WEBVTT 1 00:00:04.879 --> 00:00:10.640 A lot of the fundamental principles I've READO national self 2 00:00:10.640 --> 00:00:18.559 interest and individual rts. This is the Uran Brook Show. 3 00:00:22.320 --> 00:00:24.519 All right, everybody, welcome to your one book show on 4 00:00:24.559 --> 00:00:28.079 this Saturday, August second. 5 00:00:28.120 --> 00:00:29.719 I hope everybody is having. 6 00:00:29.559 --> 00:00:36.079 A fantastic weekend. I'm busy packing, you know, traveling tomorrow 7 00:00:36.119 --> 00:00:41.280 to lizb and Portugal. I'll be gone for two months, 8 00:00:41.320 --> 00:00:44.159 two months. I'll be in uh Portugal, in Italy for 9 00:00:44.320 --> 00:00:49.439 two months. So busy packing, organizing, getting anything ready, and 10 00:00:51.079 --> 00:00:55.600 always have time for you guys for for another show. 11 00:00:55.679 --> 00:00:59.759 So I thought we talked today better topic. I just 12 00:00:59.759 --> 00:01:04.920 been uh really three days, eight hours talking about at 13 00:01:04.920 --> 00:01:07.959 the Peterson Academy. I just got back from there a 14 00:01:08.040 --> 00:01:11.599 few days ago, and uh and and I did a 15 00:01:11.640 --> 00:01:16.120 whole eight hours on trade. It was it was, I think, 16 00:01:16.120 --> 00:01:18.359 really cool. You know, you guys should check it out. 17 00:01:18.359 --> 00:01:21.840 You should go to Peterson Academy. Just use use the 18 00:01:21.879 --> 00:01:24.120 link that has my name in it. So I get 19 00:01:24.159 --> 00:01:29.239 credit for you going for me. But uh, what you 20 00:01:29.680 --> 00:01:32.439 what you'll get there is eight hours on trade and 21 00:01:32.480 --> 00:01:35.319 tariffs and the history and the economics. 22 00:01:35.359 --> 00:01:38.280 I spent a whole you know, over an hour on. 23 00:01:39.640 --> 00:01:44.959 Examples of specialization and division of labor and and compartitive 24 00:01:45.000 --> 00:01:46.920 advantage and what they all mean and how they all 25 00:01:46.959 --> 00:01:52.040 work and running through an example. Uh and uh. And 26 00:01:52.079 --> 00:01:54.560 then you know, we go over the history and then 27 00:01:55.319 --> 00:01:57.280 we talk about kind. 28 00:01:57.079 --> 00:01:59.680 Of tariffs and what they are and how they work. 29 00:02:00.120 --> 00:02:05.560 We talked about milkitialism and neo milk indalism. That's what 30 00:02:05.599 --> 00:02:08.479 I you know, that's what we call Donald Trump and 31 00:02:08.599 --> 00:02:11.560 his people around him the new milk in the lists 32 00:02:11.599 --> 00:02:13.759 and and what what that implies and what that means. 33 00:02:14.319 --> 00:02:17.240 And then we talked about objections to globalization, objections to 34 00:02:17.319 --> 00:02:20.319 trade and uh and and you know, so we cover 35 00:02:20.319 --> 00:02:22.280 it a lot a lot of content in eight hours. 36 00:02:22.280 --> 00:02:24.599 It was great. So if you have a check out 37 00:02:24.599 --> 00:02:27.479 the Pederston Academy, I will have I think by the 38 00:02:27.560 --> 00:02:30.360 end of the year five courses on the Pedasent Academy 39 00:02:30.360 --> 00:02:33.919 Capitalism and Finance are already up there. You know a 40 00:02:33.919 --> 00:02:35.639 lot of people are watching those. And then there's going 41 00:02:35.680 --> 00:02:37.199 to be trade, and there's going to be money, and 42 00:02:37.240 --> 00:02:39.599 there's going to be the corporation kind of business history 43 00:02:40.360 --> 00:02:43.560 and uh. Those all I think, I think really good courses, 44 00:02:44.680 --> 00:02:50.240 kind of cool. So yeah, take advantage of it. You 45 00:02:50.280 --> 00:02:53.400 can You can get an annual You pay one annual 46 00:02:53.400 --> 00:02:55.400 fee and then you can watch whatever you want. You 47 00:02:55.400 --> 00:02:58.000 can watch as many courses as you want. So h 48 00:02:58.840 --> 00:03:01.120 you know those five if I do a few more 49 00:03:01.159 --> 00:03:04.039 than just just watching my courses, will make worth the 50 00:03:04.120 --> 00:03:08.680 annual commitment, the annual financial commitment. All right. 51 00:03:08.759 --> 00:03:11.039 So yeah, so let's talk about trade. 52 00:03:11.199 --> 00:03:15.520 Let's talk about trade, and to talk about the history 53 00:03:15.560 --> 00:03:17.800 of trade, I mean, I want to talk about trade 54 00:03:17.840 --> 00:03:21.680 in America, but the history of trade more broadly, one 55 00:03:21.719 --> 00:03:25.199 has to understand I think really two things so important 56 00:03:25.199 --> 00:03:29.919 to here. One is the trade has always been a 57 00:03:29.919 --> 00:03:34.840 part of human life. Trade goes back to a time 58 00:03:34.879 --> 00:03:38.639 where we were tribal and tribes traded. And if you 59 00:03:38.680 --> 00:03:43.759 go back to two thousand BC, you already see quite 60 00:03:43.800 --> 00:03:51.360 a bit of trade across geography. You know. You you 61 00:03:52.159 --> 00:03:55.599 even see, you know, stuff coming down from northern Europe 62 00:03:55.599 --> 00:03:59.240 where there's nothing with a bunch of barbarians h Northern 63 00:03:59.280 --> 00:04:07.039 Europe trading with uh you know, certain uh Greek cities. 64 00:04:07.080 --> 00:04:09.080 We're trading with the Egyptians who are trading with the 65 00:04:09.120 --> 00:04:15.360 Mesopotamiams and uh you know, so certainly by a thousand BC, 66 00:04:15.599 --> 00:04:18.720 you get you get substantial trade, and of course all 67 00:04:18.720 --> 00:04:22.040 of them are trading for the East with India, and 68 00:04:22.079 --> 00:04:24.920 India is trading with China, so indirectly there trading with China. 69 00:04:25.480 --> 00:04:28.680 And then by the time you get the Greek classical period, 70 00:04:30.360 --> 00:04:34.720 there's it's even more just explicit. You know, there's trade 71 00:04:35.879 --> 00:04:39.000 across the Mediterranean all the way to Spain. There's trade 72 00:04:39.120 --> 00:04:43.279 up some of the European rivers into northern Europe. There's 73 00:04:43.360 --> 00:04:48.720 trade to India and China and Egypt, and trade robust 74 00:04:48.720 --> 00:04:53.720 trade is a is a a real part. 75 00:04:53.560 --> 00:04:55.920 Of human history. You just can't separate the two. 76 00:04:56.600 --> 00:04:58.920 And of course, once the Europeans discovered a way around 77 00:04:59.000 --> 00:05:00.959 the corner of the Horn of af, once the Age 78 00:05:00.959 --> 00:05:07.920 of Discovery begins, trade explodes. The Europeans are, you know, 79 00:05:07.959 --> 00:05:13.319 sending lots of ships to Asia to trade Primeallyy to 80 00:05:13.360 --> 00:05:17.279 India and Indonesia and what are called the Spice Islands. 81 00:05:17.879 --> 00:05:21.600 And the main thing that Europeans are trading for the 82 00:05:21.680 --> 00:05:29.160 thing that they want the most spices, Like Europeans are 83 00:05:29.199 --> 00:05:35.519 suddenly discovering that food has flake, can have flavor that 84 00:05:36.040 --> 00:05:41.279 they taste. Buds are not limited to a narrow spectrum 85 00:05:41.680 --> 00:05:48.439 of food stuff. They discover spice and they start importing spices. 86 00:05:49.120 --> 00:05:53.759 Farm Asia and its spices are some of the most lucrative, 87 00:05:54.519 --> 00:05:58.360 if not the most lucrative, you know, trading features. So 88 00:05:58.519 --> 00:06:01.680 spices are coming in and and so there's a lot 89 00:06:01.680 --> 00:06:05.600 of trading, and then of course that evolves into ultimately 90 00:06:05.639 --> 00:06:09.279 into you know, somebody says black peppers, black peck and 91 00:06:09.319 --> 00:06:14.959 cefron and cinnamon and a variety of different of these 92 00:06:15.000 --> 00:06:18.480 of these just flavors that Europeans are not experienced. Remember 93 00:06:19.079 --> 00:06:22.920 you're you know, in spite of tea time in England, 94 00:06:23.439 --> 00:06:26.160 you have had a discovered teeth in the Chinese, that 95 00:06:26.360 --> 00:06:31.040 discovered coffee from ultimately from Ethiopia. I mean, all the 96 00:06:31.160 --> 00:06:39.560 stuff that actually tastes really really good comes in through trade, right, 97 00:06:47.279 --> 00:06:54.120 So trade is blowing up, and then of course with 98 00:06:54.680 --> 00:06:58.560 the trade routes into Asia and through Africa, the Europeans 99 00:06:58.600 --> 00:07:03.160 start colonizing. And part of the motivation for colonization, and 100 00:07:03.439 --> 00:07:10.879 I found this really interesting is the economic ideology of Melcanalism. 101 00:07:11.839 --> 00:07:17.639 Mercanalism really drives the idea of colonial colonizing. 102 00:07:17.759 --> 00:07:20.480 So, you know, if we. 103 00:07:20.399 --> 00:07:24.680 Think about trade as win win, well, why colonize places 104 00:07:24.720 --> 00:07:26.920 when you can trade with them. Why do you need 105 00:07:26.959 --> 00:07:29.199 to colonize India, Why do you need to colonize on 106 00:07:29.279 --> 00:07:33.360 the Asian countries? Why can't you just set up trade 107 00:07:33.360 --> 00:07:38.480 shops there and trade with them. And here's the problem 108 00:07:39.160 --> 00:07:46.120 that you view trade as win lose Europe I mean, 109 00:07:46.160 --> 00:07:51.079 Mercanalism is a philosophy. It's an ideology of trade as 110 00:07:51.079 --> 00:07:59.240 being fundamentally win lose, and that export and thus having 111 00:07:59.279 --> 00:08:06.480 precious metals flow into your country is a win, and imports, 112 00:08:06.879 --> 00:08:12.519 importing cotton or textiles or spices for that matter, and 113 00:08:12.759 --> 00:08:19.120 giving up precious matter for it isn't at loss. So 114 00:08:19.160 --> 00:08:23.920 the philosophy of moketalism, you know, kind of guides the 115 00:08:24.040 --> 00:08:25.240 various empires to. 116 00:08:25.199 --> 00:08:27.160 Set up colonies. 117 00:08:27.959 --> 00:08:32.919 The colonies are basically there to provide war materials to 118 00:08:33.759 --> 00:08:38.399 the mother country and to buy finished goods from the 119 00:08:38.440 --> 00:08:42.639 money mother countries. So they're there to suck up war materials, 120 00:08:43.480 --> 00:08:49.879 natural resources and to import to themselves, constituting export to 121 00:08:49.919 --> 00:08:53.919 the mother country of goods. And thus this is perceived 122 00:08:54.120 --> 00:08:56.919 as this is a this is this is the winning strategy. 123 00:08:57.519 --> 00:08:59.519 This is what trade is all about. This is what 124 00:09:00.080 --> 00:09:02.600 uh you know, winning is all about. This is what 125 00:09:02.679 --> 00:09:06.679 winning looks like money flowing in UH and and and 126 00:09:06.799 --> 00:09:10.720 uh stuff flowing out. The only thing other than money 127 00:09:10.720 --> 00:09:14.039 coming in UH of natural resources to be able to 128 00:09:14.080 --> 00:09:14.960 produce the stuff. 129 00:09:19.120 --> 00:09:22.200 And you know, this. 130 00:09:23.159 --> 00:09:30.320 Probably holds back the West in terms of wealth significantly. 131 00:09:30.440 --> 00:09:36.600 This attitude of milkanalism, it explains some of what happens 132 00:09:36.679 --> 00:09:42.080 during colonialism. It explains the whole attitude of you know, 133 00:09:42.159 --> 00:09:48.200 and and and attitude towards the colonies and the attempt 134 00:09:48.600 --> 00:09:51.320 kind of the kind of trade that happens between England 135 00:09:51.320 --> 00:09:53.919 and the colonies, or the French and the colonies, Belgian 136 00:09:53.960 --> 00:09:58.159 the colonies. It explains that the exploitation that does happen 137 00:09:58.480 --> 00:10:03.399 in these places, because motionalism is a system believed that 138 00:10:03.639 --> 00:10:07.039 embraces exploitations. This is wind lose, you want to make 139 00:10:07.080 --> 00:10:16.480 sure the other party loses. And so this is kind 140 00:10:16.480 --> 00:10:22.480 of the context of seventeenth and eighteenth century European trade. 141 00:10:22.919 --> 00:10:26.879 It's robust, but it is all done on a long 142 00:10:26.960 --> 00:10:34.039 premise which guides trade not to win win maximizing win 143 00:10:34.120 --> 00:10:39.440 win relationship with guides it towards maximizing the amount of money. 144 00:10:40.519 --> 00:10:44.279 You know, the European nations accumulating gold and silver rather 145 00:10:44.360 --> 00:10:49.120 than the amount of wealth that they are accumulating. And 146 00:10:49.679 --> 00:10:53.799 there's a lot of lost efficiency, a lot of lost productivity. 147 00:10:54.240 --> 00:10:57.799 I mean, there's a real sense in which the industry 148 00:10:57.840 --> 00:11:02.840 revolution happens and it's success in spite of the milk 149 00:11:02.879 --> 00:11:08.879 and salistic attitudes that so many in you have look 150 00:11:08.919 --> 00:11:11.919 at the list. Attitudes also involve much more central planning 151 00:11:11.919 --> 00:11:17.000 that otherwise, and much more goment involvement in everything going around, 152 00:11:17.039 --> 00:11:23.399 not just trade but production itself. And during this period 153 00:11:23.440 --> 00:11:26.360 there were a number of thinkers, a number of economists, 154 00:11:26.519 --> 00:11:29.240 and I'm intellectuals is saying, you know this, all this 155 00:11:29.399 --> 00:11:32.639 is wrong. It just doesn't make any sense. Trade fundamentally 156 00:11:32.679 --> 00:11:35.480 is win win. You guys are getting it all wrong. 157 00:11:35.519 --> 00:11:39.559 Molcanalism is wrong. But nobody's really listening. None of them 158 00:11:39.679 --> 00:11:43.080 have kind of the weight. None of them have they 159 00:11:43.200 --> 00:11:48.799 fleshed out arguments. None of them have the case really 160 00:11:48.799 --> 00:11:51.240 worked out for free trade and for what free trade 161 00:11:51.480 --> 00:11:55.559 would entail until Adam Smith. And Adam Smith in the 162 00:11:55.600 --> 00:12:01.960 sense is a pivotal figure. Annas Smith basically you know, 163 00:12:02.120 --> 00:12:11.080 argues that mercualism is wrong. He criticizes their obsession with 164 00:12:11.159 --> 00:12:16.159 trades si pluses, the holding of gold and a A 165 00:12:16.240 --> 00:12:20.120 Smouth advocates, I mean, this is the wealth of nations 166 00:12:20.159 --> 00:12:26.840 for free trade, for competition, and really all based on 167 00:12:26.960 --> 00:12:32.120 the idea of the value of specialization, the value of 168 00:12:32.159 --> 00:12:37.039 the division of labor. And a Smith sees how if 169 00:12:37.480 --> 00:12:41.080 British industry specializes in the thing they're good at, and 170 00:12:41.159 --> 00:12:43.399 in India they specialize in the things they're good at, 171 00:12:43.399 --> 00:12:45.480 and Indonesia they specializing in the things they're good at, 172 00:12:45.840 --> 00:12:49.200 and Africa they, you know, whatever country in Africa, individuals 173 00:12:49.240 --> 00:12:51.960 specialize in the things that they are good at, and 174 00:12:52.000 --> 00:12:55.639 then they all trade, everybody benefits. He doesn't quite have 175 00:12:55.759 --> 00:12:59.279 the concept of comparative advantage. That is that is Ricardo 176 00:13:00.360 --> 00:13:05.519 about forty years later, forty one years later exactly who 177 00:13:05.519 --> 00:13:10.399 develops that? But I mean the fundamental is division of 178 00:13:10.480 --> 00:13:13.559 labor and specialization, and therefore the value of trade as 179 00:13:13.600 --> 00:13:18.399 a consequence of division of labor and specialization, and that 180 00:13:18.840 --> 00:13:21.879 if trade is win win, you want everybody to specialize, 181 00:13:21.919 --> 00:13:23.519 and then you want a trade and you want no 182 00:13:23.679 --> 00:13:26.759 barriers to that trade, because any barrier to trade is 183 00:13:26.799 --> 00:13:30.320 a barrier of specialization, it's a barrier to division of labor. 184 00:13:31.120 --> 00:13:32.960 You want every human being on planet Earth to do 185 00:13:33.000 --> 00:13:37.440 what they're good at. What they have what we call 186 00:13:37.480 --> 00:13:40.159 it will call a comparative advantage in But you want 187 00:13:40.159 --> 00:13:44.000 every individual out there to specialize and become an expert 188 00:13:44.039 --> 00:13:48.159 in what they do and then to trade, and everybody 189 00:13:48.440 --> 00:13:53.360 is dramatically better off. Specialization not only makes is more efficient, 190 00:13:54.000 --> 00:13:57.200 but also as you specialize, you become better at what 191 00:13:57.240 --> 00:14:02.080 you do. You learn a massive learning curve. By specializing, 192 00:14:02.639 --> 00:14:05.759 you learn the topic, you figure it out, you find 193 00:14:05.840 --> 00:14:10.320 better ways to do it, and that increases dramatically efficiency. 194 00:14:10.320 --> 00:14:17.200 And ultimately, mechanization comes from specialization. You see something done, 195 00:14:17.399 --> 00:14:20.360 you understand how it's done. Now you can start thinking 196 00:14:20.399 --> 00:14:22.480 about how to I make a machine do it instead, 197 00:14:25.799 --> 00:14:35.919 and this drives drives economic growth, it drives progress. Now 198 00:14:35.960 --> 00:14:40.279 at the time Adam Smith is writing, though England politically 199 00:14:40.360 --> 00:14:46.039 is dominated by the Mercatalists, and they have tariffs, they 200 00:14:46.039 --> 00:14:49.639 have government granted monopolies. An ansth called the Navigation Act, 201 00:14:49.639 --> 00:14:52.159 which is very similar to the Jones Act but worse. 202 00:14:52.720 --> 00:14:55.080 It basically says that if you want to enter a 203 00:14:55.080 --> 00:14:58.519 British port, you have to be flying a British flag. 204 00:14:58.799 --> 00:15:01.600 The ship has to be a British ship, only Brits 205 00:15:02.440 --> 00:15:06.759 can facilitate trade with Britain. In other words, can have 206 00:15:06.879 --> 00:15:13.840 other navies, other other ships carrying other flags carry goods 207 00:15:13.879 --> 00:15:17.759 into a British port. Again, you know, kind of a 208 00:15:17.799 --> 00:15:21.840 monopoly for British shipping. So this is the time of 209 00:15:22.600 --> 00:15:27.519 really high levels of protectionism and Jurdan and Poleonic wars. 210 00:15:27.639 --> 00:15:31.600 It only gets worse. So seventeen ninety three to eighteen fifteen, 211 00:15:31.639 --> 00:15:34.759 this post Wealth of Nations was seventeen seventy six, and 212 00:15:34.840 --> 00:15:37.960 nobody's really paying attention. Everybody admires Adam Smith reads his 213 00:15:38.039 --> 00:15:42.799 book and then ignores it. The idea of a war 214 00:15:44.159 --> 00:15:46.159 means to the Brits, oh, we need to become self 215 00:15:46.200 --> 00:15:52.360 sufficient emergency. It's not familiar. So they become even more 216 00:15:52.399 --> 00:15:57.919 aggressive in terms of trade barriers. Indeed, at they end 217 00:15:58.000 --> 00:16:02.279 of this war, limit passes what's called the Corn Laws 218 00:16:02.360 --> 00:16:06.240 of eighteen fifteen. They place a huge tariff on inputed grain. 219 00:16:08.600 --> 00:16:11.879 And this of course is supported by the aristocrats who 220 00:16:12.000 --> 00:16:16.399 are their landowners, who are profiting from artificially high prices 221 00:16:16.919 --> 00:16:20.480 because they're not facing any competition from a global from 222 00:16:20.519 --> 00:16:27.120 around the world. And indeed, these laws become kind of 223 00:16:27.360 --> 00:16:32.080 a symbol of aristocratic privilege. And protectionist policies, and the 224 00:16:32.159 --> 00:16:34.039 beneficiaries are clear, more so. 225 00:16:34.159 --> 00:16:36.720 In England than let's say, later in America. 226 00:16:37.279 --> 00:16:42.360 Who benefits is very, very very is very clear from 227 00:16:42.440 --> 00:16:47.600 these laws, but immediately once they pass is already prescious. 228 00:16:47.600 --> 00:16:51.480 So the intellectual movement for free trade is growing in 229 00:16:51.559 --> 00:16:55.679 England from the publication of atimsmus Wealth of Nation. And 230 00:16:55.799 --> 00:16:58.279 of course, and already in the eighteen twenties you start 231 00:16:58.360 --> 00:17:05.640 seeing slowly and erosion in tariffs and an attempt mild 232 00:17:05.720 --> 00:17:09.519 as it is, to start reducing tariffs and bring about 233 00:17:09.559 --> 00:17:13.960 more trade. I mean, the Corn Acts were particularly sensitive 234 00:17:14.440 --> 00:17:19.799 because they're protecting they're protecting British farmers who are basically 235 00:17:19.839 --> 00:17:24.960 the landowners, the aristocrats from you know, much more efficient 236 00:17:25.000 --> 00:17:31.640 producers of food, for example, the Americans and parts of Europe, 237 00:17:31.880 --> 00:17:34.400 which are producing food a lot cheaper than the than 238 00:17:34.880 --> 00:17:37.079 the English. And of course this is also a period 239 00:17:37.720 --> 00:17:41.279 in England, this is industrializing. A lot of people are 240 00:17:41.359 --> 00:17:44.880 leaving the farm, they're going to the city. Supplying food 241 00:17:44.960 --> 00:17:47.880 to the cities becomes a major problem and a major issue. 242 00:17:49.039 --> 00:17:56.160 Food is expensive, People are hungry, people are poor, and 243 00:17:57.319 --> 00:17:59.319 it's the poor and the hungry, if you will, are 244 00:17:59.359 --> 00:18:06.039 part of the Russia placed on Parliament to reduce the tarots. 245 00:18:07.839 --> 00:18:11.720 The indudry Industrial Revolution is turning Britain into the workshop 246 00:18:11.799 --> 00:18:14.880 of the world. They are making stuff. 247 00:18:17.960 --> 00:18:21.680 And so there's there's now, you know, significant pressure. 248 00:18:23.000 --> 00:18:26.480 David ricardo Theory of comparative advantage is published in eighteen seventeen, 249 00:18:27.400 --> 00:18:30.480 which provides a powerful economic qussion off of free trade. 250 00:18:31.400 --> 00:18:35.680 Countries should specialize just like individuals, and trading should be free. 251 00:18:39.799 --> 00:18:41.759 So in eighteen twenty eight they passed kind of a 252 00:18:42.599 --> 00:18:47.240 sliding scale for grain duties partial relief because there's there's 253 00:18:47.240 --> 00:18:51.559 starvation that people people hungry and complaining and they're trying 254 00:18:51.599 --> 00:18:54.880 to appease appease the public, so they do this in 255 00:18:55.119 --> 00:19:00.440 order to appease them. But during the nineteenth thirties you 256 00:19:00.519 --> 00:19:05.759 really get momentum, and here it's intellectual momentum, not just 257 00:19:05.839 --> 00:19:09.519 political momentum. In eighteen thirties you get the Anti corn 258 00:19:09.599 --> 00:19:16.079 Law League, which is led by by politicians slash intellectuals, 259 00:19:16.640 --> 00:19:19.160 and they gain a lot of strength, a lot of power. 260 00:19:19.400 --> 00:19:23.640 Within England. They are educating people, educate, educate, educate, just 261 00:19:23.759 --> 00:19:27.119 like the abolitionist movement in England and in the United States. 262 00:19:27.720 --> 00:19:32.880 The primary focus was on education, and they argued the 263 00:19:32.920 --> 00:19:36.839 free trade with low prices, reduce poverty, stimulate the industry, 264 00:19:38.599 --> 00:19:47.960 and you know, through economic interdependence bring peace, which mostly 265 00:19:48.039 --> 00:19:55.640 works but not always. Ultimately eighteen forty six you get 266 00:19:56.160 --> 00:20:01.000 a serious Irish famine and a and by the way, 267 00:20:01.079 --> 00:20:03.960 that the people supporting the tariffs, of course, the Conservatives. 268 00:20:05.680 --> 00:20:09.440 But in eighteen forty six andative Conservative Prime Minister Robert 269 00:20:09.519 --> 00:20:15.079 Peel breaks with the Conservative Party and joins the Liberal 270 00:20:15.160 --> 00:20:18.759 Party and the Opposition Party and repeal the corn Laws 271 00:20:20.160 --> 00:20:28.559 and basically start a half century of unilateral free trade. 272 00:20:28.799 --> 00:20:34.799 That is, Britain becomes an island of zero tariffs. It 273 00:20:34.880 --> 00:20:39.200 doesn't do deals, it doesn't do deals with other countries. 274 00:20:39.720 --> 00:20:43.839 It just lowes tawifs to zero and trades with anybody 275 00:20:43.880 --> 00:20:55.440 who's willing to trade with him. It's from eighteen forty 276 00:20:55.480 --> 00:21:00.160 six on they slowly repeal all the other laws and 277 00:21:00.559 --> 00:21:03.240 uh in spite of the battle, you know, in spite 278 00:21:03.240 --> 00:21:05.759 of the opposition by the aristocrats. This is a real 279 00:21:05.799 --> 00:21:08.880 blow to the aristocrats in England, but it's it's part 280 00:21:08.920 --> 00:21:12.319 of kind of the the the change that British society, 281 00:21:12.359 --> 00:21:16.680 British economy is going through as it enters the modern era. 282 00:21:17.960 --> 00:21:21.559 And of course a lot of economic. 283 00:21:21.279 --> 00:21:25.680 Nationalists and farmers and but mainly was the aristocrats who 284 00:21:25.759 --> 00:21:31.400 opposed this, uh, supporting the liberalization with the industrialists and manufacturers, 285 00:21:31.759 --> 00:21:36.440 the middle class, the new working class who are relatively poor, 286 00:21:37.079 --> 00:21:40.119 but we're going to benefit from cheaper food prices. And 287 00:21:40.240 --> 00:21:43.480 of course they once saying corn the corn low is 288 00:21:43.960 --> 00:21:49.480 is abolished. Cheap food just flows into the UK. Uh 289 00:21:49.720 --> 00:21:53.319 and uh, you know the United States, So that's exploding, 290 00:21:53.400 --> 00:21:57.920 for example, food to the UK, as do parts of Europe, Ukraine, Uh, 291 00:21:58.480 --> 00:22:02.400 you know Russia where there is fertile ground and they 292 00:22:02.480 --> 00:22:08.599 can they grow food quite cheaply, start imputting food into 293 00:22:09.119 --> 00:22:14.839 Great Britain. From that point on, Britain phases out all 294 00:22:14.920 --> 00:22:18.680 the regulations. So in eighteen forty nine they repeal the 295 00:22:18.799 --> 00:22:22.799 old navigation acts that have required the goods imported into 296 00:22:22.839 --> 00:22:26.960 Britain or its colonies how to be transported in British ships. 297 00:22:27.759 --> 00:22:32.039 That is repealed. That is huge for international trade. Eighteen 298 00:22:32.079 --> 00:22:35.279 fifty four they repealed the Merchant Ship Act of eighteen 299 00:22:35.279 --> 00:22:39.799 fifty They they established sorry, the Merchant Shipping Act, which 300 00:22:39.920 --> 00:22:43.559 cleaned up all other remnants of any kind of restrictions 301 00:22:43.599 --> 00:22:43.960 on trade. 302 00:22:44.000 --> 00:22:44.880 I mean, really. 303 00:22:47.160 --> 00:22:54.960 Brit becomes unilaterals, zero tariff, no trade restrictions during this period, 304 00:22:54.960 --> 00:22:56.000 and really that continues. 305 00:22:56.000 --> 00:22:57.440 And sad World War One. 306 00:22:58.440 --> 00:23:02.240 I mean, it is amazing how many good things end 307 00:23:03.000 --> 00:23:07.920 in World War One, how many bad things instituted just 308 00:23:08.000 --> 00:23:10.640 before during World War One. World War One is really 309 00:23:10.680 --> 00:23:17.279 a turning point historically against capitalism away from and I 310 00:23:17.440 --> 00:23:20.880 Ran talked about there was a different sense of life 311 00:23:21.559 --> 00:23:25.720 before World War One. There was a different attitude towards living, 312 00:23:26.839 --> 00:23:32.839 and there was a different attitude towards art, and of 313 00:23:32.920 --> 00:23:37.440 course towards towards trade and capitalism. World War One was 314 00:23:37.519 --> 00:23:43.799 a monumentally horrific negative event in human history. It really 315 00:23:43.920 --> 00:23:50.119 did turn so much of the population against the values 316 00:23:50.279 --> 00:23:54.039 that against romanticism and arts, and against capitalism and against 317 00:23:54.559 --> 00:23:56.640 really liberty, and of course it sets up World War One, 318 00:23:56.680 --> 00:24:01.559 sets up World War two. It destroys benevolences, milelevelence, and 319 00:24:02.119 --> 00:24:06.839 it destroys individualism, and it basest collectivism and nationalism. The 320 00:24:06.960 --> 00:24:12.799 nationalist movements really come to the foray in World War 321 00:24:12.839 --> 00:24:16.039 One and the post World War One and leading up to, 322 00:24:16.359 --> 00:24:21.720 of course the implosion of World War two. So between 323 00:24:21.960 --> 00:24:28.000 eighteen forty six and nineteen fourteen, Britain, which is at 324 00:24:28.000 --> 00:24:31.960 the heart of the industry revolution, Britain that is basically 325 00:24:32.000 --> 00:24:35.400 as the most important navy in the world, a navy 326 00:24:35.559 --> 00:24:40.759 dedicated now to free trade. Ran at some point somewhere 327 00:24:40.799 --> 00:24:44.119 it talks about the fact that British farm Party in 328 00:24:44.119 --> 00:24:49.599 the nineteenth century was basically gunboat diplomacy. Boat diplomacy dedicated 329 00:24:49.759 --> 00:24:54.079 to opening up the sea lanes for trade, opening up 330 00:24:54.160 --> 00:25:00.279 ports for trade, making it possible to engage in araide 331 00:25:00.559 --> 00:25:03.000 free of privacy and free of cos and free of force. 332 00:25:03.880 --> 00:25:07.960 Uh And and really if a country resisted trade with 333 00:25:08.039 --> 00:25:11.480 the British, it's gunships would enter the port, bomb a 334 00:25:11.559 --> 00:25:15.079 few buildings and the rulers would change their mind and 335 00:25:15.200 --> 00:25:17.640 start trading with the UK with with the bits. That 336 00:25:17.920 --> 00:25:23.640 was what gunboat diplomacy was like, and all in the 337 00:25:23.720 --> 00:25:26.200 name of free trade. It is the only country that 338 00:25:26.359 --> 00:25:30.480 I know of in history that has been dedicated to 339 00:25:30.519 --> 00:25:33.480 the principle of free trade. And in that sense it 340 00:25:33.599 --> 00:25:36.160 was a huge success that that the failure of Britain 341 00:25:36.240 --> 00:25:40.599 during this period while were it's colonies, it has spent 342 00:25:40.880 --> 00:25:46.599 so much money on expanding and preserving and defending and exploiting. 343 00:25:46.640 --> 00:25:52.519 I guess even and its colonies that it ultimately bankrupted Britain, 344 00:25:53.960 --> 00:25:57.519 the colonies that I mean people today think the colonialism 345 00:25:57.599 --> 00:26:02.119 is what made capitalism possible. I mean, that's absurd. Actually 346 00:26:02.200 --> 00:26:07.720 colonialism drained the capitalism in England from resources, and the 347 00:26:07.799 --> 00:26:11.480 consequence of that are both socialism rose in England and 348 00:26:11.640 --> 00:26:15.440 of course England abandoned capitalism completely at the end of 349 00:26:15.480 --> 00:26:17.559 World War One. Right, World War One was a turning 350 00:26:17.599 --> 00:26:20.279 point for the abandonment of capitalism. 351 00:26:23.359 --> 00:26:26.640 So that is what's going on in Britain. Unilateral free trade. 352 00:26:26.680 --> 00:26:30.160 It's what I argue America should become zero tasks, zero 353 00:26:30.279 --> 00:26:33.359 trade barriers. Bring your good sell them here. You know 354 00:26:33.480 --> 00:26:37.359 in American businesses compete, compete. That is your mission in 355 00:26:37.440 --> 00:26:43.000 life to compete with everybody else. Right. Uh. 356 00:26:43.200 --> 00:26:46.880 And you know this is this is also a time. 357 00:26:46.759 --> 00:26:50.359 In England when the monopoly is have broken apart, that is, 358 00:26:50.680 --> 00:26:55.079 the government granted monopolies and trade is now not exclusive 359 00:26:55.160 --> 00:26:56.880 to the East India Company or something like that. 360 00:26:57.279 --> 00:26:58.839 Trade is now open to competition. 361 00:26:59.720 --> 00:27:03.920 Uh. And industries industries were always competitive in England, but 362 00:27:04.039 --> 00:27:10.160 any semblance of central planning and control, this is the 363 00:27:10.319 --> 00:27:14.119 freest period in British history and some of the freest 364 00:27:14.359 --> 00:27:23.599 ever in world history is eighteen forty six to nineteen fourteen. 365 00:27:24.079 --> 00:27:27.279 And note that in Britain free trade is more important 366 00:27:27.319 --> 00:27:29.920 than as we'll see in the US. Why is it 367 00:27:30.039 --> 00:27:36.079 more important because Britain is small, it's small geographically, it 368 00:27:36.200 --> 00:27:43.119 doesn't have natural resources, it's relatively small population, it's small. 369 00:27:45.160 --> 00:27:49.960 So for Britain to do to thrive, it has to 370 00:27:50.079 --> 00:27:56.240 have trade, it has to have global free trade. The 371 00:27:56.359 --> 00:28:00.279 United States, in comparison, is huge, filled in the natural 372 00:28:00.319 --> 00:28:04.319 resources and dramatically growing in population during this period during 373 00:28:04.319 --> 00:28:08.720 the nineteenth century, and it could sustain itself in some 374 00:28:08.880 --> 00:28:12.680 ways because it's got so much division of labor and 375 00:28:12.720 --> 00:28:17.519 specialization happening within and there's so much, relatively speaking, at least, 376 00:28:17.559 --> 00:28:21.359 so much freedom within the United States that the United 377 00:28:21.400 --> 00:28:24.960 States from its beginning is far less dependent and reliance 378 00:28:25.160 --> 00:28:28.559 on trade than the British Islands. Off Britain is an island, 379 00:28:29.079 --> 00:28:33.799 a small island at that it's not Australia, you know, 380 00:28:33.960 --> 00:28:38.000 and it's a small island that's dependent on trading with 381 00:28:38.039 --> 00:28:41.680 the rest of the world. So the comparative advantage division 382 00:28:41.680 --> 00:28:46.000 of labor specialization even more important in England, in Britain, 383 00:28:46.200 --> 00:28:51.359 Great Britain than in a big country like the United States. 384 00:28:53.680 --> 00:28:59.119 Now the US free trade or really the issue of tariffs, 385 00:29:00.079 --> 00:29:03.839 it's very much wound up in the US with the 386 00:29:04.039 --> 00:29:08.799 idea of taxation, particularly at the founding. I mean, there 387 00:29:08.839 --> 00:29:12.039 were a lot of voices pre founding for free trade. 388 00:29:12.880 --> 00:29:15.160 Uh and in deep part of the rejection of British 389 00:29:15.200 --> 00:29:19.680 control and the British monarchy was the rejection of the British. 390 00:29:19.359 --> 00:29:22.359 Control over trade with the American colony. 391 00:29:22.920 --> 00:29:26.559 They the Americans didn't see why British was intervening in 392 00:29:26.640 --> 00:29:29.000 their ability to trade with whoever they wanted to trade. 393 00:29:33.400 --> 00:29:36.640 So from the beginning, you know, the United States is 394 00:29:36.720 --> 00:29:39.880 set on a path towards free trade. But they encounter 395 00:29:40.680 --> 00:29:44.799 the challenge is during the Constitution, they encountered the challenge 396 00:29:44.880 --> 00:29:48.319 of how do we raise revenue for this new government? 397 00:29:48.440 --> 00:29:54.359 Where does the revenue come from? H And you know, 398 00:29:54.519 --> 00:29:58.559 this is a real problem. They for variety of reasons, 399 00:29:58.599 --> 00:30:02.160 they't want to tax income, partially because it's it's difficult 400 00:30:02.160 --> 00:30:06.559 to collect, it's difficult to identify income. And I think 401 00:30:06.599 --> 00:30:10.359