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Title : standard furniture careers
standard furniture careers
trevor burrus: welcome to free thoughts fromlibertarianism.org and the cato institute. i’m trevor burrus. aaron ross powell: and i’m aaron powell. trevor burrus: joining us today is richardepstein, the lawrence a. tisch professor of law at nyu school of law and the directorof the classical liberal institute. he is the author of many important books includingtakings: private property and the power of eminent domain and simple rules for a complexworld. his most recent book is the classical liberal constitution. welcome to free thoughts,richard. richard epstein: it’s great to be here.
trevor burrus: i would like to start witha broad question. there are many types of libertarians/classical liberals. we talk aboutthem a lot on this show and on libertarianism.org. we have your rothbardian deontologists andyour utilitarians. if someone was to ask what is the richard epstein type of libertarianclassical liberal, what does that generally – what kind of world view does that encompass? richard epstein: well, it certainly is a worldview which is an opposition to the two positions that you just mentioned. in terms of the hardline classical liberal position in which the sole duty of the state is to prevent the useof force and fraud, the classical liberal tradition goes much further and it allowsto be sure – various institutions like taxation
and eminent domain which are forced exchangeagainst individuals who have committed no wrong. so in terms of the scope of the governmentpower, working out the implications of a takings principle. private property may be taken forpublic use but only upon payment of just compensation. it’s a huge endeavor. it’s a more complicatedworld than the one you see in the hard line libertarian view but it’s more faithfulto the kinds of enduring social institutions we have. you don’t have to, if you’rea classical liberal, explain the mystery of public highways and profit property. whatyou do is you ask the question, “what’s the best way to finance them?†how is itthat you create access rights from private
property to public property? how do you putthe net worth together and so forth? the other thing is the deontological positionis always a mystery. i recently wrote a paper called smart consequentialism and its purposewas to attack the kantian mysticism associated with the idea that there are certain rightsthat are so inherently necessary, true and inevitable that simply to observe them isto demonstrate and to justify them. it’s not that they aren’t rights whichare extremely powerful and so forth. but if you’re going to try and justify them, ithas to be at least in part and reference to the source of consequences that they generate.once you put the word “in part†there, it turns out it’s very difficult to preventthe part from becoming the whole.
what that means is if you get a systematicsystem of consequentialism that respects these strong kantian institution of the separationof persons, then you should be able to do the whole ball of wax. so when you talk about the utilitarian tradition,there are two halves of it. one half is the so-called aggregate utilitarian position inwhich you think you – you kind of treat the happiness as though it’s building blocksand then figure out which is the largest pile and that becomes the greatest happiness. ifyou’re in the paretian tradition as i am, what you tend to … trevor burrus: does that mean pareto?
richard epstein: oh, yeah, pareto. that’svilfredo pareto. he was something of a fascist ironically in these political views. but hedid develop criteria for social welfare which essentially solved i think the problem ofhow it is that you go from individual preferences to social states and there are two simplenotions there. one is the notion of pareto optimality and this means that you’re inheaven simply heaven, i.e. if it turns out you’re in a pareto optimal position, theonly way you can make anyone better off is to make somebody else worse off. at whichpoint, you don’t want to move from this. this ignores the problem of dynamic equilibriumin which everything is changing but at least it gives you a conceptual frame. then there’sthe notion of a pareto improvement. then what
that says is whenever you have to comparetwo states of the world, if there’s one which leaves everybody as well off as in theother, and makes at least one person better off, then you prefer the second to the first. now what this does in effect is it takes everybody’spreferences, weighs them equally. it means that no utility monster can wipe out any otherindividual. so my recent work on kant is sort of to argue if you’re looking at his categorical– you know, imperatives explaining why everybody should be treated as an ends and not as ameans. it maps very nicely into the paretian theory in which what you’re trying to dois to create worlds in which you constantly move things to the better.
in my own work however, i think that in manycases, the paretian requirement is too weak rather than too strong. what do i mean bythat? they are two basic problems that you have to face when you put together a classicalliberal constitution. the one is the paretian problem, how it is that you prevent one personfrom being compromised or wiped out in the name of general social improvement. that isi think part of the kantian instinct. then the other thing is suppose you have what wecall loosely speaking a [indiscernible]. that is a situation whether you’re measuringin utility or in wealth, in which you’re going to create large amounts of potentialgain. there is now a very difficult second orderquestion. how do you allocate the gain? because
the simple pareto rule does not answer thatquestion. you could give it all to one person or give it all to somebody else. you coulddivide it in any which way. the competition over gains is in fact the source of waste. so what you need to do is to develop ruleswhich can limit that if you can design them and there are two ways in which you have tothink of it. one of them is you’re dealing with private bargains. you let the peopledecide what’s good in their interest and if the surplus is allocated one way or theother, you don’t try to cross-examine that. the only way in which you can control dominantsurplus for one individual is to let a little competition come into the market which willbid it down.
so you become generally agnostic. but on theother hand, if you’re using coercive government programs, you can’t be agnostic about thesethings. so what you tend to do is to move to a system which says, look, what we’regoing to try to do is to figure out how we could prorate the gains between the parties.it’s a nice focal point equilibrium. not only does it move you along a unique path,but it tends to avoid the problems of social dissipation of wealth. so your intuitive notions of fairness equalme treating equals. it turns out they have a very powerful functional justification onceyou start getting into the gains. then by extension, it works in the losses. if thereare certain kinds of social projects which
inevitably have to be undertaken and now yourjob is trying to minimize the total losses, if you could allocate those pro rata, thenyou avoid competition in the domain of losses and you will minimize the total size of thehome that will start to take place so if you put this all together, it turnsout that the government is going to have to do things by way of taxation and by way ofregulation and by way of condemnation and these things will be judged by the way inwhich force is used and the sort of model is we wish this force to be used by the stateonly in those circumstances where it provides net benefits to all concerned. then you tryto divide the surplus equally. now, can you achieve this?
aaron ross powell: can i ask one question? richard epstein: sure. you can ask two questions. aaron ross powell: ok. so when we were talkingabout these consequences that matter and maximizing utility and minimizing harm, on the one hand,we could simply use wealth as a proxy for whatever that utility is. but that’s probablyunsatisfying in certain areas. so instead you have mentioned well-being and so whati’m curious about is how we know what well-being is, if that’s the thing that this wholesystem is in place to maximize or at least increase. i mean is well-being synonymouswith preference satisfaction? richard epstein: you’re asking all the rightquestions. first of all, do we want to use
the wealth side or do we want to use the utilityside? for certain large scales operation, the verdict is in. there is no way you canhave an income tax on wealth which is based upon utility. so you start to go around andsay, well, you’re happily married. we’re going to tax you more. i’ve got a liquidity problem. so you can’tdo that. so what we do is we do tax you the income or consumption and so forth. the generalclassical liberal preference on that is you try to make it proportionate to wealth soas to avoid the conflicts of a surplus in the matter that i talked about. it’s justa classic application of the pro rata rule and if you do that, it will have all sortsof desirable consequences, namely since everybody
has skin in the game. it will tend to reducethe willingness of people to create various kinds of public benefits if other people aregoing to have to bear their full cost. so that – now, when you get to these privatecontracts that i talked about, i mean is there a relationship between well-being and preferencesatisfaction? the answer is surely yes. the question is, “how tight is it?†so thebasic instinct is you have two people, each with a well-defined set of endowments andthey wish to engage in an exchange and you follow the hobbesian insight that you willmake the decision as to whether or not you surrender – what you surrender is worthless than what you receive. i will make the same decision. if we bothcan do our sums correctly, what will happen
is each of us will pronounce ourselves betteroff than before and be ready for either consumption activities or further exchanges with otherpeople. so you want to use the objective manifestation of preferences as the guide because otherwise,you then have to meddle very, very deep. but it’s like … trevor burrus: so on that point because theobjective manifestation of preferences – presuming that they engage in this exchange so theymust feel better off. is the reason – i mean that’s often wrong. yeah, it’s thereason that we want to stay away from that because the alternatives are worse. richard epstein: always. i mean first of all,do you have robust beliefs that people have
stable preferences? the answer is no, butin some settings yes. so you do in an area which you want to have strong and rapid exchanges.you can never allow interceptive introspection or regret to upset them. so if you want togo on to an exchange, you have to understand there’s no back season in that game to quotethe famous phrase from a bargain for frances. i don’t know if you remember that book. trevor burrus: i learned that in the playground. richard epstein: yeah, but not backseat. imean it becomes a rule of finality. but when you start talking about contracts, in somecases, you’re not in exchanges. when you are in exchanges, what you do is you haveentry tests in order to get there. so you
have to pass a certain examination becausethe fundamental rule is if you wish to have rapid and almost simultaneous exchanges overlarge quantities, everybody has to be a professional. you can’t allow amateurs into that particularroad because they will gum everything up. so, one of the big mistakes of a securitieslaw in many cases is to insist that the small investor be able to compete with the largeguys. fifty years ago, that was plausible. but once you start getting quantitative methodsand machines in there, then no small guy can survive and so you tell them, “all right.you want to play, play. but you have to play by the other rules. otherwise invest in amutual fund and let somebody manage your money who actually knows what he or she is doing.â€that is probably the better way.
but one of the fields that i teach is medicalethics from time to time and the model of rational behavior simply does not work withsix people facing their last illness and family difficulties of all sorts. what you realizeis you have to slow down the situation and diffuse the authority and you start gettingdocuments like informed consent. you can’t do something to a patient until you tell himor her exactly what’s going to happen. half the time they don’t understand because theyreally are in compromised positions and their mental faculties are down. so you start bringing in the relatives. ifthe relatives can’t do this stuff, you get an ethicist at the hospital who’s goingto sort of stand proxy and so forth. so if
you actually look at the common law, it’svery good on this point. it understands that for normal situations, the robust assumptionof self-interest and manifestation of preferences works quite well. but when you have peoplein compromised circumstances, the doctrines of undue influence take over and they usethat phrase and it’s very useful. undue means excessive. it’s certainly involvedwith the possibility of fraud and other kinds of misconduct. but it’s also the personis vulnerable and so therefore suggestions can have undue weight, excessive weight withthem. so you have to be able to counter that. the answer is one of two things. one is you have to act like a fiduciary tothe person, which is inherently difficult
to do or you tell the person you have to haveindependent advice. so that when you deal with a business transaction, you’re representedby somebody who can take your interest better than others. so you don’t want to get yourself into thisposition in which everybody is perfectly rational all the time because you only discredit theway in which people look at you because they’ve seen too many counter instances in the world. what you want to say is we can tell you arenaswhere the strong self-interest assumptions work very well indeed and we can make institutionalarrangements for those cases where they don’t work and we’ve done this for hundreds ofyears. nobody has said when the doctrine of
influences, undue influence developed, itsystemically in the equity courts and england and around the 18th century and so forth – peoplesaid, “socialism is at the door.†it just wasn’t what was happening in thosekinds of cases. there are many, many settings where this takes place. the first course iever taught in law school was estate planning and it turns out that’s not the right title.estate planning deals with the way in which the money goes back and forth. the new term is a little bit softer but actuallystrangely more accurate. sometimes they call it eldercare. what they mean by that is it’sjust not the wealth transfer that you’re worried about. it’s [indiscernible] whetheror not institutional care is going to be needed,
what kind of do not resuscitate orders youput or put not into place under critical care situations and so forth. i mean in the endwe all die sadly as it may sound. it is sad. but there are ways to go which are betterand ways to go which are worse. what you’re trying to do is to ease the transition forthose who will depart this world and for those who are left behind, grieving over their loss. we put these things into place and if you’regoing to be a classical liberal or a libertarian, you don’t want to be dogmatic about infiniteconfidence of all people in all places. the first thing you do before you pronounce generalizationis you sniff around the world and look at various kinds of areas. see the way in whichthings have been traditionally done. it’s
not that you accept them slavishly. but youthen ask the question of why are they doing this and once you talk to them and figureout the answer, you could say, you know, this is another one of those cases where the peoplein the business for a very long time, know more about that particular business than ido. so my job is to learn from them about theparticulars and then build it back into the general theory because i’m a theorist. i’mnot an empirist. trevor burrus: but as opposed to the ideathat someone would say, well, what we need – because you said, well, we have a traditionof dealing with none – different types of choices where people are maybe less than rational,which is a huge amount of discussion like
for example on labor law coercion, thingslike this. richard epstein: you don’t want that discussion. trevor burrus: yeah. so the – someone willsay, well, we need a government department that comes in. aaron ross powell: right. well, let me … [crosstalk] aaron ross powell: … might say, “we canassume that people are rational actors. but we’re also beings that grew up in this bodyof cultural knowledge that goes back thousands of generations and that it’s not just thatthere’s undue influence but we can act out
of say ignorance about consequences,†inthe sense that like aristotle thought that moral teaching was lost on the young becausethey simply don’t have the life experience to make the right decisions. so we need tobasically force them to make the right decisions until they know why. richard epstein: do you have children? aaron ross powell: i do. richard epstein: do you use the word “force� aaron ross powell: no, but i’m putting myselfin the mind of like the – the conservative mindsets of say something like …
trevor burrus: or the progressive mindset. aaron ross powell: … prohibiting drugs whereyou would say, look, people make these decisions. but we know from enormous cultural experiencethat people who undertake using say hard drugs later come to regret it. so therefore there’sa place for government as the embodiment of moral wisdom, call it, to step in and say,“look, we’re going to prevent you from making this decision and you will thank uslater.†trevor burrus: it’s a pareto. it’s notstop that transaction … richard epstein: let’s go back. we’retalking about vulnerabilities. i stress vulnerabilities towards the end of life, but there are alsovulnerabilities towards the beginning of life
and guardianship relationships are generallythere. interestingly enough, there is no government in the natural law tradition. so the guardianstend to be parents of people whom the parents appoint if they’re unable to serve and they’resupposed to take that function. of course it’s extremely difficult to doso because there’s always going to be cases where it seems easy and then there are goingto be lots of cases as kids get older where there’s a conflict. the kid is absolutelyconfident they know what to do and somehow you don’t say it. you could try to havea standard for guardianship which says when a child reaches suitable age, maturity andjudgment, they’re free to make their own decision and then try to litigate whether14, 15, 16 or 17 is apt for any kid or what
you do is say, now, this does not work. the way the law will do it is it will set18 as the age and what the parents should do is if they have any sense when the kidsare 14, 15 and 16, is to slowly play out the string and the rope so that people get morechoices and they can make the transition easily. but that of course is why life is hard becausesometimes these things start out and it works – you know, coincides of interest betweenparent and child and then what happens is you get some really neglectful parents. youget some really bellicose children and it may well be that some other institution isgoing to have to come in. the legal standard on this is – can be statedin three words. it turns out to be whether
or not it’s abuse or neglect. trying toexplocate both of those terms, particularly the second one, is an entire field of law.so what you’re doing as a classical liberal thinker is you first understand what the boundaryof problems are and then you recognize that the transitions are going to be difficult.if you do that, then you can avoid some of the sort of endless dogmatism that’s sometimesassociated with hard line libertarian thought where everything turns out to be either whiteor black. it turns out in a world of these transitionseverybody probably goes through two of them in the normal life span and each of them hasits awkwardness that’s associated with it. the theory about institutional adaptationis you’re trying to figure out ways collectively
and individually on how you do this. the firstmove i said parent rather than state. it’s a hayekian decentralization move because differentparents with different strategies will do different things. so common [indiscernible]will not blow you up in the way in which it would on the other situation. then you usethe word “force†and i twitted you a bit about that. the reason is, is all of us who have beenparents understand that force is the last resort, that there have to be lesser modesof example in persuasion and argumentation. otherwise, it turns out the family becomesa prison and you can’t survive that either. so what you do is in effect, you sort of spenda huge amount of time in trying to teach.
you do it in different ways. in the epsteinhousehold, my wife is always on the effective side, getting along, talking, listening andso forth. i was always the teacher. well, it’s now time to do the violin. how abouta little bit of math and so forth? it’s not as though either alone is goingto be sufficient or that each of us did only one but not the other. but it’s very clearthat parental instruction on both moral and on various subject matter items is an extremelyimportant part of that mix and the basic rule is that force is always understood to be inthe background. but if it’s used too frequently, then it’s a disaster. as we said, the compromise position is a modestversion of what you might call false imprisonment
known as the timeout. you have to go to yourroom for an hour and cool down and then we can come back and talk about all this. that’sa command that’s not a request and so forth. but it gives them chance for reflection andit’s a kind of a punishment which they can – will work their way out of. so there area lot of things about … aaron ross powell: so your kids are totalintroverts. i mean sending them to their room … richard epstein: it’s a blessing. but they’renot going to be the ones who are going to be hitting and killing all sorts of otherkids. but, no, i mean a classical liberal tradition has to worry about this and it’sinteresting. if you remember and go back and
read locke, i mean he has chapter five on– of property and then i think the next chapter is on parenting. trevor burrus: so what can we learn aboutgovernment? is there any question about interposing government in free choice before drugs ona conservative side or interposing government in free choice on say choosing a doctor andgetting a license? you’re not allowed to just choose any – so what can we learn fromthe parenting situation and the use of force about government? richard epstein: essentially what happensis parents have a commonality of interest with respect to children. what you learn aboutgovernment is by virtue of the fact that it’s
distant and impersonal and subject to bureaucraticimperatives. it’s that you’re very reluctant to substitute government in for private choiceunless there’s a manifest failure in the private choices, which is what drives theabuse and the very narrow conception of neglect associated with this. this is in fact the correct way to do it.so when you start thinking about education, it may well be that public financing is necessaryif you’re worried about inequalities of wealth. i’m not on these points and i willexplain it in a second. but if so, you certainly don’t want to create public school monopolieswhich can be taken over by particular groups. you want to have open entry by – any andall sorts of people. some based on religion,
some based upon techniques, some based onshared philosophy or some based on expertise. i want to run a music and arts school. i’mgoing to do that. i don’t want to take people who are tone deaf and things of that sort. you let these things spread out. now the questionis, “do you need public support for this?†one of the things that i think has to be rememberedis that literacy in the united states in 1840 was virtually 100 percent and public schoolsystems were nowhere to be found. well, what is it? it turns out if you don’t have stateprovisions, the cost to private provision is much lower because it’s an un-incumbent,non-bureaucratic situation. if you want to think of what the modern equivalent is, it’sthe home schooling movement, which starts
out as a home schooling movement. mom anddad teach everything and then it kind of evolves. somebody says, “well, we cannot have homeschooling and still have a baseball team,†and so families in the same neighborhood gettogether for some purposes and not others. then we say, you know, it would be better– since i know math, if i teach that to your kid and you teach english to my kid.what we do is we have like kind of a swap and barter type situation and then somebodysays, you know, if you think about this for a while, here’s an instructional manualwhich will start to tell you the way in which you might want to sequence learning in thisparticular field. now these things start getting distributedand slowly through increments, there’s this
whole network that comes up by way of supportfor the home schooling parent. when you put all of those things together, what happensis it becomes a viable alternative to the monolithic public school. aaron ross powell: but was it – it was viablein the 1840s in part because the opportunity costs to women of home schooling was quitelow because they didn’t really have opportunities to earn outside the home. but in our modernsociety, where they would be giving up careers and often highlight paid careers, is it asmuch of an option? richard epstein: well, it has grown hugelyas a movement. so clearly something is odd there and in fact i think that’s wrong becausemodern society at least in an unregulated
situation also gives you infinite amount offlex time and flex space. so you don’t have to go into the office and work 40 hours aweek at a desk. you could work at home and as the kids are doing your homework, you coulddo your correspondence on email and so forth with respect to your job, so the ability tointegrate these things given the flexibility of technology means it’s there and that’swhy you have so many people who are doing it. the fathers who are working fulltime in thetraditional model, they may come home and they will do something after work as well.so i don’t think in effect that this is a dead model and if you are right about thepoint, it’s not a reason to ban anything.
it’s just a ground to predict that it willbe less successful and then you get something like the charter school movement which willwork on pretty much the same basis of the voucher movement. the point that i meant about the home schoolingis that if in fact you allow this thing to grow organically as it often does, the costbecomes efficiently low that it turns out the need for public subsidy is reduced. infact ironically, start throwing the public subsidy in. then you have to inspect to seethat the money has been sent to the proper purposes and so slowly what starts to happenis it becomes more costly to do this sort of thing at which point the subsidies nowbecome much more necessary than they would
otherwise turn out to be. so i mean i don’t think at this particularpoint you can go back to a world in which you sort of ban all forms of public educationand so forth. but it does suggest that decentralization and privatization is the way to go and thatif you do that, the level of coercive subsidies that are demanded through taxation and otherwisewill start to shrink because the private forms will be cheaper cost providers in the public.they won’t have a duty to hire unions for example and they won’t have to spend thecost on collective bargaining. well, why is it that unions hate charter schools?we know what the answer is. they’re more efficient competitors. so in the typical fashionis you put them out of business by state regulation
or you lose market share and hence union dues.we know what the imperatives are if you’re on the union side, which is why it is thatthe public co-option problem is extremely dangerous and that decentralization turnsout to be one of the answers. to get back to the book for a second on theclassical liberal constitution, a large part of what the book is doing about on federalismis to figure out what stuff did we decentralize to the state and basically all forms of generalproductive labor can be done so like manufacturing, agriculture, mining and the like. but whatthings have to be kept open at the federal level and that tends to be interstate transactionsof one sort or another where you’re worried about the common path being shut down andbalkanized by given state action.
trevor burrus: before we get to that, i wantedto – because i think we had a good little segue there because we were talking aboutwhen should the government interpose itself between free choices that are generally consideredto be pareto optimal. so with parents and children into schooling and things – what’sthe difference between government and parents? then we get to the constitution and beforewe get to the things like the commerce clause, i want to talk about the philosophical shift. richard epstein: yeah. trevor burrus: one of the lines you writein the classical liberal constitution is that the greatest challenge to the original constitutionalplan comes not from the inevitable and salutary
historical adaptations but from a consciousreversal of – conscious reversal of philosophical principles on the proper role of government. trevor burrus: can you talk about how thatchanged and then how it changed [indiscernible] putting the government in between the choicesof people? richard epstein: yes, of course i can. i meanif you go to the original constitutional stuff, it was driven in it by a political theorywhich started with some estimation of individual psychology. then tried to work out the voluntaryinteraction and then tried to go to the question of state craft. so both hobbes and locke for example werevery much into personal psychology, personality
formation and so forth. essentially what theseguys thought was that most people were relatively self-interested but not exclusively so inpart because of the family situation and in part because of what hume called in this onethe [indiscernible]. there was a form of confined generosity meaning you’re willing to helpsomebody else a little bit but not a huge amount. now what you try to do when you form [indiscernible]is to channel the self-interested impulses into production fashion and to exploit theconfined generosity to create the social ethos which will allow this thing to come together.so you build a government out of hope to some extent and skepticism on the other and itturns out that it becomes a limited government.
then the question is, “what are the techniquesfor running the limitations?†well, the first of these techniques is thatyou don’t allow one person to have the keys to the doors themselves. so it’s calledseparation of powers and you consciously create three branches of government with differentfunctions. sometimes they cooperate. sometimes there’s an exclusive here, sometimes there,sometimes there’s a check and balance. essentially the theory is that if there’s a strong socialimperative, you will get very strong popular sentiment in favor of it and the proceduralobstacles will not stop the thing from happening. if on the other hand there’s a great dealof division among some particular coercive measure, separation of powers is a rough wayof weeding out the bad systems because they
won’t get sufficient – majority of thesupport to do things right. but then you have the layer question, federaland state. this is not a uniform question because in small countries, federalism makesabsolutely no sense and you need other forms of division. but in the united states, wehad a bunch of colonies that were accustomed to doing business with the crown. essentiallywashington is the replacement for george the third and we’re familiar with working federalistkinds of an arrangement. then you have to have an allocation of functionand the last piece of this at least on the governance side is that to some extent, theway in which you want the federal government to define – not direct control over states,but to have the ability to limit the ways
in which states deal with their own citizens. this turns out to be the struggle over the14th amendment. if you go back to the original constitution, it was a devil’s bargain inone sense because to keep the system alive, you had to preserve the institution of slaveryof there’s no deal. so we have very explicit provisions that protected the fugitive slaveclause and the three-fifths clause and so forth. but it also should be understood that otherthings were designed to protect slave institutions in the state, including the commerce clauseand the privileges and immunities clause. the commerce clause says you got to open stuffup to commerce everywhere and if you start
doing that, it means you can’t discriminategetting things that are made by slave states when they ship it across state lines. thiswas well understood at the time as being a feature of the union. they couldn’t stop it from moving into interstatecommerce and they could not from congress abolish slavery on the individual state. theprivileges and immunities clause is exactly the same thing. citizens of one state cango to sell their goods and another state, it means that a northern abolitionist statecould not discriminate against the southern state which has slave-practicing institutions. now it turns out when you get rid of slavery,these protections are actually extremely important
for keeping a free society but they were alwaystainted by what’s going on in terms of the historical … then you weigh in all the guarantees of individualrights, which again are anti-concentration arguments. the takings clause is designedto make sure that we don’t get a wreckage coming out of selective government actionwhich wipes out one person for the benefit of others or wipes out one group for the benefitof another and that goes back to the paretian principle that i talked about earlier. we developed out of nothing essentially adoctrine of unconstitutional conditions which is determined – well, it’s something thatyou want and we’re going to condition on
something you don’t want. you’re willingto take both, i.e. it’s positive to you. but you should not be able to impose the condition. what do we mean by that? simple case, yes,i can use the public highways i am told so long as i agree to waive my constitutionalright to free speech. we don’t allow those kinds of bargains. the reason we don’t allowthem is people will take them and it may well be in the individual cases. it’s perfectlyrational to give up your freedom of speech but if everybody turns out to do it, you nowhave government through waiver which turns into a tyranny. so you learn that freedom of contract is notideal when you’re sitting with a government
monopoly out there and this whole doctrineis designed to protect individuals from making deals that in fact are in their own interestto do so and that’s to preserve this corporative surplus and that’s why the doctrine develops. so you got all of this stuff together. nowyou’ve come and you get the progressive years. what’s the change in time? so thevillain of the piece i think, probably the worst president of the united states in termsof his long term philosophical influence as well as his short term behavior … trevor burrus: i guess woodrow wilson. richard epstein: you got it right! rooseveltwas a second generation guy and was actually
a little bit more pragmatic in many ways thanwilson, who was a very dogmatic princeton professor and art segregationist amongst otherkinds of things. his attitude was in the modern times, government expertise, administrativeawareness and so forth means that we have to bring the german model into the unitedstates and a strong centralized authority finds that traditional views of separationof power and federalism are a mere irritation that we have to overcome and exactly whatthe program he tried to do. so the first progressive movement took placein 1913 when he takes office and it has many unpleasant features to it. segregation ofcourse is one of them. large state aggregation of powers is another and so you start seeingthe clayton act and the federal trade act
coming forward and so forth with really comprehensivegovernment powers. then they exempt unions from the antitrustlaw under the clayton act because they’re my friends, not my opponent and their collectiveactions are always benign even if they’re in violation of – as it were the shermanact. so you get all of that. he’s the one whoremembered, who runs the palmer raids. he’s president. schenck and abrams are the freespeech cases that come up with … trevor burrus: eugene debs. richard epstein: james debs gets thrown intojail for a speech he makes at the socialist annual convention and the conviction is upheldand debs is pardoned by harry daugherty, the
attorney general in the warren g. harding.i mean – so this monolithic model is there. i might add that many progressives were reallyvery attracted by the whole eugenics movement, which was very big at that particular time.it reached [indiscernible] in 1927 when oliver wendell holmes on what one might say was avery bad day describes three generations of imbeciles as being enough and then engagesin forced sterilization. so wilson was somebody who was so confidentabout how this thing would go that he knew who the guys were and the constitution wasnow an obstacle. so what you have to do is to figure out ways that you undercut it. there are many willing people in the easternelite institutions like harvard and so forth
and columbia and yale at the time who wereall too eager. what did they do? they chopped away at every part of the structure. well,we expect the separation of powers. that’s not a problem. we will create independentand not so independent administrative agencies. we will give them the power to prosecute,the power to form rules, the power to judge. they can pretty much run the show becausethey’re run by experts and of course these are the most politically-driven and corruptinstitutions of the united states. the three to two majority flip-flop problem is enormousand my view is even … trevor burrus: you mean three to – likea board … richard epstein: yes, like the nlrb has threedemocrats and two republicans and of course
they tend to divide on party lines, whichshows you the lie to the expertise notion. this is all bias and you look at the stuffthey’re doing. it’s typical contract dispute negotiation and their expertise turns outto be being lousy contracts lawyers. that’s their expertise in this stuff. they can’tdo this stuff or you take the fcc and – well, they’re lousy property lawyers and so forth. the famous – there’s a wonderful kindof contrast. you get felix frankfurter who is one of the spokesman of this movement.a high iq wildly overrated guy and in 1943, he’s faced with the question as to whetheror not administrative delegation to the fcc to allocate frequencies and concern with thepublic interest convenience and necessity,
whether it does allow the state to do morethan be as – frankfurter called a night watch, to simply make sure there’s not physicalinterference across frequencies. he says of course it is. not only do theyhave to set the rules of the road but they could determine the composition of the trafficis what he said. it’s the same year that hayek writes – virtually a year before hayekwrites the road to serfdom and which he says the great genius of a highway system is ifyou put this thing together and run it well with entry and exit ramps, you can have ahighly efficient system even if nobody knows the purpose for which anyone at any particulartime wants to go on the highway. you set the rules of the road and then thetraffic will figure out what it should carry
and so forth. those are two radically differentdifferences and frankfurter was profoundly inalterably wrong with respect to this. hismethod, to find out what public interest and convenience and necessity did, was never satisfied.you run these hearings and it’s just – it’s a kind of a situation where some – well,i’m absolutely wonderful because i’m big and somebody else says i’m absolutely wonderfulbecause i’m small. somebody else says i’m absolutely wonderful because i gave you alocal perspective. i’m absolutely fabulous because i have a national point of view. so you put these attributes together and there’sno way in which you could marginal tradeoffs if you just sold the frequencies off or gavethem away. people could then subdivide them
in ways in which you would figure out throughmarket experimentation where the national is more important than local. news was moreimportant than music and so forth. so this is a huge retardant that takes placewith the kind of hubris which starts with our friend woodrow wilson. now, who was theguy who put this into effect? it was herbert hoover. i mean hoover was aggressive. trevor burrus: in the federal communicationsact … richard epstein: well, the federal radio actin 1927 was certainly one of them. the other thing he did that year was he put togethermodel zoning statutes, which he couldn’t enact given then understandings about thecommerce clause which was assumed to disappear
and they were – zoning became an ordinarypart of the world in 1930 and they had about 45 states with 30 states doing it. by 1940,it was all over and the supreme court in a case called [indiscernible]. oh, isn’t itwonderful that we zone out people whom we don’t like from our particular kinds ofneighborhoods? what do i mean by that? well, there’s afamous sentence in there which he says you have a home area with single family homes.we don’t want these parasites, i.e. apartment houses, moving into our neighborhoods. heuses the word. it’s not epstein who uses that stuff. if you’re a believer in theclassical liberal constitution, you watch everything going completely south in all ofthese cases, you come to the conclusion. you’re
not going to try and fix the system by massagingsome of the points, changing the burden of proof in a rational basis test and so forth. this is deck [indiscernible] on the titanic.what you have to do is to talk about these two visions and say one of these guys gotit right and the other got it wrong. trevor burrus: so on the right and wrong,so in 1918, the supreme court, in an older version of the congress clause – more limitedversion of … richard epstein: hammer and dagenhart? trevor burrus: yes. they make a decision thatsays that the congress does not have the power to prohibit items of – made by child laborfrom moving in interstate commerce. on one
view, this is a complete free market fundamentalismrun amok. they’re not caring about the social effects of legislation. they’re allowingthese things to go through and not thinking that the government has any power to do anythingabout it. how do you respond to that? richard epstein: oh my god. hammer and dagenhartis one of the three to four most important commerce clause cases and it was [indiscernible]was wrong. let me see if i could explain what’s going on here because this is the unconstitutionalconditions problem. holmes’ attitude – and he was a literalist on this. these are goodsin interstate commerce. congress could regulate into state commerce and end of story. but what’s the regulation? to be slightlymore precise about it, the regulation says
that nobody is allowed to ship into interstatecommerce. any goods made by any company if it or its affiliates at any point in its operationsuses child labor under 14 years of age and north carolina had a child labor law at 12years of age. this is what’s happening. if you can basicallycondition the shipment of goods into interstate commerce on what to do prior to interstatecommerce, the game is over. what’s the benefit that you get from running child labor? betweensay the ages of 12 and 14. well, it’s clearly positive in some sense. otherwise, you wouldnot do it and it’s also a state which thinks that it’s ok for you to do this in partbecause they may be under sufficiently hard-pressed circumstances that it gives them a comparative,competitive advantage in the international
markets to be a little softer on child labor. now what happens is the only way you can dothis is to give up access to interstate markets. well, if you’re in the furniture businessand you’re in north carolina, you’re probably selling 90 percent of your goods out of stateand you’re wiped out. so essentially you the capitulator – well,you can always ratchet up the consequences on the interstate side so as to essentiallydominate everything on the interstate side. it’s a classic use of the commerce poweras monopoly power within an elicit extension. justice day wrote this opinion, understoodthat holmes did not. you just start thinking about the way in which you go.
you cannot ship into interstate commerce anygood which turns out to be made with environmentally-sensitive issues, i.e. fossil fuels. i mean you cannow start to do that. you can stop it. so what you have to do is to limit the doctrinesto those cases where the things that you ship into interstate commerce are a peril to interstatecommerce. so you can ship goods in interstate commercein containers which are likely to break in shipment and spill pollution all over thelandscape. so the basic theorem – and it is a theorem – is you can stop with theuse of the commerce power and the shipment of things into interstate commerce if theconsequence that you’re trying to prevent occurred. you could then punish it, i.e. theleakage of the fuels on the ground.
one side understood that the progressive didnot and in darby against the united states, good old justice harlan stone, who had noidea what was going on about this thing, overcomes it because he’s convinced that all theselabor statutes, the fair labor standards act in particular, are only designed to protect“workersâ€. completely naã¯ve. aaron ross powell: so then this – the experience– the american experience to some extent is the experience of a failure of the constitutionto create a government that is actually limited. i mean we’ve just told how these things– even a government of law is ultimately a government of men and if the men want togo about undercutting these limits. so i mean this looks back to when we were talking atthe very beginning about the contrast with
say other kinds of libertarians who take therothbardian anarchists. i mean part of their argument is you say youwant limited government but you can’t have limited government. once you have a governmentof any kind, we kick off this process of growing government that keeps aggregating more powerto itself and unfortunately it seems the public wants it too. i mean they – the public opinionseems to run to a government that takes more to give away more goodies or as we’re watchingon college campuses to a government that cracks down on kinds of speech and association wedon’t like. so is there a way to actually institute a government that would be limitedoutside of hoping that classical liberal ideas have persuasive power?
richard epstein: let me give you the alternative.suppose you decide – yeah, this is always going to be subject to vulnerability. it didtake 150 years for it to kind of subject itself to serious collapse. it’s not as thoughwe didn’t stop. you don’t have a gun and then somebody willput one in its place and those guys will be much worse than the framer. so i think allthings considered, you want to take a sound structure, which is subject to deteriorationand then try to maintain it as opposed to have no structure and then let the enemy putin a system which is going to be beyond bad and so forth. then the second question is, “has it allfailed?†and the answer to that question
is no. i mean what is so clear about it isthat the judges themselves are schizophrenic and in at least two areas, they tend to believein competition as an ideal. one is they are very astute at stopping state barriers tointestate trade and competition under the so-called dormant commerce clause. this actually is a judicial invention becausethe founders did not actually understand how passive the federal government would be inremoving state barriers in international trade or national trade, which is what the commerceclause was in part about. this was a judicial creation and it is held not perfectly but85 percent doable, which i think is a great achievement given all the possible ways thatyou could go wrong. so they see the breakup
risk and the organization risk. they don’tsee the monopolization risk by the federal government and of course all the great casesthat expanded the scope of the commerce power, most notably the decisions on labor and onagriculture, were in favor of progressive model, in which there was a democratically-appointedgroup which then set the prices in terms of trade for a cartel. the agricultural statute works exactly thesame way as the labor statute. farmers get to vote on total output and then the governmentimplements the quotas, would separate it first by state, then by county, then by farm. trevor burrus: like the raisin cartel.
richard epstein: that’s like the raisincartel or like [indiscernible]. the raisin cartel is a state cartel with external effectson other states. the agricultural cartel – grain is grown everywhere. it’s a nationwide cartel.a horn is just the state of california with the huge control over the market, taking advantagein the export market, just the way that happened in montana with one of the coal severancecases where they had huge dominance in certain kinds of minerals and it allowed them to extractfrom people elsewhere and the supreme court on some of these cases has been very bad andit was very bad on the raisin cartel. there was a case in 1943, a very bad year,parker v. brown in which what happened was it was the raisin cartel and somebody wantsto attack them on the sherman act that these
guys are cartelizing and it was justice stoneagain clueless on this point. he said, “well, this is not a problem because it’s a state-organizedcartel,†and of course to somebody like myself, wait a second, you got it backwards.private cartels, if you don’t enforce them, will tend to grade by cheating. public cartelscould be maintained forever. you’re telling me that the sherman act wantsstates to create permanent cartels as an implied exception and this proves that the argumentthat state power is more important than economic principles and what makes it peculiarly grotesqueis that this is a cartel selling in the export market to other states. so essentially thefederal government is allowing one state to extract [indiscernible] cartels from everybodyelse. it was a very bad day in american constitution.
trevor burrus: i think that – the case thatamerican agricultural marketing adjustment – agreement act of 1937 which – but thefirst line of that act is nothing in this law shall be considered to violate the shermanantitrust act which is usually a bad sign. richard epstein: well, of course, but it’snot – well, they say that. they don’t really mean it in some sense because the wholescheme is a cartel. roosevelt was extremely smart on this particular point because hewas viciously anti-monopoly as was [indiscernible] and the basic point was monopolists are thebig guys and taking after large corporations fall strongly within the progressive traditionwhether or not they have market power. so the progressives essentially thought thatsize rather than monopoly was the dominant
issue, which meant that they have a convenientwhipping boy. but cartels are in fact at least as great and maybe a greater danger particularlyif they’re state-sponsored and cartels are much less efficient than monopolies becausethey have distributional constraints. they have to allocate some portion of the productionto all farmers, some of whom are highly inefficient and a monopolist would shut down the inefficientoutlets when it does its production and keep only the good ones going. so you get this cartel and politically a cartelis stable because you can get widespread support from farmers and agricultural states whereasthe monopolist doesn’t have the vote. so cartelization is economically a disaster butpolitically a winner in many cases and that
was the genius of roosevelt. he just lookedat these statues one after another from the 1930s. they were cartel manufacturers. trevor burrus: why do you say the genius ofroosevelt, the genius for … richard epstein: political survival. trevor burrus: ok. you’re not supportingthe cartels. you’re just … richard epstein: no. i mean – there’sa long libertarian classical liberal debate as to whether or not private cartels shouldbe enforced. the answer most people have is no. then there’s a question of whether ornot you want to chase down cartels by antitrust law because they could survive in secret,which is an immense dispute. but there’s
nobody who’s serious about this. there arethings that the job of the state is to create the cartel and then to enforce its mechanism. you get the whole opinion and justice robertsstacks all matters of first principle in the case but at least he puts a dent into thecartel and is given some language which is very useful in attacking cartels and othercontext if the case ever gets to that. but the fundamental difference between the progressiveand the classical liberals is as follows. on economic matters, the classical liberalunderstands that state monopolization and even private monopolization are a danger andthey’re willing to take steps against it but they will protect competition againstgovernment regulation because that’s always
going to get you to some kind of an optimum. the woodrow wilson guy says, well, some days,i like constitutional competition. some days i like monopoly. monday, wednesday and friday,i do this. tuesday, thursday and saturday, i do the other thing. sunday thank god isa day of rest. but if you actually watch what’s happening there, they’re completely agnosticabout all of this stuff and all they believe is that the legislature should – decidethe question but they never tell you what the legislature should decide. this becomes completely self-destructive andyou get this huge situation. you get the motor vehicle act. you get the fcc. you get thecivil aeronautics board. it just goes on,
one agency after another, designed to dealwith a cartel allocation. so they then have to develop a political story that this isreally a very wonderful self-expression of a different kind of group, internal expertise. whatever it is that they talk about, it turnsout to be terrible. the difference between roosevelt’s [indiscernible] is we have apresident who’s very progressive, extremely mischievous, totally uninformed about howthese things works in my view, but there’s at least a learned opposition on the otherside. look, if cato really believed that speakingcould not possibly influence policy, this conversation would never be taking place.it does take place and we make a difference.
sometimes the different we make is simplyslowing down the rate of decay, but even that turns out to be a benefit and in some cases,maybe you could reverse the flow. in the united states today – i was at thefederal society meeting yesterday and you listen to these state governors starting totalk about what it is that they want to do and they’ve obviously been to cato academyin one sense or another. they tend to be basically relatively hands on pragmatic guys, tryingto figure out how to attract markets with a system of low taxes and stable criminallaws and so forth. they’re willing to reform prison systems and things like that insteadof saying, well, libertarians don’t have anybody in jail. let’s not worry about thiskind of problem.
they were by and large pretty impressive interms of the way in which they directed it and you can see the impact. there are now32 republican governors and 18 democrat governors and you even see republican governors in placesas godforsaken as illinois where i live and bruce [indiscernible] actually understandswhat’s going on. the democrats understand that he’s a danger. they’re doing everythingthey can to undermine him. but it is now the case that you could getrepublican governments in democratic states because they understand that democratic governmentswill simply give away the farm to their favorite constituency starting with the labor union. trevor burrus: so then we see the questionthere on your panel with the federal society
yesterday. we see this emergency of sort ofthe bernie sanders idea and one of your co-panelists had sort of said that the introduction tothe national labor relations act reads like a bernie sanders pamphlet basically saying– i had it actually written down here. the inequality of bargaining power betweenemployees who do not posses full freedom of association or actual liberty of contractand employers are organizing the corporate or other forms of ownership tends to aggregatecurrent business depressions by depressing rage rates and the purchasing power of wageearners and industry and by preventing the stabilization of competitive wage rates andworking conditions within and between industries. at least some people are finding this to beincredibly persuasive. now maybe things are
going the right way. but are we pulling backin a … richard epstein: there’s no question thatthe great difficulty in america is not that people are muddling through. it’s that peoplelike bernie sanders and hilary clinton i dare say actually think that that sentence whichis wrong on every particular should be regarded as the incarnation of truth. at the same time, the classical liberals aregoing back and saying that this is simply an excuse for something else. so if you pickapart some of the components and saying, “how is it that it turns out that free marketslower wages and therefore reduce purchasing power?†well the answer is the wages ina competitive market are lower than a monopoly
rage at the first time. but if the competitive market is more productive,wages will move up with productivity and so therefore the thing that you want to do isto have wages move up in a competitive market which is doable rather than in a monopolytype situation. why is that? because the monopoly workers get increased purchasing power butthose people who are excluded from the unions by one rule over another find their wagesdepressed. if you’re trying to figure this is an aggregate phenomenon, you could seethat the sentence is just wrong. increasing the purchasing power of some ifit results in the reduction of the purchasing power of others does not increase the aggregateamount of wealth. so therefore what you suggest
is a prolongation of the depression by virtueof the fact that total demand is going to be down because of the inefficiencies of theoverall structures. they start talking about companies where theyconfuse the size of a business with the issue of whether you have any kind of market powerand you could have a very large company which has a lot of small competitors in multipleareas. it’s not going to be able to dictate wages or prices or anything else. it’s goingto be faced with competition. you could be an effective competitor if you’re one-tenththe size of a firm or even one-one-hundredths of a firm because that large firm is in 80different markets and it turns out that they have only a small amount of their resourcesdeveloped in the area, in which you as a small
company devote all of your area. you couldwipe them out. so this kind of crazy methodology. the thirdpoint, they start talking about stabilization. the moment you start hearing that, you knowexactly what they mean. stabilization is that we fix prices regardless of market circumstancesthrough cartel legislation so that if it turns out prices are high and demand is low, whatyou do is you get these huge surpluses and then you do the only thing you can do in thenew deal. you either burn them or you put them in warehouses and let them rot or youtry to find a way to ship them overseas in american bottoms because you can’t do anythingelse to cure the particular imbalance. so stabilization is rigidity, ignorance ofchanges and supply and demand stuff on both
sides of the market and it’s a recipe forsocial disaster. now the fact that this is very well-crafted is extremely comfortingbut that is economically illiterate as i think highly disturbing. when you start seeing peoplelike bernie sanders say that this is what he’s about, what you realize is that ultimatelyhe’s a completely uneducated man, which in fact he turns out to be. trevor burrus: now, how do you respond torecent calls? i mean this all kind of goes in together with the corporate form and thelabor unions and where we are now. inequality, when people talk about the one percent ininequality, what is your general response? richard epstein: well, first of all, if youstart looking at the one percent, it’s a
very heterogeneous group. one percent essentiallyincludes people in the united states whose family income is say about $350,000 or $400,000depending upon you. it also includes people with $10 million a year and it includes markzuckerberg and his $26 billion. i’m in the top one percent, thank heavens.i don’t think that i have a lot in common with mark zuckerberg. i don’t have a fleetof private jets. i carry my own bags through the airport. i eat at mcdonald’s. i meani’m an ordinary guy in that sense. so there is in a sense just it’s a labelwhich ignores huge amounts of heterogeneity. the second thing is the questions, “wheredoes the top one percent get its wealth from?†the standard label story is they take it fromeverybody else. so it’s one percent up.
everybody else down. then you start lookingabout it. what you discover is that these guys – they had an idea that they can processmultiple and commercial lines. call it facebook. call it the laptop, whatever it is, the ipad,phone. what they do is they generate huge amountsof wealth for other people which make their dollars go further and they take a relativelysmall slice of it for themselves and so if you see that somebody has earned a billiondollars, the first thing you think is the only way you could get that billion dollarsin market transactions is to create nine billion dollars in net benefits to the consumers whopurchase the particular goods in question. you then say, “thank god that this particularfellow turns around there,†because he has
made everybody else better off. the secondthing you say is he has got a million dollars, a billion dollars a year in income. he maylike fine wine but he can’t spend a billion dollars on himself. so what do you do if you get that kind ofmoney? you sign the buffett pledge and half of it gets redistributed anyhow by privateparties that know what they’re doing instead of by a government who turns out … so if you want people to understand aboutthis, it’s the people who have that kind of wealth, unless they’re bandits or governmentagents at one form or another. they get it because they’ve contributed greater powerto other people and you should look upon them
and say thank you. then when it comes to their civic duties,you ask the questions. all right, mr. gates, you got this money. what are you going todo with it? well, he does two things with it. he plays bridge. that’s fine. it doesn’thurt anybody and he forms the gates foundation. he gives large portions of it away. so you’re trying to figure out how the fullcycle works. you cannot only look at the amount of income that’s earned. you have to lookat the way in which it is distributed and who gets the next benefit of this and sureenough, if you go back, the university of chicago where i taught for many years, i wasthe brainchild of a guy named harper and also
john d. rockefeller who turned out the funwilliam rainey when he did this other thing. ok. i’m supposed to get upset at rockefellerbecause they had a billion dollars and founded the university of chicago, spellman college,rockefeller institute and contributed to god knows how many other charities. if he doesn’tdo it, his kids will. so i don’t think you should do this. what about their political influence? well,we know what their political influence is. it’s that it is not sufficient to withstandthe power of – in a democracy of the electorate when it gets angry in terms of its vote. so the top one percent or the top fractionof it may have 20 or so percent of the wealth
give or take. it pays 40 percent of the taxes.these guys were as good with politics as you would think. they would have 20 percent ofthe wealth and they pay five percent of the taxes. now it turns out there are awesome tax gimmickswhich are not recorded in these things, which are utterly inexcusable. but all the peoplewho are after this don’t – know so little about taxation. they don’t know the gimmicks.i know the gimmicks. i teach taxation at one point. then you should change all those particulargimmicks on the stepped up basis of death and the partnership allocation stuff and thefake depreciation allowance on borrowed capital. i said that real fast. nobody understandswhat i’m talking about but that’s the
point. i can sit down in 20 minutes and explainit to you, how these things have been developed and the great racket that you get from peoplelike warren buffett is he talks about the rates of tax on taxable income. the real issueis whether or not they’re unrealized capital gains that never get taxed so that the ratesdon’t matter. that’s where the wealthy make their money.it’s not going to be on the rights. it’s going to be on the vehicles that they useto organize these kinds of systems and as a good libertarian, if you believe in proportionatetaxes, nobody should be able to shelter or hide income in that particular form. then on the other hand, their attitude islook, you’re milking me on everything i
take out of this system. if you had a flattertax, you could do it. now, as a theorist, i’m a straight flat tax man. you were twocents in the – five cents and the apical rate is 20 percent. you pay a … now this is not going to sell politicallybut here’s the trick. i can make the following compromise. give me a two-tier system bothflat. the first one is zero. basically it’s going to have to stop somewhere around $60,000or $80,000. otherwise, you can’t raise the revenue and then that second tier is flat. so you’ve got progressivity a little bitand so forth. all the rich people essentially will now know that the flat tax structurethat they face for all the marginal decisions
will improve their growth potentials in makingrational choices and you have some redistribution at the … it’s perfectly stable and then you can movethat boundary line. that was the theory of the 1986 tax more or less by reagan and it’sthe correct theory if you take into account both the sort of strong social impulses onthe redistribution side and in effect the needs for productivity. the interesting thing about it is even thoughthis thing does have some redistribution, if you talk to serious people of sufficientwealth, their attitude is one of relief rather than one of anxiety.
we can do this. we can do what we need todo. we’re helping things out. we don’t want to be dogs in the mangers. in fact, longbefore income tax, there was a huge amount of what we call a discharge of imperfect obligations. people would have an amount of money. theywould give it to churches and homes and so forth to take care of folks and it actuallyworked and that’s why if you look at rockefeller, he gave it away. johns hopkins was a richman. leland stanford was a rich man and the university got the money because his son diedat a very young age and he had to do something with the money and decided to create one ofthe great research institutions in the world. i mean if you really want to treat the richpeople as though they’re demons and ogres,
be my guest. but the guy who’s really beingpetty is you. i mean my attitude towards these people is i thank them for what they’vebeen able to contribute to society. i hope that they use the money in a socially-responsiblefashion but the last thing i’m going to do, given their success, is to tell them howit is if they were to spend their money or be upset that they’re not doing it. so at the meantime, at the bottom, we gunkup the labor market with regulation after regulation and sure enough, the position ofthe median income person goes down under obama by six or seven percent. that’s a big numberbecause it should be a six or seven percent increase. so what you’re doing is you’retalking about a series of labor policies that
make no sense and the way in which you justifysilly things in the labor market is that you point out the fact that there are rich peopleout there who invented facebook or ipads or whatever it is that happens to be the thingof the moment. listening to that conversation, it showedme the utter intellectual bankruptcy of the labor movement. they could never quite focuson their own defects and what they try to do is to divert the whole discussion to somethingwhich is irrelevant to their position and yes, inequality is in fact a serious problemand the way to solve it is to remove the barriers to improve – that poor people face in theform of government regulation, which is announced to be [indiscernible]. it’s to get rid ofunion monopolies in schools so that kids of
poor background can in fact get a decent educationand it is said [indiscernible] that all of the real supporters of the charter schoolsturn out to come from the broadly speaking libertarian movement. none of it comes out from the politically-activepeople on the left and that is in fact the greatest condemnation you could make becauseit shows that their concern for humanity is really a disguise in many cases for the self-interestand perpetuation of union monopolies. trevor burrus: thank you for listening. freethoughts is produced by evan banks and mark mcdaniel. to learn more, find us on the webat www.libertarianism.org.
