or slaves or Iraqis to normality. War is something you just don't get over. It's not something that you can, where there's any kind of magic eraser that we can just erase like on the board and then all of a sudden the board goes back just the way it was. With war you can't, you can never do that. But hopefully over a long period of things always improve but one of the lessons of war is that it does leave a permanent scar and institutionally it almost always leaves us with a bigger government.

40:34In particular in countries that win wars end up with bigger governments. There's actually a phenomenon where war helps reduce government, but in order to get that sort of thing, you have to lose the war. This is not clearly a straightforward win-win situation, but for example, this is debatable, But it is said that as a result of World War II that Germany and Japan benefited in the sense that the war destroyed their fascist governments and their fascist economic policy and their fascist bureaucracy which had gotten entangled in industry and unions and distribution Networks, with the government in control of the vital switches and dials in the economy, and that all sorts of regulations and price controls were put into place, and all forms of subsidies and credit rationing were put into place, and that the war and losing the in the war essentially destroyed all that and those countries then adopted fairly simple straightforward forms of government and economic policy and of course Germany and Japan were

42:22two of the all-star economies on the globe during the 1950s and 1960s and even the 70s. Would somebody from Germany buy that story? Does that something that sounds like a fantasy? Don't you think? Which the fact is, in the 48 or 47 in the U.S., because of all the money in West England, even the new amount of issued money to people needed so much that they at least managed to get a little more because of all their emergency periods. Right like that. And it wasn't a few years ago we had the German miracle and the market was the hardest money in the world.

43:07I think since that time, though, the Germans have... The Greek bureaucratized and the Japanese too in a different way, but they thought they would centralize planning and that kind of stuff, but this is twice Schroder, and Germany is micro-urban from what I've really been doing with my question about this design, but this is micro-urban, they're having to come to terms with labor agreements, and they're having to do a limit of 35 hours a week to build a board

44:10The case, and I don't know whether this is part of the German culture, is our tendency to do this. I think all nations do it. It seems to me, based on my comprehension of history, is that the longer you go and the more you engage yourself in wars, as we do, that the more top-heavy you come with government. and our government is doing things now that a decade or two ago, they've never done it before and I think it's more centralized government and more burdensome taxes and more people being employed in the public sector and it's just very difficult.

45:01or both for the economy affair. Yeah, I don't think it has anything to do with being German or being Japanese. I think that they are good examples of how war destroyed the apparatus of too much government and cleared out all that bureaucracy. and but then this natural tendency of allowing government to grow over time seems to be unstoppable in many respects and there's really, there's two things here and I'm going to go back to Bob Higgs again and another one of his books it's called Crisis and Leviathan and critical episodes in the history of the growth of government in the United States. That may not be exactly correct but it's pretty close to the truth and in that book Higgs explains that the growth of government occurs in two ways. One is the slow steady growth where the size of Government gets bigger and bigger relative to the economy over time. And the second way in which government grows is through emergency. And in an emergency, government gets ratcheted up so that there's a big buildup in government for a crisis to address an emergency. And then once the crisis is resolved, government is

46:48cut back, but it's never cut back to its pre-crisis level. So that if we looked at government is relative to the size of the economy, and then we looked at it over time, what we see is that government starts out, in the United States it starts out very small, The Federal Government is almost non-existent really. The majority of Americans in the beginning of the country will live their entire lives without ever seeing a federal government official outside of the postman.

47:34Don't you have it in here? 5% of the gross national product. It's very low and it starts out low and this is just, this is not a historical model or more of a stylized model of the growth of government relative to the economy over time. And then at some point a crisis occurs or is engineered in some form. Alright, well the crisis occurs and the size of government gets ratcheted up. Very quickly there's a mobilization to address this emergency and then the emergency lasts a period of time where essentially government is getting big bigger but just at the old rate and then the crisis is resolved and so there's a demobilization after the crisis and then government gets back on its old path. This angle or this ascent can also will change due to institutionalized forces such as constitutional changes. If we were to adopt an income tax, for example, we might see this growth rate increase. But in the

49:18absence of that, we just wait for another crisis and another resolution to the crisis. and then we get back on the peacetime path or whatever and we go until we hit another crisis and another resolution. And so, Higgs' model of the growth of government is called a ratchet model. Well, I can't recommend more highly a book than Higgs' book. It's historical, It's theoretical and I think the model is very compelling. I will say that he mentions the Civil War as one of the first real ratchets in the growth of government.

50:10It doesn't form a major basis of his work, he just mentions that he's more concerned with World War I, America's Great Depression, World War II, and the Cold War. Isn't the ratchet coming back down, not going up? Why does it go up and then ratchet back down? Yeah, it's a mechanical process. But not ever back where it was? except in those other cases you know where you lose the war and then you get you know then you get the the benefit of well I haven't written that book Well, in any case, there's other authorities or ways of looking at this growth of government. Richard Benzell, who's actually a Marxist, I think, describes the Civil War in great detail as the episode in America when central state authority was born.

51:42So where Higgs just says, oh this was the first major crisis and then goes on, Benzell says, hold on a minute, this war really changed everything, we used to be a decentralized republic of states and now we are a centralized state authority that has all this precedent for presidential powers, the income tax, we have these new constitutional amendments which essentially take away real authority from state government and leave all ultimate authority in the central government. So I think that's also an important perspective on the Civil War and the growth of big government.

52:38Management, and then finally, it's important to note, as we do in the book, that the Republican Party agenda, and this is something I've been pointing out over and over again, is an economic agenda of mercantilism. Mercantilism where basically the government provides a set of of Economic Policies that create more government in the economy, such as protectionism, such as a national monetary authority, banking authority, and monopolies, special grants and privileges, and public works projects on the part of the government.

53:30and so that where the Republican agenda was known and still is today known as the laissez-faire economic policy the truth of the matter is precisely the opposite that they have and continue to represent and I must say there's the modern Democratic Party represents pretty much the same thing. This agenda where you have a market economy, but the government is actively and constantly involved on a whole variety of fronts, and that is known as mercantilism, not capitalism.

54:15Isn't it a matter of moving away from the Constitution, too? In other words, when I read the Constitution, the fact that the Federal Reserve System can be bought back anytime, and they still put up with the regulatory character there. Everyone finds that the interest rates are going up or down and they all jump like that. I mean, that's a departure from the Constitution. And as you go along, you find that that's what's happening and nobody's going the other way. Yeah, certainly the Federal Reserve is not in the Constitution.

55:04It's a separate act and Congress could change that at any time. You know the, the, and this is another example of sort of an untrue type of laissez-faire. The Federal Reserve is kind of one of the first public-private partnerships where you've got this private semi-autonomous regulator of the money and banking attached to the government. and the government could sort of tell them what to do and they can get rid of them, but they're still there. Yeah, it's kind of one of these public-private partnerships and I've always found that to be a bad idea.

55:51I think people get sort of succumbed to the idea that, well, it's private enterprise, but it's government regulated, so it's got to be the best of both worlds. I think it actually turns out to be the worst of both worlds. And so that's a good point. And your general point about the Constitution, I think, is is also valid, whether you're talking about the changes that occur in this historical time or for that matter today. It's a terrifically flexible organism. It's full of simple, declarative sentences. and the Supreme Court has been twisting them ever since the Supreme Court was set up. In other words, if everybody would more or less go according to the Constitution and do their job, but by now they've got a triple-layer bureaucracy in them, and the Constitution is like peanuts when you go to kick the football.

56:57They pull it away. In other words, you never get a feel endure the man that's making the thing go. It's some joker down there that pulls the string, and then it throws it off. You get the point about this discussion, it's a woman that pulls that football away. Yeah, I know. Speaking of that, do you have a question, Clara? I have a question. Is it true that Texas puts a city on the union, legitimately? It may have that authority. I know that they made some special provision when they agreed to enter the Union that at some point in time the Texas legislature could decide to subdivide Texas into as many as four or five different states but remain in the Union.

57:51Of course, the big advantage of that was that it would give Texans ten senators. But I don't know, they may have also had a provision in there for seceding from the union. Several states, when they accepted statehood into the United States, made declarations that they were a free and sovereign nation and that if any time in the future they were, you know, wanted to that they would and no one would stop them. And you know, that's the way everybody kind of understood it. But the Constitution did not, one thing that it did not do, and I think it should have done was to have an explicit statement regarding the means of which an individual state could would extricate itself from the Union under what conditions and under what procedures.

58:54It was something that was never done. I don't know if the writers of the Constitution just assumed that states could withdraw at anytime or not, but the failure to do that one simple thing, and you know, every important contract has articles of, you know, what dissolves the contract, and this one unfortunately did did not have those explicit statements and so but now it does and those explicit statements say that you're not allowed out and that you don't you no longer they no longer have the authority of the type and character that they that they once did so it got us into that that mess and it resolved it in a way I think would be in complete contrast to the wishes of the majority of the original signers of that document and to the leaders of the states that agreed to it at the time.

1:00:12The Regulation states that a certain number of states approve the Constitution, then it's established. And every document, every commission, military commission of the Constitution of the United States is 200 and something something. In other words, if that goes down, you might go check it in, because that's the only organ that has stayed up there and made sense out of the United States. But it can happen. It's an institution. Any institution can fall down, because the right number of people get a whole wrong steering wheel or something.

1:01:00I mean there's, human institutions, they not only just change, evolve and grow, but they come and go. Jack? Yeah, Mark, I wanted to take a revisit with this thing, the tendency for governments to grow bigger and bigger. And I think that also applies to all public institutions, at whatever level and whenever they're possible. Well, that's true, I don't get that, but to a lesser extent, because public institutions are spending somebody else's money, tax money, or whatever, and private institutions aren't, at least those that haven't been co-opted and are being funded by public money, and there are those, too, because they have the balance sheet, they have to compare them, and it is true that some corporations get so huge that it's only All these two slides overweigh the bureaucratically, that they have the same problems, but nevertheless, even they have limits to what they're doing.

1:02:06It seems that public institutions don't have it, especially central government. And you look at the banking system, it was created by government to take care of government needs. Well, we've got a couple minutes, and so I hadn't planned on doing this, but I think it might be worthwhile to provide a solution to this problem of the growth of government, because... Well, I do have an answer, and so you want to keep this government, the size of the economy model in the background here to our thinking, and Ozzy, what does it say in the Constitution And regarding how we are represented in the House of Representatives, how many constituents is a congressman's position?

1:03:23Does each congressman have? I don't know a figure, but it's there again by the Constitution, it essentially lays down the rule, but I know they can, now they're, the big, the big, you know, fronts are changing, the districts are, they're, just like back in the gerrymandering times, and that they can do, but they're supposed to only do it up to a certain point, it's supposed to be a limiting factor, that's the thing about a constitution, it's the reigns of government, and as long as that's held in, you've got a chance, but once a big hero, The man on horseback doesn't hold up, because they're not doing what the Constitution says.

1:04:16They're making an excuse to do what they shouldn't do. I remember that we worked this out one day. There'd be 4,000 members of the House of Representatives if we adhered to the Constitution. If you think about it, that would be a good idea. Yeah, well that's the idea here, is that the Constitution says that each state must have at least one member in the House of Representatives. And it can have, each congressman would have a minimum of 30,000 citizens to represent. But it doesn't provide any maximum. It provides a minimum, 30,000. Every state gets at least one. But there's no maximum.

1:05:12In the early days of the Republic, from 1790 up until the late antebellum period, When they would do the census, and they would find out how many people were in each state, they would allocate congressmen on the basis of population changes. So if one state got more populace, they would get more representatives. If all states got more populace, they would increase the number of representatives. And the allocation would occur on the basis of what I call the Jefferson Plan, which is basically that they increase the number of representatives in proportion to the increase in population.

1:06:17And so we started out with a Congress of less than a hundred people and it quickly grew And that's representative government. That's what constitutionality means. As long as they make allowances for that. Isn't that correct? The population increases, they apportion representatives, and therefore they have representative government, but any anti-constitution, in other words, I write my congressmen or senators, and some of this stuff, they don't even know what laws are on the books now. I asked him to, like that, Al Sharpton went over and he was a citizen, and he was, quote, campaign down, quote.

1:07:15He goes over to Ghana and consults with the head of the Ghanaian government about the thing in, what's that, Liberia. In other words, he did it for a humanitarian reason, but that was unconstitutional because he had no representation, I got it from my council, there was no representation, the State Department had nothing to do with it, nevertheless he went over there, and when I got the congressman's answer back I knew darn well he didn't know that that was law. Okay, in this next period from 1860 to 1930, and these are very rough characterizations, obviously there's a lot of things going on, reapportionment of Congress is the real political battle in Washington D.C. All this stuff about legislation or treaties, almost meaningless to the political parties. Reapportionment of districts and things like that is the be-all All and End All of Politics. Most citizens don't even know what's going on, they don't care, they don't think it's important. Believe me, it's the number one thing.

1:08:25Well, in this period, you have Congress increasing with the population. In the Hamiltonian period, and with his sort of view of things, Congress continued to increase in size, but less than and the Rate of Population Growth. And then finally, with the 1920 census, there was a big squabble about it, so they didn't do a reapportionment, and in 1930, one of the conditions of the reapportionment of Congress was the compromise which left us with 435 congressmen, and it's stayed that way ever since.

1:09:12So that the nature of representative government has changed in the United States at the congressional level from 1790 when congressional districts had anywhere from 30 to 60,000 citizens. Today there are over 700,000 citizens in a district. So the whole nature of how congressmen get elected and how they represent their constituents has changed. You no longer have direct access, direct input into how your congressman represents you.

1:10:02They're often a different city. There's somebody you've never met very often. You might see them on TV, hear their name occasionally. It even influences the way campaigning is done, which today it's mostly done through the media, through television, through TV reporters, sound bites, those sorts of things. They still have meetings and town meetings and that kind of, that's all just staged. It's not really the process of elections and the process of campaigning anymore. So the idea that I've come up with, and I've done run statistical tests which support the inference that the fact that we have a much higher population per representative leads leads to more government spending in terms of real per-capita spending relative to the size of the economy.

1:11:10This lack of representation means higher levels and higher growth rates of government spending. And the same is true with the local area. I mean Auburn has grown in population from 22,000 to 50,000, I don't think they've increased the size of the city council, you know, and the state governments are the same way. They stopped increasing the size of their House of Representatives. That's the only way you're going to control the Congress, though. Do they think they're going to get elected every election? They couldn't give a tinker's damn about what the people think of them. That's right, you know, and I think that, you know, just imagine if instead of your congressman being in some far-off city, somebody you've never met, just think if your congressman, first of all, if we go back to this original ratio, the size of the House of Representatives would increase from its current level of 435 to several thousand members of the House of of Representatives.

1:12:22That would, if we brought it back to the 30,000 level, would mean that there'd be probably two congressmen living here in Auburn. You pay these scoundrels, though, for many of them. Originally, they weren't even paid. They didn't want to pay. Yeah, I mean, there's no. Now you gotta pay them, what is it now, 175,000? Well, no, see, you wouldn't have to, necessarily. Those are things that probably only developed because Congress has become such an elite group. If you had a Congress of 4,000 people, George might have been the congressman at one point and you might be the congressman in a few years. It wouldn't be a job that you would be a career type of a job, necessarily.

1:13:10It looked more like the Chinese National Assembly. something like that and you know this would be somebody this would be somebody that you could walk to their house and knock on their door or maybe drive to their house and knock on their door to let them know how you feel about the way they voted on a particular item so that it would provide a lot more diversity a lot more representation and think of the type of campaign that somebody would do to become a congressman. Running TV ads wouldn't be very effective because your TV ad would go over, overlap several congressional districts. The type of campaigning you would need to do would be door-to-door, direct mail, type of neighborhood, what do they call them, neighborhood teas or coffees to meet the candidate type of campaigning and so the type of campaigning, the type of representation, the description of the job itself would all change under this type of system where representation is more money than you are, there goes your

1:14:28Well, Ozzie, with 4,000 congressmen, if you buy one congressman, you know, what's the big deal? It's a lot easier to buy the votes of 225 congressmen than it would be 2,500 congressmen. 25,000 congressmen who are no longer... You know what you're saying? No, you're defining a corrupt government. Well, but there's no... The nice thing is that all these congressmen, I don't think that they would be career congressmen, congresspeople, whatever. I think you would see more of the type of government that the founders originally thought of, which would be the citizen representative, and we would elect people of known intellect and integrity, and we could do that, people who we knew.

1:15:36and so that's just a taste of of this idea and it's it's something that is a little surprising it's it's it's but it's something that's built right back into our history you know that this is the way things once were this is another example however of a little thing in the Constitution that I think is a defect I I think we needed that explicit way out and I think we needed this, an explicit cap on the size of the congressional, you know, it could be no smaller than 30,000 but it can be no greater than say 60,000. If we had kept that cap working, I think, you know, you'd have a government, both of those things fixed. I think you'd have a government in the United States, which would be so good, in a sense, that nobody would want to get out. What we'd have to be worried about is, you know, other provinces and regions around the world trying to get into the United States. I don't think we'd have to worry at all about states getting

1:16:48out of the United States. I think things would be just too darn good for anybody to consider it. Maybe that's what the founding fathers were thinking in the first place, that things These are going to be so good in the United States that nobody in their right mind would want to leave.