Unknown (12:58)

Kibbe on Liberty and for being part of our fiercely independent audience. Every week, my organization, Free the People, partners with BlazeTV to bring you this show. My guests bring smart perspectives on everything from current events to timeless philosophical debates. If you like what you hear, go to freethepeople.org kol and support Kibbe on Liberty so we can continue to produce these honest conversations with interesting people. Now, let's get back to it.

Matt Kibbe (13:29)

When I was a kid studying economics, I was told that the Austrians were fringe. I've heard this my entire life. Because the professional economics profession, professional economics profession, that's sort of redundant. But the experts, they didn't like the fact that there was this alternate tradition that in many ways undermined their most important project. And their most important project was to reduce human action into a series of numbers and equations and treat people not as thinking, acting individuals, but as moves on a chessboard, as pawns, as cogs in a wheel, as simply numbers and some sort of macroeconomic aggregate fantasy. And the Austrians spent a lot of their time trying to dismantle the pretense of the macroeconomic way of thinking with the simple point that people act, aggregates don't act. And that has pretty profound implications when it comes to economics. But because they didn't ape the physical sciences, because they didn't use mathematics, because they didn't reduce human action to a series of quadratic equations and pretend that there was this thing called general equilibrium where everyone had perfect knowledge and there was no time and there was no choice and there was no ignorance, none of that makes sense if you actually are studying what people actually do in their real lives, which is an endless quest to figure out what to do next in a world of radical uncertainty. Now why does this matter to the economics profession? It, it matters because if you can reduce people to an equation, you can manipulate the outcomes of the math, you can train people or nudge them, as the kinder, gentler planners like to put it, you can nudge them in a certain direction and you can reorganize macroeconomic outcomes. And this of course, was the basis of Keynesian economics, but more fundamentally, it was the basis of any flavor of top down authoritarian. We're going to use force to make people do better things based on our particular belief and what those better things are. And the Austrians said, you can't do it, you can't do it because people are individualistic acting creatures. They act in their own self interest, they create plans, they have personal knowledge of time and place that can't be replaced with an equation or a plan. And they will find workarounds to your central plans and create unintended consequences, both positive and negative. And that critique was the thing that Hayek tried to explain when he was debating John Maynard Keynes. Keynes famously won that debate in large part because what Keynes was proposing, macroeconomic manipulation of the economy, was politically expedient. It was precisely what the politicians wanted to do because Keynes said that during a recession the government should spend more money. You can imagine politicians saying, you know what, hold my beer, I'm going to spend a lot of money. Now Keynes, to his credit, wanted them to spend less money during good times. And that part never really worked out. I feel like perhaps we've been living through that for quite some time. So I was talking to Glenn for this series and speculating out loud, like I this conversation was open ended in a very purposeful way. But the question came up, why is it that Austrian economics is so much more popular? Meaning accessible, meaning available to regular people, Meaning that God forbid, even a comedian can read books like Human Action and explain some of those principles on a podcast like Joe Rogan. Why is it so different? There is no grassroots movement for Keynesian economics because all of those equations, and by the way, those equations and the principles of Keynesianism got more esoteric every single generation. So if you pick up a professional journal today trying to understand the macroeconomics of, of stimulus spending, it won't make any sense to you, nor should it, because it's pure gibberish. So you don't see like there is no Ron Paul of Keynesian economics, there is no Keynes of Keynesian economics, and there has to be a reason for that. And I think it goes back to those core principles of what the Austrians were talking about, because they're talking about people acting and they're not using equations because equations are not appropriate for analyzing human action. They're using language, which is in fact how people communicate, how people choose, how people engage with each other, how people trade and how they exchange. It's fascinating to think about this and this is a project that Logan Albright's in studio with me right now and myself were working on a project called Austrian Economics and Popular Culture, which is going to be part of a series edited by my friend Peter Bettke, who is in fact an Austrian economist and a credentialed authority that I would stand up to the best of them.

Unknown (20:08)

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Matt Kibbe (20:44)

We're trying to suss out, like, you know, who were these people that got to the point where someone like Cain or more recently, Renato Moicano. By the way, his nickname is Money Moicano, and I have suggested on Twitter recently that he should rename his name sound Money Moicano because he won this fight a while ago and immediately told people to start reading Ludwig von Mises and has continued to educate his audience on the tenets of the Austrian School of Economics, which I think is amazing. I don't think Douglas Murray is going to be happy about this because surely monimoikano is not qualified to do this. But there is this tradition that goes back, and I'm not going to get into the details here, because I think you want to wait until we actually finish this project. But it goes all the way back to Friedrich Hayek and his decision to publish the Road to Serfdom. Hayek, in many ways, is the most challenging Austrian to read, in part because of his native German writing. And, you know, it's fairly dense writing. But he. But he wrote a popular book that exceeded the expectations of the publisher time and time again. They had to keep going back to the printer to make more and more copies. He wrote the Road to Serfdom during World War II. And his point, which you've heard on this show a thousand times, is there is no fundamental difference between socialism and fascism. Both are appeals to government authority. Both presume that you can centrally plan an economy to various degrees, and both assume that the individual is subservient to the state at the time. He's trying to debunk this debate that for some reason, as the socialists claimed at the time, that fascism was sort of the last cry of late stage capitalism, a reaction to the glories that would be achieved once we transformed to true communism. And Hayek was warning people that that's not how it's going to work out. It's going to all boil down to pain and suffering and violence from the state. And that book became wildly popular, and it turned on an entire new generation. You had Ben Roge and Leonard Reed at the foundation for Economic Education that published the Freeman, which, again, were very short articles that were designed specifically to turn on regular folks to these really profound ideas. You had Henry Hazlett, who was. I'm sure the experts would not approve of this, but Henry Hazlett, a wildly successful journalist, did not finish college, but single handedly managed to introduce an American audience to people like Ludwig von Mises. Ludwig von Mises, because of Henry Hazlitt, was publishing in the Wall Street Journal and really turning on a broad lay audience to the ideas of the Austrian school. And of course Ayn Rand is where I learned about Ludwig von Mises. Henry Hazlitt introduced Ayn Rand to Ludwig von Mises, which is why she, in her nonfiction work that I eventually picked up, suggests that if you want to understand economics, you have to read the writings of Ludwig von Mises. I wouldn't have found him otherwise. Fast forward to my professor, Hans Senholz, who was a longtime professor at Grove City College. He was a professor for Peter Bettke, who I mentioned he was my professor. But amongst many other influences, including the Road to Serfdom, Hans Senholz is the guy that turned on Ron Paul to the ideas of the Austrian School. Ongoing conversations between Hans Sennholz and Ron Paul and of course Murray Rothbard is very much part of that mix as well. And fast forward to today. Tom Woods, Dave Smith, who I've mentioned a thousand times in this show, Javier Millet, who actually has pit bulls named after Murray Rothbard and Ludwig von Mises. There's some, I'm sure the experts don't approve of that and of course, Mani Moicano. And I think the reason I bring all this up and I've probably given you guys some reading assignments by mentioning some of these guys, if you haven't been turned on to them already, is I want to pull this quote from John Maynard Keynes in the General Theory of Unemployment, this iconic work that he did that frankly ruined everything when it came to macroeconomics and is more than anything else responsible for the fact that our government today seems to be very comfortable spending trillions of dollars every year that we don't have, building up the debt, monetizing that through expanding the money supply and, and generally just destroying the money in your wallet. But this quote is worthy of consideration. And he says in the General Theory, the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men who believe themselves to be quite exempt from any intellectual influence are usually the slaves of some defunct economist. Mad men in authority who hear voices in the air are distilling their frenzy. From some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Now, that last sentence I would quibble with, because I think what has happened in practice is that the vested interest that he speaks of this entire ecosystem in Washington, D.C. that feeds off the power of government, they have embraced exactly the ideas from exactly the wrong scribblers like John Maynard Keynes to intellectually justify their financially ruinous and enslaving ideas. But what Keynes is saying is that if we want to protect ourselves from bad intellectual ideas, we better know who those guys are. We better know who the good guys are, who the bad guys are. We better have the intellectual curiosity to sort of sort through what that is. And up until this generation where podcasters are allowed to have intellectual conversations, even though they don't have the right credentials, and maybe they're just asking questions as Douglas Murray kept scolding them for. We have a responsibility to understand the ideas that make the world work or the ideas that are driving America into a fiscal dumpster fire. We got to understand where they're coming from. And I don't think it ever makes sense, and it certainly doesn't make sense now to wait for the experts to figure it out for us. Those experts are precisely the people that John Maynard Keynes is warning you against. We have to figure it out for ourselves, and we have to push back against this counter revolution of ideas that says that we shouldn't do our own research. Remember that during COVID Don't do your own research. Rely on the experts. The science is settled. Well, we shouldn't watch Joe Rogan because Joe Rogan platforms the wrong types of intellectuals. Don't believe that. Pick up some books for yourself and be willing to have conversations. Because this Austrian tradition that I love so much, maybe you're not interested in that, but there's some aspects to it that can help guide you along your way. Specifically, a little bit of intellectual humility. The whole point of the science of economics is not that everything is settled, but that we're trying to figure out as best we can how humans will respond to exogenous events and the next crisis and the radical uncertainty, and how almost magically, it's not magic, it's human action, but how magically people, when left to their own devices, can sort things out, solve problems, and move forward. If we can understand that process, or at least have respect for the process of letting people to be free to figure stuff out, we can be armed with an alternative narrative to the experts that tell us basically to sit down and shut up. Two final thoughts, and I've talked about this Many times, the two points that I get from economics that allow me to think about the world when I'm confronted with a new idea, a new public policy, a new set of challenges, a new narrative that says we need to give power to the governments to solve global warming, fill in the blank. There's always going to be a crisis. There's two basic principles that I get from Austrian economics that help me sort through that, and they're just questions. I'm just asking questions. The first is, do we know enough? Do we know enough in a situation that is radically uncertain? And I asked this about the pandemic in March of 2020. If this is a novel virus, do we know enough to actually centrally plan our way around this? Because the answer is always no. Nobody has all the knowledge. The knowledge is the process of the market itself. The knowledge comes from people acting and reacting, their personal knowledge of time and place and sharing that knowledge with other people. Through that comes prices and other consequences of the market process. This was the fundamental point that Hayek used to criticize socialist planners. And the second question, which is not unique to Hayek, it goes all the way back to the classical liberals in the Scottish Enlightenment and even before that. The second question is, even if they did know the right thing to do, can you trust them with that much power? And that's the entire theme of the Road to Serfdom. It's certainly the entire theme of most of public choice economics. And if you can't say yes to both of those things, you have to start thinking about the unintended consequences of and the collateral damage done by giving government more power. And don't let the experts tell you that you don't have that responsibility. They want you to think that it's okay just to listen to them. That's precisely the wrong thing to do. All right, enough. Thank you and I will see you again next week.

Unknown (33:23)

Thanks for watching.

Matt Kibbe (33:24)

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Unknown (33:27)

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