Speaker 1: A lot of the fundamental principles I've READO national self
Speaker 1: interest and individual rts. This is the Uran Brook Show.
Speaker 1: All right, everybody, welcome to your one book show on
Speaker 1: this Saturday, August second.
Speaker 2: I hope everybody is having.
Speaker 1: A fantastic weekend. I'm busy packing, you know, traveling tomorrow
Speaker 1: to lizb and Portugal. I'll be gone for two months,
Speaker 1: two months. I'll be in uh Portugal, in Italy for
Speaker 1: two months. So busy packing, organizing, getting anything ready, and
Speaker 1: always have time for you guys for for another show.
Speaker 1: So I thought we talked today better topic. I just
Speaker 1: been uh really three days, eight hours talking about at
Speaker 1: the Peterson Academy. I just got back from there a
Speaker 1: few days ago, and uh and and I did a
Speaker 1: whole eight hours on trade. It was it was, I think,
Speaker 1: really cool. You know, you guys should check it out.
Speaker 1: You should go to Peterson Academy. Just use use the
Speaker 1: link that has my name in it. So I get
Speaker 1: credit for you going for me. But uh, what you
Speaker 1: what you'll get there is eight hours on trade and
Speaker 1: tariffs and the history and the economics.
Speaker 2: I spent a whole you know, over an hour on.
Speaker 1: Examples of specialization and division of labor and and compartitive
Speaker 1: advantage and what they all mean and how they all
Speaker 1: work and running through an example. Uh and uh. And
Speaker 1: then you know, we go over the history and then
Speaker 1: we talk about kind.
Speaker 2: Of tariffs and what they are and how they work.
Speaker 1: We talked about milkitialism and neo milk indalism. That's what
Speaker 1: I you know, that's what we call Donald Trump and
Speaker 1: his people around him the new milk in the lists
Speaker 1: and and what what that implies and what that means.
Speaker 1: And then we talked about objections to globalization, objections to
Speaker 1: trade and uh and and you know, so we cover
Speaker 1: it a lot a lot of content in eight hours.
Speaker 1: It was great. So if you have a check out
Speaker 1: the Pederston Academy, I will have I think by the
Speaker 1: end of the year five courses on the Pedasent Academy
Speaker 1: Capitalism and Finance are already up there. You know a
Speaker 1: lot of people are watching those. And then there's going
Speaker 1: to be trade, and there's going to be money, and
Speaker 1: there's going to be the corporation kind of business history
Speaker 1: and uh. Those all I think, I think really good courses,
Speaker 1: kind of cool. So yeah, take advantage of it. You
Speaker 1: can You can get an annual You pay one annual
Speaker 1: fee and then you can watch whatever you want. You
Speaker 1: can watch as many courses as you want. So h
Speaker 1: you know those five if I do a few more
Speaker 1: than just just watching my courses, will make worth the
Speaker 1: annual commitment, the annual financial commitment. All right.
Speaker 2: So yeah, so let's talk about trade.
Speaker 1: Let's talk about trade, and to talk about the history
Speaker 1: of trade, I mean, I want to talk about trade
Speaker 1: in America, but the history of trade more broadly, one
Speaker 1: has to understand I think really two things so important
Speaker 1: to here. One is the trade has always been a
Speaker 1: part of human life. Trade goes back to a time
Speaker 1: where we were tribal and tribes traded. And if you
Speaker 1: go back to two thousand BC, you already see quite
Speaker 1: a bit of trade across geography. You know. You you
Speaker 1: even see, you know, stuff coming down from northern Europe
Speaker 1: where there's nothing with a bunch of barbarians h Northern
Speaker 1: Europe trading with uh you know, certain uh Greek cities.
Speaker 1: We're trading with the Egyptians who are trading with the
Speaker 1: Mesopotamiams and uh you know, so certainly by a thousand BC,
Speaker 1: you get you get substantial trade, and of course all
Speaker 1: of them are trading for the East with India, and
Speaker 1: India is trading with China, so indirectly there trading with China.
Speaker 1: And then by the time you get the Greek classical period,
Speaker 1: there's it's even more just explicit. You know, there's trade
Speaker 1: across the Mediterranean all the way to Spain. There's trade
Speaker 1: up some of the European rivers into northern Europe. There's
Speaker 1: trade to India and China and Egypt, and trade robust
Speaker 1: trade is a is a a real part.
Speaker 2: Of human history. You just can't separate the two.
Speaker 1: And of course, once the Europeans discovered a way around
Speaker 1: the corner of the Horn of af, once the Age
Speaker 1: of Discovery begins, trade explodes. The Europeans are, you know,
Speaker 1: sending lots of ships to Asia to trade Primeallyy to
Speaker 1: India and Indonesia and what are called the Spice Islands.
Speaker 1: And the main thing that Europeans are trading for the
Speaker 1: thing that they want the most spices, Like Europeans are
Speaker 1: suddenly discovering that food has flake, can have flavor that
Speaker 1: they taste. Buds are not limited to a narrow spectrum
Speaker 1: of food stuff. They discover spice and they start importing spices.
Speaker 1: Farm Asia and its spices are some of the most lucrative,
Speaker 1: if not the most lucrative, you know, trading features. So
Speaker 1: spices are coming in and and so there's a lot
Speaker 1: of trading, and then of course that evolves into ultimately
Speaker 1: into you know, somebody says black peppers, black peck and
Speaker 1: cefron and cinnamon and a variety of different of these
Speaker 1: of these just flavors that Europeans are not experienced. Remember
Speaker 1: you're you know, in spite of tea time in England,
Speaker 1: you have had a discovered teeth in the Chinese, that
Speaker 1: discovered coffee from ultimately from Ethiopia. I mean, all the
Speaker 1: stuff that actually tastes really really good comes in through trade, right,
Speaker 1: So trade is blowing up, and then of course with
Speaker 1: the trade routes into Asia and through Africa, the Europeans
Speaker 1: start colonizing. And part of the motivation for colonization, and
Speaker 1: I found this really interesting is the economic ideology of Melcanalism.
Speaker 1: Mercanalism really drives the idea of colonial colonizing.
Speaker 2: So, you know, if we.
Speaker 1: Think about trade as win win, well, why colonize places
Speaker 1: when you can trade with them. Why do you need
Speaker 1: to colonize India, Why do you need to colonize on
Speaker 1: the Asian countries? Why can't you just set up trade
Speaker 1: shops there and trade with them. And here's the problem
Speaker 1: that you view trade as win lose Europe I mean,
Speaker 1: Mercanalism is a philosophy. It's an ideology of trade as
Speaker 1: being fundamentally win lose, and that export and thus having
Speaker 1: precious metals flow into your country is a win, and imports,
Speaker 1: importing cotton or textiles or spices for that matter, and
Speaker 1: giving up precious matter for it isn't at loss. So
Speaker 1: the philosophy of moketalism, you know, kind of guides the
Speaker 1: various empires to.
Speaker 2: Set up colonies.
Speaker 1: The colonies are basically there to provide war materials to
Speaker 1: the mother country and to buy finished goods from the
Speaker 1: money mother countries. So they're there to suck up war materials,
Speaker 1: natural resources and to import to themselves, constituting export to
Speaker 1: the mother country of goods. And thus this is perceived
Speaker 1: as this is a this is this is the winning strategy.
Speaker 1: This is what trade is all about. This is what
Speaker 1: uh you know, winning is all about. This is what
Speaker 1: winning looks like money flowing in UH and and and
Speaker 1: uh stuff flowing out. The only thing other than money
Speaker 1: coming in UH of natural resources to be able to
Speaker 1: produce the stuff.
Speaker 2: And you know, this.
Speaker 1: Probably holds back the West in terms of wealth significantly.
Speaker 1: This attitude of milkanalism, it explains some of what happens
Speaker 1: during colonialism. It explains the whole attitude of you know,
Speaker 1: and and and attitude towards the colonies and the attempt
Speaker 1: kind of the kind of trade that happens between England
Speaker 1: and the colonies, or the French and the colonies, Belgian
Speaker 1: the colonies. It explains that the exploitation that does happen
Speaker 1: in these places, because motionalism is a system believed that
Speaker 1: embraces exploitations. This is wind lose, you want to make
Speaker 1: sure the other party loses. And so this is kind
Speaker 1: of the context of seventeenth and eighteenth century European trade.
Speaker 1: It's robust, but it is all done on a long
Speaker 1: premise which guides trade not to win win maximizing win
Speaker 1: win relationship with guides it towards maximizing the amount of money.
Speaker 1: You know, the European nations accumulating gold and silver rather
Speaker 1: than the amount of wealth that they are accumulating. And
Speaker 1: there's a lot of lost efficiency, a lot of lost productivity.
Speaker 1: I mean, there's a real sense in which the industry
Speaker 1: revolution happens and it's success in spite of the milk
Speaker 1: and salistic attitudes that so many in you have look
Speaker 1: at the list. Attitudes also involve much more central planning
Speaker 1: that otherwise, and much more goment involvement in everything going around,
Speaker 1: not just trade but production itself. And during this period
Speaker 1: there were a number of thinkers, a number of economists,
Speaker 1: and I'm intellectuals is saying, you know this, all this
Speaker 1: is wrong. It just doesn't make any sense. Trade fundamentally
Speaker 1: is win win. You guys are getting it all wrong.
Speaker 1: Molcanalism is wrong. But nobody's really listening. None of them
Speaker 1: have kind of the weight. None of them have they
Speaker 1: fleshed out arguments. None of them have the case really
Speaker 1: worked out for free trade and for what free trade
Speaker 1: would entail until Adam Smith. And Adam Smith in the
Speaker 1: sense is a pivotal figure. Annas Smith basically you know,
Speaker 1: argues that mercualism is wrong. He criticizes their obsession with
Speaker 1: trades si pluses, the holding of gold and a A
Speaker 1: Smouth advocates, I mean, this is the wealth of nations
Speaker 1: for free trade, for competition, and really all based on
Speaker 1: the idea of the value of specialization, the value of
Speaker 1: the division of labor. And a Smith sees how if
Speaker 1: British industry specializes in the thing they're good at, and
Speaker 1: in India they specialize in the things they're good at,
Speaker 1: and Indonesia they specializing in the things they're good at,
Speaker 1: and Africa they, you know, whatever country in Africa, individuals
Speaker 1: specialize in the things that they are good at, and
Speaker 1: then they all trade, everybody benefits. He doesn't quite have
Speaker 1: the concept of comparative advantage. That is that is Ricardo
Speaker 1: about forty years later, forty one years later exactly who
Speaker 1: develops that? But I mean the fundamental is division of
Speaker 1: labor and specialization, and therefore the value of trade as
Speaker 1: a consequence of division of labor and specialization, and that
Speaker 1: if trade is win win, you want everybody to specialize,
Speaker 1: and then you want a trade and you want no
Speaker 1: barriers to that trade, because any barrier to trade is
Speaker 1: a barrier of specialization, it's a barrier to division of labor.
Speaker 1: You want every human being on planet Earth to do
Speaker 1: what they're good at. What they have what we call
Speaker 1: it will call a comparative advantage in But you want
Speaker 1: every individual out there to specialize and become an expert
Speaker 1: in what they do and then to trade, and everybody
Speaker 1: is dramatically better off. Specialization not only makes is more efficient,
Speaker 1: but also as you specialize, you become better at what
Speaker 1: you do. You learn a massive learning curve. By specializing,
Speaker 1: you learn the topic, you figure it out, you find
Speaker 1: better ways to do it, and that increases dramatically efficiency.
Speaker 1: And ultimately, mechanization comes from specialization. You see something done,
Speaker 1: you understand how it's done. Now you can start thinking
Speaker 1: about how to I make a machine do it instead,
Speaker 1: and this drives drives economic growth, it drives progress. Now
Speaker 1: at the time Adam Smith is writing, though England politically
Speaker 1: is dominated by the Mercatalists, and they have tariffs, they
Speaker 1: have government granted monopolies. An ansth called the Navigation Act,
Speaker 1: which is very similar to the Jones Act but worse.
Speaker 1: It basically says that if you want to enter a
Speaker 1: British port, you have to be flying a British flag.
Speaker 1: The ship has to be a British ship, only Brits
Speaker 1: can facilitate trade with Britain. In other words, can have
Speaker 1: other navies, other other ships carrying other flags carry goods
Speaker 1: into a British port. Again, you know, kind of a
Speaker 1: monopoly for British shipping. So this is the time of
Speaker 1: really high levels of protectionism and Jurdan and Poleonic wars.
Speaker 1: It only gets worse. So seventeen ninety three to eighteen fifteen,
Speaker 1: this post Wealth of Nations was seventeen seventy six, and
Speaker 1: nobody's really paying attention. Everybody admires Adam Smith reads his
Speaker 1: book and then ignores it. The idea of a war
Speaker 1: means to the Brits, oh, we need to become self
Speaker 1: sufficient emergency. It's not familiar. So they become even more
Speaker 1: aggressive in terms of trade barriers. Indeed, at they end
Speaker 1: of this war, limit passes what's called the Corn Laws
Speaker 1: of eighteen fifteen. They place a huge tariff on inputed grain.
Speaker 1: And this of course is supported by the aristocrats who
Speaker 1: are their landowners, who are profiting from artificially high prices
Speaker 1: because they're not facing any competition from a global from
Speaker 1: around the world. And indeed, these laws become kind of
Speaker 1: a symbol of aristocratic privilege. And protectionist policies, and the
Speaker 1: beneficiaries are clear, more so.
Speaker 2: In England than let's say, later in America.
Speaker 1: Who benefits is very, very very is very clear from
Speaker 1: these laws, but immediately once they pass is already prescious.
Speaker 1: So the intellectual movement for free trade is growing in
Speaker 1: England from the publication of atimsmus Wealth of Nation. And
Speaker 1: of course, and already in the eighteen twenties you start
Speaker 1: seeing slowly and erosion in tariffs and an attempt mild
Speaker 1: as it is, to start reducing tariffs and bring about
Speaker 1: more trade. I mean, the Corn Acts were particularly sensitive
Speaker 1: because they're protecting they're protecting British farmers who are basically
Speaker 1: the landowners, the aristocrats from you know, much more efficient
Speaker 1: producers of food, for example, the Americans and parts of Europe,
Speaker 1: which are producing food a lot cheaper than the than
Speaker 1: the English. And of course this is also a period
Speaker 1: in England, this is industrializing. A lot of people are
Speaker 1: leaving the farm, they're going to the city. Supplying food
Speaker 1: to the cities becomes a major problem and a major issue.
Speaker 1: Food is expensive, People are hungry, people are poor, and
Speaker 1: it's the poor and the hungry, if you will, are
Speaker 1: part of the Russia placed on Parliament to reduce the tarots.
Speaker 1: The indudry Industrial Revolution is turning Britain into the workshop
Speaker 1: of the world. They are making stuff.
Speaker 2: And so there's there's now, you know, significant pressure.
Speaker 1: David ricardo Theory of comparative advantage is published in eighteen seventeen,
Speaker 1: which provides a powerful economic qussion off of free trade.
Speaker 1: Countries should specialize just like individuals, and trading should be free.
Speaker 1: So in eighteen twenty eight they passed kind of a
Speaker 1: sliding scale for grain duties partial relief because there's there's
Speaker 1: starvation that people people hungry and complaining and they're trying
Speaker 1: to appease appease the public, so they do this in
Speaker 1: order to appease them. But during the nineteenth thirties you
Speaker 1: really get momentum, and here it's intellectual momentum, not just
Speaker 1: political momentum. In eighteen thirties you get the Anti corn
Speaker 1: Law League, which is led by by politicians slash intellectuals,
Speaker 1: and they gain a lot of strength, a lot of power.
Speaker 1: Within England. They are educating people, educate, educate, educate, just
Speaker 1: like the abolitionist movement in England and in the United States.
Speaker 1: The primary focus was on education, and they argued the
Speaker 1: free trade with low prices, reduce poverty, stimulate the industry,
Speaker 1: and you know, through economic interdependence bring peace, which mostly
Speaker 1: works but not always. Ultimately eighteen forty six you get
Speaker 1: a serious Irish famine and a and by the way,
Speaker 1: that the people supporting the tariffs, of course, the Conservatives.
Speaker 1: But in eighteen forty six andative Conservative Prime Minister Robert
Speaker 1: Peel breaks with the Conservative Party and joins the Liberal
Speaker 1: Party and the Opposition Party and repeal the corn Laws
Speaker 1: and basically start a half century of unilateral free trade.
Speaker 1: That is, Britain becomes an island of zero tariffs. It
Speaker 1: doesn't do deals, it doesn't do deals with other countries.
Speaker 1: It just lowes tawifs to zero and trades with anybody
Speaker 1: who's willing to trade with him. It's from eighteen forty
Speaker 1: six on they slowly repeal all the other laws and
Speaker 1: uh in spite of the battle, you know, in spite
Speaker 1: of the opposition by the aristocrats. This is a real
Speaker 1: blow to the aristocrats in England, but it's it's part
Speaker 1: of kind of the the the change that British society,
Speaker 1: British economy is going through as it enters the modern era.
Speaker 2: And of course a lot of economic.
Speaker 1: Nationalists and farmers and but mainly was the aristocrats who
Speaker 1: opposed this, uh, supporting the liberalization with the industrialists and manufacturers,
Speaker 1: the middle class, the new working class who are relatively poor,
Speaker 1: but we're going to benefit from cheaper food prices. And
Speaker 1: of course they once saying corn the corn low is
Speaker 1: is abolished. Cheap food just flows into the UK. Uh
Speaker 1: and uh, you know the United States, So that's exploding,
Speaker 1: for example, food to the UK, as do parts of Europe, Ukraine, Uh,
Speaker 1: you know Russia where there is fertile ground and they
Speaker 1: can they grow food quite cheaply, start imputting food into
Speaker 1: Great Britain. From that point on, Britain phases out all
Speaker 1: the regulations. So in eighteen forty nine they repeal the
Speaker 1: old navigation acts that have required the goods imported into
Speaker 1: Britain or its colonies how to be transported in British ships.
Speaker 1: That is repealed. That is huge for international trade. Eighteen
Speaker 1: fifty four they repealed the Merchant Ship Act of eighteen
Speaker 1: fifty They they established sorry, the Merchant Shipping Act, which
Speaker 1: cleaned up all other remnants of any kind of restrictions
Speaker 1: on trade.
Speaker 2: I mean, really.
Speaker 1: Brit becomes unilaterals, zero tariff, no trade restrictions during this period,
Speaker 1: and really that continues.
Speaker 2: And sad World War One.
Speaker 1: I mean, it is amazing how many good things end
Speaker 1: in World War One, how many bad things instituted just
Speaker 1: before during World War One. World War One is really
Speaker 1: a turning point historically against capitalism away from and I
Speaker 1: Ran talked about there was a different sense of life
Speaker 1: before World War One. There was a different attitude towards living,
Speaker 1: and there was a different attitude towards art, and of
Speaker 1: course towards towards trade and capitalism. World War One was
Speaker 1: a monumentally horrific negative event in human history. It really
Speaker 1: did turn so much of the population against the values
Speaker 1: that against romanticism and arts, and against capitalism and against
Speaker 1: really liberty, and of course it sets up World War One,
Speaker 1: sets up World War two. It destroys benevolences, milelevelence, and
Speaker 1: it destroys individualism, and it basest collectivism and nationalism. The
Speaker 1: nationalist movements really come to the foray in World War
Speaker 1: One and the post World War One and leading up to,
Speaker 1: of course the implosion of World War two. So between
Speaker 1: eighteen forty six and nineteen fourteen, Britain, which is at
Speaker 1: the heart of the industry revolution, Britain that is basically
Speaker 1: as the most important navy in the world, a navy
Speaker 1: dedicated now to free trade. Ran at some point somewhere
Speaker 1: it talks about the fact that British farm Party in
Speaker 1: the nineteenth century was basically gunboat diplomacy. Boat diplomacy dedicated
Speaker 1: to opening up the sea lanes for trade, opening up
Speaker 1: ports for trade, making it possible to engage in araide
Speaker 1: free of privacy and free of cos and free of force.
Speaker 1: Uh And and really if a country resisted trade with
Speaker 1: the British, it's gunships would enter the port, bomb a
Speaker 1: few buildings and the rulers would change their mind and
Speaker 1: start trading with the UK with with the bits. That
Speaker 1: was what gunboat diplomacy was like, and all in the
Speaker 1: name of free trade. It is the only country that
Speaker 1: I know of in history that has been dedicated to
Speaker 1: the principle of free trade. And in that sense it
Speaker 1: was a huge success that that the failure of Britain
Speaker 1: during this period while were it's colonies, it has spent
Speaker 1: so much money on expanding and preserving and defending and exploiting.
Speaker 1: I guess even and its colonies that it ultimately bankrupted Britain,
Speaker 1: the colonies that I mean people today think the colonialism
Speaker 1: is what made capitalism possible. I mean, that's absurd. Actually
Speaker 1: colonialism drained the capitalism in England from resources, and the
Speaker 1: consequence of that are both socialism rose in England and
Speaker 1: of course England abandoned capitalism completely at the end of
Speaker 1: World War One. Right, World War One was a turning
Speaker 1: point for the abandonment of capitalism.
Speaker 2: So that is what's going on in Britain. Unilateral free trade.
Speaker 1: It's what I argue America should become zero tasks, zero
Speaker 1: trade barriers. Bring your good sell them here. You know
Speaker 1: in American businesses compete, compete. That is your mission in
Speaker 1: life to compete with everybody else. Right. Uh.
Speaker 2: And you know this is this is also a time.
Speaker 1: In England when the monopoly is have broken apart, that is,
Speaker 1: the government granted monopolies and trade is now not exclusive
Speaker 1: to the East India Company or something like that.
Speaker 2: Trade is now open to competition.
Speaker 1: Uh. And industries industries were always competitive in England, but
Speaker 1: any semblance of central planning and control, this is the
Speaker 1: freest period in British history and some of the freest
Speaker 1: ever in world history is eighteen forty six to nineteen fourteen.
Speaker 1: And note that in Britain free trade is more important
Speaker 1: than as we'll see in the US. Why is it
Speaker 1: more important because Britain is small, it's small geographically, it
Speaker 1: doesn't have natural resources, it's relatively small population, it's small.
Speaker 1: So for Britain to do to thrive, it has to
Speaker 1: have trade, it has to have global free trade. The
Speaker 1: United States, in comparison, is huge, filled in the natural
Speaker 1: resources and dramatically growing in population during this period during
Speaker 1: the nineteenth century, and it could sustain itself in some
Speaker 1: ways because it's got so much division of labor and
Speaker 1: specialization happening within and there's so much, relatively speaking, at least,
Speaker 1: so much freedom within the United States that the United
Speaker 1: States from its beginning is far less dependent and reliance
Speaker 1: on trade than the British Islands. Off Britain is an island,
Speaker 1: a small island at that it's not Australia, you know,
Speaker 1: and it's a small island that's dependent on trading with
Speaker 1: the rest of the world. So the comparative advantage division
Speaker 1: of labor specialization even more important in England, in Britain,
Speaker 1: Great Britain than in a big country like the United States.
Speaker 1: Now the US free trade or really the issue of tariffs,
Speaker 1: it's very much wound up in the US with the
Speaker 1: idea of taxation, particularly at the founding. I mean, there
Speaker 1: were a lot of voices pre founding for free trade.
Speaker 1: Uh and in deep part of the rejection of British
Speaker 1: control and the British monarchy was the rejection of the British.
Speaker 2: Control over trade with the American colony.
Speaker 1: They the Americans didn't see why British was intervening in
Speaker 1: their ability to trade with whoever they wanted to trade.
Speaker 1: So from the beginning, you know, the United States is
Speaker 1: set on a path towards free trade. But they encounter
Speaker 1: the challenge is during the Constitution, they encountered the challenge
Speaker 1: of how do we raise revenue for this new government?
Speaker 1: Where does the revenue come from? H And you know,
Speaker 1: this is a real problem. They for variety of reasons,
Speaker 1: they't want to tax income, partially because it's it's difficult
Speaker 1: to collect, it's difficult to identify income. And I think
Speaker 1: they're posted it philosophically. It's like you're taxing work. I
Speaker 1: think they understood well enough that when you tax something,
Speaker 1: you get less of it. And this was a country
Speaker 1: that where work was admired and respected, and they didn't
Speaker 1: they didn't want to tax it. They could have imposed
Speaker 1: a sales tax on consumption. But how do you collect
Speaker 1: the sales tax. It's very difficult to collect the sales
Speaker 1: tax because you now have to be present in a
Speaker 1: sense and every transaction there cause they're no real accounting systems,
Speaker 1: sophisticated accounting systems. It's on computerized obviously. How does the
Speaker 1: government keep track of what's being bought and what's being sold.
Speaker 1: It would take too much of an administrative headache to
Speaker 1: impose something like that. Now, tariffs, input taxes, which is
Speaker 1: what a tariff is an import tax, is relatively simple.
Speaker 1: There are only so many ports or places of entry
Speaker 1: into the country. You put a customer's office in every
Speaker 1: one of those places, and you charge a uniform tariff
Speaker 1: on the goods coming in, and yeah, it reduces it
Speaker 1: reduces sales of those goods, but that's not a tragedy,
Speaker 1: and you gain revenue. And in those days government was
Speaker 1: so small, so small, two and a half percent max
Speaker 1: three and a half percent of GDP. That they could
Speaker 1: raise a big chunk of the revenue from tariffs. The
Speaker 1: rest were excise taxes, like on alcohol and particular goods,
Speaker 1: where again you could control, you know, what was happening
Speaker 1: at the points of engagement, at the points of trade.
Speaker 1: You didn't have to create a massive bureaucracy to regulate
Speaker 1: every piece of everything that traded, everything that change stands.
Speaker 1: So the idea at the Constitution, at the writing of
Speaker 1: the Constitution was that they would use tariffs. They would
Speaker 1: use tariffs in order to raise revenue. It was an
Speaker 1: indirect revenue, but it was relatively easy to collect, and
Speaker 1: in April April ninth, seventeen eighty nine.
Speaker 2: Madison actually introduced the first law.
Speaker 1: To impose tariffs fairly low rate, low rate, because you
Speaker 1: don't want to hoot, you know, trade too much. They understood,
Speaker 1: they had read Amsmith, they understood some of the principles involved.
Speaker 1: They didn't have a deep understanding of economics, but they
Speaker 1: understood that free trade was a good thing, and they
Speaker 1: wanted to resist intervening too much in trade.
Speaker 2: Now, this is not true of Hamilton. Hamilton very much.
Speaker 1: Thought that America should be self sufficient that America should
Speaker 1: limit imports, particularly limited imports early in the Republic, so
Speaker 1: that they could build up an industry free of competition
Speaker 1: from imports. So Hamilton was definitely a protectionist, and he
Speaker 1: also proposed differentiated tariffs are different tariffs on different goods
Speaker 1: based on the industries that he believed needed to be protected.
Speaker 1: So Hamilton viewed tariffs as ways to protect industries. Madison
Speaker 1: viewed tariffs as a way to raise revenue. Both believed
Speaker 1: in low tariffs, by the way, so Madison Hamilton did
Speaker 1: not are you for very high taists. They both believed
Speaker 1: in low tws. But one of the things that shock
Speaker 1: Madison when he introduced the law is the extent to
Speaker 1: which this became a part of an issue. This became
Speaker 1: splitting political alignment within America and the degree to which
Speaker 1: people started to advocate for tariffs not as the source
Speaker 1: of revenue, but as a way to manipulate the economy,
Speaker 1: as a way to protect industries, as a way to
Speaker 1: benefit some and who it's others. So this is really
Speaker 1: the beginning of what will become the you know, probably
Speaker 1: a very contentious issue within American politics during the nineteenth century.
Speaker 2: I'm actually going to be give give a talk on this,
Speaker 2: give a talk on on on.
Speaker 1: UH tariffs and the politics of tariffs and what exactly happened,
Speaker 1: much more detailed than what I'm doing now. I'm just
Speaker 1: giving you kind of an outline. Today. I'm going to
Speaker 1: give a talk on this at a at the Florida
Speaker 1: Objective's Conference. They're doing another one next year. This will
Speaker 1: be the last weekend in January. I think it's January,
Speaker 1: like thirty first, February first, something like that. I'll be
Speaker 1: giving a talk on this in more detail and you know,
Speaker 1: different slightly different material. So yeah, if anybody is interested,
Speaker 1: you should come to Florida. Last year was a lot
Speaker 1: of fun. It was.
Speaker 2: It was it's a it's a very uh you know,
Speaker 2: it's a fun confidence.
Speaker 1: You get to see a lot of objectives come, mostly Floridians,
Speaker 1: but some people flew in from out of the out
Speaker 1: of states, from Texas, from northeast and came, and so
Speaker 1: it was great, great time to meet people and to
Speaker 1: hang out and good talks, a lot of good speakers,
Speaker 1: and yeah, it was even though I was sick part
Speaker 1: of it last time. Hope not to be sick this time.
Speaker 1: It's still was a lot of fun, so encourage you
Speaker 1: to come. And this will be kind of the topic
Speaker 1: that I talk about. So I'll just say during the
Speaker 1: nineteenth century, there was a constant battle between using very
Speaker 1: low tariffs to raise revenue for the federal government and
Speaker 1: to fund the federal government, and between those who wanted
Speaker 1: to use tariffs in order to protect the industries and
Speaker 1: in order to stop importation. That is, there was definitely
Speaker 1: a mercantilist attitude in America. They were definitely behind the cove.
Speaker 1: They were not at the cutting edge intellectually as the
Speaker 1: British were on these issues, which is sad because I mean,
Speaker 1: America was so much on the cutting edge of pretty
Speaker 1: much everything else, particularly politically and ultimately economically, that this
Speaker 1: is one issue where they lagged behind the British and
Speaker 1: they did not really, ever in all American history, really
Speaker 1: embrace the British system of unilado free trade, of zero tariffs,
Speaker 1: and of just opening up your market and accepting free trade.
Speaker 2: You know, American this was something that was.
Speaker 1: Debated heavily in the US, but it became you know,
Speaker 1: probably the first issue over which you got the development
Speaker 1: of pressure groups. We'll talk about that and I'll go
Speaker 1: through the pressure groups in my talk in Florida. You
Speaker 1: got the development of pressure groups, and it's the first
Speaker 1: issue where it was real contentious between them and the
Speaker 1: politics swaye a post Civil war, the political party that
Speaker 1: became the pro tariff political party aggressively so was the
Speaker 1: Republican Party. The Republican Party was very much a pro
Speaker 1: tariff political party. The Democrats were the pro free trade
Speaker 1: political party. And indeed the Democrats in many respects during
Speaker 1: the late nineteenth century, in particular where the pro freedom
Speaker 1: political party po economic freedom political party that other problems,
Speaker 1: but on economics, Democrats are much better than Republicans. I
Speaker 1: think the best president of this period is is Grover Cleveland,
Speaker 1: who has two terms. He has a first term, he
Speaker 1: loses in the second term. And he is own f
Speaker 1: vetoying a bunch of bills coming out of Congress, vetoying
Speaker 1: goum and spending, rejecting regulations, rejecting an income tax, you know,
Speaker 1: rejecting the growth of the state, and rejecting the growth
Speaker 1: of the state intervention into the economy. He is an
Speaker 1: advocate of low tariffs. He is an opponent, a political opponent.
Speaker 1: McKinley who Donald Trump praises all the time because of
Speaker 1: the McKinley tariffs. McKinley tafts were passed when McKinley was
Speaker 1: not president. McKinley was actually Chairman of the House of
Speaker 1: Means else something it means, what's something? It means? Anyway,
Speaker 1: he was in the House of Representative House Ways and
Speaker 1: Means Committee, Ways and Means Committee, and he passed the tariffs,
Speaker 1: which a huge increase in tariffs in eighteen ninety. Same year,
Speaker 1: by the way, we got the Anti Trust bill. And
Speaker 1: during the talk in Florida, I'll tell you about the
Speaker 1: relationship between tariffs and anti trust. Why were they both
Speaker 1: passed at the same time. What's the relationship? And again
Speaker 1: the politics are super interesting, super interesting. It was a
Speaker 1: third thing that happened during that same time, which was
Speaker 1: the negation of There was a big push by populists
Speaker 1: to make silver a part of the silver money in
Speaker 1: the United States, which would inflated the economy significantly, raised prices,
Speaker 1: would have increased the amount of money in the economy
Speaker 1: because it wouldn't just be gold, it would be silver
Speaker 1: as well. And there was a reinformation in eighteen ninety
Speaker 1: that no the United States would stay on an exclusively
Speaker 1: gold standard, which it had been, which had been on
Speaker 1: since the Great Depression, so or since after the Great
Speaker 1: Depression eighteen seventy four, I think Great Depression. Would the
Speaker 1: Great Depression come from? I don't know, since the Civil War,
Speaker 1: but it was after the Wars eighteen seventy four when
Speaker 1: the United States went back on the gold stand and
Speaker 1: stayed on the gold stand until nominally until eighteen thirty three,
Speaker 1: nineteen thirty three. God, I miss speaking, So you know,
Speaker 1: panic on, no panic. Grover Cleveland was probably the best,
Speaker 1: one of the best president maybe economically the best president
Speaker 1: in American history. So, and he was a Democrat, you know.
Speaker 1: So throughout the nineteenth century, the United States had pretty
Speaker 1: high tariffs. They raised them and then they'd lower them,
Speaker 1: and then they'd raise them, and then they'd lower them
Speaker 1: because once they raised them there would be negative consequences,
Speaker 1: and the intellectual argument against them was was really strong.
Speaker 1: So it was always you know, there was a period,
Speaker 1: there was a period in which they passed tariffs in
Speaker 1: eighteen twenty four, called the Tariffs of Abomination because they
Speaker 1: were so hated over sixty percent. It actually led to
Speaker 1: constitutional crisis, and they were lowered, and then they were
Speaker 1: raised again in eighteen forty two, and then they were
Speaker 1: lowered in eighteen forty six, so about the same time
Speaker 1: as that corn acts are appealed, and you actually had
Speaker 1: fifteen years of relative free trade until after the Civil
Speaker 1: War you get tariffs again, and then even higher tariffs
Speaker 1: with the McKinley tariffs of it eighteen ninety. And then
Speaker 1: once McKinley becomes president, he doesn't like the tariffs he
Speaker 1: put in place, and he starts lowering tariffs. He starts
Speaker 1: cutting deals with other countries, and so tariffs are lowered,
Speaker 1: although they stay fairly high until nineteen thirteen, and then
Speaker 1: you know, around the First World War, they are lowered.
Speaker 1: In particular, they're lowered because what happens in nineteen thirteen, Well,
Speaker 1: in nineteen thirteen income tax. The Constitution is amended to
Speaker 1: allow an income tax. And when an income tax provides
Speaker 1: is revenue. And now the revenue excuse justification for tariffs
Speaker 1: is gone. You can fund the government with income tax.
Speaker 1: By the way, do you guys know how hi the
Speaker 1: income text was when it was first passed. So in
Speaker 1: nineteen thirteen, the first income tax law passes.
Speaker 2: And it is seven percent, seven percent.
Speaker 1: But the only people who pay seven percent, the only
Speaker 1: people who pay taxes income taxes, are people making over
Speaker 1: five hundred thousand dollars a year, which in today's money
Speaker 1: is thirteen million dollars. So think about that. Only people
Speaker 1: making over thirteen million dollars are taxed, a tiny fraction
Speaker 1: of the population, and they were only taxed at seven percent,
Speaker 1: And indeed, is part of passing this income tax law.
Speaker 1: Politicians keep telling people, Oh, no, it's it's it's we're
Speaker 1: not going to increase it beyond this.
Speaker 2: This is as high as it's going to go.
Speaker 1: We don't need that much revenue, and don't worry, most
Speaker 1: people will never be taxed within five years. Nineteen eighteen,
Speaker 1: the US has entered World War One. The top right
Speaker 1: is seventy seven percent, and pretty much everybody in the
Speaker 1: country is paying outcome Texas more people paid in come
Speaker 1: text back then than pay today. And again top rate
Speaker 1: is seventy seven percent. It's lowered after the war after
Speaker 1: eighteen nineteen to fifth, but it's still over fifty percent.
Speaker 1: So so much for the promises of politicians. Right just
Speaker 1: to remind you to use the super chat to ask questions,
Speaker 1: you can ask questions about anything, but anything I'll just
Speaker 1: a complete list. I'll just say, you know, in nineteen
Speaker 1: twenty two, high tariffs were reinstituted. I mean, there are
Speaker 1: two things in which Calvin co who's often cited as
Speaker 1: one of people's favorite presidents, two things that coplic Coolige
Speaker 1: did that very anti freedom and very bad and you know,
Speaker 1: taint his reputation as a free marketer. One was reinstating
Speaker 1: high tariffs in nineteen twenty two with the idea of
Speaker 1: stimulating the economy, which was pretty stupid. Now, the economy
Speaker 1: was strong, but that was in spite of taris. The
Speaker 1: same thing happened in the late nineteenth century. Economy was
Speaker 1: strong in spite of the tariffs. Study after study after
Speaker 1: study shows that it wasn't the industries protected by tarifs
Speaker 1: that did well. It was other industries they.
Speaker 2: Weren't protected by taos they did the best.
Speaker 1: And the second thing he did was, of course, signed
Speaker 1: the nineteen twenty four anti immigration law, which basically stopped
Speaker 1: immigration for much of Europe and much of the world.
Speaker 1: And it's just devastating for the US. It was devastating
Speaker 1: for potential immigrants who could have fled Europe before World
Speaker 1: War Two and got stuck in Europe. Jewish immigration plummeted,
Speaker 1: Eastern European immigration plummeted. And those are two the cooliages
Speaker 1: did that are not market friendly, freedom friendly. And then,
Speaker 1: of course, in nineteen thirty smooth Holly under the Who administration.
Speaker 1: Note that both Coolidge and Hoover Republicans under the Hoover
Speaker 1: administration raised House significantly, and while they didn't cause the
Speaker 1: Great Depression, clearly made the Great Depression worse. Clearly contributed
Speaker 1: because they launched the trade war, which had not just
Speaker 1: the United States but many other countries and made the
Speaker 1: Great Depression globally much worse phenomena than it needed to be.
Speaker 1: One of the interesting facts is that smooth Holly has
Speaker 1: never been repealed. Smooth Holly is still being in place.
Speaker 1: The way they get around smooth Holly is that in
Speaker 1: nineteen thirty four, Congress passed something called the Reciprocal Trade
Speaker 1: Agreement Act of nineteen thirty four. And what that act did,
Speaker 1: this is under Democrat and a Secretary of State who
Speaker 1: was very very pro trade, what they did was they
Speaker 1: couldn't repeal Smooth Holly. So what instead they did is
Speaker 1: they made it possible for the executive branch to negotiate
Speaker 1: reciprocal trade deals with other countries, bilateral trade agreements, and
Speaker 1: that Congress would fast track their ratification and only require
Speaker 1: a simple majority vote for ratifying trade deals. And it
Speaker 1: placed much more of the responsibility for tariffs on the
Speaker 1: executive PIMLI with the idea that the executive would then
Speaker 1: go and cut deals. The executive, the assumption is, has
Speaker 1: the perspective of the good for the entire nation, whereas
Speaker 1: Congress is rife with fighting between different pressure groups who
Speaker 1: want different tariffs on different industries in different places, different times,
Speaker 1: and therefore never actually work towards freedom, whereas the president could.
Speaker 1: Now that's backfired on us a little bit with Trump,
Speaker 1: but that was the intention. So the lowering of tariffs
Speaker 1: since nineteen thirty four, really until nineteen six, twenty sixteen
Speaker 1: with Donald Trump, the lowering of tariff has all happened
Speaker 1: in a reciprocal trade, you know, whether it's by lateral
Speaker 1: or multilateral deals that then Congress approves, and you got
Speaker 1: that through GATS and through the Trade Organization, all facilitating
Speaker 1: this reduction. Uh, this reduction in tariffs again until Trump,
Speaker 1: so smooth holly technically still on the books, and it's
Speaker 1: just the rates that have changed visa very particular countries
Speaker 1: in particular trade agreements. All right. Uh, So that's a
Speaker 1: quick history of kind of trade tariffs of the United
Speaker 1: States and Britain. Uh and uh.
Speaker 2: The bottom line is that the United States has never
Speaker 2: really had until.
Speaker 1: Never really had. To put it this way, the States
Speaker 1: has never really had a free trade regime. It's never
Speaker 1: had it's and it's never been committed to real free
Speaker 1: trade and whatever commitment it's you know, the commitment of
Speaker 1: free trade historically has been that of the Democratic Party,
Speaker 1: particularly in the post Civil War era, and it has
Speaker 1: been that of but even in the pre Civil War
Speaker 1: actually and and has been.
Speaker 2: You know, bipartisan in the post World War two era,
Speaker 2: but it's.
Speaker 1: Never manifested itself in actually lowering tariffs to zero and
Speaker 1: eliminating trade barriers.
Speaker 2: We have tons of trade barriers today, and we have tariffs.
Speaker 1: They're very low by historical standards, very low again until Trump.
Speaker 2: And it was a bipartisan.
Speaker 1: Commitment after World War Two to lower them as far
Speaker 1: as far as you could. But United States has never
Speaker 1: been at the forefront of real free trade, which is sad,
Speaker 1: you know, except again after World War Two, and even
Speaker 1: then it was more.
Speaker 2: Managed trade than really free trade.
Speaker 1: The one great era of free trade was in Britain
Speaker 1: from eighteen forty six to nineteen thirteen, and it was
Speaker 1: and you got free trade in Hong Kong and Singapore.
Speaker 1: To this day, particularly Singapore, you've got no trade barriers
Speaker 1: and no tariffs. So wherever to be tried, it is
Speaker 1: a huge success. But the reality is that tariffs, particularly
Speaker 1: in America, don't play a big enough trade doesn't play
Speaker 1: international trade, doesn't play.
Speaker 2: Big enough role in the economy to actually.
Speaker 1: To actually stop real you know success, domestic success, given
Speaker 1: all the other factors that go into economic growth.
Speaker 2: So the United States who significantly in the nineteenth century.
Speaker 1: In spite of tariffs. The United States grew, you know,
Speaker 1: significantly after World War Two in spite of tariffs because
Speaker 1: of other factors, because of the size of the United
Speaker 1: States and because of the resources of the United States.
Speaker 1: Has But tafts have been understood intellectually from an economics perspective,
Speaker 1: not political perspective. Economic perspective, tas have been understood clearly
Speaker 1: to be bad economically, bad economics since the time of
Speaker 1: Adam Smith. Really no real economists is questioned the free
Speaker 1: trade idea, and the idea including unilateral free trade, unilateral
Speaker 1: zero tariffs, which is what Britain implemented. That idea has
Speaker 1: not really been challenged by economists at all. All right, Yeah,
Speaker 1: I mean, just imagine how rich a we would be.
Speaker 1: Imagine how richer we would be if we didn't have
Speaker 1: tais during the nineteenth century, or at least if we
Speaker 1: didn't have tais beyond the minimal tasks required for revenue,
Speaker 1: and if we'd embraced free trade in the post World
Speaker 1: War two period completely unilaterally, unequivocally. I mean, there were
Speaker 1: a lot of things like that. Imagine if we didn't
Speaker 1: have regulations, right, I mean, there was already business regulation
Speaker 1: in nineteenth century. There was a lot of business regulation
Speaker 1: during the twentieth century post World War Two, and we
Speaker 1: became the number one economy in spite of all of
Speaker 1: that too. So does that mean the regulations are Okay?
Speaker 1: We had horrible tax regimes like income of text to
Speaker 1: seventy seven percent and the year's economy still grew. Does
Speaker 1: that mean that those taxi teams didn't hurt the year's
Speaker 1: economy growing? You have to be able to control those
Speaker 1: for those factors and realize that even a little bit
Speaker 1: of freedom goes a long way. You can see that
Speaker 1: in China. China got a little bit of freedom, a
Speaker 1: little bit of economic freedom in the post nineteen seventy
Speaker 1: eight period and it grew a lot that I mean
Speaker 1: once one should view that as well. Imagine how much
Speaker 1: more they would have grown if they had complete freedom.
Speaker 1: And I think that's true of the United States in
Speaker 1: spades even more so. All right, we're approaching the end
Speaker 1: of the first hour. I'll remind you that we have
Speaker 1: goals for these shows because you guys fund the run
Speaker 1: book show. It couldn't exist without support from you. So
Speaker 1: we have a goal of two hundred and fifty an hour,
Speaker 1: and we're about halfway there. So I encourage you, uh
Speaker 1: for for the first hour and we're going into the
Speaker 1: second hours. I encourage you to step in and participate
Speaker 1: and support the show and support what I am doing,
Speaker 1: what all of us are doing. Uh So, please consider
Speaker 1: doing a sticker or super chat. That would be fantastic.
Speaker 1: Althoso remind you that the best way to support the
Speaker 1: show is is by coming a Patreon or a PayPal
Speaker 1: monthly contributor. You just go in and search for your
Speaker 1: on Book Show and PayPal, Patreon, or go to my
Speaker 1: website your on Book Show dot com and and you
Speaker 1: can you can find ways there to contribute and become
Speaker 1: a supporter of the show on a monthly basis.
Speaker 2: And that is probably the best way to.
Speaker 1: Guarantee the continuity of the show and to preserve that
Speaker 1: continuity over time. Uh.
Speaker 2: We also have sponsors who make this show possible.
Speaker 1: Uh. You know, the Amine Institute is a sponsor. An
Speaker 1: Imin Institute has now this has for years now an
Speaker 1: Ironman Institute app, which is it's just amazing. It's like
Speaker 1: an iron Rand.
Speaker 2: Library on your phone, accessible at.
Speaker 1: Any time with Ironman talks and and some iron Land
Speaker 1: University and maybe the most valuable thing there all of
Speaker 1: Leonard Peacock's courses. All of us take courses on there
Speaker 1: to be accessed by you. If you really want to
Speaker 1: study Iran's ideas, that's the way to do it, you
Speaker 1: know' listen to Lenar Peacoff's courses and it's available free.
Speaker 2: You can have it on your phone. Just download the
Speaker 2: Ironman Institute app.
Speaker 1: You can go to Inrand dot org, slash start here
Speaker 1: to access the app. There's a link there that will
Speaker 1: send you to the app Store to access the app
Speaker 1: and and download it and just.
Speaker 2: Start start listening.
Speaker 1: I mean, yeah, it's an amazing, amazing, amazing that we
Speaker 1: have the ability. You know, again, I remember when I
Speaker 1: first discovered Iran, there was nothing, I mean, and the
Speaker 1: books were out, but I was living in Israel.
Speaker 2: I couldn't find there was no internet, and you know, it's.
Speaker 1: It's amazing. Now what's just accessible at your fingertips. Let's see,
Speaker 1: you don't eat spices when you eat beef, yes, you do.
Speaker 1: Beef is so much more delicious when it's got like
Speaker 1: some good spices on it. When you get a really
Speaker 1: good chef who can who knows how to treat the
Speaker 1: beef and put the right spices on it, it is
Speaker 1: pretty It is pretty amazing how much better the beef becomes.
Speaker 1: So yeah, I mean, you don't know what good food
Speaker 1: is if you think just a plain slab of meat
Speaker 1: is good enough. Yeah, it's good enough, but it's also
Speaker 1: boring and bland as compared to what it could be,
Speaker 1: what it could be, So yeah, go find a good
Speaker 1: chef who really knows how to cook a steak and
Speaker 1: knows what to put on it, knows what spices and
Speaker 1: stuff to put on it. And anyway, making something spicy
Speaker 1: is always going to improve the flavor no matter what
Speaker 1: the food is. And what the spices do is they
Speaker 1: bring out the flavor of the beef so much better.
Speaker 1: And certainly a steak needs salt, a little bit of salt.
Speaker 1: But you know, you can have a steak with coffee
Speaker 1: rub it is so good. And what it does is
Speaker 1: a lot of times by coating it with certain spices
Speaker 1: you get the juices captured. It captures the juice is
Speaker 1: much better and it just adds fantastic to the flavor
Speaker 1: of the beef.
Speaker 2: Anyway, Not not sure why.
Speaker 1: I got into a discussion of that. We were talking
Speaker 1: about what Well. Yes, the next.
Speaker 2: Sponsor is Alex Epstein.
Speaker 1: Alex is of course the leading world leading thinker with
Speaker 1: regard to everything energy, everything energy, including environmental impact, including
Speaker 1: the politics of it. So you guys should go try
Speaker 1: you should read him because you'll learn so much, you
Speaker 1: will become so much more knowledgeable about it. And it's
Speaker 1: a crucial field. It's it's a kind of a crucial
Speaker 1: part of our lives, all of us consume energy constantly
Speaker 1: and the government wants to intervene constantly into our consumption
Speaker 1: of energy. So check out alex Epstein dot substack dot com.
Speaker 1: Alex Epstein dot substick dot com doesn't cost you anything
Speaker 1: to subscribe. You can support him financially as well, but
Speaker 1: it doesn't cost you anything to subscribe. And then finally
Speaker 1: Hendershot Wealth, hendershot Wealth dot com, slash ybs. They have
Speaker 1: a number of really interesting products. The latest product is
Speaker 1: this product that you can access that really does a
Speaker 1: good job delaying or significantly reducing you're exposed to capital
Speaker 1: gains taxes if you have if you have a lot
Speaker 1: of capital gains exposure, you've got some stock that's appreciated
Speaker 1: a lot, you want to sell that stock, or you're
Speaker 1: living off that stock, or maybe it's bitcoin, or maybe
Speaker 1: it's some other asset where you've got a lot of
Speaker 1: capital gains there, or a business that you're going to sell.
Speaker 1: There are really now some pretty cool sophisticated financial methods
Speaker 1: tools portfolios that can really help you reduce your tax bill.
Speaker 1: And we're all for reducing taxes at day on Book Show,
Speaker 1: So check out my interview with Robert Handershot on YouTube
Speaker 1: where we explain exactly what happens and how it works
Speaker 1: and how it's done. And check out the website hand
Speaker 1: a Shot with two tease, hand a Shot, Wealth dot com,
Speaker 1: slash ybs.
Speaker 2: Sign up for conversation with them. You know, it doesn't
Speaker 2: cost you anything, I promise the sells. There's no sales pitch.
Speaker 1: They're just gonna educate you about this and if it's
Speaker 1: something that it's appropriate for you, then then you should
Speaker 1: go ahead and do it. And I will say this,
Speaker 1: if you're going to do it, I would do it
Speaker 1: through them. I mean I trust them, and they are
Speaker 1: trustworthy about as trustworthy as anybody is out there. So
Speaker 1: Robert Handershot was a business partner of mine for many, many,
Speaker 1: many years, so I know him well, I know his
Speaker 1: character well, and I trust him completely. So yes, check
Speaker 1: it out hand ashot, wealth dot com, slash ybs, and
Speaker 1: check out the video with me talking to Robert Handershot
Speaker 1: on my YouTube channels. It's under the sponsors playlist, so
Speaker 1: you'll find it there. All right, Let's see what else
Speaker 1: did I want to say? Yeah, I wanted to thank
Speaker 1: Barry fifty dollars stick. I thank you Barry, really appreciate it.
Speaker 1: They got us closer to the one hour goal, but
Speaker 1: we still still need some work there. Guys, John, thank
Speaker 1: you for the sticker. Really appreciate it. DF thank you
Speaker 1: for the sticker. Nature Observer, thank you. Let's see who else?
Speaker 1: I think I saw Jonathan honing you always is Day. Yeah,
Speaker 1: there's Jonathan and Donna. Thank you guys, Thanks everybody for
Speaker 1: the sticker, for the support. I appreciate it. All of
Speaker 1: you will watching right now, whether you're on if you're
Speaker 1: on Twitter, coming over to YouTube. You can support your
Speaker 1: show on YouTube or go to Patreons support the show there.
Speaker 1: And if you're watching right now, just do a stick
Speaker 1: at two dollars ninety nine cents.
Speaker 2: If everybody right now just did a couple of bucks,
Speaker 2: we'd be in great shape.
Speaker 1: We'd be in great shape. So consider doing something before
Speaker 1: the end of the show. We don't have a lot
Speaker 1: of questions. We have a few, don't have a lot
Speaker 1: of questions to the show might be showed today. You
Speaker 1: get to term of the length of the show. You
Speaker 1: get to determine the content of the show because you
Speaker 1: ask questions and I answer all right now, do you
Speaker 1: have a y AGORITHM The greatest prison people live in
Speaker 1: is the fear of what other people think. Yeah. Absolutely,
Speaker 1: I mean it is a form of a prison. It's
Speaker 1: a form of a cognitive psychological prison, and it makes
Speaker 1: it very difficult for people to take risks and to
Speaker 1: express themselves and to really manifest themselves. Yeah, it's sad
Speaker 1: that people care as much as they do about what
Speaker 1: other people think of them and think of their ideas. Andrew,
Speaker 1: you gave a great answer on motivation by love yesterday.
Speaker 1: Many do achieve material success or prestige based on negative motivation.
Speaker 1: But to objectivism, moral success is happiness, and for that
Speaker 1: one needs motivation by love. Yeah. Absolutely. And look, I
Speaker 1: think if you watch successful individuals in any field, you
Speaker 1: can differentiate the ones that were motivated by fear and
Speaker 1: the ones that were motivated by love, by just their attitude,
Speaker 1: how how much joy they get out of what they do.
Speaker 1: I mean, take somebody like Steve Jobs and comparing to
Speaker 1: other you know, others who are being successful, and he
Speaker 1: exuded a.
Speaker 2: Sense of joy and a sense of pride and a
Speaker 2: sense of achievement.
Speaker 1: And it comes from the fact that you knew that
Speaker 1: the products of Steve Jobs developed and put out there
Speaker 1: were based on his values that were based on what
Speaker 1: he loved to do, that this was something he cherished,
Speaker 1: he loved, he embraced. He was completely motivated by love.
Speaker 1: And you could tell. And I think a lot of
Speaker 1: the billion is, to their credit, people who are motivated
Speaker 1: by love. They work unbelievably hard. They you know, and
Speaker 1: they and they love the products that they build, and
Speaker 1: they and they love the businesses that they build, and
Speaker 1: it's it's it's a positive motivation.
Speaker 2: And most of them, look, most of them do not
Speaker 2: have you know, most of them are a middle class.
Speaker 1: They maybe didn't have hard childhood, so it wasn't like
Speaker 1: they had something to fear. And if you look at
Speaker 1: Bill Gates and look at Jeff Bezos, and you look
Speaker 1: at these guys, there's not a sense of what drives
Speaker 1: them is fear. You really do get a sense of
Speaker 1: what drives them is values ultimately love. It's part of
Speaker 1: what I admire about about them. Thought criminal ten British
Speaker 1: pounds stoling. Thank you. I really appreciate the support. And
Speaker 1: of course the pounds. Sterling was the global currency, global money,
Speaker 1: the reserve currency of the world in the pre World
Speaker 1: War One era. That of course shifted to the dollars.
Speaker 1: By the end of World War Two, the dollar was
Speaker 1: a reserve currency of the world. James, If Trump actually
Speaker 1: loses his mind and orders those nuclear submarines to launch,
Speaker 1: what does generals and people around Trump stop him? Could
Speaker 1: humanity end over the whims of a narcissistic manchild with
Speaker 1: too much power? Yeah, it could, you know. I don't
Speaker 1: know who would stop him. I assume they would, because
Speaker 1: as crazy as jd Vance and some of the others
Speaker 1: Hegseth and some of the others are around Trump, I
Speaker 1: don't think that that crazy, and I think somebody would
Speaker 1: try to stop him and would make a real effort.
Speaker 1: But my real wary is that this is the beginning
Speaker 1: of a slippy slope of fatat of soda rattling that
Speaker 1: might not lead to warn the short run, but it
Speaker 1: just create an environment of war that is very very
Speaker 1: dangerous and very very difficult to get out of. Now,
Speaker 1: there are ways to deal with Russia. I've articulated. Some
Speaker 1: of them do not involve a nuclear threat. All you
Speaker 1: have to do is I'd shut down the embassy in Russia,
Speaker 1: I bring my in bess at home. I would, you know,
Speaker 1: massively arm the Ukrainians, and I would tell Russia that
Speaker 1: you know for now the United States is completely committed
Speaker 1: to Article five of NATO and will participate if he
Speaker 1: invades a NATO country. And that's it. That's all you
Speaker 1: have to do. We don't have to play tit for
Speaker 1: tat on Twitter. You don't have to comment on anyvy
Speaker 1: stupid thing, Madvedev says. Just cut off diplomatic relations, reconfirm
Speaker 1: your dedication to Article five of NATO, and armed the
Speaker 1: Ukrainians the teeth. And just if you arm the Ukrainians
Speaker 1: to the teeth, you'll achieve much of what you need
Speaker 1: to achieve. There's no point in this again, saber rattling.
Speaker 1: Oh you want to talk about war, I'll show you war.
Speaker 1: Very dangerous, very dangerous, Andrew. Some resent the optionality of trade.
Speaker 1: The Brital self esteem can handle and know they want
Speaker 1: to force values on others, but trade and force the opposites.
Speaker 1: The antagonism to trade is a sign of fertility and fear.
Speaker 1: I think that's right, but it's more than that. They
Speaker 1: also want They're afraid of trade, they're afraid of competition,
Speaker 1: they're afraid of the other, and they really do view
Speaker 1: the world as zero sum. So if the other side
Speaker 1: is gaining by getting our dollars, we might be losing.
Speaker 2: This is Trump's view, and that induces fear.
Speaker 1: Right, It's all based on fear and induced by fear,
Speaker 1: and a lot of it is driven, indeed by a
Speaker 1: zero sum mentality, which I think is broader than just trade,
Speaker 1: a zero some mentality.
Speaker 2: The mentality of everything in life is win a lose,
Speaker 2: and and.
Speaker 1: Other people are threat to me because other people, if
Speaker 1: they win, then I lose. And so the only way
Speaker 1: I can get ahead is by winning, which is exploiting
Speaker 1: other people causing them to lose.
Speaker 2: And it just creates a horrible environment in which to live.
Speaker 1: And I think at the root of a life, a
Speaker 1: lot of this stuff on trade and fear of competition
Speaker 1: and fear of the other is a zero some mentality,
Speaker 1: a zero some mentality, and it's very hard to get
Speaker 1: rid of that kind of mentality because it's so psychological
Speaker 1: embedded in them. And of course the galaxyianism supports that,
Speaker 1: Egalitarianism encourages that. So the left is very much encouraging
Speaker 1: and supporting of a zero sum view. What's sad is
Speaker 1: to see the extent of which it's universal now. The
Speaker 1: right is embraced it just as much as the left,
Speaker 1: even detached from the galiarianism the left. All right, let
Speaker 1: me just remind you again, value for value. You're listening
Speaker 1: to show. We've got almost one hundred people listening and
Speaker 1: one hundred and sixty people on Twitter, and you get
Speaker 1: the show. Where's the trade? We're talking about trade. Where's
Speaker 1: the win win trade? So the one way to exert
Speaker 1: a win win trade is to come onto the super
Speaker 1: chat and make a small contribution, ask a question or
Speaker 1: just do a sticker with a contribution, and you can
Speaker 1: do that for on your phone. You can do that
Speaker 1: on the computer. It's pretty easy to do. Just press
Speaker 1: that dollar sign underneath it and you can get it
Speaker 1: all rolling. Of course, if you don't want to get
Speaker 1: involved here, you can go to Patreon, or you can
Speaker 1: go to a PayPal. Patreon I think is easy for
Speaker 1: easier for everybody, and you can set up a monthly
Speaker 1: contribution for the one book show show funded completely by you. Guys,
Speaker 1: doesn't exist without you, and of course you gain value
Speaker 1: from it. Value for value trade, that's what it's all about,
Speaker 1: all right. Dan says, Ran might have not given us
Speaker 1: the answer with objectivism. But today it is clear, however,
Speaker 1: how evil altruism is. And she was spot on, and well,
Speaker 1: I happen to think that grand did give us an
Speaker 1: answer with objectivism to pretty much most of our burning questions,
Speaker 1: most of the big issues in philosophy. Iron ran as
Speaker 1: sould with objectivism. And it's not surprising at all that
Speaker 1: you can now recognize the evil of altruism. She couldn't have.
Speaker 1: I mean, part of that is because what she built
Speaker 1: was a uniform it was a systematic, integrated philosophy. And
Speaker 1: the fact that she was writing on altruism suggests he's
Speaker 1: writing on other things egoism, for example, capitalism, reason as
Speaker 1: man's basic means of survival. All of that is implied
Speaker 1: by her being right on altruism. So I think, I
Speaker 1: think you need to think rethink your view of rand there. Whops,
Speaker 1: what am I doing? All right? Liam? From what legal
Speaker 1: experts of you have told me, it is likely the
Speaker 1: Supreme Court throws these teriffs out.
Speaker 2: I think there's a good chance that that indeed happens.
Speaker 2: I mean, it does look like the I.
Speaker 1: Mean again, the Court of the Court of International Trade
Speaker 1: has already thrown them out. The Pellet Court that heard
Speaker 1: arguments on Thursday seem pretty skeptical of the mart of
Speaker 1: the government's arguments. They might throw it out, and I
Speaker 1: think the Supreme Court will do the same thing. I
Speaker 1: think what Trump is doing is a real reach. And
Speaker 1: given that this court is concerned about division of power,
Speaker 1: concerned about, for example, regulatory agencies doing things that are
Speaker 1: not in the law, and therefore have done away with
Speaker 1: Chevron and may basically change the way we view regulations,
Speaker 1: it would be in consistent of the Court not to
Speaker 1: say things about the same thing about the executive You know, basically,
Speaker 1: the law Trump is using does not give him the authority.
Speaker 2: To use tariffs, even.
Speaker 1: If he believes there's any economic emergency, and that the
Speaker 1: Constitution is quite clear that tariffs are the purview of Congress.
Speaker 1: So yes, I think there's a really good chance.
Speaker 2: It's going to take some time. It's just going to
Speaker 2: take some time.
Speaker 1: Liam says, if interstates come down and the tariffs are
Speaker 1: abolished and AI innovation accelerates, could we have another decade
Speaker 1: like the nineties. Yeah, easily, easily even I mean, depending
Speaker 1: on how big of a DLAI is, maybe even better
Speaker 1: than the nineties, But absolutely you abolish the tariffs, maybe
Speaker 1: they abolished by by the now. Note the Beame Court
Speaker 1: will only abolish the tariffs that are that are that
Speaker 1: are being put in place using that one particular law.
Speaker 1: The tariffs that are put in place based on national security,
Speaker 1: for example, will not be covered under that lawsuit. So
Speaker 1: steel tariffs, aluminum tabs, car tariffs, a bunch of other
Speaker 1: taps will not be covered. But these reciprocal tabs, those
Speaker 1: are the ones be thrown out. But if that is abolished,
Speaker 1: and if interest rates I think will come down. Yeah,
Speaker 1: even if interstates don't come down, I think just tariff
Speaker 1: going away, an AI innovation accelerating. You got a golden
Speaker 1: era in front of you. Frank, what is free trade zone?
Speaker 1: Some tell me it's being able to pollute the air,
Speaker 1: dump in the water, making.
Speaker 2: Off of products, no building codes. What's true?
Speaker 1: I mean, I guess it depends on the exact regulation
Speaker 1: in the exact place where the free trade zone exists.
Speaker 1: But free trade zones are basically areas in which companies
Speaker 1: can produce and they everything they import is not tariffed.
Speaker 1: So it's an area in which you can bring in
Speaker 1: raw materials and other things and not had a tariff. Now,
Speaker 1: there's no guarantee that when you sell it other countries
Speaker 1: won't impost tariff on it. But it is a unilateral
Speaker 1: free trade zone, so anything coming in is tariff free.
Speaker 1: And you see that all over the world. You see
Speaker 1: Manaos in Brazil has a free trade zone. It's a
Speaker 1: city in the middle of the Amazon. It's almost impossible
Speaker 1: to get to this city. And they have massive industry there.
Speaker 1: And that massive industry there because the only place in
Speaker 1: Brazil that has a free trade zone, so you know,
Speaker 1: a lot of capital came in and they built auto companies,
Speaker 1: built manufacturing plants and everything else. And the cars coming
Speaker 1: out of there really cheap because there are no towers
Speaker 1: placed on them. Within Brazil, oh, no tabs were placed
Speaker 1: on the stuff coming in to make the cars. And
Speaker 1: it's it's a relatively cheap place to live. It always
Speaker 1: was because it's no the Amazon, but it's it's very
Speaker 1: inefficient if you want to if you do trade zone,
Speaker 1: free trade zone, you want to do it like next
Speaker 1: to a major port. Now, it's true that in some
Speaker 1: places because because of the local regulations, there's a lot
Speaker 1: less pollution regulation and there's a lot less building regulation.
Speaker 1: But that's good. We're against regulations. So you get an
Speaker 1: opportunity to build cheaply, and you build and to provide
Speaker 1: people with jobs and to create wealth for the local
Speaker 1: economy and and and uh yeah, and and create industry
Speaker 1: where there wasn't any industy before. And it's a win win, win,
Speaker 1: win win for everybody. And yeah, you know, nobody has
Speaker 1: ever industrialized, any country ever industrialized anywhere in the world
Speaker 1: without polluting. Pollution is a minor cost of getting rich
Speaker 1: through industrialization, and there's no other way to get rich. Frank,
Speaker 1: do you think that scene in Dirty Dancing when Bully
Speaker 1: praises the fountain head hurt the objective's movement? Also, was
Speaker 1: Charles Lawton the best film actor ever? No, I don't
Speaker 1: think it hurts. I think anytime you get a mention
Speaker 1: of one of her books in a major media platform,
Speaker 1: it's a win. Some people are going to be curious,
Speaker 1: they will go and check it out and and maybe
Speaker 1: by it, and that's a win. So few publicity is
Speaker 1: always a win. Is Charles Lawton the best actor ever?
Speaker 1: Maybe he's definitely one of the greats. You know, I'm
Speaker 1: not in a position to say he's the greatest of
Speaker 1: all time. But Charles Lawton certainly is one of the
Speaker 1: great actors of all time, no question about that. Jeffrey,
Speaker 1: thank you for the sticker.
Speaker 2: Jeffrey got us close up.
Speaker 1: We still didn't make the goal, so we're like forty
Speaker 1: six bucks showed. Anyway, we'll out of questions. So unless
Speaker 1: somebody quickly asked the question, this is it. I'm not
Speaker 1: sure if we'll do a show tomorrow. It depends how
Speaker 1: packing goes, how much time I have. But if not,
Speaker 1: then probably a show on Tuesday. In Tuesday, in afternoon
Speaker 1: East Coast time. What's the exact time. But I'm getting
Speaker 1: my office set up on Tuesday in Lisbon and hopefully
Speaker 1: I'll be able to do a show out of Dare
Speaker 1: on Tuesday. So maybe tomorrow. Definitely a show on Tuesday.
Speaker 1: Have a fantastic weekend. Don't forget a sign up on
Speaker 1: Patreon to become a supporter of the show, and I
Speaker 1: will see you all. If not tomorrow, then next week.
Speaker 1: Bye everybody.