Speaker 1: So this is a tale as old as time. You know,
governments run up huge debts, they spend way more than
they collect in taxes. They try to resort to money
printing or monetary debasement to fix the problem. It doesn't
fix the problem. It just causes even more problems, and
then eventually, you know, the empire withers away.
Speaker 2: So you're listening to Carrie Leutz's Financial Survival Network where
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Speaker 3: And welcome you are listening to and watching the Financial
Survival Network. I'm your host, Carrie Lutz. Well, we're almost
done with electioncies, and thank goodness, that's all anybody seems
to talk about or think about at the present. But
what is this election really going to solve, if anything?
Speaker 1: That's what I'd like to know.
Speaker 3: And doctor Jonathan Newman is with us from one of
my favorite organizations, the Mesis Foundation, and I'm a big
the Mesis institute. I should say, which is a nonprofit.
I'm a big fan booster of theirs. Interviewed many people
from the organization over the years. Probably the leading libertarian
think tank on the planet, and it keeps growing.
Speaker 1: Jonathan, it's great to have you on. Hey, thanks for
having me on.
Speaker 3: Hey, So mesis I remember when started the first website
for mesis probably about twenty five God, it must be
twenty five years at this point, and the organization's really growing,
isn't it.
Speaker 1: Yeah, Yeah, we're doing well. So if people are unfamiliar,
the Mesa's Institute is an educational organization that it's dedicated
to spreading the message of liberty, especially Austrian economics, which
is a particular branch or school of thought in economics
that champion is the individual. So we start with an
individual's values, their subjective value and the importance of market prices,
and that leads us up to, you know, talking about
economic calculation, business cycles, and really the whole of economics
and so both micro stuff and macro stuff. But what
really sets us apart from the mainstream in most people's
perspective is the fact that Austrian economists typically come to
very free market conclusions. So the prescriptions that come from
Austrian economics is very las fair hands off. The government
shouldn't be manipulating the money supply, the government shouldn't be
manipulating interest rates and posting price controls regulations. So we're very,
very free market. So a lot of our educational programs
are that have that sort of bent. But one thing
that people sometimes criticize Austrians for when that up as
they say, oh, you start, you start with the policy prescriptions,
you start with free markets, and then you work your
way backwards to this sort of economic analysis that would
bring you to that conclusion. But that's not the case.
If you open up any Austrian texts, especially the big
ones like Misis's Human Action or Rothbard's Man Economy and State,
you see them building economics from the ground up. You
see them talking about individuals acting and markets coming to
market prices, and the importance of the profit and loss
mechanism for economizing resources. And then only later on do
we reach these conclusions that, hey, when the government gets involved,
when the government intervenes, we get these bad outcomes. Hey,
I just my favorite quote, and I did read Human
Action many many years ago. It was a tough read.
Speaker 3: You know, twelve thirteen hundred pages with a lot of vocabulary. Now,
I could just look on the internet and look these
words up, like praxeology and a pistol something, right, pistemology, yeah,
epistemology things I knew nothing about, but I read it,
and I remember one quote that's often attributed to mesis
I hope it's true. He says, only government can take
a valuable commodity like paper and make it worthless by
applying ink and printing money. Right now, they didn't even
need to use the paper, they use electrons.
Speaker 1: Yeah, that's I'm not exactly sure where that quote is,
but that does sort of sound like something that Mysis
would say. Of course, Well, what he's getting at there
is the government intervention in monetary matters and in banking matters,
and so what we've seen over the twentieth century especially,
is the government took over so many things that had
been performed by the market. So we had we had
markets for money where under the gold standard, we had
gold miners who were getting gold out of the ground
and then mentors who were making coins out of it,
and that sort of to where the market was selecting
the money that it wanted, and it was regulated by
the market. It worked very well for thousands of years.
But then over the twentieth century, the US government, but
also governments around the world, realize that there's a tremendous
benefit to being in control of the printing press, tremendous
benefit to being able to regulate banking and have the
banking system become cartialized. In that way, it's much easier
to do government finance. It's much easier for the government
to spend as much as it wants and pile up
massive amounts of debts. And the reason why is because
it has a ready buyer of its debt in the
form of the central bank. So really, a lot of
people think backwards when it comes to money. They start
with the US dollar, they start with the fiat buddies
that exist around the world, and then they just sort
of project that into the past. It's like, oh, government
has always been in charge of money, Government has always
been in charge of the printing press, and so this
is the way that it ought to be. But of course,
as we see throughout human history and also more recent
history of the past century, that what has happened is
the government has corrupted a very important institution. It has
corrupted the monetary sphere to serve its own interests.
Speaker 3: So one thing Murray Rothbard often was a proponent of
was competing currencies. Now we've got these cryptocurrencies, although I
call many of them klepto currencies, but something like bitcoin
and the others potentially provide that. Although the government now
originally they were majorly against it, but now they seem
to be more in favor of it.
Speaker 1: Yeah, the advent of cryptocurrencies has been very interesting, and
I think you're right that the main draw to bitcoin
is the fact that it's a way to escape from
the government managed money and banking system that we have today.
It's a way to break free from the government's inflation.
It's a way to break free from the banking crises
that arise when we have a central bank trying to
manage the making system. So a lot of people, a
lot of people realize that there's all these flaws with
government managed money in banking, and so they view cryptocurrency
and especially bitcoin, as a way to escape that. And
so for that reason, like I'm a big fan of
cryptocurrencies in general, I'm a big fan of bitcoin because
it offers that that escape hatch, that way to get
out of the system that's managed by the government. And
I think that's why the government originally considered as the
major threats like what if what if people do just
flock to bitcoin, what if people do flock to these
these cryptocurrencies and that causes a huge decrease in demand
for the US dollar, that we'd have debt crises, we'd
have massive inflation. It would be it'd be bad for
the for the government because they would lose this ability
to use money, to use money printing finance their own spending.
Speaker 3: It's not just spending though, too. There's no greater power
that a country has than to coin its own money,
to print its own money, because that means control. Right,
he who has the gold makes the rules, the golden rule.
It's really the fiat currency rule. He who he who
sets the legal tender, right is is in charge of things.
Speaker 1: Yeah, you're right. And this this goes way back in history,
where like you can look at the history of the
Roman Empire and what happened over the course of about
three centuries or so is they started off with pretty
sound money. And we can actually look at you know, archaeologically,
we can you know, find these coins and we know
what year that they were issued, a year that they
were minted, and you can analyze the silver content of
those coins. So they were they had the silver denarios
and you can actually see the fall of the Roman
Empire coinciding with the decrease and the value of are
the amount of silver content in each one of their coins,
and so what was what was the Roman Empire trying
to do? They were doing the same thing that the
US government is doing today. They were trying to spend
as much as possible. Uh, And they realized that they
could debase their coinage. They could introduce these baser metals
into the coinage and make more coins, and this of
course led to predictable results. You get inflation. They tried
to impose price controls and that was disastrous and then
eventually the empire, you know, fell apart. So this is
a tail as old as time. You know, governments run
up huge debts, they spend way more than they collect
in taxes. They try to resort to money printing or
monetary debasement to fix the problem. It doesn't fix the problem,
It just causes even more problems and then eventually, you know,
the empire withers away. So you know, hopefully we can
have a better story, but right now it doesn't look
very good.
Speaker 3: Right, so we're looking at Traditionally the price of gold
was kind of the hedge against this, but the government
and the big have figured out how to suppress the
price of gold and silver, going back to the London
Gold Pool once upon a time, is it possible? Now
what we're seeing is them losing control of the price
of precious medals.
Speaker 1: Well, what's interesting is you're right. They tried to you know,
they tried to keep the dollar peg to a certain
ratio with gold for the longest time. And under the
Breton Woods Agreement, that was the commitment of the US government.
They said, we'll let all of these countries around the
world use US dollars as their reserve currency, and in exchange,
the US government will stand ready to redeem dollars for
gold at this exchange ratio. So, even though gold ownership
had been prohibited in the United States for all the citizens,
it was still possible for foreign central banks and foreign
governments to redeem dollars for gold. And of course, with
Vietnam War, with great society programs. There was a ton
of government spending, and of course they financed that with
money printing and low and behold, we got the same outcome.
We had a decrease in purchasing power, and that would
have resulted, and it was starting to result in a
gold flowing out of the US and into these foreign
governments that were redeeming dollars for gold. And so what
happened is in August of nineteen seventy one, President Nixon
ended that agreement. He totally closed the gold window where
he prevented foreign governments from bringing their dollars in exchanging
them for gold. And so what we've had since then
is a pure paper fiat system where now we don't
even have that constraint on government spending. So it's very
important for people to realize one of the main benefits
of the gold standard is that it constrained the government.
You can't just make more gold, you can't just print,
you can't press a button and print up more gold.
But you can do that with green pieces of paper.
And so now we have this system where the government
does not constrained by a gold standard. They're they're they're
not constrained in any meaningful sort of way. And so
that's that is what has led to this massive increase
in the size and scope of our governments because they've
had the printing press.
Speaker 3: And yeah, so the printing press is is the problem here.
But governments always do this, right, every government does it.
We've seen how many hyperinflations since since why More Republic
in Germany.
Speaker 1: We've seen probably a couple.
Speaker 3: Dozen of them happen in various places where they kind
of lose control of the printing press, right, and then
all hill proceeds to break loose when the currency crashes.
So one thing I want to talk to you about though,
is Argentina. It's kind of become the hope of humanity,
hasn't it.
Speaker 1: Yeah, some some good things are happening in Argentina. You'll
find some different perspectives, different perspectives on what Malay is
doing among some of the like the purists in the
libertarian camp, but like, overall, I'm impressed with what he's doing.
So I recently saw it. I just looked at headlines.
I didn't do like a deep diving this, but apparently
Malay eliminated the Argentinian version of the I R. S
Lay has has you know, promised to have balanced budgets,
He's brought inflation down, he's you know, getting rid of
all of the wokeism that's inside the bureaucracies in Argentina.
So overall, just big picture, I'm in favor of what's
going on.
Speaker 3: Imagine that, just getting rid of all of that garbage.
So Trump this term right, he's anything but a libertarian.
He turned out to be another big government, big spender,
big deficits. But now he's promising to put Elon Musk
in charge of basically getting rid of or cutting the
government down to size. Now, one of the great things
about Ai Jonathan is uh I went into chat GPT
and I said, like, you know, I want to cut
the budget by two thirds and get rid of the deficit.
Speaker 1: How would I do it?
Speaker 3: And it came up with a thing of raising taxes,
and I said, I want to do it without raising taxes,
and I want to get rid of one hundred government
agencies instantly.
Speaker 1: What can I get rid of?
Speaker 3: And it gave me a list of agencies here I
didn't even know existed half of them. I mean the
Department of Redundancy, Department. You know, that's the way it
works there.
Speaker 1: Yeah, So I mean that's that is very encouraging for
me to see, and I think the people who are
a part of this, the libertarian camp, they viewed this
sort of rhetoric coming from the Trump campaign as as encouraging.
Of course, there's Trump is a mixed bag, you know,
there's you know, there's good things that he says about
decreasing taxes, decreasing regulation. Like you mentioned, eliminating government agencies.
I think probably one of the most important ones is
the Department of Education. I would love to see that
thing go away. And the main reason there is because
of the long term effect on people's ideology. I think
that if we have the federal government in charge of,
you know, setting curricula around the country, it means that
students are going to be presented with a pro government
narrative there, and so they're going to be predisposed to
agreeing with price controls, agreeing with inflation, agreeing with the
institutions that we have as opposed to thinking critically about them.
So I think I think that's that's huge. But of course,
you know, like you mentioned, Trump's track record in the
in his first administration in terms of the size and
scope of government is not very good. And so there's
this big question, but will he will he fulfill these
promises in a potential second term? And of course, I
so Trump is a mixed bag, but I don't see
anything that's promising or encouraging in terms of the rhetoric
or the policy proposals from the Harris camp. So like,
if I had to, if I had to pick one
over the other, I would definitely favor the Trump side
of things, simply because he's got all of this rhetoric
about reducing regulations, taxes, and getting rid of agencies.
Speaker 3: So what happens if you give every first time home
buyer twenty five thousand dollars, I really accomplish anything good?
Speaker 1: Yeah? That was That's one of the more perplexing I mean,
I guess I shouldn't be surprised anymore, just given the
historically bad policy proposals that we see from candidates broadly,
but also presidential candidates. So like, if we're concerned about
the cost of home ownership and prices of homes are skyrocketing,
and they're extremely high even to this day, then how
could you possibly think that just granting home buyers with
this twenty five thousand dollars credit would actually help the problem,
because all that's going to do is just increase the
demand for housing, which will increase the price of housing. So,
I mean, it just boggs my mind see these sorts
of things. It would do the exact opposite thing that
they're saying it would do. All right, So what about
borders here?
Speaker 3: As libertarian, we believe the world is one big, happy
place and there shouldn't be borders. But as a practical matter,
I guess a lot of what attracts people here is
all the free stuff we're giving out. Like I jokingly
refer to Biden's three main accomplishments when they ended the
US war in Afghanistan and brought the troops home in
a week. Number two is he ended the job shortage.
And number three is he saved the hotel industry, especially
in the New York.
Speaker 1: Yeah, there's a variety of opinions about the immigration and
borders question among libertarians. I don't think it's quite correct
to say that libertarians are in favor of open borders,
because libertarians are champions of private property, which means that
we at least believe in borders surrounding people's individual property
that they own. And so what that means is that
all of the bad outcomes, all all the issues that
we're seeing that are rising from open borders and from
government managed immigration policy simply arises from the fact that
the government is the one that's managing it. They're subsidizing
the immigration, They're making immigration more attract more attractive than
otherwise would be. But I think every libertarian would be
in favor of a system in which the government was
not in charge of that at all, and instead we
had private property everywhere, which means that we would have
we would have the market regulating immigration, so we would
get the we would get the labor coming across the
border that the market demands, and no more and so
and so. I think what we have now is just
a gross distortion of what we would have if we
had unhampered markets for land and for labor.
Speaker 3: All right, well, yeah, you got to have some uh,
some controls in place, you know. This is the thing.
I had this discussion with somebody today. Interstate highway system. Right,
I don't as a former attorney, I don't see anyway
this system could have been built privately. I just don't
see it. Maybe I'm wrong. You know, some of my
best friends are libertarians and they fight me tooth and
nail on that. But the complexity of it, the need
to acquire property, and then you're always going to have holdouts.
And I'm a big believer in private property too. How
do you how do you build an interstate highway system
without the government.
Speaker 1: Well, so I would encourage interested listeners to look at
some of the more in depth research and literature that's
that's been done on this topic of how the how
the how the market would provide a road system. I
think personally, I think that it can be done. But
also I think that this, like this issue is one
of the most it's very very low on the totem pole.
I don't think it like this is an important one. So, like,
if I can get somebody to agree on all of
the other issues, the government should get out of money
and banking, the government should get out of imposing price controls,
the government should get out of education, we should eliminate
all of these different government agencies. But if the last
thing that they're holding on to is you know, roads, courts,
police and that sort of thing, then I would I
would say Okay, fine, we'll agree to disagree on those
sorts of things, because then we'll do with that issue
when the time comes. But right now, I think we
have like very important issues like the business cycle and
like the loss of purchasing power, and like you said,
the immigration issues that are plaguing the United States and
countries around the world. So, just in short, to summarize
my answer, I do think that the market can provide roads,
including an interstate highway sort of system, based on private
property and market prices and profit and loss associated with
making those roads. But it's not that's not something that
I wake up in the morning and think, Okay, I
got to go convince people that we can have a
private road system.
Speaker 3: Yeah, I agree, in the scheme of priorities, it's not
very high up there. But but you know, and I
remember seeing a funny meme in Florida. Here, you know,
they're always watering the islands that are plush, but of
course they wind up watering the street and and it
was a meme it said, without government, who would who
would water the streets? I like that, Hey, Jonathan, how
do we find you? How do we connect with you
on the web, and how do we find out more
about mesas dot org.
Speaker 1: So I'm I'm pretty active on Twitter and i as
you can find me just to search for Jonathan Newman.
But also I write pretty regularly for our website, mesas
dot org. And so we've got a great website with
tons and tons of resources, more resources, more literature than
people can read in a lifetime. And so I highly
recommend people check out our website. And also a special
offer for your listeners. If you go to mesis dot
org slash my Money, that's M I S e S
dot org Slash my Money, then you can get a
free copy of Murray Rothbards What Has Government Done to
Our Money? It's a great little book, very approachable, very
easy to understand, that explains how government has taken over
money and banking in the United States and around the world,
and what that is, what that has done to cause inflation,
what that that is done to cause business cycles, and
so some proposals about how we should, you know, take
money and banking back from the state and have it
returned to the market. So once again that's mesis dot
org slash my Money.
Speaker 3: Come check it out, and that's in the link to
that is in the show that to this interview on
Financial Survival Network dot com. While you're there, please sign
up for your free newsletter. Got a lot of great
info going out. Summaries of all the podcast to take
place day by day, I probably do I think over
nine thousand of them, and I started this channel. Jonathan,
sure you're enough familiar with it, but basically as a
reverse or an Austrian approach to what was going on
after the financial crisis, because of course free markets were
blamed for that when it was purely a work of
government to neglect. Maybe it was intentional. Maybe there's a
little bit of both there. So if you got a
question for Jonathan or myself, shoot me an email kl
Atcarrie lets dot com. We'll get you an answer quick. Jonathan,
appreciate you coming on. We'll have you on again soon.
Speaker 1: Yeah, thanks for having me, and kudos to you and
congratulations for the long run. Keep up the good work.
Speaker 2: Thanks for listening to Carrie Letz's Financial Survival Network your
solution to today's trying times. For the latest, go to
Financial Survivalnetwork dot com. Financial Survival Network now more than
ever