Fabian Society Hayek vs Keynes wWarHamster Brady

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0:00 Hello, everybody. Welcome to another edition of The Colonel's Corner with Warhamster Brady. We're going to continue our series on the Fabian Society. What do you got for us today, Brady? Well, we're going to take a little spinoff of the Fabians and get into one of the most important debates of the 20th century between John Maynard Keynes and Frederick Hayek. Frederick Hayek was a

0:27 at the London School of Economics at the time, founded by the Fabians. So that's why that's on topic. And it's very, very interesting that a guy who's very much of a free market Austrian school economist was teaching at the socialist, the Fabian socialist university. But that's to the London School of Economics credit. They did welcome rigorous debate of other ideas. And of course, John Maynard Keynes is over at Cambridge and nearby school.

0:59 And they would basically have a series of heated debates, more back and forth letter writing than anything else, and how Britain and the world should handle the post-Depression or what policies could get them out of the Great Depression in Europe. And it shaped the rest of the 20th century in many, many ways. And what we'll find is that Keynes won the debates on public policy at the time.

1:26 And then 30 years back in the 70s, when all those policies started to fail, it turns out that Hayek was correct the entire time. Give me one second. And this would be fun. If you want to get wonky on some political stuff, I got some political charts and it is going to be a good one. So with no further ado, let's go ahead and get the screen share going. OK. Oh, hang on. I got it.

2:07 It's up. Okay. First, gentlemen, we are going to introduce you to Frederick Hayek. Now, I've got to warn everybody. I try to present this stuff in an unbiased manner. That's not going to happen today. Frederick Hayek is on my personal Mount Rushmore. He's up there with John Locke, okay? And this is a great, great man, in my opinion. So just to give you some of Freddie's background.

2:45 He is born in 1899 and lived in 1992. Born in Vienna, Austria. I'm not even going to try to do his accent when I do his quotes. But since my family comes from Austria, I'm a fan. His father is a medical doctor, lectured botany at the University of Vienna. Both his grandfathers were scholars. His second cousin was a philosopher named Ludwig Wittgenstein.

3:19 Wittgenstein. He's pretty well known. He did a lot of mathematical formulas applying it to human behavior, something we've talked about a bit. His maternal grandfather was an economist, and he was a close friend of Eugène von Bohm-Bawerk, another Austrian who was one of the founders of what is known as the Austrian School of Economics. Key term here, Austrian school.

3:48 economists versus the keynesian schools which are two of the major schools of economic thought in the 20th century uh the main founder of the austrian school of economics is carl menger so you can basically say freddie here was born into this role fair enough yes austrian school of economics best way to summarize it it is a school of economic thought that advocates for a strict adherence to what they call methodological individualism

4:21 Basically, let individuals act in their own self-interest. You buy what you want to buy at the price you're willing to buy it. The markets will sort it out. Keep the government's fingers off the scale. That's Austrian economics 101. So Freddie fights in World War I as a teenager, and that experience shakes him a little bit. And that's what led him to study economics, because he wanted to see...

4:51 how we could avoid making major mistakes, similar mistakes to getting into World War I in the first place. And World War I was very much an economic war, without a doubt. I mean, I'll put the tinfoil hat on and say, you know, England instigated the war because they were concerned that Germany was passing them up industrially, in industrial production. I mean, to me, that's the number one cause. So Freddie gets a doctoral degree in law and political studies.

5:24 from the University of Vienna, I'm sorry, by 1923. He then gets hired by Ludwig von Mises as a specialist for the Austrian government on legal and economic details of the Treaty of St. Germain in Ley, which is kind of the kissing cousin of the Treaty of Versailles. And we'll find later that Keynes was at the Treaty of Versailles. You're familiar with Ludwig von Mises, of course. Yeah.

5:56 This is another great economist from the Austrian school. Von Mises could also go up on Mount Rushmore. Freddie writes a book called The Prices of Production. And then he writes his magnus opus, which is called The Road to Serfdom. If your parents out there homeschooling or what have you and have teenage kids, this is the book to get them for Christmas. If you want them to understand economics, The Road to Serfdom.

6:32 um it was concerned about the general review of britain's academia that fascism was a capitalist reaction to socialism and that's a fascinating theory because fascism well nazis were national socialists but they're also fascists and a capitalist reaction would be i would call it a crony capitalist reaction but

7:02 The big thing about the book, it warns of danger of tyranny that inevitably, the tyranny that will inevitably result from government control of economic decision making through central planning. And that sentence right there, I could put it, if I wrote my own book, I would include it. Well, it really describes the totalitarian model of Mussolini as well. Very much so. But any of these isms. Yes. He's warning about all these isms.

7:34 Any centrally planned government decision making is eventually going to spiral into tyranny. Correct. And what the book will tell you is the reason that happens is you're creating imbalances in the markets and you're always in a position of having to make corrections. And you're never going to get it right because human behavior is too complex. We're individuals that act in our own special interest, best interest. And the more...

8:02 You put your finger on the scale, the more government programs you have to do, you now have to enforce them. You've got to use coercion to get the money to pay for them, raising taxes, reducing freedom, and it always ends up in tyranny. Correct. In 1950, he would leave the London School of Economics. He would come over to the University of Chicago. There, he was very influential on another great economist by the name of Milton Friedman.

8:33 They actually worked in different departments and weren't very close, but Friedman was an admirer of his writings. And of course, Hayek wins tons of awards, Nobel Peace Prize for Economics, etc. But very well storied guy. So he had influence on both sides of the pond. His rival is one John Maynard Keynes, later to be known as Lord Keynes. He's born in 1883.

9:05 So he is 16 years older. He's born in Cambridge. His father was an economist and a lecturer in moral sciences at Cambridge. His mother was a local social reformer. And if she was here today, she'd be out there at the No Kings protests. She was actually, I think, the first mayor of their town, first female mayor or the second. I don't know, something like that. But she was one of those who had been an abolitionist and all that.

9:42 In 1897, Keynes wins what's called a King's Scholarship to Eton College. There he meets what he describes as the first love of his life, a gentleman by the name of Dan McMillan. Yes, Keynes was a homophabian. That Dan McMillan name may be familiar because he's the older brother of the future prime minister of England, Harold McMillan. Yes. Which shows Keynes, he's upper middle class, Keynes is.

10:17 you know he's in that scholarly class but he has no problem rubbing elbows with the elites that's kind of indicative of the entire fabians yeah yeah it really is and so it's really interesting that keynes was not a fabian because he sure acts like one you know but remember that just because you're not technically classified as one doesn't mean you're not one yeah

10:49 All right, what else do we want to know about John Maynard Keynes? He leaves Eaton College and goes to Cambridge. And there he becomes what's known as a Cambridge Apostle. So who are the Cambridge Apostles? This is a secret society, Colonel. Oh, I'm shocked. It's also known as the Cambridge Conversation Society, sort of like one of those little dinner clubs, just like the Fabians.

11:19 Only this one is organized at a university, and it's very much a secret society. It is elite. It is secretive. Founded in 1820 by a guy by the name of George Tomlinson. He would go on to become the Bishop of Gibraltar. Interesting. Starts out as a discussion of 12 evangelical Tory students. Tories are conservatives. There's 12 of them. That's why they call themselves apostles.

11:56 Candidates to be the next year's apostles were known as embryos. And when apostles graduate, they spread their wings and become angels. Every year, I guess every few years, there's a secret, very secret angels dinner with the apostles. So this is not too dissimilar from the same structure as Skull and Bones. Correct. Members swear an oath of secrecy. They listen to quasi-Masonic curses upon joining, meaning if you ever spill the beans, you know.

12:26 We're going to kill you. I was a hundred percent male until the 1970s. Keynes was part of a group called the Bloomsbury group, the people in his class. And a lot of them are notable in other fields. We're not going to go into that much detail because we've got a lot to get to today. Other notable alumni of the apostles, Alfred Tennyson, Henry Sidwick, Amartya Sen, Jonathan Miller, and of course, Bertrand Russell.

13:03 Do you find it interesting that Russell was one? I'm not surprised. Bertrand Russell is a big part of the conversations we're going to be having. We've already started a little bit into the Rhodes Society. Correct. The apostles got really well known because there was a spiring, Soviet spiring out of Cambridge. It's called the Cambridge Five.

13:35 And three of the five were apostles. Guy Burgess, Anthony Blunt, and John Carencroft were all apostles. And along with Donald McLean and the infamous Kim Philby, all spied for the Soviet Union from the 1930s onward. It's pretty bad. And let me just say this because I want people to understand just kind of from a strategic perspective.

14:07 The goals of these people are similar. There's two tracks. There's the revolutionary and the gradualism track. So in order to bridge those two things, it should not be surprising to anyone that you're going to have the bridges. And that's what the Cambridge Five basically looks like to me, that they're all going to the same destination.

14:35 And there is a certain level of crossover along the way. And that's going to be a common theme through all of this, is that whether you take the revolutionary, like the Bolshevik revolution, or you take the gradualism approach, we're all traveling, according to them, to the same destination. So there has to be coordination.

15:02 There's definitely a lot more coordination than any of us even realize. We will highlight the ones that have been caught doing it, but understand they're just the, you know.

15:15 the onesies and twosies there's a lot more underneath this which is why we saw the fabians traveling to the communist uh union or the soviet union and the welcome committee that they got and how they didn't talk about any of the negative pieces of this um so it's going to be a common theme through this entire series indeed uh quick question in chat uh rob was asking about um

15:44 Whether that's the same Russell from the Russell Trust and Yale Skull and Bones? No, it's not. They may be related, but it's a distant relation. The William Russell who co-founded Skull and Bones that the Russell Trust was named after was American. Bertrand Russell was British. If the family split, it was centuries before. Interestingly enough, with Russell, William Russell, he was actually in Germany when all the debates about Hegel.

16:15 We're going on. It's a fun little side note. But that's a great catch. The way they found out about the Cambridge spy ring is Blunt, one of the apostles, confessed in 1964. Some of the others ended up defecting to Russia or were later exposed. The post-mortem on that big spy ring, and it's a big deal. It's one of the biggest espionage rings of all time.

16:47 They said the apostles' culture of secrecy, their moral relativism, and anti-establishment tendencies in the leftist 1930s England climate really enabled the Soviet recruitment. And we saw that happen in America as well. Colonel, I am going to have to ask to take about a two-minute timeout because I've got to get my charger. Otherwise, this is going to end. So if you want to talk a little bit while I'm gone, I will be right back. Sure.

17:18 What I wanted to do is I had researched a little bit on, because my favorite economist is Thomas Sowell. And I had looked up what Thomas Sowell, his views on both Hayek and Keynes were. And I just wanted to read a little bit.

17:47 from my research. Sowell, in his 1980 book called Knowledge and Decisions, basically did a major expansion of Hayek's work that he did in 1945 called The Use of Knowledge in Society. According to Sowell, it applies Hayek's insight on the dispersed tactic and localized nature of knowledge, which markets and prices.

18:17 um coordinate far better than central planners which is the point um war hamster was making in a broader social economic and political decision making the local um decisions on purchases is what most efficiently drives markets hayek himself reviewed the book favorably calling it one of the best books on general economics in many years

18:47 That's what Hayek said about Thomas Sowell's book. And you don't get any higher review remarks or affirmation from Hayek than that. He was very impressed with Sowell's expansion of his book. Sowell also said that he acknowledged Hayek's influence when awarded the Hayek.

19:16 book prize in 2021 for charter schools and their enemies he said the hayek prize is especially meaningful to me because of the influence of frederick hayek's writing had on my own work and he frequently if you guys have read any of souls work he frequently cites hayek and if anybody goes on my

19:41 Mount Rushmore of economics, it is Thomas Sowell. He is an amazing, amazing man. And again, he was a huge advocate of Hayek. So I'll say what I have on Keynes from Sowell when Warhamster gets done. Very good. And I probably 100% agree with everything positive you said about Thomas Sowell.

20:09 Yes, he definitely is a Mount Rushmore candidate. Great, great, great man. OK, so we were talking about the Cambridge Apostles. What else is there? Oh, very much known as a hotbed of homosexuality. It was called criticizing the British tabloids as a hotbed of vice. Many, many members were gay or bisexual, especially in Keynes's Bloomsbury group.

20:40 Critics accused it of promoting a homosexual mafia. And we point that out because we had a lot of homosexuality and homoeroticism written about with the early Fabians. So that's why it's actually a pattern. It is not really clear whether this group still exists or not. I can't find anything definitive or anybody who can. But those are your Cambridge apostles. It's Keynes is one of them.

21:15 So it's 1906. John Maynard Keynes joins the Civil Service. He works in the India office. And we've been talking a little bit about India. A lot of these Fabians, London School of Economics, had a lot of impact on India, the British rule over there. And by impact, you mean completely infiltrated. It's a big part of our history. Yes. He goes back to Cambridge and becomes a fellow at King's College.

21:48 which is one of the schools there starts writing he becomes the editor of the economic journal in 1911 1913 he publishes something called indian currency and finance now what's going on in 1913 in the world or what's about to happen we're about to break out into world war one um he gets appointed to the royal commission on indian currency and finance what he'd been studying 1915 um

22:22 he takes up a position at the british treasury department and his main job was detailing with the terms of credit between britain and its continental allies keep that in mind when i start when i give you start talking about what led to the great depression because well and you have to say in 1913 we set up the central bank as well which is going to feed into this whole story yeah that's that's part of this background but it's a very important year

22:54 Yes. He gets appointed to the Royal Commission on Indian Currency and Finance. He's appointed to Treasury's representative at the Treaty of Versailles. Remember we said how Hayek was at the other treaty? Mm-hmm. Keynes was interesting there because he was really trying to prevent Germany's war payments from being set so high. He was worried about the economic destruction of the Germanic people if you give them these punitive damages.

23:26 He was very sympathetic to the German people. And he also recognized that would have a spillover effect to the rest of Europe. You can't have a weak neighbor that's always in debt. And he got overruled. By the Dulles brothers that were there. Yeah, by his own people. And, you know, sorry, it was Woodrow Wilson as well. He'd end up writing a book called The Economic Consequences of the Peace in 1919.

23:58 he was critical of it and history will tell she was probably correct because we saw what happened with the hyperinflation of the rearmark republic and obviously that led would lead to the you know to the rise of the nazis in the 1930s but i think that was all by design um maybe he's just the guy that's supposed to be given the alternative view but yeah he was yeah he was definitely critical of it though um

24:26 He would write a treatise on probability in 1921, really dealt with probability theory. This is when they're trying to, you know, what we just talked about earlier. You're trying to formulate, create a formula for these, you know, economic concepts. And as we say, human interaction is far too complex. And we change our minds. We like something one day, we don't like it the next. When you're simply planning it, you can't account for that. Your formulas are worthless because of human nature.

24:57 Yeah, it's the transition of economics as a social science into economics as a business analysis and trying to formulate predictions, which is impossible to do. It's the transition from a nebulous social thing to a science, which they failed at miserably. And it's inevitable.

25:28 Yes. Let's see what else to do. Okay. The 1923 rights attract on monetary reform, which called for an end to the gold standard in England. Two years later, Winston Churchill reestablishes the gold standard and it had an amazingly depressing effect on the British economy. Churchill screwed up by doing that because he repriced gold at a much lower price than the market would bear. And it's just completely messed with the entire economy.

26:01 So Keynes turns around and writes The Economic Consequences of Mr. Churchill. It's another book saying exactly what I just said. Churchill screwed up. He writes something called A Treatise on Money in 1930. Now, we're already into the Great Depression here, and I'm skipping a little bit ahead about the main topic. But what he wanted was stimulus, not austerity. Print money, is he saying. That's how you get out of depressions or recessions, he hoped.

26:32 He then writes his magnum opus, which is called The General Theory of Employment, Interest, and Money. He writes that in 1936. At this point, he's debating with Hayek about how Western governments should be dealing with what's now in a Great Depression. His general theory challenged all the neoclassical economists. It argues that demand, not supply, is the key variable. This is the fundamental debate that these two guys are going to have.

27:00 and it advocates spending on public works. Where have we heard that before, Colonel? Every single one of these bastards. Yeah, that's big, Fabian. Remember they talked about socializing all the municipalities? Yes. That's what that is. He gets to World War II. He writes a book on how to pay for the war. It says higher taxation and compulsory saving is more important than deficit spending, so we'll avoid inflation. That's a bit of a flip-flop, it seems, to some degree.

27:35 Gets named Baron Keynes and joins the House of Lords as a liberal party rep. So he's not a labor guy. Again, a little bit different than the Fabians. He becomes England's chief delegate at the Bretton Woods Conference, which took place just over the hill here in New Hampshire. Keynes is the leader of the British delegation. He was going head to head on every issue with America's top banker, Harry Dexter White.

28:04 And White would win every single argument about Keynes. Keynes was still pleased with Bretton Woods, but he didn't get it the way he wanted it in any way, shape, or form. America just had too much influence on the post-World War II because nobody bombed our factories. We were intact. And, of course, the result of Bretton Woods was things like the International Monetary Fund and the World Bank. So enough on Keynes, but remind me at the very end to come back to a quote on his deathbed, okay?

28:37 Okay, but I want to do the Sol's summary of him before we move on. Thomas Sol, in reference to Keynes and Keynesianism, says he was consistently skeptical of Keynesian economics. He viewed it as overconfident in policymakers' ability to fine-tune the economy through government spending and intervention, often

29:04 ignoring trade-offs incentives dispersed knowledge and long-term consequences in basic economics and in his columns he placed kane's 1936 general theory in historical context noting that ideas of government spending to combat downturns um was not solid uh economics one of his signature

29:33 um critiques was quote even if the government spins itself into bankruptcy and the economy still does not recover keynesianism can always say that it would have recovered if it had just spent more he calls uh thomas's uh uh rephrasing of that is heads i win and tells you lose argument that's how he described keynesianism that's correct and

30:04 That's the whole thing. We're talking about an economic debate here, and an economic debate is never won or lost because it's unfalsifiable. Yes. There's a reason for that. Well, it is, except for historically, right? Yeah, it's like when I argue against the American system of Hamilton and Lincoln, I'm having to go, you know, because it's constitutional to keep the government's fingers out of the economic pie. But they've got, you know.

30:31 real history to look back and say hey it worked out pretty well to some degree with a bunch of consequences we never got to try a true free market in America that was taken away from us by Hamilton so I can't prove you know something that never happened and that's that's to me is very important to this um where you can look at historically um whether or not a particular Avenue

31:00 was proven correct. But Sol's point is that regardless of how bad they fail, they just say we didn't spend enough and move on. So a couple of general comments. An economy is a collection of production and consumption processes. They're all working together towards solving the central economic problem. That economic problem is there's a finite amount of resources and unlimited human potential for human consumption.

31:31 And solving that is the definition of economics. I suggest free markets can solve it more efficiently than any government, any AI or anything else. Correct. And the problem has no solution by definition because it's always going to be changing. Correct. Today's right answer will change tomorrow. Correct. Prices of something on one coast are going to be different prices on another. And it's always changing. Markets, you have to have markets. If you start doing price controls and setting it.

32:01 you get misallocation of capital correct most economists are going to agree on a lot of these issues so they're really arguing you know keynes and hayek were respectful of each other um and that's because there's an element of philosophy and morality in this academic pursuit no matter how much economists try to sterilize it with math stats it still comes down to an ethical and philosophical question yeah and what i've always been saying the only legitimate purpose of government is to preserve your god-given natural rights

32:32 anything more, you know, and to maintain order, anything more than that. And the government's always going to lead to tyranny. Correct. And to me, that's a moral issue. So it's also trying to turn this into a science is really difficult because in science, you have to have experiments, right? To test your theories. Well, economies are really hard to experiment on because if you screw up, you destroy a nation. Well, and you also have to have a control group. How do you do that?

33:06 To your point, we've never had a 100% free economy. So without that, you have no control group. So you can't make any scientific conclusions one way or the other. We can. To some degree, we can. Because if you look at the 1800s, and this is an imperfect example. The colonel's correct. You can't. We don't have an example.

33:34 When we had the westward expansion in the United States, you really had two different economic systems going on. There was almost no government going west in the new territories, and these were very free and fair markets. And you saw a very successful rising middle class. And on the east coast, eastern seaboard, where you had industrialization,

33:56 you ended up with a huge wealth disparity and much more government involvement in the economy. So you actually got to see the two side by side. And the middle class certainly did better with the freer and fairer markets. So that's probably the best example I can give you. Is that reasonable? Yes, absolutely. I'm just going to give a quick background. I've gone through this before. So I'm going to do it really fast about what led to the Great Depression because it matters. I'm going to start it with a panic of 1907.

34:29 Were you going to do the video since you just did those two? Let's do that. Let me get to the Great Depression and then we do the video. Okay. Okay. This will be pretty fast. 1907, a bunch of banks were shorting the Knickerbocker Trust. It starts going down. Interest rates overnight, lending banks hits 100%. The whole banking system's in jeopardy. We don't have a Federal Reserve or any kind of deposit insurance. Everyone's freaking out. J.P. Morgan steps in, bullies the other banks, and throws about...

34:59 a bunch of money at it and shores up the banks, provides liquidity, and we live through that. That results in the Aldrich-Vreeland Act. Yes, that's Senator Nelson Aldrich's namesake. The Aldrich-Vreeland Act created a quasi-Federal Reserve, and the key thing was to have a lender of last resort when a panic was happening. They would then meet on Jekyll Island, create the Federal Reserve. That gets implemented in 1913, or gets...

35:30 passed in 1913 it's not implemented in time for world war one so they extended the albert's real enact and this is where jp morgan steps in and we do the lend lease with europe jp morgan gets a cut on every single weapon piece of food clothing we sent to europe for world war one he made a bloody fortune on it um we get through world war one federal reserves in place um

36:02 And what happens is the Federal Reserve gets a little bit too big for its britches. It starts doing some things. And what it does is it starts lowering the discount rate. Now, why is that a problem? Well, stock war's over. Stock market's booming. And here's the stock market booming. Because people are borrowing money. They're buying stocks on what's called margin. We get a speculative frenzy.

36:42 That leads to Black Tuesday, huge stock market crash. Market would lose 90% of its value. In fact, I'm going to show you this even, that's good enough. Oh, I got it right here. Here's the Dow Jones Industrial Average at 362 right before Black Monday. Falls all the way down to 64 or down to 51 and does not regain its 1929 high until 1954. That is the Great Depression.

37:17 Let me just put the reference in here to Aldridge. Aldridge's daughter marries John D. Rockefeller Jr. And Nelson Aldridge Rockefeller is named after him. Indeed. Just to tie all of those loops together. Yeah, all roads lead to Rockefellers. And of course, look at all these bankers, these banksters.

37:47 who are totally on board with the one world government, because they've already founded the Carnegie Institute for International Peace and Rockefeller Foundation. And they right when they do that, just years later, World War One starts and they start making a bloody fortune. So I also want to tie in what you just said about Morgan profiting off of all of that material. What I found when I was going through the series on Permadex with

38:15 Alpha over the last several weeks is while Bill Donovan and Stevenson, the guy that was basically the UK SOE chief in New York during World War II, they founded a company called the World Commerce Corporation, WCC.

38:38 And post-World War II, they were dubbed in the United States as the organization that filtered all of the business investment purchases into rebuilding Europe. So they copied the JP Morgan model that you just articulated.

39:01 into a corporation and did the same thing post-World War II in making money off of all of that. So I just wanted to throw that out there because patterns matter. Once they figure out something like this that works and they can profit off of war, they're going to perpetuate that. Yeah, the war profiteering has been around a long time. And that's one of the reasons we have wars. All wars are banker wars, but it's not just banking. So this period of time,

39:29 between the gilded age and there's a run-up of the stock market the wealth in income and wealth inequality was at an all-time high in america the crash brought that down a little bit but you can see we're actually getting wealth inequality again right now we're heading in the wrong direction that's because we've financialized so much of our economy and the people that have assets are able to benefit from people closest to the rent-seeking banks profit or the people downstream that don't have the capital already get punished

39:59 and that's one of the huge divide we see in america today because the young people feel like they're being priced out of ever owning a home because they don't have the capital assets to start with and this has got to change but it will not change using these principles a little more economic wonkiness uh this is the us stocks price earnings ratio you can see how bad it got in 1929 crashed then we get the dot-com era major crash look where we are today

40:29 Valuations are pretty stretched right now, people. A few more charts. This is the U.S. monetary base. You can see they're keeping it really small up through the 1920s. And this will be the result of the Keynesian solutions as they decided to print money and throw it at it. That's still crazy. Yeah. It basically was down here at $5 billion up until 1929. And they jacked it all the way up to almost $30 billion. So 600% increase in a decade.

41:10 You're going to hear this criticism on why the Great Depression happened. The Federal Reserve basically tightened the rates right before 1929 and started a margin squeeze. So the Federal Reserve, and we'll get into that more, but this is actually the chart that shows. In fact, I'm going to save this chart for later. Okay. I think it's time to play our first video. Okay. So people, this is hilarious. That's why we're sharing it. But it really summarizes in a fun way what this entire debate is.

41:43 So buckle up. We've got a short video to play. And it is coming up right now. And I am hitting play. Okay, hold on. You got the volume, right? I don't have any control over the volume. Did you hear it when I started it? No, I can't hear it. Well, hang on. I'm not playing it right now. So I'm going to hit play. Tell me if it's working. Did you hear the phone ring? Yes? Yes. Okay. Now I'm hitting play. Freddie. Okay.

42:20 Hey, listen, party at the Fed. Lobby. John Maynard Keynes. F.A. Hayek. Yeah, we're opposed. We oppose each other philosophically. In the same studio.

42:43 It's the animal spirit. John Maynard Keynes wrote the book on modern macro, the man you need when the economy's off track. Depression, recession, now your question's in session. Have a seat and I'll school you in one simple lesson.

42:56 Boom, 1929, the big crash. We didn't bounce back, economy's in the trash. Persistent unemployment, the result of sticky wages. Waiting for recovery, that's outrageous. I had a real plan, any fool can understand. The advice, real simple, who's aggregate demand? C-I-G, all together gets to Y. Keep that total growing, watch the economy fly. We've been going back and forth for a century. I want to steer markets. I want them set free. There's a boom and bust cycle.

43:28 It's the animal spirit. You see, it's all about spending. Hear the register, cha-ching. Circular flow, the dough is everything. So if that flow is getting low, doesn't matter the reason. We need more government spending. Now it's stimulus season. So forget about saving. Get it straight out of your head. Like I said, in the long run, we're all dead. Savings is destruction. That's the paradox of thrift. Don't keep money in your pocket or that growth will never lift because business is driven by the animal spirits.

43:55 the bull and the bear. And there's reasons to fear its effects on capital investment, income and growth. That's why the state should build a gap with stimulus, both the monetary and the fiscal. They're equally correct. So I don't think we need to play the whole thing. Oh, come on. You want to play the rest? You can go on now that you already stopped it.

44:16 Well, it's got another five minutes to go. So I don't want to, unfortunately, it's pretty long. It's amazing they're able to put this entire argument in a rap song. And they actually hit every point. Yes. And what they're arguing about is how to get out of the Great Depression because we've been screwing it up. You know, we got us into it by messing around with the interest rates. We're in 1930 and over 9000 banks fail in America.

44:43 There's no, and I've seen things happen in Europe. There's no FDIC. So there's people, there's runs on the banks. And what that happens is it forces the banks to liquidate assets at fire sale prices. And now their balance sheets are wiped out and they go out of business. And if your money's in that bank that doesn't have deposit insurance, you just lost your money. That's pretty brutal. And it creates a vicious cycle. You got bank failures, which leads to reduced lending, which creates a credit crunch businesses can't borrow.

45:13 And therefore the businesses fail and that creates more unemployment. And I showed you what the, I showed you what the unemployment was. Yeah. Let's take a look at that real quick. Hang on. Here's your unemployment rate in the 1930s. It spikes up over 20%. It doesn't go back to full employment until we got to world war. We had to get into a bloody world war to get unemployment back. None of these economic policies ever solved the great depression. It never did. It just went to war and it solved all their problems. Yep. And then they decided, Oh, print more money. The Marshall plan.

46:01 There's real GDP growth by decade. Obviously, the 30s is the worst ever. We're not doing so hot these days. And of course, there's the monetary money supply from January 21 to December 37. This is where they squeezed the money supply and caused the Great Depression. And this is where they tried to print their way out of it. And it didn't work. Because this downturn here is the second depression of 1937 and 38 due to government policies. See if there's anything else that's worth looking at now.

46:45 Federal debt held by the public, 1900 to 2050. Not a whole lot in World War I. Huh. Great recession. That doesn't look too healthy, does it? No. All right. Told you I had some fun economic charts. The big mistake they make over there was the, well, let's talk about the failures. You had protectionism and global trade collapse. That was caused by the Smoot-Hawley Tariff Act of 1930.

47:22 The U.S. raises tariffs. Other countries retaliated, and global trade fails by 66%. So now we've got a global depression. From having a recession to a depression is spread because of policy, protectionist policies. Milton Friedman and Anna Schwartz wrote a book. Let me pull these guys up again real quick on screen. They had a book, and they said the depression caused by the fall of the money supply between 1929 and 1933 converting.

48:10 An ordinary recession into a prolonged depression. And they are correct. The guy running the Federal Reserve once FDR got in there was Mariner Eccles. The guy that has a Federal Reserve building is known as the Eccles Building. So he's the one implementing all these terrible policies. He's got an interesting background. He's a Mormon from a polygamist family in Utah. He's got nine siblings and 12 half-siblings. The guy was a millionaire by the age of 23 by buying up bank debt.

48:44 But that's who's running our Federal Reserve. So this whole debate is not a two-way street because the monetarists are a little bit different than the Keynesians and the Austrians. But Friedman and Schwartz write a book after the fact in the 60s called A Monetary History of the United States. And they say the Federal Reserve, they blamed it on the Federal Reserve because they allowed the money supply to contract by 30% between 1929 and 33.

49:21 They had raised interest rates in 1929, 28 and 29 to curb the speculation on Wall Street. And then when everything crashed, the Federal Reserve failed to act as a lender of last resort. Remember we talked about the panic of 1907 where J.P. Morgan was the lender of last resort? And that got turned over to the Federal Reserve. Well, then they didn't do their job. They did not bail out the people they were supposed to. If you're going to have that kind of a safety net in place, they should have used it. That's what Freedman's saying.

49:52 This is a monetarist policy. This is what they did in 2008 and 2009. Ben Bernanke famously has a quote. I should have brought this one with us. It says something along the lines of, to Friedman and Schwartz, you're right. We, the Fed, failed you. We're not going to do it again. He says that in 2004, before we became head of the Federal Reserve, and then orchestrated the biggest bailout in history in 2008 and 2009. And we're still paying for that to this very day.

50:21 I mean, the repercussions of that spending, that bailout, that lender of last resort, we have yet to see it play out. But we do see it on the debt clock because the debt keeps growing and it's not going down anytime soon. There's no plans to do so. So other causes of we had a structural weakness in the 1920s economy. It was the roaring 20s. It was a bit of a myth. You had overproduction in both agriculture and manufacturing. Farm prices had already collapsed.

50:56 When you get too much supply, what happens to prices, Colonel? I'm sorry. I was reading something. Go ahead. We had overproduction in agriculture and manufacturing. Too much supply leads to lower prices. Yes. You had extreme income inequality, which I already showed you. You had high consumer debt and installment buying. People are buying big things like from Sears Roebuck catalog and doing it on installment. This is debt financing, not saving.

51:27 This is the opposite of what Hayek preaches. We also had the international imbalances. Europe's owed massive war debt to the United States. The gold standard transmitted these shocks globally. All right, so there's three schools of thought now on how the banks caused the Great Depression. The first was the monetarist school of Friedman, and they said the banks were central.

52:01 The Fed's inaction allowed cascading failures. A properly functioning central bank could have ejected liquidity and prevented the worst contraction. He's probably correct, but there would have been other prices down the road. But he is correct. The depression probably would not have gotten anywhere near as bad. You've got the Keynesian view. The banks were the victim. You're going to love this. The banks were the victim more than the causes. And here's Keynes' fundamental theory right here. The real problem was a collapse in aggregate demand.

52:34 Bank failures were a symptom of a broader panic. So why do you think the bankers love Keynes and Keynesian economics? Right. You never blame us for anything. But he thinks, oh, people aren't buying enough things. So we'll just print some money and artificially force demand. And that'll lift up all boats. How do you know how much to print? How do you know when to pull it back? You're never going to get it right. There's always going to be misallocation. And that's exactly what Hayek's going to say.

53:08 The Austrian school, 1920s Federal Reserve artificially lowered interest rates, and that fueled an unsustainable credit boom and malinvestment. Hayek would say crashes are necessary but painful corrections. And I would agree 100%. Right. So that's how the Great Depression gets caused. And now we're in this debate between how we should solve it. And in America, with FDR and his boy Eccles, we're doing all kinds of...

53:42 Oh, new government programs. And they're doing the same darn thing in Europe. And that's what they're debating, Keynes and Hayek are. And they're based on the same theories. Do you just throw money at the situation or do you let the market settle and find the right pricing itself naturally? So the U.S. would do something called in 1933, the National Industrial Recovery Act, which was anything but. What this did is it encouraged cartels, price fixing and higher wages.

54:16 It reduces competition and made hiring more expensive during high unemployment, which makes absolutely no sense whatsoever. But the cartel situation with price fixing, well, that's a system we're living under today. That's our regulatory environment. Right. Where the cartel industries control. It's a regulatory capture. They keep competition out and you don't get a real market. Guarantee profits and socialize your losses. Good work if you can get it. Well, correct me if I'm wrong, but.

54:51 Isn't the National Industrial Recovery Act, wasn't that the second bite at the apple? The original one was found unconstitutional, which was the National Recovery Act. Is that not true? That's the one Hoover tried to do, right? No, FDR did both of them. FDR originally, because it was the basic.

55:20 it was basically socialism in the united states and it was found unconstitutional and then they revised it and it became the national industrial recovery act which um was kind of um you know ends up being nicknamed um the what did they call it um the oh shoot the new deal um and um it becomes

55:49 socialism light with everything that you talked about with the cartels and that type of thing. Yeah. And the problem with these New Deal type policies is once the government programs gets put in place to stimulate the economy, it never goes away. Correct. We're still dealing with New Deal programs that are socialist, unconstitutional to this very day because government will never take it back. And that's the problem with Keynesian's philosophy in general.

56:13 oh, we're just going to kind of micromanage the economy. We'll throw money in and we'll take money out. But they never take it out. It never ends. It's the gift that keeps on giving. It grows and grows and grows, just like parasites. And this probably extended the depression by at least five to seven years. FDR also raises taxes. It creates a ton of uncertainty. Top income tax rate, it gets to 79%. Corporate taxes increase.

56:47 They came up with a new tax. Tell me if this sounds familiar. Undistributed profits tax. Yeah, that's like the wealth tax that the democratic socialists are trying to inflict on America right now. They've done this in Europe, in the EU to some degree. And some people argue that's what property taxes are. It is to the middle class. Of course, they had to get involved with labor policies. And there was something called the Wagner Act of 1935, which strongly favored unions.

57:24 And it led to strikes and higher wages at a time of high unemployment. So you're squeezing the corporations. You have labor unions striking, but you're forcing them to pay them more. So without profits, how are you going to build an economy? They're doing everything wrong. And Keynes just crossed the Atlantic debating Hayek. And the bankers and the politicians are listening to Keynes. He won the argument at the time. He lost it historically. Then, of course, the Fed steps in and steps on their toe on their own you-know-what.

57:58 They raised the reserve requirements for banks in 1936 and 37. And that leads to the double dip recession of 1937 and 38. So the deficit spending did keep the depression from being quite as bad, even while the policies are extending it. But it was still never enough. There's still not enough spending to get us out of the tailspin until we got to World War II in 100% full wartime economy, which will always get you 100% employment. How are we doing so far?

58:34 Okay. All right. Here is their key arguments. I'm just going to sum them up because we've been going through it. And I think the final video will do it for us too. A lot of inner teens would argue, economies get stuck in high unemployment equilibria due to insufficient aggregate demand. To me, that is just completely snake eating itself argument. He says, markets do not always self-correct quickly. And therefore, they require us to put our thumb on the scale.

59:10 It's a famous quote. You actually saw it mentioned in the first rap video we watched. It's called the paradox of thrift. That's a Keynes quote. He says, everyone saves more and the man falls further. Don't save everybody. You've got to keep spending. This is what you saw in the stimulus packages with Obama, that they wanted to punish savings. They wanted you out there borrowing. And he says, Keynes would say the solution is government intervention with fiscal stimulus to boost demand. But it's an artificial demand because it's done with printed paper.

59:43 printed money and it's unsustainable yeah it leads to inefficient markets high equity counter again he'd say the depression was caused by an artificial boom in the 1920s fueled by excessive credit expansion which makes perfect sense because that's how every other major recession has started that's what got us 2008 and 2009 the federal reserve kept interest rates artificially low after 9 11.

1:00:14 led to a huge excessive real estate bubble. The Glass-Steagall Act had just been repealed in 1998, so the banks could do all kinds of things they couldn't do before. Just like in the 20s, in the roaring 20s, regulation wasn't done properly. They basically eased the regulation while they're priming the pump with low interest rates. You're never going to find equilibrium rates. It will always lead to malinvestment, and Hayek's solution is simple.

1:00:41 Allow necessary liquidation of bad investments. Do not bail out the bad actors. Failure is a good thing. Some quotes. Keynes on the need for intervention. He says the difficulty lies not in the new ideas, but in escaping from the old ones. On government spending during slumps, he advocates public works and deficits financing to fill the demand gap when private investment collapses. The problem is, John Maynard.

1:01:17 You're filling a gap and then you're keeping it filled. You're making a public investment all the time. You never pull back. It becomes a totalitarian state. Which apparently is the goal. Famous quote, Hayek was criticized by Keynes on his treatise of money. It's a play on Keynes' criticism of Hayek's price and production, but they both used about the same words. It says, the book, as it stands, seems to be.

1:01:48 Seems to me to be one of the most frightful muddles I have ever read, with scarcely a sound proposition beginning with page 45. It is an extraordinary example of how, starting with a mistake, a remorseless logician can end up in bedlam. A few more. Hayek on the dangers of planning and intervention says, the more the state plans, the more difficult planning becomes for the individual.

1:02:24 100%. That actually sounds like a Thomas Sowell. Yes. Hayek, if socialists understood economics, they wouldn't be socialists. I love it. So like I said, Keynes won this great debate in the near term, but lost the historical argument. After the 1970s, we had huge movements back towards Austrian-style economics, and we were going in the right path.

1:02:58 until the Federal Reserve gave us the artificially low rates post 9-11. And then we went down the same blunder, and now we're dealing with that today. I want to end with a quote, if I can find it. Keynes on his deathbed. Bear with me. I can't have lost that. Just before his death in 1946, John Keynes would tell the Bank of England's chair, Henry Clay, he hoped Adam Smith's invisible hand.

1:03:49 could help britain out of its economic hole in quotes it's a direct quote he says i find myself more and more relying for a solution of our problems on the invisible hand which i tried to reject from economic thinking 20 years ago on his deathbed keynes admitted he was wrong what a bastard unfortunately all these keynesian economists that we're dealing with today don't know about that quote and they ignore it because they're

1:04:25 taking us down the road of socialism yeah and that's because they want political power and they've got this dream of you know start getting into our the philosophers we studied this hegelian you know one world government dream yes and that's what they want and they use the keynesian arguments to push the needle to make progress that's why they're progressives that's what they're trying to do and take away our individual freedoms and liberties and god-given natural rights that's fundamentally what the uh what the debate is yes

1:04:56 Okay, so you can play that video, but you've got to play the whole thing. Fair enough. Okay. Second video. I skipped the first minute, okay? Okay. I'll go straight to the song. Ladies and gentlemen, members of the committee, we are here today to consider the impact of government spending on our economy. We're fortunate to have two world-renowned economists to offer their testimony on the matter.

1:05:30 I see you took a detour down the road to serfdom. Talk about the end of laissez-faire. Well, shake it off, Freddy. I'm not pulling any punches in there. I'm ready. Are you? Prepare for the return of the master. John Maynard Keynes. F.A. Hayek. Round two. Round 2.0. Same economists. Same beliefs. New microphones. New mustaches.

1:06:06 Here we are, peace out, great recession, thanks to me, as you see, we're not in a depression. Recovery, destiny, if you follow my lesson, Lord Keynes, here I come, line up for the procession. We brought out the shovels and we're still in a ditch and still digging. Don't you think it's time for a switch from that hair of the dog? Friend, the party is over.

1:06:25 The long run is here. It's time to get sober. Are you kidding? Look, your work's perfectly fine. Have a look. The Great Recession ended back in 09. I deserve credit. Things would have been worse. All the estimates prove it. Upload chapter and verse. Econometricians, they're ever so pious. Are they doing real science or confirming their bias? Their Keynesian models are tidy and neat, but that top-down approach is a fatal conceit. Which way should we choose?

1:06:52 More bottom up or more drop down. The fight continues. Kings and Hyatt second round. It's time to win. More from the top or from the crowd.

1:07:06 Let's listen to the great sayings and how you're going down. We could have done better had we only spent more. Too bad that only happens when there's a world war. You can carve all you want about stats and regression. Do you deny World War II cut short the depression? Wow, one data point and you're jumping for joy. The last time I checked, wars only destroy. There was no multiplier. Consumption just shrank as we used scarce resources for every new tank. Pretty perverse to call that prosperity.

1:07:34 Rationed meat, rationed butter, a life of austerity. When that war spending ended, your friends cried disaster. Yet the economy thrived and grew faster.

1:07:47 You too only see what you want to see. The spending on war clearly includes GDP. Unemployment was over, almost down to zero. That's why I'm the master. That's why I'm the hero. Creating employment's a straightforward craft when the nation's at war and there's a draft. If every worker was staffed in the army and fleet, we'd have full employment and nothing to eat.

1:08:25 It's time to wait. Jobs are a means, not the ends in themselves. People work to live better, to put food on the shelves. Real growth means production of what people demand. That's entrepreneurship, not your central plan. My solution is simple.

1:08:47 and easy to handle it's spending that matters why is that such a scandal money sloshes through the pipes and the sluices revitalizing the economy's juices it's just like an engine that's stalled and gone dark to bring it to life we need a quick spark spending's the lifeblood that gets the flow going where it goes doesn't matter just get spending flow you see slack in some sectors as a general glut but some sectors are healthy only some in a rut

1:09:12 So spending's not free, that's the heart of the matter. Too much is wasted as cronies get fatter. The economy's not a car, there's no engine to stall. No expert can fix it, there's no it at all. The economy's us, we don't need a mechanic. Put away the wrenches, the economy's organic.

1:09:49 So what would you do to help those unemployed? This is the question you seem to avoid. When we're in a mess, would you have us just wait doing nothing until markets equilibrate? I don't want to do nothing. There's plenty to do. The question I ponder is who plans for whom? Do I plan for myself?

1:10:07 or leave it to you. I want plans by the many, not by the few. Let's not repeat what created our troubles. I want real growth, not a series of bubbles. Stop bailing out losers. Let prices work. If we don't try to steer them, they won't go berserk. Come on, are you kidding? Don't Wall Street gyrations challenge a worldview of self-regulation? Even you must admit that the lesson we've learned is more oversights needed or else we'll get burned. Oversight? The government's long been in bed with those Wall Street execs.

1:10:36 and the burdens that they've led. Capitalism's about profit and loss. You bail at the losers, there's no end to the cost. The lesson I've learned, it's how little we know. The world is complex, not some circular flow. The economy's not a classic and master in college. To think otherwise is the pretense of knowledge.

1:11:14 You get on your high horse and you're off to the races. I look at the world on a case-by-case basis. When people are suffering, I roll up my sleeves and do what I can to cure our disease. The future's uncertain. Our outlooks are frail.

1:11:28 That's why free markets are so prone to fail in a volatile world. We need more discretion so state intervention can counter depression. People aren't chessmen you move on a board at your whim, their dreams and desires ignored. With political incentives, discretion's a joke. Those dials are twisting, just mirrors and smoke. We need stable rules and real market prices so prosperity emerges and cuts short the crisis. Give us a chance so we can discover the most valuable ways to serve one another.

1:12:10 It's time to wait. It's time to wait.

1:12:54 So what you see there is Hayek actually wins, but they crown.

1:13:05 the other it's so classic uh yeah i just thought a video producer basically said anything in six minutes that i've been talking about for 30 years of studying economics and it's just nailed it when i when i found that i sent it i texted that over to the colonel said we got to use these and she was all over it but uh hope you guys hope you enjoyed that it's um not rarely do you get something so well produced

1:13:33 That's so stinkin' accurate. That proves the points we've been talking about for years. Hey, shout out real quick to somebody in the chat. In the rumble, there's John Article 5. That's my friend John from California. He is one of the co-founders of a group called Friends of the Article 5 Convention. And if you look that up online, go check out his website. He's doing a lot of work on trying to get us to an Article 5 convention. I've been talking to him again lately. And I will probably be involved in that organization again soon.

1:14:02 uh with some mock conventions and try to actually make the real one happen so everybody here knows how i feel about uh the article 5 convention so anyways jon appreciate you coming by and checking this out awesome boy i'll tell you um i don't think the distinction could be made any more clearer than we've done it today i agree top down bottom up what do you want i want bottom up i want the government out of our lives and i think once again

1:14:34 yeah i think you made that case um very well so um i hope everybody enjoyed it i did definitely so this is one of my favorite shows to research just because um yeah i studied economics in college because my university didn't have a business school and the colonel i talked about that then i go into business with the economics and social uh social studies background and was able to pick up on the patterns really quickly on wall street and recognize what was wrong

1:15:05 And I was sharing with Warhamster before the show, I went to Indiana University, which at the time had one of the top 50 business schools in the United States. And I took all of my business electives in economics. And what I find so interesting is that economics outside of a business school is really a social construct. And the whole.

1:15:34 transition of economics because it looks at human behavior as to what people want to buy, what is driving demand and that type of thing. That really is the appropriate place for economics. They're transitioning economics into business schools and trying to make it a science loses the entire construct of

1:16:03 those theories, in my opinion, because you cannot quantify individual people and their demands, what they want to purchase. It's impossible to put them in a numbers graph. And that is what the Fabians force fed everyone to treat it as a precise science when it's actually impossible to do that and get efficiency in the system.

1:16:32 And they justify it because they're egalitarian social reform. They said that's what motivates us. We want everything to be fair. And that's where you start to get into equity as opposed to equality and fair competition. Correct. You can't quantify the unquantifiable. It sends false signals to the market, which means you're going to get distortions that have to then be fixed. By the government. Or we could let them fix themselves naturally. So look, nobody's buying.

1:17:00 your gizmos, you probably ought to stop producing them. But if the government's telling you, giving you money to keep producing them, well, that's just, you know, that's misallocation of capital. And that's my argument. That's my argument against the American system that was actually implemented in the United States. And although, yes, it did produce the biggest economy in history, it came at a severe cost of great wealth disparity and the opportunity cost of seeing what a true free and fair market could have done instead.

1:17:27 And that's what the probably the latest best example of that is solar energy. Right. Yeah. You basically are trying to shove something into the market that the public does not want. Correct. And then you spend billions, hundreds of billions of dollars in incentives to drive that market. And within, in some cases, less than a year, the companies go broke. Solyndra. Solyndra.

1:17:58 because it's yeah and their cronies wake up make off with millions of dollars of our tax dollars with absolutely nothing accomplished that's why you get things like the california's train to nowhere nobody wanted the damn train correct and so then you're let your if you step back from that you understand that all of these are basically large money laundering machines of our wealth that we could have done

1:18:26 we could have used much more efficiently to enhance our lives are being taken from us involuntarily to subsidize their cronies. And that's always going to happen inevitably because I'll say it once again, once you turn the government into a piggy bank, you're going to attract swine. And that's what happened in America. When you start doing your federally funded internal improvements, where do you stop? Where's the slip race?

1:18:53 slippery slope always leads to 100 totalitarianism with a bunch of cronies getting rich you know robber baron type elites getting rich along the way and they create a ruling class and they have to destroy the middle class and that's exactly the war we're fighting today because our government couldn't keep its grubby hands you know out of our markets and that's what's got to happen 100 what a great way to end the show boom mic drop okay

1:19:22 say it one more time about the swine because i love that that's my famous that's my favorite saying when you turn your government into a piggy bank you are going to attract swine and we sure as hell have a lot of them here yes we do all right guys thanks for joining us join us again next friday what are we going to be talking about next friday war hamster i don't remember what we said we're going to do this you know we could be going um

1:19:51 We could probably be going Pilgrim Society because we need to cross the Atlantic here. Okay. Or we could spend some time on the 20th century Fabians, the more notable ones. But I don't think that's as imperative to our story because that takes us away from the 1900s period. Yeah. So let's do the Pilgrims and then we'll come back to the modern day Fabians. We'll get there because there's some fun ones. Okay. Cheers, everyone. See you later.

Entities here

Claims made here

Friedrich Hayek member_of Paris School of Economics documented ▶ 0:27

“at the London School of Economics at the time, founded by the Fabians. So that's why that's on topic. And it's very, very interesting that a guy who's very much of a free market Austrian school econom…”

John Maynard Keynes taught_at Cambridge Apostles host_asserted ▶ 0:27

Friedrich Hayek taught_at London School of Economics documented ▶ 0:27

London School of Economics founded Fabian Society host_asserted ▶ 0:27

Ludwig Wittgenstein relationship_with Friedrich Hayek documented ▶ 2:45

“He is born in 1899 and lived in 1992. Born in Vienna, Austria. I'm not even going to try to do his accent when I do his quotes. But since my family comes from Austria, I'm a fan. His father is a medic…”

Eugène von Bohm-Bawerk relationship_with Friedrich Hayek documented ▶ 3:19

“Wittgenstein. He's pretty well known. He did a lot of mathematical formulas applying it to human behavior, something we've talked about a bit. His maternal grandfather was an economist, and he was a c…”

Carl Menger founded Paris School of Economics documented ▶ 3:48

“economists versus the keynesian schools which are two of the major schools of economic thought in the 20th century uh the main founder of the austrian school of economics is carl menger so you can bas…”

Ludwig von Mises recruited Friedrich Hayek documented ▶ 5:24

“from the University of Vienna, I'm sorry, by 1923. He then gets hired by Ludwig von Mises as a specialist for the Austrian government on legal and economic details of the Treaty of St. Germain in Ley,…”

Friedrich Hayek founded The Road to Serfdom documented ▶ 5:56

“This is another great economist from the Austrian school. Von Mises could also go up on Mount Rushmore. Freddie writes a book called The Prices of Production. And then he writes his magnus opus, which…”

Friedrich Hayek moved_to University of Chicago documented ▶ 8:02

“You put your finger on the scale, the more government programs you have to do, you now have to enforce them. You've got to use coercion to get the money to pay for them, raising taxes, reducing freedo…”

Milton Friedman relationship_with Friedrich Hayek documented ▶ 8:33

“They actually worked in different departments and weren't very close, but Friedman was an admirer of his writings. And of course, Hayek wins tons of awards, Nobel Peace Prize for Economics, etc. But v…”

Harold Macmillan relationship_with Dan McMillan documented ▶ 9:42

“In 1897, Keynes wins what's called a King's Scholarship to Eton College. There he meets what he describes as the first love of his life, a gentleman by the name of Dan McMillan. Yes, Keynes was a homo…”

John Maynard Keynes relationship_with Dan McMillan documented ▶ 9:42

George Tomlinson founded Cambridge Apostles documented ▶ 11:19

“Only this one is organized at a university, and it's very much a secret society. It is elite. It is secretive. Founded in 1820 by a guy by the name of George Tomlinson. He would go on to become the Bi…”

John Maynard Keynes member_of Bloomsbury Group documented ▶ 12:26

“We're going to kill you. I was a hundred percent male until the 1970s. Keynes was part of a group called the Bloomsbury group, the people in his class. And a lot of them are notable in other fields. W…”

John Maynard Keynes member_of Cambridge Apostles documented ▶ 12:26

Bertrand Russell member_of Cambridge Apostles documented ▶ 12:26

John Cairncross spied_on Soviet Union documented ▶ 13:35

“And three of the five were apostles. Guy Burgess, Anthony Blunt, and John Carencroft were all apostles. And along with Donald McLean and the infamous Kim Philby, all spied for the Soviet Union from th…”

John Cairncross member_of Cambridge Apostles documented ▶ 13:35

Anthony Blunt member_of Cambridge Apostles documented ▶ 13:35

Guy Burgess member_of Cambridge Apostles documented ▶ 13:35

Donald Maclean spied_on Soviet Union documented ▶ 13:35

Anthony Blunt spied_on Soviet Union documented ▶ 13:35

Kim Philby spied_on Soviet Union documented ▶ 13:35

Guy Burgess spied_on Soviet Union documented ▶ 13:35

Anthony Blunt exposed Cambridge Five documented ▶ 16:15

“We're going on. It's a fun little side note. But that's a great catch. The way they found out about the Cambridge spy ring is Blunt, one of the apostles, confessed in 1964. Some of the others ended up…”

Friedrich Hayek founded The Use of Knowledge in Society documented ▶ 17:47

“from my research. Sowell, in his 1980 book called Knowledge and Decisions, basically did a major expansion of Hayek's work that he did in 1945 called The Use of Knowledge in Society. According to Sowe…”

Thomas Sowell founded Knowledge and Decisions documented ▶ 17:47

Thomas Sowell relationship_with Friedrich Hayek documented ▶ 18:47

“That's what Hayek said about Thomas Sowell's book. And you don't get any higher review remarks or affirmation from Hayek than that. He was very impressed with Sowell's expansion of his book. Sowell al…”

John Maynard Keynes worked_at British Treasury documented ▶ 22:22

“he takes up a position at the british treasury department and his main job was detailing with the terms of credit between britain and its continental allies keep that in mind when i start when i give …”

John Maynard Keynes attended Versailles Treaty documented ▶ 22:54

“Yes. He gets appointed to the Royal Commission on Indian Currency and Finance. He's appointed to Treasury's representative at the Treaty of Versailles. Remember we said how Hayek was at the other trea…”

John Maynard Keynes founded The Economic Consequences of the Peace documented ▶ 23:26

“He was very sympathetic to the German people. And he also recognized that would have a spillover effect to the rest of Europe. You can't have a weak neighbor that's always in debt. And he got overrule…”

John Maynard Keynes founded The Economic Consequences of the Peace documented ▶ 26:01

“So Keynes turns around and writes The Economic Consequences of Mr. Churchill. It's another book saying exactly what I just said. Churchill screwed up. He writes something called A Treatise on Money in…”

John Maynard Keynes founded A Treatise on Money documented ▶ 26:01

John Maynard Keynes founded The General Theory of Employment, Interest, and Money documented ▶ 26:32

“He then writes his magnum opus, which is called The General Theory of Employment, Interest, and Money. He writes that in 1936. At this point, he's debating with Hayek about how Western governments sho…”

John Maynard Keynes attended Bretton Woods Conference documented ▶ 27:35

“Gets named Baron Keynes and joins the House of Lords as a liberal party rep. So he's not a labor guy. Again, a little bit different than the Fabians. He becomes England's chief delegate at the Bretton…”

Harry Dexter White attended Bretton Woods Conference documented ▶ 27:35

Bretton Woods Conference founded IMF documented ▶ 28:04

“And White would win every single argument about Keynes. Keynes was still pleased with Bretton Woods, but he didn't get it the way he wanted it in any way, shape, or form. America just had too much inf…”

Bretton Woods Conference founded World Bank documented ▶ 28:04

John Maynard Keynes relationship_with Friedrich Hayek host_asserted ▶ 32:01

“you get misallocation of capital correct most economists are going to agree on a lot of these issues so they're really arguing you know keynes and hayek were respectful of each other um and that's bec…”

J.P. Morgan funded Knickerbocker Trust Company host_asserted ▶ 34:29

“Were you going to do the video since you just did those two? Let's do that. Let me get to the Great Depression and then we do the video. Okay. Okay. This will be pretty fast. 1907, a bunch of banks we…”

Federal Reserve founded Aldrich-Vreeland Act host_asserted ▶ 34:59

“a bunch of money at it and shores up the banks, provides liquidity, and we live through that. That results in the Aldrich-Vreeland Act. Yes, that's Senator Nelson Aldrich's namesake. The Aldrich-Vreel…”

Nelson W. Aldrich founded Aldrich-Vreeland Act host_asserted ▶ 34:59

J.P. Morgan financed_via World War I host_asserted ▶ 35:30

“passed in 1913 it's not implemented in time for world war one so they extended the albert's real enact and this is where jp morgan steps in and we do the lend lease with europe jp morgan gets a cut on…”

Nelson W. Aldrich married John Davison Rockefeller host_asserted ▶ 37:17

“Let me just put the reference in here to Aldridge. Aldridge's daughter marries John D. Rockefeller Jr. And Nelson Aldridge Rockefeller is named after him. Indeed. Just to tie all of those loops togeth…”

William Stephenson headed Special Operations Executive host_asserted ▶ 38:15

“Alpha over the last several weeks is while Bill Donovan and Stevenson, the guy that was basically the UK SOE chief in New York during World War II, they founded a company called the World Commerce Cor…”

William Stephenson founded World Commerce Corporation host_asserted ▶ 38:15

William J. Donovan founded World Commerce Corporation host_asserted ▶ 38:15

World Commerce Corporation financed_via World War II host_asserted ▶ 38:38

“And post-World War II, they were dubbed in the United States as the organization that filtered all of the business investment purchases into rebuilding Europe. So they copied the JP Morgan model that …”

Federal Reserve caused Black Tuesday host_asserted ▶ 41:10

“You're going to hear this criticism on why the Great Depression happened. The Federal Reserve basically tightened the rates right before 1929 and started a margin squeeze. So the Federal Reserve, and …”

Federal Reserve caused Great Depression book_quoted ▶ 47:22

“The U.S. raises tariffs. Other countries retaliated, and global trade fails by 66%. So now we've got a global depression. From having a recession to a depression is spread because of policy, protectio…”

Smoot-Hawley Tariff Act caused Great Depression host_asserted ▶ 47:22

Mariner Eccles headed Federal Reserve host_asserted ▶ 48:10

“An ordinary recession into a prolonged depression. And they are correct. The guy running the Federal Reserve once FDR got in there was Mariner Eccles. The guy that has a Federal Reserve building is kn…”

Anna Schwartz wrote The Untold History of the United States host_asserted ▶ 48:44

“But that's who's running our Federal Reserve. So this whole debate is not a two-way street because the monetarists are a little bit different than the Keynesians and the Austrians. But Friedman and Sc…”

Milton Friedman wrote The Untold History of the United States host_asserted ▶ 48:44

Federal Reserve caused Great Depression host_asserted ▶ 53:08

“The Austrian school, 1920s Federal Reserve artificially lowered interest rates, and that fueled an unsustainable credit boom and malinvestment. Hayek would say crashes are necessary but painful correc…”

National Recovery Act part_of New Deal host_asserted ▶ 55:20

“it was basically socialism in the united states and it was found unconstitutional and then they revised it and it became the national industrial recovery act which um was kind of um you know ends up b…”

John Maynard Keynes criticized Friedrich Hayek host_asserted ▶ 1:01:17

“You're filling a gap and then you're keeping it filled. You're making a public investment all the time. You never pull back. It becomes a totalitarian state. Which apparently is the goal. Famous quote…”

Friedrich Hayek criticized John Maynard Keynes host_asserted ▶ 1:01:17

John Maynard Keynes relationship_with Henry Clay Frick host_asserted ▶ 1:02:58

“until the Federal Reserve gave us the artificially low rates post 9-11. And then we went down the same blunder, and now we're dealing with that today. I want to end with a quote, if I can find it. Key…”

John Maynard Keynes studied_at Adam Smith host_asserted ▶ 1:03:49

“could help britain out of its economic hole in quotes it's a direct quote he says i find myself more and more relying for a solution of our problems on the invisible hand which i tried to reject from …”

John Article 5 member_of Friends of the Article 5 Convention host_asserted ▶ 1:13:33

“That's so stinkin' accurate. That proves the points we've been talking about for years. Hey, shout out real quick to somebody in the chat. In the rumble, there's John Article 5. That's my friend John …”

Fabian Society funded Solyndra host_asserted ▶ 1:17:27

“And that's what the probably the latest best example of that is solar energy. Right. Yeah. You basically are trying to shove something into the market that the public does not want. Correct. And then …”