So this is a tale as old as time, you know, governments run up huge debts. They spend way more than they collect in taxes. They try to resort to money printing or monetary debasement to fix the problem. It doesn't fix the problem, it just causes even more problems. And then eventually, you know, the empire withers away. So you're listening to Carrie Lutz's financial survival network, where you get valuable information, you just can't find anywhere else to thrive. In today's trying times, you need the financial survival network now more than ever. Go to financialsurvivalnetwork.com and get your free newsletter and gift. Financial survival network now more than ever. And welcome, you are listening to and watching the financial survival network. I'm your host, Carrie Lutz. Well, we're almost done with election season. And thank goodness, that's all anybody seems to talk about or think about at the present time. But what is this election really going to solve, if anything, that's what I'd like to know. And Dr. Jonathan Newman is with us from one of my favorite organizations, the Mises Foundation, and I'm a big Mises Institute, I should say, which is a nonprofit. I'm a big fan booster of theirs, interviewed many people from the organization over the years, probably the leading libertarian think tank on the planet. And it keeps growing. Jonathan, it's great to have you on. Hey, thanks for having me on. Hey, so Mises, I remember when it started the first website for Mises, probably about 25. God, it must be 25 years at this point, and the organization's really growing, isn't it? Yeah, yeah, we're doing well. So if people are unfamiliar, the Mises Institute is an educational organization that's dedicated to spreading the message of liberty, especially Austrian economics, which is a particular branch or school of thought in economics that champions the individual. So we start with an individual's values, their subjective value, and the importance of market prices. And that leads us up to talking about economic calculation, business cycles, and really the whole of economics, and so both micro stuff and macro stuff. But what really sets us apart from the mainstream, in most people's perspective, is the fact that Austrian economists typically come to very free market conclusions. So the prescriptions that come from Austrian economics is very laissez-faire, hands off, the government shouldn't be manipulating the money supply, the government shouldn't be manipulating interest rates, imposing price controls, regulations. So we're very, very free market. So a lot of our educational programs have that sort of bent. But one thing that people sometimes criticize, when that comes up, is they say, you start with the policy prescriptions, you start with free markets, and then you work your way backwards to this sort of economic analysis that would bring you to that conclusion. But that's not the case. If you open up any Austrian texts, especially the big ones like Mises' human action or Rothbard's man economy in state, you see them building economics from the ground up. You see them talking about individuals acting and markets coming to market prices and the importance of the profit and loss mechanism for economizing resources. And then, only later on, do we reach these conclusions that, hey, when the government gets involved, when the government intervenes, we get these bad outcomes. Maybe I just, my favorite quote, and I did read human action many, many years ago, it was a tough read, you know, 1,200 pages with a lot of vocabulary. Now I could just look on the internet and look these words up, like praxeology and epistemology. Yeah, epistemology, things I knew nothing about, but I read it. And I remember one quote that's often attributed to Mises, I hope it's true. He says, "Only government can take a valuable commodity like paper and make it worthless by applying ink and printing money, right? Now they don't even need to use the paper. They use electrons." Yeah, that's, I'm not exactly sure where that quote is, but that does sort of sound like something that Mises would say. Of course, what is getting at there is the government intervention in monetary matters and in banking matters. And so what we've seen over the 20th century, especially, is the government took over so many things that had been performed by the market. So we had markets for money where under the gold standard, we had gold miners who were getting gold out of the ground and then mentors who were making coins out of it. And this, that sort of system where the market was selecting the money that it wanted and it was regulated by the market, it worked very well for thousands of years. But then over the 20th century, the US government, but also governments around the world realized that there's a tremendous benefit to being in control of the printing press. Tremendous benefit to being able to regulate banking and have the banking system become catalyzed in that way, it's much easier to do government finance. It's much easier for the government to spend as much as it wants and pile up massive amounts of debts. And the reason why is because it has a ready buyer of its debt in the form of the central bank. So really, a lot of people think backwards when it comes to money, they start with the US dollar, they start with the fiat buddies that exist around the world. And then they just sort of project that into the past as like, oh, government has always been in charge of money. Government has always been in charge of the printing press. And so this is the way that it ought to be. But of course, as we see throughout human history, and also more recent history over the past century, what has happened is the government has corrupted a very important institution. It has corrupted the monetary sphere to serve its own interests. So one thing Murray Rothbard often was a proponent of was competing currencies. Now we've got these cryptocurrencies, although I call many of them, Klepto currencies. But something like Bitcoin and the others potentially provide that, although the government now originally they were majorly against it. But now they seem to be more in favor of it. Yeah, the advent of cryptocurrencies has been very interesting. And I think you're right that the main draw to Bitcoin is the fact that it's a way to escape from the government-managed money and banking system that we have today. It's a way to break free from the government's inflation. It's a way to break free from the banking crises that arise when we have a central bank trying to manage the banking system. So a lot of people realize that there's all these flaws with government-managed money and banking. And so they view cryptocurrency and especially Bitcoin as a way to escape that. And so for that reason, I'm a big fan of cryptocurrencies in general. I'm a big fan of Bitcoin because it offers that escape hatch, that way to get out of the system that's managed by the government. And I think that's why the government originally considered as this major threat. It's like, what if people do just flock to Bitcoin? What if people do flock to these cryptocurrencies and that causes a huge decrease in demand for the US dollar, that we'd have debt crises, we'd have massive inflation, it would be bad for the government because they would lose this ability to use money printing to finance their own spending. It's not just spending though, too. There's no greater power that a country has than to coin its own money, to print its own money because that means control. He who has the gold makes the rules, the golden rule, it's really the fiat currency rule. He who sets the legal tender is in charge of things. Yeah, you're right. And this goes way back in history where you can look at the history of the Roman Empire and what happened over the course of about three centuries or so as they started off with pretty sound money, and we could actually look at archaeologically, we can find these coins and we know what year that they were issued, but year that they were minted and you can analyze the silver content of those coins. So they had the silver denarius and you can actually see the fall of the Roman Empire coinciding with the decrease in the value of the amount of silver content in each one of their coins. And so what was the Roman Empire trying to do? They were doing the same thing that the US government is doing today. They were trying to spend as much as possible and they realized that they could debase their coinage. They could introduce these baser metals into the coinage and make more coins. And this of course led to predict or results you get inflation. They tried to impose price controls and that was disastrous. And then eventually the empire, you know, fell apart. So this is a tale as old as time, you know, governments run up huge debts. They spend way more than they collect in taxes. They try to resort to money printing or monetary debasement to fix the problem. It doesn't fix the problem. It just causes even more problems. And then eventually, you know, the empire withers away. So, you know, hopefully we can have a better story, but right now it doesn't look very good. Right. So we're looking at traditionally the price of gold was kind of the hedge against this, but the government and the big banks have figured out how to suppress the price of gold and silver going back to the London gold pool once upon a time. Is it possible now what we're seeing is them losing control of the price of precious metals? Well, what's interesting is you're right. They tried to, you know, they tried to keep the dollar peg to a certain ratio with gold for the longest time. And under the Bretton Woods agreement, that was the commitment of the US government. They said, well, we'll let all of these countries around the world use US dollars as their reserve currency and in exchange the US government will stand ready to redeem dollars for gold at this exchange ratio. So even though gold ownership had been prohibited in the United States for all the citizens, it was still possible for foreign central banks and foreign governments to redeem dollars for gold. And of course, with Vietnam War, with great society programs, there was a ton of government spending. And of course, they financed that with money printing and lo and behold, we got the same outcome. We had a decrease in purchasing power and that that would have resulted in and was starting to result in a gold flowing out of the US and into these foreign governments that were redeeming dollars for gold. And so what happened is in August of 1971, President Nixon ended that agreement. He totally closed the gold window where he prevented foreign governments from bringing their dollars and exchanging them for gold. And so what we've had since then is a pure paper fiat system where now we don't even have that constraint on government spending. So it's very important for people to realize one of the main benefits of the gold standard is that it constrained the government. You can't just make more gold, you can't just print, you can't press a button and print up more gold, but you can do that with green pieces of paper. And so now we have the system where the government is not constrained by a gold standard. They're not constrained in any meaningful sort of way. And so that's that is what has led to this massive increase in the size and scope of our governments because they've had the printing press. And yeah, so the printing press is the problem here, but governments always do this, right? Every government does it. We've seen how many hyperinflation since my more republic in Germany, we've seen probably a couple dozen of them happen in various places where they kind of lose control of the printing press, right, and then all hell proceeds to break loose when the currency crashes. So one thing I want to talk to you about though is Argentina, it's kind of become the hope of humanity, hasn't it? Yeah, so some good things are happening in Argentina. You'll find some different perspectives, different perspectives on what Malay is doing among some of the like the purists in the libertarian camp, but like overall, I'm impressed with what he's doing. So I recently saw it. I just looked at headlines. I didn't do like a deep diving this, but apparently Malay eliminated the Argentinian version of the IRS. Malay has, you know, promised to have balanced budgets. He's brought inflation down. He's, you know, getting rid of all of the wokism that's inside the bureaucracies in Argentina. So overall, just big picture, I'm in favor of what's going on. Imagine that, just getting rid of all of that garbage. So Trump, this term, right, he's anything but a libertarian, he turned out to be another big government, big spender, big deficits, but now he's promising to put Elon Musk in charge of basically getting rid of or cutting the government down to size. Now, one of the great things about AI, Jonathan, is I went into chat GPT and I said, like, you know, I want to cut the budget by two thirds and get rid of the deficit. How would I do it? And it came up with a thing of raising taxes and I said, I want to do it without raising taxes. And I want to get rid of 100 government agencies instantly. What can I get rid of? And it gave me a list of agencies here. I didn't even know existed half of them. I mean, the Department of Redundancy Department, you know, that's the way it works there. Yeah. So, I mean, that is very encouraging for me to see. And I think people who are a part of this, the libertarian camp, they view this sort of rhetoric coming from the Trump campaign as encouraging. Of course, Trump is a mixed bag. You know, there's good things that he says about decreasing taxes, decreasing regulation. Like you mentioned, eliminating government agencies. I think probably one of the most important ones is the Department of Education. I would love to see that thing go away. And the main reason there is because of the long-term effect on people's ideology. I think that if we have the federal government in charge of, you know, setting curricula around the country, it means that students are going to be presented with a pro-government narrative. And so they're going to be predisposed to agreeing with price controls, agreeing with inflation, agreeing with the institutions that we have, as opposed to thinking critically about them. So I think that's huge. But of course, you know, like you mentioned, Trump's track record in his first administration, in terms of the size and scope of government is not very good. And so there's this big question, but will he fulfill these promises in a potential second term? Of course, so Trump is a mixed bag, but I don't see anything that's promising or encouraging in terms of the rhetoric or the policy proposals from the Harris campaign. So like if I had to, if I had to, you know, pick one over the other, I would definitely favor the Trump side of things simply because he's got all of this rhetoric about reducing regulations, and getting rid of agencies. But what happens if you give every first time homebuyer $25,000 really accomplish anything good? Yeah. That was, that's one of the more perplexing. I mean, I guess I shouldn't be surprised anymore, just given the historically bad policy proposals that we see from, from candidates broadly, but also presidential candidates. So like if we're concerned about the, the cost of home ownership and prices of homes or skyrocketing, and they're extremely high even to this day, then how could you possibly think that just granting homebuyers with this $25,000 credit would actually help the problem? Because all that's going to do is just increase the demand for housing, which will increase the price of housing. So I mean, it just bogged with my mind to see these sorts of things is it would do the exact opposite thing that that they're saying it would do. All right. The border is here as the libertarian, we believe the world is one big, happy place and there shouldn't be borders. But as a practical matter, I guess a lot of what attracts people here is all the free stuff we're giving out. Like I give, I jokingly refer to Biden's three main accomplishments when they ended the, the US war in Afghanistan and brought the troops home in a week. Number two is he ended the job shortage. And number three is he saved the hotel industry, especially in New York. Yeah, there's a variety of opinions about the immigration and borders question among libertarians. But I don't think it's quite correct to say that libertarians are in favor of open borders because libertarians are champions of private property, which means that we at least believe in borders surrounding people's individual property that they own. And so what that means is that all of the bad outcomes, all the issues that we're seeing that are rising from open borders and from government managed immigration policy simply rises from the fact that the government is the one that's managing it. They're subsidizing the immigration, they're making immigration more attract more attractive than otherwise would be. But, but I think every libertarian would be in favor of a system in which the government was not in charge of that at all, and instead we had private property everywhere, which means that we would have, we would have the market regulating immigration. So we would get the, we would get the labor coming across the border that the market demands and no more. And so I think what we have now is just a gross distortion of what we would have if we had unhampered markets for land and for labor. Some controls in place. This is the thing. I had this discussion with somebody today, interstate highway system, right? I know as a former attorney, I don't see any way this system could have been built privately. I just don't see it. I'm wrong. Some of my best friends are libertarians and they'll fight me tooth and nail on that. But the complexity of it, the need to acquire property and then you're always going to have holdouts and I'm a big believer in private property too. How do you build an interstate highway system without the government? Well, so I would encourage interested listeners to look at some of the more in-depth research and literature that's been done on this topic of how the market would provide a road system. I think it, personally, I think that it can be done. But also I think that this issue is one of the most, it's very, very low on the totem ball. I don't think it's like this is an important one. So like if I can get somebody to agree on all of the other issues, the government should get out of money and banking, the government should get out of imposing price controls, the government should get out of education. We should eliminate all of these different government agencies. But if the last thing that they're holding on to is roads, courts, police and that sort of thing, then I would say, okay, fine, well, we'll agree to disagree on those sorts of things because then we'll deal with that issue when the time comes. But right now, I think we have like very important issue of like the business cycle and like the loss of purchasing power. And like you said, the immigration issues that are plaguing the United States and countries around the world. So just in short, to summarize my answer, I do think that the market can provide roads including an interstate highway sort of system based on private property and market prices and profit and loss associated with making those roads. But that's not something that I wake up in the morning and think, okay, I got to go convince people that we can have a private road system. Yeah, I agree in the scheme of priorities. It's not very high up there, but I remember seeing a funny meme in Florida here, you know, they're always watering the islands that are plush, but of course they wind up watering the street and there was a meme it said, without government, who would water the streets? Like that. Hey, Jonathan, how do we find you? How do we connect with you on the web and how do we find out more about Mises.org? So I'm pretty active on Twitter and you can find me just to search for Jonathan Newman. But also I write pretty regularly for our website Mises.org and so we've got a great website with tons and tons of resources, more resources, more literature than people can read in a lifetime. And so I highly recommend people check out our website and also a special offer for your listeners. If you go to mises.org/mymoney, that's M-I-S-E-S dot org slash my money, then you can get a free copy of Murray Rothbard's What Has Government Done to Our Money. It's a great little book, very approachable, very easy to understand, that explains how government has taken over money and banking in the United States and around the world. And what that has done to cause inflation, what that has done to cause business cycles and some proposals about how we should take money and banking back from the state and have it returned to the market. So once again, that's mises.org/mymoney, come check it out. And that's in the link to that is in the show that's this interview on financialsurvivalnetwork.com. While you're there, please sign up for your free newsletter. I've got a lot of great info going out, summaries of all the podcasts that take place day by day. I probably do, I think I'm over 9,000 of them and I started this channel, Jonathan. I'm sure you're not familiar with it, but basically as a reverse or an Austrian approach to what was going on after the financial crisis, because of course, free markets were blamed for that when it was purely a work of government to neglect. Maybe it was intentional. Maybe there's a little bit of both there. So if you've got a question for Jonathan or myself, shoot me an email kl@carrilets.com. We'll get you an answer quick. Jonathan, appreciate you coming on. We'll have you on again soon. Yeah, thanks for having me and kudos to you and congratulations for the long run. Keep up the good work. Thanks for listening to Kerry Lutz's Financial Survival Network, your solution to today's trying times. For the latest, go to financialsurvivalnetwork.com. Financial Survival Network. Now, more than ever. [music]
