{ "episodeId": "SLP589", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "guido_hulsmann": { "name": "Guido Hulsmann", "role": "guest", "tag": "GUIDO" } }, "segments": [ { "speaker": "stephan", "time": "00:12", "start": 11.67, "text": "Hi everyone and welcome back to Stephan Livera podcast brought to you by swan dot com the best place to buy bitcoin. Rejoining me today is Dr. Guido Hulsmann. He's a senior fellow of the Mises Institute. He's a member of the European Academy of Sciences and Arts. He's a professor of economics at the University of Ondno and he has Written, numerous books and given so many talks, notably \"Mises: The Last Night of Liberalism, \" \"The Ethics of Money Production, \" and most recently, \"Abundance, Generosity, and the State. \" So first of all, welcome back to the show." }, { "speaker": "guido_hulsmann", "time": "00:43", "start": 42.71, "text": "Thank you very much, Sarah. It's a pleasure to be with you." }, { "speaker": "stephan", "time": "00:46", "start": 45.95, "text": "So I have to say, Dr. Hulsmann, I really enjoyed this book. I think there was a lot of really interesting insights, and I hope my listeners are, after hearing this interview, they'll also be inspired to go" }, { "speaker": "stephan", "time": "01:00", "start": 60.02, "text": "This book, were there elements of your previous book that, you know, spurred you to write this one?" }, { "speaker": "guido_hulsmann", "time": "01:06", "start": 66.41, "text": "yes, absolutely. I mean, I, had started being, becoming interested in gratuitous goods only two thousand and nine, when Pope Benedict the sixteenth published an encyclical, with the title, \"A Charity in Truth.\" And so I'm a Catholic, so I'm-- you're as a, as a good Catholic, you're supposed to, to read all these encyclicals. Doesn't mean that you, adopt this rule of abstinence, but you need to give this serious consideration, right? So it's not really something that you have to believe like you would believe the Ten Commandments or something like this, right? But, the, the Pope typically publishes encyclicals when they feel there is a subject of current importance that is underappreciated and that needs to be given more thought So Pope felt, well, actually the most important goods in human life, such as love, hope, friendship, and so on, are always gratuitous. and of course, we, we cannot do as human beings, we cannot do without payments, we cannot do without markets, but still he had the impression that markets were taking the upper hand and growing at the expense of gratuitousness. So there was something wrong going on, and he said, \"Well, all the faithful and actually all people of good will, whether even with the- They're not Catholic, should give this some attention and figure out what's going on and possibly, find out what can be done about it. So that's my, my logic. So I, at, at the time was involved with other things, I was more interested in the economics of financial markets and capital theory and so on. And, didn't have time to set aside for this, so I asked a doctoral student to, look into this. So I had this, doctoral student, and she worked on this for a couple of years and then defended her dissertation in two thousand and fifteen. And I felt after the workshop, it was, there was no other dissertation on the topic before, right? So it, it was, breaking new ground. But then she was a beginner, and unfort- unsurprisingly, she, she had Didn't, have the, the full command of all the literature and, things that that might be relevant. So I thought, yeah, I have to go over some of these things again. And in particular, as far as two topics were concerned, one is, what the economists call positive externalities. So it's all the side effect goods that might exist in a, in a market or that might result from market interaction, but even outside of the market, this was one thing. And the other thing is, and this brings me back to your question, the other thing Influence of the monetary system. I got that, that this is, impression, and I said so also in some previous texts, most notably in the ethics of money production, which we talked last time, that, the, the Government interventionism entailed a tendency for people to become more materialistic, and so this clearly seemed to have, something to do with, with this topic, right? If people care more about money and more about themselves, well, it, that seems to be a, a reason why they might turn more cold-hearted, and, be less generous in their attitude toward others and so on. So I then set out to, to, to spell this out in, in more detail and elaborate this. So this was the, the starting point. But then, as very often in, in research, things get out of hand, and rather than, covering just these two topics, I eventually set out to write a treatise on gratuitous goods, because there was no such treatise, than before, and that's what the book, It is, right? So now it's four hundred pages on gratuitous goods. It's more than enough. It's not gratuitous reading, right? So many, many friends told me, \"Oh, Guido, it's fine, you have this book on this business, but it's not gratuitous to read.\" Yes, I know, it's a lot of investment of time investment involved. But anyway, that's how it" }, { "speaker": "stephan", "time": "05:01", "start": 300.86, "text": "is. Time well invested, I'd say. I really enjoyed it. I think there were a lot of really valuable insights. But before we go into some of those, let's start with just, you know, the basics. What is a gratuitous good?" }, { "speaker": "guido_hulsmann", "time": "05:13", "start": 312.87, "text": "Well, actually, as, as I explain in the book, strictly speaking, there are no gratuitous goods. What is gratuitous are the ways we receive an economic good or provide an economic good to others, right? I mean, if, if I give, pair of glasses to somebody, then it's not the glasses that are gratuitous because the glasses have been produced, by human labor, so there was of, of, of the monetary cost involved, certainly opportunity cost and, and so on, right? So it's not Schutuitas, but I provide it to others without payment, that, so that's Schutuitas, and the other person might receive it without any payment. And so when we talk about Schutuitas, good, so you received Schutuitas, basically meaning that it is received without any prior obligation on the part of the person who provided it. So, gratuitousness can only be defined within, this normative context, a context of rights and obligations, right? It's, gratuitous only to the extent that it goes beyond what I owe And to the extent that it's received beyond what I have the right to claim, right? If I have the right to claim, for example, some, somebody steals my wallet, then I, I say, \"Well, give me your wallet back.\" He hands the wallet over. Well, that's not gratuitous, it doesn't make a gift, right? And, even Robinhood, right? If he, if he gives money to the poor, then he stole from the rich. Strictly speaking, that's not a, a, a gift, it's restitution of money that had been" }, { "speaker": "guido_hulsmann", "time": "06:50", "start": 409.92, "text": "in a very similar way as you can define, inflation, only within the context of pre-existing rights and obligations, the same thing here as well, gratuitousness can only be correctly defined, I think, in this, in this normative context. And, and, that so that that, that shows that, that, well, there's a strong, connection right between, Rights, obligations, which are perceived juridical, moral terms and economic analysis as soon as it touches on, on such things, right?" }, { "speaker": "stephan", "time": "07:25", "start": 445.15, "text": "Yeah, and so as you rightly point out, it comes down to Your, what is your theory of justice, right? Like, what, what are you rightly owed or what are, what may you rightly claim from that other person if, you know, I've done this work for you and you owe me my salary, but actually if you give me some other benefit on top of that, that thing on top, that might be a gratuitous benefit because that wasn't something that I could claim from you, per se. So" }, { "speaker": "guido_hulsmann", "time": "07:49", "start": 468.91, "text": "it shows again, right, the central importance of private property rights, because private property rights are of course the most important institutions," }, { "speaker": "guido_hulsmann", "time": "07:59", "start": 479.39, "text": "In order to delimit what is owed and what is no longer owed, or what can I claim and what may I not claim, as I can always claim, but what do I righteously claim, right? And, so in, in private property rights are of course fundamental also for exchange, so for contracts, and the very purpose of contracts is to define the obligations and the, the, the rights of, of the partners. so in, within that context, within, the, the world created by private- property rights, you may have such a thing as gratuitous goods, which implies, on the other hand, that as soon as you no longer have private property rights, as soon as you are in a moral-juridical limbo in which there are no clear boundaries, well, there is no more gratuitousness, there are no more gifts. And that's what some, anthropologists, Bronislaw Malinowski and, and, and others found in the early twentieth century when they investigated, the, the manners, and, and, and the lives of primitive, tribes in the, the Pacific, basin, so it's around the world, these people actually have no conception of a gift. And that's of course not surprising, right? Because in order for things like a gift to even become conceivable, and then also to be experienced, well, it presupposes a context of limitations of rights and obligations. If every-- everything is in the limbo, everybody has the right on everything, everybody is somehow, but not precisely defined, obliged to do all things, it's impossible to make gifts and it's impossible to receive anything gratuitously, because you always already from the outset Some sort of claim on, on all other" }, { "speaker": "stephan", "time": "09:43", "start": 582.66, "text": "things. And when it comes to gratuitous benefits, one area that you touch on in the book is around virtues and sacrifice, right? Now, these aren't necessarily tangible things that you can hand to somebody, but maybe it's more the attitude, the way you behave, the temperance, the wisdom, the judgment, these kinds of aspects. And you mention how people have to effectively sacrifice to train other people to have this virtue. Elaborate a bit on, you know, your treatment there of virtues and sacrifice." }, { "speaker": "guido_hulsmann", "time": "10:14", "start": 614.28, "text": "Yeah, sure. I mean, a, a virtue, of course, it's, it's the right way of behaving, even if materially, there, there's nothing coming out of you, or quite to the contrary, you're, you're, undergoing some sort of a cost, right? And of course, the only way to teach this to other people is, in particular, your children, because, I mean, either you teach it to your children, or the children will have a difficult time" }, { "speaker": "guido_hulsmann", "time": "10:41", "start": 640.98, "text": "Even if it costs you. In fact, if in the extreme case, it'll cost you your life, a less extreme case, it'll cost you your job, other less extreme case, well, you, you lose an opportunity to make money or to live in a nice place or to marry the, the, the girl that you love and so on, right? So whenever you, you live the virtue, you do what's right, even though it doesn't benefit you materially. And the only way to teach this is actually to see people doing this and doing it therefore for the right cause. Children see this right away, right? They, they see right away the dishonesty and, the hypocrisy, right? If you said, \"Yes, I'm, I'm, I'm doing this because I love you,\" but really they're doing this because they hope to get some, something in return, later on, right? And, so that's, that's not the way to, to teach virtues, and actually people are only confronted to this sort of opportun" }, { "speaker": "guido_hulsmann", "time": "11:36", "start": 695.91, "text": "Really behave, virtuously, but it's very difficult. I mean, you need to have a lot of spiritual gifts to get out of this." }, { "speaker": "stephan", "time": "11:41", "start": 701.17, "text": "Yeah. And, as part of gratuitous goods, you also mention in some of your treatment here, now we're not getting to the government intervention, we'll get to that later, but you, you mentioned things like, the possibility of tit for tat exchange or customary gifts, and so there's this dynamic where you might be giving a gift, but actually you're sort of-- There's an expectation being placed on the other person. Buy you lunch today, and then you feel like you have an obligation to buy me lunch the next day." }, { "speaker": "guido_hulsmann", "time": "12:07", "start": 727.45, "text": "Yes. And, absolutely, right? And, let me just point out that of course there's nothing wrong with this, right? I mean, this-- my book is not a treatise on morals or something, it's an economic, book, so in which I want to analyze different causal connections. And so of course, in, in real life, you always have tit for tat, and there's nothing wrong, with, with tit for tat. I'm In the book was simply to point out, yeah, from a logical point of view, what is involved in a true gift, right? In a, in a genuine gift. And, then of course, in real life, you have a lot of hybrid forms that are somewhere in between, market, exchange in which the purpose is just to benefit, materially and, and, acts of, donations in which your orientation is completely, toward the others. In real life, you have all sorts of, Hybrid cases and sometimes also mixed cases, you're both a market exchange, you pay a bit more because, well, you like the person or you, you want to help out the operator, you pay a higher price, and so on, right? So of course, that's" }, { "speaker": "stephan", "time": "13:14", "start": 793.94, "text": "life, right? Now, one point that I really enjoyed from the economic perspective, and I'm sure you're very, deeply well versed on this, is this idea of capital accumulation and how gratuitous benefits are actually part of a free market economy. So can you explain a bit about- About why it is that in a free market with capital accumulation, that's actually the environment that creates more gratuitous benefits. Yeah." }, { "speaker": "guido_hulsmann", "time": "13:41", "start": 820.53, "text": "Well, the most straightforward con-connections, of course, you can make gifts only if you have something to give. So the richer you are, the more you can give, right? And then, so that's the first thing. And then there's a very straight correlation, you see it in all countries, all the records are incredibly stable across time, the richer people are, the higher are the gifts that they make also. Right, so there's a very strong correlation, and it's, it's, it's common sense. Now the other question is, what about the willingness to make donations? Right? Because you may become richer, but at stingy, more stingy at the same time, right? So which means that even though you're richer now, I mean, you're still making more gifts than before, but relatively speaking, as a proportion of your wealth and your income, it becomes less. And what I argue in the book is that actually in the market economy, there are strong, tendencies for, people to become more generous, in a, in a free market setting, and they become more stingy under government interventionism. Now they become more generous in a free market economy, under, what I call the saturation mechanism. Of capital accumulation. And that mechanism is, very-- has been known for a very long time, has been discussed well by, by Adam Smith and, Carl Marx and various others, and it simply, says that if people become richer, right, so then savings become more abundant, and like all things that become more abundant, they lose in marginal value Right? Something grows in value much, much, much, much, to the extent it becomes scarce. If something becomes very abundant, for example, savings, well, these savings lose in value, right? So then, and the way it shows up in a market economy is that the return on investment tends to diminish on investment projects. And you have more savings available, but if the number of investment ideas and investment opportunities doesn't increase at the same time, you're, well, you're throwing more money at the same number Of the opportunities, well, the consequence is that you drive up the remuneration of the factors of production, the particular wages and, the remuneration of, of landed factors, so raw materials and so on, and so the return on, on savings, the remuneration of capital itself, monetary capital, diminishes. And that's perfectly fine, and, and that's, that's natural and so on, but the implication is that the opportunity cost of donations diminishes. Right? If I have fifty thousand dollars on hand, can earn, twenty percent by investing the fifty thousand dollars, like, well, well, if I give them away, then in fact, I'm not only giving away fifty, I'm in fact giving away seventy. And whereas if the return is very low, it's just one percent or so, well, then I give away, well, not fifty but fifty-two or something, right? Fifty, fifty and a half, fifty-one. So, as a consequence, then under free market conditions, As capital, accumulation grows, there is a tendency for the opportunity cost of donations to diminish, right? So we would expect under free market conditions that there is a tendency that the, people become more willing to donate money. So the amount of donations w-uh, would increase not only linearly with the revenue and wealth, but o- slightly over proportionally. Now, that's not a rigid, tendency, right? So you wouldn't expect to find, with an econometric exercise, a, a linear relationship or even a fixed, a rigid relationship of, of a dynamic sort, because there are always countervailing tendencies, right? For example, if you have very strong, technological innovation, which might create opportunities for the deployment of capital, well, then that tends to increase the return on, on capital investments. Right? So you have two countervailing tendencies. On the one hand, people have more, wealth available, but there are also greater opportunities, so the return on investment is likely to, to increase. In that case, right? So it's a countervailing force. So it depends on the situation. But if we're just looking at, at people becoming richer, well, if we're just look-- looking at this factor per se, we would think that, well, because of that, people would tend to become more willing to, to make donations relative," }, { "speaker": "guido_hulsmann", "time": "18:05", "start": 1084.85, "text": "And there are, indications that, well, in the absence of strong, technological revolutions and, and so on, yeah, there is this tendency. And if we look back at the history of the nineteenth century and so on, we, we look, I mean, at, at charitable activity, but also, donations for, To fund the, the sciences and the arts and so on, they've all increased very strongly, very considerably in times of strong capital" }, { "speaker": "stephan", "time": "18:30", "start": 1109.73, "text": "accumulation. And back to the show in a moment. The lead sponsor of this show is Swan dot com, and Swan has a mission to onboard millions of people into Bitcoin. I also work at Swan, helping on some educational content for the team. Now, the team have also put out a new version of the Swan Bitcoin application, which is available on your smartphone, whether it's Apple or Android. Now, this app has a really fast onboarding experience. It's now just a few minutes to go from zero to Bitcoin. So if you are standing there with your family or friends and you might have been having trouble trying to get them onboarded, well, try this now. Recommend Swan Bitcoin, and you can do this while you're standing next to them. They can click through, and most of them will be able to set up and do this in just a few minutes. Also, the team at Swan have rolled out a new promotion. There are zero fees on your first ten thousand dollars of Bitcoin buys. So this is a great way to go from zero to Bitcoin and in a guided and managed way. So, reminder, go to your app store or Play Store and search \"Swan Bitcoin\" to get onboarded with Bitcoin today. And now, back to the show. I see. And as you point out there, I mean, some of your discussion there was about donations and some of these things, but it, there's even the element of just sort of positive side effects or positive externalities, maybe to use the economics term, that, as people become wealthier, as an example, maybe your neighbor, he has a really, he's really rich and he has a beautiful garden, and you get the nice benefit of seeing that nice garden. To this, this element as well, that as society in a free market, when we have capital accumulation People become wealthier and there's this flywheel of productivity, and that then in turn gives this kind of side, like unintended side effects or unintended beneficial side effects," }, { "speaker": "guido_hulsmann", "time": "20:19", "start": 1219.16, "text": "right? Absolutely, yeah, absolutely, right. So a, a thriving, economy is full of such side effects, and that e-each one of them, is small, tends to be small, sometimes barely perceptible, but in the mass of it, right? You're surrounded by Thousands and millions of people who are thriving. This creates this sort of abundance, imperceptible, but w-which means, the, the economy is actually, a, a, a nice place to live in. It's beautiful, it's secure, prices are diminishing, right? So f- a-as a consumer, you're benefiting, from this, on a yearly basis, sometimes even on a monthly basis and so on, right? So this is this sort of abundance which is characteristic of also market economy, right? Even the things for which you Pay for them ever less, right? So ever smaller part of your revenue is needed to purchase the things that you need to survive and also purchase the things that you love to do. And" }, { "speaker": "stephan", "time": "21:18", "start": 1278.02, "text": "on a related theme, as we were talking a little bit about virtues and sacrifice and maybe the way we train our children to be, you know, good, honest people, this kind of thing, even that is enabled by having more capital accumulation, isn't it? Because, you know, people talk about, low trust or high trust societies and It's obviously beneficial, like most of us would like to live in a high trust society where, you know, you can leave your lap-- laptop in the cafe and it's not stolen or this kind of thing. So there's, I guess, you could also argue that there's like a virtue benefit that the society, as long as it's a wealthy one, it tends to create this kind of high trust, dynamic." }, { "speaker": "guido_hulsmann", "time": "22:02", "start": 1321.83, "text": "Well, first of all, if, if you are wealthy, you have more time to- Dedicate, well, first of all, to educating your children, spending time with your friends, taking care of your community and so on. Whereas if, if you are, on the verge of surva-- of starvation, well, automatically you get a tunnel, look on, on the, on the world, tunnel vision, and all you care for is how to make it, through the next day. All right? So there's not much, time to, to consen-- consecrate to, well, donations, community work and, and so on Economic hardship, it's, it's just a fact." }, { "speaker": "stephan", "time": "22:40", "start": 1359.64, "text": "Yeah, that's unfortunate. And so let's talk a little bit about taxation and regulation. So you mentioned in the book that taxation and regulation of gifts and particularly of inheritances slows down capital accumulation, right? So it's the reverse of the process we were just talking about, and it reduces the willingness of private households to make gifts. So can you explain a bit around how that process occurs?" }, { "speaker": "guido_hulsmann", "time": "23:02", "start": 1382.29, "text": "Well, if, if we look at, capital accumulation, so I mean, f- Well, most, people with very modest means, very modest revenue, the way they save is in cash, right? So they have, money on, on the bank account. Now that is, destroyed by the inflationary policies of, the central bank, right? If you have constant, price inflation, well, there's no incentive actually to save any amount in, in cash. So in, in fact, the twentieth century and now the first, two decades of, of the twenty-first century, they have destroyed in the working class, of the population, any culture of savings. And the transition was, very brutal in countries like France and Germany, where we had very strong working class saving culture and therefore the independence that came with it, in the 19th century and the early 20th century. And you, you see it today also in the, the consequences and the behavior. So, working class people feel powerless and, and they are very often powerless because they have no independent means of resistance, right? And, whereas, things were different in the, in the 19th century, they had, independent means, and as a consequence, they-- you also had more strikes, right? I, I don't say I'm, I'm not pleading for, for, for strikes and, and so on, but it, it just, it's a consequence. If people become more independent, well, they have the ability to resist. Whereas today, because there, there are no independent means and everybody's dependent on the credit system engineered by the central bank, people tend" }, { "speaker": "guido_hulsmann", "time": "24:37", "start": 1477.0, "text": "Resistance to any, any nonsense coming out of politics, today. The consequence is, the, the, are these inflationary pol-policies. And I wanted to, to highlight an, another mechanism, that can to play. Well, the, the starting point was, regulation. Wait, wait, I immediately opted on, on cash savings. That what, that was not my main point. Yeah. So" }, { "speaker": "stephan", "time": "25:02", "start": 1502.29, "text": "in-inheritances and the taking," }, { "speaker": "guido_hulsmann", "time": "25:04", "start": 1504.47, "text": "yeah. Inheritances, thank you. So these are, these are work- Working class people, right? Now, if we are looking at people who are, let's say middle class, middle class investment will typically be real estate, right? And then upper middle class and the top income, brackets and so on, their industrial property becomes more and more important, right? So if we look at really wealthy people and so on, so where is the money? Either it is invested in shares through the stock market. Or it is invested in the, in the family's own business. Right. Now, the amount of money that you would commit to your own business, of course, depends on the question, of continuity. Right. Your lifespan is limited. You can, you can work until sixty or seventy and so on, then of course, your productivity rapidly declines. So what will happen to the company after you're gone, after you're no longer as productive as you, as you once were? It makes a huge difference whether you can donate that company to somebody who you love or whom you feel is competent or, whether that's not possible. Now what the taxation of inheritance does is to, in fact, it destroys family businesses, right? It prevents effectively the transmission of industrial property and of commercial property to, to your children. And thereby destroys the, or at least saps, the incentives in the, in the present to commit additional capital to their business. Right? If I know my children will carry on, well, of course, I will keep investing. But if I know, well, none of my children will carry on, well, then at some point I will hold back and rather than putting the money into, into the company, I will invest it on the stock market or, or something else or buy gold coins or bitcoins. Right? And, and, again, the- And that's not a moral judgment, it's just, I mean, that's the mechanism, right? So as a consequence, if you tax inheritance heavily, what you produce is a disincentive to invest in the present, right? So you think you're only creating justice between, well, the rich guy and the rest of society, or more precisely between his presumptive heirs who have done nothing and all other members of society say, \"Well, I mean, these are-- the heirs aren't better than the others, so why should they get all the money and why not s-- Sho-sho-sho shouldn't we share it more, more generally? Well, the-but the problem is, again, right? You, you, diminish capital expenditure now, and that means lower, wages, right, for the people who are hired by the company, it means lower revenue for suppliers of the company, and so on, right? You get negative effects already in the present for other people, right, that are, that are not family members. And then, the, the other, a big problem that results from it is much more difficult to evaluate, quantitatively, wh-which concerns the quality of the management. It's a different with, whether you have a family business or, a, a complete, just a, a, a joint stock company with anonymous shareholder base and just some, some, temporary caretakers, called the board, of the company, right? So they're not really with their tribes in, in the business, it's different. If you have a family business, there's a long time relationship between the members of the family already between the generations, the, the family members and their employees, the suppliers, the customers, it's a completely different thing. And you're destroying this with inheritance taxes. And it's one of these things where, well, people think, \"Yeah, this seems to be a good idea as a question of justice, yeah,\" but, first of all, the, the justice, the things aren't as, as readily evident as they seem to be, right? And, and, and then there are the consequences which actually, are negative. For the people whom you claim to, benefit, right? People who don't have much money and so on, yet, but they are maybe the, the employees of that company, maybe they're employees of all companies, there's no more family business around, and so, so these people are just have to compete in a, in a, in a, in a shark basin, right? With, with all other opportunists, and maybe they would need to have a, a framework that takes care of their, of their needs in a long-term relationship. You have lots of people of this around, but not everybody is good at cleaning the markets, and that holds true for the labor markets as well." }, { "speaker": "stephan", "time": "29:32", "start": 1772.31, "text": "Yeah, and as you say, there's often this, let's say, leftist or egalitarian sentiment of, \"Oh, this person is unearned.\" He's just earning this money unearned. We should, in their mind, we should tax it and spread it out to society more broadly. And, and in their mind, they think they're being \"quote-unquote\" fair or egalitarian to the rest of society, but as, as you were mentioning, that cuts down the process of capital accumulation and also, as I think you mentioned in the book, that it-- there's this family incentive that, you know, part of the reason we might want to work is so that we can actually leave something down to our children. And so when you take that From people with a very high inheritance tax, now there's less incentive for you to even try hard and earn and create wealth in the first place. Yes." }, { "speaker": "guido_hulsmann", "time": "30:20", "start": 1820.13, "text": "And also to have a family. Let's not forget that. Right? Because well, from the outset, you, you can't hand it down to your heirs. The government tells you how to use your, your, your wealth. That's, that's not very interesting." }, { "speaker": "stephan", "time": "30:32", "start": 1832.49, "text": "Yeah. And so let's talk a little bit about the welfare state. I know this is something you touch on in the book also, and that can be- Confused with, you know, charity, and so there's this distinction between private charity and the welfare state. can you outline a little bit of your thoughts on the how to think about the difference there?" }, { "speaker": "guido_hulsmann", "time": "30:51", "start": 1850.86, "text": "Well, I mean, in, in this chapter, this chapter ten of the book, it, it is the longest chapter in the book, but, it's, it's probably the least original, chapter in the book because I'm mainly restating lots of points that you already find in the literature on, on the welfare state, right? So the, the problems have been State is not doing the things it's supposed to do, right? If you have an institution, you put something in place, any sort of organization, the idea is always that this organization will solve a problem. Now, the nasty thing about the welfare state is that it- aggravates all the problems that it is charged with, right? you, you put the state in, in charge of housing, well, there's more housing shortages. You put it in charge of education, education levels, accomplishment le- levels, plummet. you put it into, into charge of the medical system, well, it becomes even more costly and the quality of, of, services, medical services, diminishes, except for some technological progress and, and so on. It's just all All over the place, it's not just one unfortunate country, it's all countries, all over the world. I mean, the, the evidence is without a peer. It just doesn't work. And the reason has been known for a very long time and by all people who are involved with actual charity, contrary to, to the welfare state, and, and that has something to do with incentives, right? If you have private charity, there is a bond between, the, the persons who provide assistance to others and these others, right? There is some, some mutual, There's, there's a mutual obligation, and as a consequence, the, the donor isn't abusing a situation because he's giving out a lot for the person he really wants to promote, that other person help, and sometimes the help needs to be permanent. If you have a handicapped person or somebody who is, has terrible medical ailment and, and so on, right? Then it's clear, yeah, you, this person needs permanent support" }, { "speaker": "stephan", "time": "32:49", "start": 1969.12, "text": "All right, and as you were mentioning there, the welfare state, is-- has been shown to not be effective, right? Comparing with private charity, where there is an incentive and more of a, I guess, there's more interest in making sure that person is actually able to now stand on their own two feet where possible, whereas in a welfare state, as I understand, you, you end up with more like a dependency kind of trap where people can sometimes get into a situation where they don't want to now get out of it." }, { "speaker": "guido_hulsmann", "time": "33:18", "start": 1998.4, "text": "And that's what we are-- and, and the, the, the basic mechanism is that in a welfare state, people have a right to that assistance independent of their own attitudes, right? So they don't really need to, change, they just need to check the boxes, right? I don't have a job, therefore I can claim, assistance, coming from, from, taxpayer money. So people make sure that they don't have a job. Whereas in, in, in a private setting, you say, \"Well, I helped you out because you're having" }, { "speaker": "guido_hulsmann", "time": "33:48", "start": 2027.8, "text": "Okay, and, you're not hiding this from the other person saying, \"Yeah, I-but stay with me for another two weeks or something like this,\" and then as the job takes off, well, you, you're no longer dependent, you know, lead that, that other mother and so on, right? So there's a mutual sense of, of obligation which entices both parties to, be fair, to each other. Whereas in a welfare state, you just try to rip off the taxpayer, as much as possible, and that's what For all the, these problems, right? People stay unemployed indefinitely, and the people providing, I mean, the, the bureaucrats who are running the machine, they don't have an incentive that the problem goes away because they're being paid for administering, that, that situation. So they're actually kind of happy, for this, right? And then if you have very strong ideologues in the administration, they might actually have the idea of bringing in people from other parts of the world who also become unemployed, right? So they have more people to take care of Higher budgets and, and get a raise and I don't know what. So it's, it's a very perverse system. And it's not just in handing out money to unemployed people, it's just all over the board. It just doesn't work that you, forcibly fund something out of taxpayer money and make it accessible to others, make these so-called benefits accessible to others, without any obligation, on their part, i- in a contractual voluntary, setting. It just doesn't work. And, so that's, right? So that's what I restate in, in, in the chapters, and I go through the main justifications of, government handouts, government benefits to other people, monopoly theory, public goods theory, a-and so on, and it's just without appeal, right? I mean, and most people understand this intuitively. You don't need to be a rocket science economist to, to understand this very, plausible, and you see the daily experience. It's just Doesn't work. Now, s-some, things have been new in the past thir- thirty years, which I also discuss, in, in the book, is what I call the enabling state, right? Which is the w-welfare state, times two or times ten. Because here the idea is that government, sh-should help people to realize themselves, right? To be all that they can be and do, well, actually, to be what they want to be and to, to do what they want to, want to do. and the, the mostly, I mean, they, they started off, very civilly in the eighteenth century with Rousseau and then the nineteenth century with Jean-Jacques Rousseau says, \"Yes, society is somehow coercive, right? The individual is crushed under the, impact of its environment. He needs to conform and, and so on. So therefore, we need to liberate the, the individual.\" And at the time there was no welfare state, but now, I mean, the same idea has been taken up and really developed with great relish. And the, the most extreme, forms of this, so it's, it's just the rejection of any sort of constraints, any sort of boundaries, right? And it concerns national boundaries, there are no more frontiers, no more border controls, nothing, no controls there. so everybody should be able to move wherever he wants and, and enter any profession that, that he wants and, and so on, and then, In, in, in a way that's almost pathological, is, is the idea that, well, I need to change my, my sex and, and my, my body as I wish to, and they're, they're too, right? The government should assist me, with, with taxpayer money and, and all the other arrangements, right? So other people should be obliged, should be coerced into accommodating, my wishes and, and, and, and so on, right? So and of course, all these things, whatever you might otherwise think about them on I mean, they, they destroy society, right? Because, society is always based on, the necessity and also the willingness of people to adjust to others, right? And sort of some, some sort-- I mean, you can call this conformity or con-conformism, but it's just an adjustment to reality. It's just, I mean, if I'm walking around in, in, in the woods, I don't run against the trees because I'm adjusting to the re-reality, the tree is there, it is harder than I- So I have an interest in walking around. It's not different in the case of society. Certain things you have just have to deal with, and can't, cannot have my will, because that's called objective reality. Now what the, the enabling state is supposed to do is to, take objective reality out of our lives so that we can just live in the fantasy world as much as possible of our own wishes and fanciful thinking. And that's not, sane a pr-approach" }, { "speaker": "stephan", "time": "38:43", "start": 2323.2, "text": "to, to public policy. Of course, and as you point out, it also ends up undermining a lot of the, let's say, private governance mechanisms, whether that's the family, the, the church, the community, the private clubs, and all of these things are, let's say, deprioritized in favor of the state, and so it just kind of destroys a lot of the social ties. And private mechanisms for governance that wouldn't have otherwise existed." }, { "speaker": "guido_hulsmann", "time": "39:14", "start": 2354.1, "text": "Yes. Exactly, because we leave the individual of adjusting, right? And so then they, they, in fact, they, they isolate themselves. And this is very well established for, for the case of, unemployed people, right? Precisely because they have the, the government handouts, while they, they no longer train themselves to learn a, a trade or to improve their abilities, they no longer- spend any energy on becoming more desirable for others so that others would like to, cooperate with them, right? So they become fatalistic and then, in effect, self-centered, completely self-centered because you only, you, you care about your little life. Oh yeah, I get mine, whatever, five hundred dollars or six hundred dollars every month, that's good enough. I, I care, I can pay, pay the bills and my groceries and so on, and I don't have to care for the others. Consequence is it is desocialization. And if you do this on The labor market is concerned, but all other things as well, well, then, then, then people become ever less social and socializable also, and so they, they become asocial and antisocial, and, and the most extreme ex-expressions of these are, anti-far gangs and, and others, right? Who are just imposing their little, schemes of how the world should be on others if" }, { "speaker": "stephan", "time": "40:34", "start": 2433.85, "text": "need be by, by violence. Yeah. One other topic I found quite interesting thing is you had some discussion on the so-called sharing economy, right? People think about Uber and Airbnb, but you actually point out that, look, even though it's branded the sharing economy, that's not necessarily the same thing as increased social integration, and in fact, these can be seen as like a social disintegration. Can you explain what you mean there?" }, { "speaker": "guido_hulsmann", "time": "41:00", "start": 2460.1, "text": "Yeah, it's, it, it's good that you, that you pointed out. I mean, this, the, this, section of the book, I presented this first at a, a conference in the Vatican, which, that was at the height of the, sharing economy frenzy. So it was two thousand fifteen, two thousand seventeen, in that order, right? So then everybody went crazy. so first of all, what I point out in the, in the, in the book is that actually, I'm sorry, there are different" }, { "speaker": "guido_hulsmann", "time": "41:25", "start": 2484.81, "text": "can, can, can be, just being a co-owner with other people, right? But th-th-that if you just think of co-ownership, right? co-ownership isn't necessarily something that you aspire to, that is desirable per se. And the example I give is, in-inheritance, right? You inherit, with a lot of cousins, let's say a house coming from, a rich aunt. And, and, that's not necessarily a desirable situation because you have ten different people and each one of them might have a different project and how to, how to take things, further away or some of them might not be happy with the amount of, with, with their part in this and they might contest this and so on. Then you're involved for years in legal and prole-- and so on. So shared, ownership is, isn't necessarily desirable per se. But okay, and then of course you can share, gratuitously. That's what most people understand when they hear the word sharing, right? I'm sharing a meal, so I invite other people to my table, they don't have to pay. But of course, in a larger sense, sharing occurs through payments also, right? I own an apartment, I rent it out to, to other people as a form of sharing my property. I could keep it for myself, just keep it empty for, for the day when my mother-in-law shows up or something So I, I would house her in my home, but as a proverbial case, right, you'll lodge somebody that you don't want to have in your home, but you want to lodge them anyway. but so if I'm sharing it on the market, right, and have other people, benefit, from, but for payment and so on, right? So what you can show then is that, actually under the impact of, capital accumulation There is, a, a, a consequence, that, that, that people would, share to a greater extent, right? Because they have, more means, right? So they can have the ability, to share. Also, capital accumulation, as we have said, diminishes the return on, on capital investments, therefore the incentives also to share increase and so on. You get the opposite tendencies, under, capital, capital decumulation, as it typically occurs if governments become too intrusive. And so people, become poorer, so that, you get the opposite. as far as technology is concerned, because that was, the, the, big question, at the time, because the sharing economy had been, associated with technological innovations, IT, in IT especially. And, the, the interesting thing, the interesting conclusion, which I arrived was that, in fact, there's no strong correlation between- Sharing and IT, right? IT has to concern, it has to facilitate sharing specifically, right? So if the technology-- technological advancement doesn't facilitate sharing this, as it is, for example, with, Airbnb software, that arguably has facilitated, sharing, of, of rental space, right, and so on, but if the technology doesn't specifically facilitate this, then there's no strong incentive because technology-- technological, progress per se Increases the return on, on investment and therefore reduces the amount of money that you would put in, into a general, pot and so on, right? So there's no strong association between, technology and," }, { "speaker": "stephan", "time": "44:52", "start": 2692.12, "text": "and, and share. Back to the show in a moment. This show brought to you by CoinKite dot com, the creators of the best Bitcoin hardware security devices such as the Coldcard Mark IV and the new Coldcard Q. Now, we use Bitcoin hardware security devices to keep our keys offline. Our private key is offline. 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So yeah. and, Another area that I think is really interesting nowadays is, you know, people are talking about the fertility rates, right? Elon Musk is saying, you know, everyone needs to have more children and so on, and I think in your book you also spell out that there's a, a deleterious or a negative effect of- A lot of government intervention and, you know, fiat, currency as well, because we are effectively, or in a broad sense Families are being forced to bear the upfront cost and sacrifice to have children, but the tax paid by those future children is being socialized to the economy even amongst the childless. And so isn't that sort of this perverse thing that is actually driving the fertility rate down?" }, { "speaker": "guido_hulsmann", "time": "47:52", "start": 2871.61, "text": "Oh, surely it does. It's a major factor contributing. I mean, if you think this through, right, the, the welfare state has in fact been designed in order to make the, the traditional family less desirable. The welfare state comes from, the socialist movement, and the socialist movement was always hostile toward the traditional family. Of course, you have, almost fanatical writings like the one of, Fr-Frédéric Engels, right, on, on the family, so he was mocking the whole family and, and so on. so they, they always wanted to use the welfare state in order to undermine the economic incentives to bond between a man, a woman, have children, and, and so on. And today We have reached new, excesses because, I, I think in the US as well, but certainly in France, but in Germany, I think it's similar, most members of parliament Are, childless. And actually most governors, they have childless. I mean, President Macron in France, he doesn't have any children of his own. Madam Merkel, she, she didn't have any, any children. Schulz, now, I, I don't know exactly, but I believe he might have, he might have a family. But it's becoming increasingly rare, right? And then parliament is full of these people who are just, dinks, right? Like doubling on their kids, yeah. No, no, and they are" }, { "speaker": "guido_hulsmann", "time": "49:15", "start": 2955.34, "text": "For them, it is of no concern, only to extent, some electoral opportunism, right? They, they have some constituency still, they are families and so on, some of them pay attention to this. But meanwhile, if you look at, big, metropolitan areas, New York City, Berlin, Paris and so on, families have become a minority, so most of these people living there are single households, so that's your electorate. So don't, don't be surprised then, if, if you get the, the policies that correspond This. And but the, the problem is, okay, without children, there's no future. and, you can't educate children in, well, public institutions, right? There's no love in public institutions. Well, of course, you can raise them there. Which, which work, should be used, right? You can, you can, accompany them in, in their aging process and so on, but that's not raising a human person, that's not educating a young man or a young woman, so these, these then they, they grow up like, like savages. I mean, so our, our, culture and civilization itself, right, is, is bound to, to disappear. And it, it's the, it's the, the arrow that we find, in Marx and all policies that he has inspired for Marx, everything that is just somehow, somehow positive, is, is just there, right? It's just part of the environment, it falls out of the blue sky, doesn't need to be produced. morals, good behavior, good intentions, virtues and, and so on. To the extent that it's recognized to be a, a positive thing at all, it's somehow, it's just there, you don't have to take care And, so you do policies, you can do this maybe for, for a generation, maybe also for two, but if you go on doing this, and, and, you know, conducting policies that sap the foundations of your civilization, which is the family, which is the love, the love bond between parents and children, and therefore also between growing animals, excuse me, growing adults amongst themselves, right? then, then you destroy, Not only the economy, it destroys civilization itself. Yeah, and it's" }, { "speaker": "stephan", "time": "51:30", "start": 3090.05, "text": "really, a tough subject because what we're seeing, and as you pointed out, what, what we're now seeing is a lot of these, government leaders, so-called leaders, are almost out here being hypocritical because they're out saying, \"Hey, I want you to have children, but I didn't have any.\" That's kind of-- That's the position that they are now finding themselves in, right? So even I think the Singapore Prime Minister or President, I think he's in that position where, Great, and as you, as you pointed out, other examples around the world, and then, now I guess there's two kind of ways I'd sort of look at this, right? On one side, it's like, I don't necessarily think it's like we should be out there promoting people to have children just to make the GDP number go up or just to help the, the welfare Ponzi system sustain itself for a little bit longer, right? So obviously, you know, those are bad, but on the good side, obviously- Sure. Under, under that motivation, right? Right, yes, it's not really the right way, but on the good side, obviously there's a, you know, there are, you know, other reasons to have children, right? I, I have, you know, I have a son, of, you know, my wife and I are planning to have more children, so, you know, but- We're not doing it for the GDP number go up reason, right? We're doing it because we want our family, but there, there are genuine benefits to that, right? Like having a bigger population means there might be more geniuses who, who are born, who are highly skilled entrepreneurs and scientists and, you know, economists and whatever, and they will make the future society far richer as opposed to being a poorer society with less division of labor, less specialization of labor possible, less future demand possible. There's just so many bad effects that are going to come from this sort of, you know, declining population. So I guess it's kind of, it's just, it's gonna be a, a real challenge, isn't it? The motivations" }, { "speaker": "guido_hulsmann", "time": "53:17", "start": 3197.19, "text": "that prompt these policies, they are always opportunists, right? So you want, you, you want to sell people additional liberties, I give you additional, money, additional help coming from, from the state, so, we're making your life easier. And that's true, right? It's true. But the- The real problem is it, it's coming under, at the point of a gun, so under the constraint of other people. As a consequence, you're no longer balancing this, you're no longer adjusting your life to the needs of others. It's no longer a give and take with others, it's something where you're living your own egoistic interest at the expense of others. And if this is only one person who does this and the others are very numerous, you barely feel it, but of course, if everybody behaving, is behaving like this, I mean, that's a disaster. And these policies which were designed to facilitate the life for everybody, so it's, it's a typical, aggregation problem, right? It's, it's a fallacy of composition. Models true for one, individual is not necessarily good for, for society, as a whole. Yes, it's quite, catastrophic. So the truth of the matter is that, Natural associations such as the family, and, and other communities of people who band together in order to help each other out, out which are based on love, commitment to the, shared, objectives or shared virtues or whatever, right? They are, they're whole and they, they are productive, whereas everything that thrives only under, taxpayer funding, so at the point of the gun, others are being, forced to, to, to subsidize Well, this tends to be not productive, but, in, in, in, in fact," }, { "speaker": "guido_hulsmann", "time": "55:07", "start": 3306.75, "text": "Turns people into prisoners of their own selves, right? Of their own petty projects at the moment because they no longer adjust to the needs of, of others. That's the basic problem." }, { "speaker": "stephan", "time": "55:18", "start": 3317.62, "text": "Yeah, and, I think also in the book you do touch on a little bit around the economics of more females going into the workforce and then less men actually wanting to get married and having children as well. Could you, elaborate a bit on what's happening there?" }, { "speaker": "guido_hulsmann", "time": "55:31", "start": 3331.28, "text": "Well, I mean, for, for, a-again, right? If we think of the family, then- If there's no love, there's no family, okay? So of course, you need all these, you need these basic virtues, you need affection, you need to have a loyalty, so commitment to this and so on, and all these virtuous, dispositions toward the other. Without this, it doesn't work. But, of course, at the margins, right, the family always depends also on the economic incentives. So why do people band together? Well, because men and women are actually complementary, so they're, from an economic point of view, they're perfect for the division of labor, because the division of labor thrives on people not being equal, but on being different. And men and women tend to be different but complementary, right? They're different strengths, right? Physical, emotional, intelligence, and, and, and so on, right? They're complementary, social, psychological, and, and so on. And, And therefore they make for a good, from the outside, right? They, they make for a good pair and they are very productive, right? If you have a man and a woman, who love each other, they can achieve incredible things. one of the things is, is raising a family, and so it's, it's just one of the things. now if you take, if you change the economic environment, then of course the perspective changes as well. Many women love their children more than their husband, at least after a while, right? And, sometimes it also mean the, the reason why they get married is in order to have children. And that's the main motivation. I mean, they, they love this other person, but it's actually okay, yeah, it's, but the main thing that really motivates them is, is the, is the children. Now comes the state and tells them, \"Look, I mean, you don't have to get married, I mean, we'll pay you money anyway, you can have all the children, and we actually pay you money for the children.\" many girls, who, take this offer, right away and, well, they have actually five" }, { "speaker": "guido_hulsmann", "time": "57:42", "start": 3462.12, "text": "For a man, this is, typically isn't, interesting, right? It's not interesting to, to be the boyfriend, or the fifth or the sixth or whatever boyfriend of, of this lady, contribute marginally to her life. That's not really what you aspire to, because you want also, if you dedicate time and resources to this, you want to build something, right? You know, to build something well, you, it needs to be-- I mean, it's not your private property, but in a way, right, it's yours, right? It's Now, the welfare state saps the, stability because it reduces the exit costs, especially for women, not so much for men. but especially for women, right? And as a consequence, the risks for failure, for family failure, increase. And because you know this from the outset, well, you have less incentives to get into the marriage bond because you know that the probability of failure is incredibly high. Look at, divorce statistics. I mean, in some countries, you almost need to be crazy to, to, to get married because it's almost sure that within three years, you, you will get a divorce. I just said, we had our oldest, daughter at home, she, she's twenty-five, she, she had been at the," }, { "speaker": "guido_hulsmann", "time": "59:02", "start": 3542.03, "text": "a ceremony of, of the, of a best, friend, she's fiancée, she was, you know, fiancée with, with, with a young man, and, this was, ended after one week, okay? So it wasn't a marriage, but it, it just shows, I mean, that, right? This institutional environment, it creates an Which is no longer geared toward the long term and toward building something productive and so on, but it's just geared toward personal satisfaction, very hedonistic attitude toward" }, { "speaker": "stephan", "time": "59:34", "start": 3574.1, "text": "life. Right. There's been this loss in our culture, let's say, that, you know, because people can't save, because people can't form families, it's starting to, you know, cause these problems where, let's say, the fertility rate is low and there are all these other, let's say, social, cultural problems of the day. so- So yeah, that's quite unfortunate. I am curious as well, it-- in, you know, somebody could look back to you and say, \"Look, you-- in, in the book, you said that there are ways where we are becoming less wealthy. Now, part of that is, as, as we would both agree, there's capital consumption happening, there's negative interest rates at, at different points. but on the other hand, people might say, \"Look, there are other ways in which we are richer, right? We have the internet, we have internet calling, Maps and all, you know, air travel and all of these things. So how, how do you sort of weave that? Would you just sort of say, \"Look, there's some ways we've gotten wealthier, but other ways we've become poorer\"?" }, { "speaker": "guido_hulsmann", "time": "01:00:32", "start": 3632.45, "text": "Yeah, fortunately, life is, is not, one-dimensional, affair, right? Fortunately, it's not all, black. I mean, there are always, good evolutions, taking place simultaneously, right? I mean, we've benefited, in, in the past Soviet Union. I mean, that was probably the most, momentous improvement for the general welfare of the world population. So suddenly this huge part of the world economy, China, but also the whole Soviet orbit, Was brought into the worldwide division of labor, and that's beneficial not only for those countries, but especially for all others. And of course, it's very clear if you are a consumer in, in Western Europe or in, in North America, I mean, lots, lots of things that you purchase on a, on a daily basis, almost, right? They, they come from, from China and, and, and, East Asian, countries." }, { "speaker": "guido_hulsmann", "time": "01:01:32", "start": 3692.51, "text": "lots of, energy, and so on came, other resources came out of Russia and, and so- Right? So this was an incredible boom, right? And then simultaneously, we also had a significant, technical, progress in, in various areas, most notably IT, but other areas, as well. We were a little bit more skeptical of nanotechnology and so on, but okay, but mainly IT. And this creates, of course, an incredible productivity boost, right? So Fortunately for us, we have benefited from all these positive factors and therefore, the decline that we have in moral, in cultural substance has been dampened, and otherwise it would have, been felt much more brutally. but of course, large parts of that, of that progress that I just mentioned has also been, taken away by the state, and our growth rates would have been significantly higher if, we had had the, kept the same regulatory and tax environment that we had in the nineteen eighties, right? So, so since then, I mean, if you just-- it's, but it's- It's, regulation, growing regulation even more so than growing tax rates. Tax rates haven't increased that dramatically, but especially, the, the, the tax base, right? So the things that you tax has increased in numbers, and then the, the reg-regulation of business, which have in, increased costs enormously, right? And the only reason why we don't feel this so much is because we have made these huge productivity gains elsewhere, thanks to the division of labor, thanks to t- technological progress. So this, this, was barely perceptible, right? But it's, yeah, I mean, the, the, the state helped itself greatly to it. I, I would say probably, the, the political sphere, they a-absorbed the lion's share of the, of the progress that we had in the past forty years, and there's still, progress for the population at, at large, and, most people only compare their present situation to how it had been before, so therefore they're happy, 'cause it's- It's been improved, but if they could see how much better they would have been if all that hadn't taken place, then, then they would grow very angry." }, { "speaker": "stephan", "time": "01:03:54", "start": 3834.16, "text": "Yeah, I see. Yeah, I think I agree with you there. one other area, I guess, I'm kind of just curious to get your thoughts on how there's almost this cyclical nature to it. I mean, people even-- there's even that meme floating around, everyone talks about it, you know, hard times create strong men, strong men create good times, good times create weak men, weak" }, { "speaker": "stephan", "time": "01:04:13", "start": 3853.69, "text": "Are we just kind of doomed to kind of keep going through these cycles or is it actually, you know, hypothetically, like if we had sound money and, you know, there was actually real capital accumulation, couldn't things continually just get better? Or is it-- Do you think that there's just like something? Not economic related, that just causes this kind of cyclical aspect. And I," }, { "speaker": "guido_hulsmann", "time": "01:04:38", "start": 3878.22, "text": "I, I believe, I mean, that's our human condition, we always have, this kind of trouble, we have just to live with it, doesn't mean that we shouldn't try to change it. And the way I see it, if we, get, progress was, always-- Progress doesn't come linearly, it doesn't come smoothly. Progress comes in big spurts, it's like wealth. I mean, most big fortunes they are build up, they, they don't come over in, in tiny increments over one hundred years, they come in big spurts over a few years. And then it depends on what people make out of it. do they, do they waste it, do they save it away and consume it, or do they keep investing it? And then usually, I mean, the, the investments that you make, they, they come in smaller increments, or sometimes you are happy if you keep the substance at the halfway" }, { "speaker": "guido_hulsmann", "time": "01:05:25", "start": 3925.39, "text": "Very similar, right? The big progress comes in a few, on a few occasions, few big spurts, like in Argentina right now. I mean, Argentina, is, is falling back on its feet through this brutal policy being led by, Xavier Milei and," }, { "speaker": "guido_hulsmann", "time": "01:05:48", "start": 3948.49, "text": "What co-" }, { "speaker": "guido_hulsmann", "time": "01:05:57", "start": 3957.51, "text": "Okay. Simply because he's taken off so much of the fat that was there and that was just crushing, the country, right? Too much government, I mean, too, too much, too many people who just produce more rules and more taxes and don't contribute, to, to the satisfaction of the needs of the others. That's a big problem. And we-- you see, there are other areas as well, take the American Revolution, right? Was one, big, s-s-sweep and, and, and it changed the s-situation dramatically Politically throughout many generations, and of course, right, that was slowly taken away, right, the idea of Lincoln and various other, tyrants, that, that bring back the, the big, big state, big government and so on. But that's the fight that we have to, to lead, right? And we, we, in order to improve things, well, you first of all need to educate yourself. You need to make sure enough people know what you know and share your, your motivations and, share your insights. And then if the conditions are propitious, you can get sweeping change, like in the US in, seventeen, seventy-six, and like in Argent-- Argentina in twenty-twenty-three. Like in Britain under Margaret Thatcher. So, I mean, these things do happen. They don't happen, unfortunately, every year. Sometimes things have to go, become very bad. But then at some point people wake up and they're, they're, they're fed up and they, they see that all these other so-called, recipes don't work, and then they try something desperate, even something that everybody told them would never work and is, is, is a terrible thing to do, like libertarian economic policies, and they, they, they do it." }, { "speaker": "stephan", "time": "01:07:37", "start": 4057.2, "text": "Fantastic. Well, look, I think I think, we should start to wrap up. So one, I guess one of the, you know, for me, one of the key lessons that I learned in reading the book is understanding that a lot of donations and positive side effect goods, they flourish and they come when we have the free market and Sadly, when we have the state that's, you know, taking too much control of the economy, whether that's regulation, whether it's taxes, it tends to make our worldview smaller and it becomes more focused about survival, and, you know, it sort of destroys the true source of gratuitous goods, whether that's families and friendship and private associations and business and, and the market. So, I guess if you had, you know, one takeaway for listeners, what would be the, you know, the closing thought or the final takeaway for them?" }, { "speaker": "guido_hulsmann", "time": "01:08:25", "start": 4105.26, "text": "Well, in practical terms, it's well, as you have said, right, stop thinking that by asking for more government involvement, you, you would, make the world more compassionate, less selfish and so on. It's the exact opposite that is true, right? And, If the book only conveys to you the reasons why this is, the case, why you need, liberty and private property, in, in order to make the, the life more generous and more abundant, unpaid abundance, well then that, that the book will have accomplished all it's, it's meant to accomplish." }, { "speaker": "stephan", "time": "01:09:01", "start": 4141.79, "text": "Excellent. Well, listeners, I'll put the link in the show notes. You can get it for free over on the Mises dot org website, or of course, buy the, you know, the, paperback or in a physical copy. Generosity and the state, and, thank you for joining me today, Dr. Hulsmann. Great pleasure, thank you for having me. I hope you enjoyed the show. If you did, make sure to give it a thumbs up and share it out there with your family and friends. Check out my website at stephanelivera dot com, and I will see you in the citadel." } ] }