Hi, this is T.K. Coleman and you're tuning in to the 2015 annual retreat for the Foundation for Economic Education. Today I'll be speaking with Larry Reid about the relationship between character and a free society. Larry, in your book, Are We Good Enough for Liberty? As well as in many of your talks, you make the case that there's this inseparable relationship between character and a free society. So I'd like to begin by asking you, what do you mean by the word character? What do you mean by the term free society, and what exactly is the relationship between those two? Okay, it's true that we use that term character in a lot of different ways. Sometimes we mean it to say that someone is special in some odd way. We say he's a character, but that doesn't necessarily mean that he has character. I mean character in terms of that cluster of personal traits that almost everybody, the great majority of people would agree that if all of us practiced them more, we'd have a freer, better, more prosperous, happier place to live. There's a general consensus of the kinds of traits that I'll touch on in just a moment that they are good things that make for a better society.  When you make a contract, you keep it. I can't imagine a free society in the absence of an honest people. I think it's that critical. If large numbers of people felt nothing about breaking their word or lying and prevaricating at the drop of a hat, I think you'd descend in a chaos and out of the chaos, some strong man would knock heads together and bring order at the expense of our liberty. But there are other traits that are important that I think define character the way I mean it, things like intellectual humility, the idea that as much as you may know, you should recognize that there is a universe of knowledge out there that you don't know. That was one of the lessons of Leonard Reed's classic essay, I Pencil, the notion that no one person in the world knows how to make a pencil from start to scratch entirely on his own. And if you do not make a pencil, then what does that say about your ability or anybody's ability to plan an economy of 320 million people. Other traits of character that I think are important, indispensable to a free society, would be responsibility, not blaming others for the consequences of your poor judgments owning up to them, being responsible for them. I think responsibility is, I can't imagine a free society without people holding that up to a lofty aspiration. Self-reliance to the extent you have the ability to be so, I think is important because the more self-reliant you are, the more likely you're going to be able then to help others who are less so. There are other important traits too, courage. Can you imagine a free society surviving or even coming into being in the absence of courage? I mean the world is full of people, always has been, who would be happy to take your liberty at the drop of a hat. So people who believe in liberty, I think have to stand up for it, have to defend it, speak on its behalf, sometimes put their lives on the line because it can be lost easily through timidity and backing off and allowing usurpers to take your liberty from you. So I think those are important traits and I think they're indispensable to a free society by which I mean an environment where people are responsible, adults who make choices for their lives, go as far as their talents can take them and are free to do so without the intrusiveness of an offensive, aggressive government or force from any source. Would you say that markets are neutral on character or do they enhance it, detract from it? I think that markets enhance character. Think about this, in the days before capitalism, the Middle Ages and before, you could get away with wrapping a robe around yourself and put a crown on your head and declaring I'm the queen, I'm the king, cough it up. But under capitalism, you can't do that. People will laugh at you. You've got to actually serve others if you're ever to be successful at improving yourself. You have to find a product, a service, something you can provide that other people want. So instead of looking for ways to take from others in a free society, you have to, if you want to do better, you have to collaborate with others. You have to work with them. You have to employ them. You have to encourage their patronage as customers for your products. So I think markets encourage a strong character. And so in many respects, liberty and character or free society and character are two sides of the same coin. Capitalism, you say that word as if it's a good thing. For a lot of people, that's a dirty word. It's become somewhat of a catch-all term to refer to everything that's wrong with society. What's your take on that? Capitalism gets a bad rap because there are some bad capitalists who in fact use the force of government, use their political connections to get ahead. When I see that, some people call that crony capitalism. I call it crony socialism because that's what socialism is all about. Socialism is a world of political connections determining how far you go. The use of political power. I don't think there's anything about capitalism, as I understand it, that is inherently cronyist or in the sense of using government, using the force of government to get ahead. There are better words to use, free enterprise is a good one. But I don't define capitalism as a system that includes the use of deception, fraud, force, violence, political power from government to get ahead. That's not capitalism in my book. So what would be your response to the person who says, all right, you say you support character and capitalism, but what do we make of all of these questionable activities performed by the rich and the greedy? You hear a lot of that these days, and you're going to hear more of it if government continues to grow and pass out favors. The reason that so many people in the business world and elsewhere are involved in government is that government is so involved in them and their lives and their businesses. So a lot of people use government not only to get something, but they're also involved with it to keep it at bay. The answer to it is to confine government to its proper duties of the defense of life and property of all people, not the dispenser of privileges and favors and subsidies and handouts. That breeds corruption. So also you have to remember that at any given time, any profession in society, including business, government, whatever, is going to be reflective of the general culture of character. If character has been widely eroded in society, the bad effects of it are going to show up in all walks of life. You're going to see it in politicians, you're going to see it in business people, media people, all walks of life. Until character is rebuilt, you're never going to get rid of all of those bad consequences, but you can go a long way if you confine the use of political power to the defense of us all, not to the dispensing of special privileges to a few. There's a famous Milton Friedman quote and I'm going to have to paraphrase here, but he says something along the following lines that if you want to fix political problems, don't focus on voting for the right people, but focus on making it politically profitable for the wrong people to do the right things. Does that oppose what you're saying or are those ideas reconcilable? Oh, I think it's perfectly in accord with those ideas. I see politics and I think Friedman did too as reflective of the general climate of opinion. If you want to change politics, whether for the better or for the worse, you first change the climate of opinion. Politicians rarely conceive of ideas. They usually reflect them and they reflect the ideas that they think they can advance and still win reelection with. So until you change the climate of opinion, don't expect big changes at the political level. There are a lot of folks who think politics is everything. That's where they put their time, their attention, their money and so forth. But you know, in a lot of ways that's like locking the barn door after the horse is left and you'll be eternally disappointed because politicians are buffeted by lots of conflicting forces. If you really want to change things, work on young people or at least work on ideas and if you succeed there, then the good from that will be reflected in politics and everything else. You've traveled over 80 different countries in six different continents. Are there any experiences or individuals that stand out to you as particularly good examples of demonstrating strong character? Oh yeah, do we have a couple hours? I can give you quite a few. One that I so enjoy talking about and this man is still living. I'll have a chance again to visit him in May 2015 when he turns 106. I've known him personally for about 15 years. His name is Sir Nicholas Winton. He saved almost 700 Jewish children from the Nazis in 1938, 39, right before World War II began and he did that sometimes at risk to himself and he did it without a desire to achieve fame or fortune from it. He couldn't talk about it for 50 years after he did it. What a courageous thing to have done and he was able to do that in spite of the opposition of most governments of the world who would not even allow these endangered children to leave harm's way and get to safety. He fought that tooth and nail. It's an example of a private initiative of a man who faced government opposition to save lives, did his best and ended up saving 669. He's since been knighted by the Queen. He is Sir Nicholas Winton. He's been the subject of a 60-minute segment earlier this past year and when I saw him last in May of 2014, at 105, he was still sharp as attack and eager to talk and so I'm looking forward to seeing him again in May. Other examples I could cite would be from the resistance movements behind the Iron Curtain. Since a very early age, I've been very interested in people who go to great length at great risk to themselves in difficult environments to spread ideas of liberty and people behind the Iron Curtain by the millions did that and some of them did not survive because of their opposition. But in 1986, I spent a couple of weeks living with people who were active in the underground in Poland and every night I stayed at a different home to stay one step ahead of the regime, meeting people who were active in endless ways to resist the communist tyranny of Poland in those years. One night, I spent the whole evening with a group of underground printers. These were mostly young people who had been illegally translating the works of great Western scholars on liberty, translating them into Polish, printing them illegally and distributing them underground throughout Poland and they brought out stacks of this stuff and I was just amazed and I asked them at one point well where do you guys get the paper to print all this because the government owns all the you know factories that produce paper and one young man named Pavel sort of with a smile said we get it from two places one we smuggle it in from the West and two we steal it from communists and I said what do you mean by that he said well in the factories and the printing plants that the government owns increasingly the workers there are on our side and when the coast is clear they smuggle the paper out to us and even on some occasions they've used the government's printing presses to print our stuff and I'll always think of that the bravery of those young people when I think of Poland and I should tell this story that comes from Poland as well just one year ago the man that I'm about to tell you about passed away a great Polish hero his name was Zbigniew Romaszewski he and his wife Sophia had run the underground radio for solidarity in the first six months of martial law which was declared in December of 81 that's when the Polish regime under threat of invasion from Moscow decided to clamp down a band solidarity and other groups organized for things like peace and freedom they put thousands of people behind bars and a dark night descended upon Poland until the big changes of the evaporation of the evil empire in 1989 so I was there in 86 in the middle of that and one of those evenings I was told was going to be very special because I was to meet Zbigniew and Sophia Romaszewski never heard of them before and here they had run underground radio for solidarity during that martial law period early on until they were arrested he was given four years in prison she was given three neither had been out of prison very long when I met with them in their home in November of 86 and here they were active again on behalf of freedom for Poland not doing radio but doing other things and I asked them a lot of questions about what was it like to run an underground radio against this powerful regime at great risk to themselves I pose questions like well you know ultimately you're up against the army navy in the air force of the Soviet Union they're not going to let this happen let freedom come to Poland without giving it a hard time how do you answer that well they were incredibly optimistic it didn't matter to them what the chances for success were didn't matter they knew freedom to be right and so they were going to work for it no matter what and at one point I said well how did you know when you were broadcasting if people were listening and Sophia answered it this way she said well we wondered that too we can only broadcast eight or ten minutes at a time and then we had to go off the air to avoid detection go someplace else set the radio up again as you said one night while we were broadcasting we said over the air if you believe in freedom for Poland the message of this radio will you please blink your lights and call your friends who believe the same way ask them to do the same and she then said we went to the window and for hours all of Warsaw was blinking well uh two and a half years later Poland became a free country it was the free elections of June of 89 swept the Communists out of power Zbigniew from Mieszewski was elected to the lower house of parliament a few years later to the upper house to the senate and that's where he was until just a year ago in early 2014 when he passed away so it's heroic stories like that that make me think golly you know we shouldn't complain about the obstacles that we face can you imagine can you imagine going back to valley forge the winter of 1776 77 78 and can you imagine uh going up to washington and his troops and saying something like uh boy we got it rough we just got a bad health care law you know what the response would be they would say what are you talking about get off your duff and go to work change things get involved look what we're doing so when i think back to the men and women who sacrifice so much for our liberty i think we should never let any obstacle set us back deterrence change our minds once you know what's right take the example of these great heroes and work your heart out for it and i think in the end you'll never regret it when you say we shouldn't complain in light of the suffering these people go through that touches on a very important point that there seems to be this connection between being a person of character and having suffered when i talk with people who seem to me to be people of good character they they always have some sort of story about how freedom just didn't come easily for them is suffering necessary for the development of character or can character be taught or imparted to someone who may not have had a difficult life i think it can be taught more by the power of example than by lecturing i think people are affected more by real life stories of real people who have been exemplars of character than they are by lectures on it uh but i also think that when it comes to suffering uh it it can if the person who's suffering is of the right character it can be a character builder it can be something that uh there have been many cases of people who have grown and improved and gotten better only because they endured the crucible of suffering i would never advocate it for anybody but i applaud when someone comes out of suffering and puts two and two together learns from it and turns it to good advantage i think that's that's a powerful combination certainly if you've suffered the absence of freedom you may know better firsthand the importance of it than those who've always taken it for granted there are endless examples of that so yeah suffering can in the long run both build character and make you a stronger person more effective spokesperson for the things you suffered for and i guess it's important to say too that suffering can also break a person and make someone of seemingly good character lose their way and and that seems to point to the fact that there's definitely that element of choice in all this that's right uh oh one of the great uh survivors of the holocaust victor frankle wrote a book called uh what's the title uh the man's search for meaning man's search for meaning yes and on this very subject and how he turned even the most incredibly awful unspeakable conditions that he endured into an opportunity for introspection and improvement in growth he turned it into a learning experience and he was an ultimately a better man perhaps because of what he endured that takes character and uh i admire that that's why at fee we love to tell stories especially the young people of people like victor frankle and others who've endured and suffered on behalf of of sound principles they are so admirable and people we should emulate no question so what are some of the things fees doing today to sort of promote this message and are there any success stories you can share with us about that the message of character and liberty and the the fact that they're two sides of the same coin in many respects is infused into everything we do now at fee you see it on the website you see it in the articles that we post you see it in themes at seminars the things that speakers talk about at our programs it isn't the only thing we talk about but it's core to it because we want young people to understand that that liberty is in fact a lofty calling it really is it's it's something that should summon forth a desire to set new standards high standards of your personal character they go hand in hand and if you can inspire young people to think of liberty as the other side of the character coin as a very high lofty admirable calling i think you've got the likelihood of keeping them on our side and keeping them a lifelong advocate for liberty if you just sell liberty on the basis of you should be for it because it produces the most stuff free economies do better than unfree and that's demonstrably to true it should not even be subject to dispute but if that's all you do if you use that one argument to convince people that you should be for liberty and free markets because they produce the most stuff well then your converts are going to be vulnerable to the first guy who comes along and says but it isn't fair and if you just put me or people with my friends in power to redistribute income and push people around a little bit we can make things better often off we go down the path to the destruction of our liberties in our society so i i think just infusing that message across all that we do has been profoundly effective it resonates with kids it's one of the talks that gets students up on their feet and applauding because it's not enough just to tell them that they're going to inherit an 18 trillion dollar national debt as a result of bad economics they're going to inherit that because of lousy character and that this is something they should not want to afflict upon their children and the time to work to prevent that is now and that building character is something that ultimately you'll never regret and and this message is very apropos because one of the main criticisms of this capitalistic perspective is well your message is entirely about getting the state out of the way it's all about none in intervention right and when it comes to the tough questions about well what do we do about that suffering person over there what do we do about that poor person over there the only thing we have to say in response to that is well we just don't want the government to do anything about it and it sounds like there's a lack of compassion but what you're saying is that if we are people of character and if we emphasize that aspect of liberty we'll actually want to come up with ways to resolve these sorts of things and we won't just say the state can't do it correctly but we'll say we can do it better on our own oh you're so right tk you can't have a message that is chronically and incessantly negative it can't be everything's going bad or the government is always the problem you can turn the tables in the thinking of many people if you start talking positively about what free people can accomplish i mean it's incredibly exciting what free people can do empower empowered with good character and the freedom to exercise it they solve problems better faster in a more lasting way than any government bureaucracy can so at fee we like to talk not just about the bad things that government may be doing but we like to talk about the good things that good people are doing and so as to encourage more of that so as to make people sit up and notice and realize wow they don't have to focus on a distant politician to fix their problems they're they're good folks in their very midst that are doing miraculous things they need to learn more about those things larry i could ask you questions all day but i want to share you with the audience a bit i know we have some questions coming in from the internet and i know people out here are probably chomping at the bit to ask you questions of their own so let's take some time to open up for q and a i'm going to pull out my phone not because i'm interested in checking espn.com but because i am going to have the questions here so i'll start off with one question that comes online and then we can sort of get ready for the audience one question is how do you recommend i talk with my friends about character without preaching to them yeah good question and the person's on to something because if you come across as preachy i think you're going to defeat your purpose especially if you're talking to young people i find that the best way is to talk about real people who have been examples such as some of those we've talked about today use real stories to underscore the character traits you want to focus on i mean if you want to if you want to stress courage and and compassion well telling the nicolas winton story does it without having to say to somebody you need to be more compassionate you need to be more caring you tell a story of a remarkable living individual who achieved a wonderful thing through private personal initiative that's a very effective way i think to reach people and you can't do it if you're preachy and luxury at them that reminds me of an indian proverb that says once you've cut off a person's nose there's no use in giving them a rose to smell yeah good way to put it i'm going to use that that's a facebook post all right questions from the audience we have one here you've used a few times the term responsible person in a free society for a free society does everyone have to be responsible does everyone have to be responsible for there to be a free society yes uh oh i no i would be the first to argue that you're always going to have some bad apples you're always going to have irresponsible people but the weight of humanity humanity must be on the side of responsibility the more irresponsible people you have the more you that shows up in the form of bailouts and expectations that the rest of the world owes you a living and that there's nothing wrong with taking it or hiring a politician to take it for you i don't think a society can remain free if if large numbers of people go down that path i don't know what the critical numbers are but i know that the more people are responsible the more likely you can retain your freedoms no question so when you say are we good enough for liberty you're not saying hey are we good enough to deserve freedom but are are we good enough to sustain it if it were given to us oh yeah if you've not uh afflicted any harm on anyone else of course you're deserving of liberty by your very nature but what i'm saying is every day we should be thinking of liberty as a very lofty calling and asking ourselves am i good enough am i am i the most honest person i can be am i responsible am i patient am i intellectually humble if i'm not i'm probably not going to be as effective a spokesperson for liberty i can do so much more for society if i am all those things and liberty thrives to the extent that more people hold very high those those standards of personal character i've heard the blinking light story in poland before and it always stuck with me at something i heard years ago and it's very captivating i'm curious if you still stay in touch with any of those people from behind the iron curtain when you were when you were there and what they're doing now what happened good update yes i do stay in touch with a number in fact one of the most exciting things but also time-consuming is answering letters and email from people in countries all over the world but i enjoy every minute of it i went back to poland to see zebigniew and sofia romashevsky in the year 2003 that was 17 years after i first met them and it was a remarkable thing i i knew he was a poly senator and so i thought well i i can go through his senate website and send him a note and so i did i sent him a note saying hey you might remember me i sent you things i published afterwards i cited the blinking light story that your wife told me i'm coming to poland and can i see you in warsaw in august and he wrote back and he said yes i remember you but we won't be in warsaw in august we'll be at our summer home in zakalpani in the tatra mountains visit us there and so i did and i took some friends and uh one of the most memorable moments of that trip was being able to say with the three friends who had heard me tell that story a million times so good i always wondered if people would think i was making it up i said sofia would you tell my friends here what you told me when i asked you if how you knew people were listening and she told it verbatim as you heard today and as i've always told it yeah i have a lot of friends in those countries from cambodia to mozambique you name it that i met in underground work who are still active in various ways a good friend of mine was the president of the rebel movement in mozambique for a decade and now is a leading member of the mozambique parliament a good friend of mine who is currently the president of mongolia served as a prime minister twice and he was a student activist in his early days against the old communist regime and uh i have he's visited me and i have been over to mongolia to visit him and uh he's still very active he's very proud of the fact that he privatized the entire herd of let me remember the figure uh well it was millions anyway of yaks in his first time as prime minister he i remember him telling me i decided right off the bat that he speaks very good english that yaks were not a core function of government and so he sold the wall to the herdsman and in no time at all the yak population went through the roof because private owners said hey i'm going to take care of my yak and make more yaks so yeah it's a it's a lot of fun staying in touch with such people regarding building character is suffering noble or is it just a necessary consequence of living on earth is suffering noble or a necessary consequence of living on earth well i think it's sooner or later is inevitable for a lot of people just by nature of you know what happens in this world uh i wouldn't say it's inherently noble what is inherently noble is turning it to good advantage learning from it trying to do all that you can when you can to help prevent other people from having to endure it it's how you handle it i think that's that that is ennobling one more question there's a question coming from the internet that's asking you larry if you could generalize the character traits of people who choose to enter politics wow uh okay you know i'm reminded of something mark twain said one of my favorite quotes and that don't mean to disparage all politicians because there are some good ones but he didn't like very many of them and he one time said of one that had passed away that he particularly didn't like he said uh i didn't attend the funeral but i sent a nice letter indicating that i approved of it if you go into politics because you really want to change the world for the better and you don't want to use the force of government to push people around if you really want to get it off people's backs out of their pockets and out of their way if you believe in liberty and you realize that to roll back the state somebody has to get in on the inside and undo it uh then i say more power to you but recognize that politics is inherently a meat grinder of principles it more often than not takes a good person that makes him bad all the more reason to keep it small in the first place and i think that's one of many reasons why our founders wanted to keep it small because in fact there are endless writings of our founders about how corrupting political power can be and it was one of the reasons they wanted to keep government small and confined to certain narrow functions intended to benefit us all not a few at the expense of the many uh but if you're of the other kind and that we're breeding them by the thousands it seems who wants to go into politics because they they love power uh i think you're playing with fire it's nasty dirty business another reason to work for smaller government is related to this and that is that the bigger it gets the more corrupting the more nasty it's going to be the more that government is involved in swiping huge chunks of other people's money and then divvying it up spending it to to suit their fancy the more corrupt and nasty it's going to be internally so what does that mean are good people going to run for office in that kind of environment have you noticed how rotten and nasty and mean political campaigns have become in recent years how many times have you heard people say why would a good person want to subject himself to that and i understand that many good people don't even think of it so what are we left with the bad people and they only make the situation worse so it is important that some people get involved but boy uh politically uh but recognize what a meat grinder it can be and uh the rest of us i guess have to find the most principled people we can find to go into government and do that work but uh i just don't i don't see government as an ennobling enterprise it never is more compassionate friendly nicer or cleaner than the folks back home and more often than not it's less so but politicians are so good at speaking to us as if they care oh yeah so how much of bad political policy would you say is the result of sincere ignorance how much of it is the result of willful malevolence well i wish i knew i wonder that all time i i see certain politicians in the way they behave and i can't help but think there is malevolence there they really are drunk with power they really don't care what an outcome may may be of a policy they want simply to have the government in charge they want to be in charge themselves and don't care what the outcome is there are those people but there are plenty of others i think who are well meeting may even yet be persuadable of a different different view but they just don't understand they don't understand the nature of government they don't understand they don't have confidence in their fellow citizens to solve problems without being pushed pushed around by politics so it's a combination and how much of each there is i i just don't know that's really a question about what's in the heart of a person and it's hard to hard to say true larry do you have a favorite president yeah i know i've often talked about him grover cleveland was my my favorite president because i think he exemplified all of these virtues that we've talked about he was an honest man it's not to say he was perfect but he really strove to be an honest person he vetoed more bills and all the previous 21 presidents combined uh and usually because he saw them for what they were these were measures to grab money from other people through the political process he's an example of a man who became president and came to almost all the right conclusions on all the big issues of the day not because he was an economist or he never went to college but because he saw things through the prism of character he was the son of a presbyterian minister so he was raised with strong values in the home and uh he was for free trade not because he read adam smith i don't know that there's any evidence that he did but he was for free trade because he thought of tariffs and quotas and intervention by government in trade as a cynical move by certain people to use political power to disadvantage their competition and he just thought good people don't do that that's dirty business you don't go after your competitors that way you compete with him in the marketplace like everybody else he was for sound money for the same reason because he thought you know inflation of the money supply to stimulate or cover your debts or whatever he saw that as a cheating people it was dishonest you don't inflate the money he wrote its value and wipe out people's savings and declare yourself some kind of savior he saw that as a moral issue you know just on down the list time and again he came to the right conclusion and for the right ultimate reasons not just economics but core principles of morality and so you know i in fact his last words and these are mentioned in the Pulitzer Prize winning biography of him by Alan Nevins his last words on his deathbed in 1908 was for work i have tried so hard to do what i thought was right and maybe gave a lot of thought to that but wouldn't that be a great thing for any of us to be able to say when we're about to check out that we tried as hard as we could to have done what was right i don't think there's any regretting for ever having done that or lived up to that to be able to say that so yeah he's my favorite we have another question from online and this one comes from a lee welter he says thomas jefferson warned a poorly educated society will not remain free is this why america's k through 12 schools are a monopoly controlled by politicians war is that a loaded question well there certainly are plenty of people who saw from the start that putting government in charge of education was serve their political agendas no question about the progressives early on i think realized that if we're really to you know reduce this individual liberty stuff in america and put the state in charge we've got to get in charge of the schools but there have been plenty of other people by the millions who have sort of gone along with that not realizing that that's part of somebody's agenda but thinking in a well-meaning fashion that government schooling will make sure everybody gets an education but it's pretty obvious isn't it that that's not been the case when anybody suggests a little more school choice somebody objects saying well somebody might fall through the cracks but what do we have we have a system of which millions of kids fall through the cracks every year through the government system so yeah i think one of the most destructive of liberty institutions in america has been government schooling don't expect government at any level federal state or local don't expect government to teach character and don't expect it to teach liberty just won't do it never has and so if those are important values to you i think one of the things you should then commit yourself to is getting government out of education the separation of of school and state larry one question about character i think most of us would concede that at some point in our lives we've let ourselves down or we've let others down that we've fallen short of our standards of integrity now i know some people that would not make that concession but for most of us what advice would you give to the person who says i would like to be a person of better character but i have a pass that includes moral failings uh is it true that once a moral failure always a moral failure or is some level of redemption possible oh and redemption is always possible forgiveness is always possible you can change and uh one of the tragedies of life is that sometimes people who do undergo a genuine change and transform themselves into better people uh are still discriminated against by others who think ah you know you did some nasty things forgiveness is such a great virtue especially if you're able to discern that the person you're forgiving is truly deserving of it truly has changed so yeah if i thought people couldn't change couldn't make their lives better and and improve on even the nastiest of behaviors i guess i would give up i wouldn't even be doing what i'm doing uh i think education and uh an inner renewal can happen for anybody and when it does we should praise that if you ever notice sometimes people in our movement uh sort of expect all of us who advance liberty to have popped out of the womb with a copy of the road to serfdom in our hands but all in every case it's been a journey hasn't it uh few people are instant libertarians they've come to ideas of liberty over time it's the same with character uh there are bumps along the way the question is are you going to learn from them are you uh going to put the bad ones behind you and and and not do that again that's so that's the important question and of course people can make that difference and redeem themselves that's an encouraging message do we have any more questions from online there's another question from the web and this is from kanasuke and this person asks what can we do to more effectively fight the false generosity of politicians oh the false generosity of politicians oh i'm your savior i'm going to help you i've got something for you and the other guy doesn't want to give it uh doesn't like you or doesn't like a whole class of people don't we hear that all the time um i think we should point out that there's nothing about government or going into government that makes you suddenly more compassionate more caring more helpful more considerate than the folks who sent you there in the first place nothing and there are powerful internal incentives in government that tend to take whatever good you got in you and and eat away at it the lust for power and to retain it is one of the most powerfully destructive motives on the earth when government gives something it's not as if it were a fountain of free goodies government has nothing to give anybody except what it first takes from somebody and a government that's big enough to give you everything you want is big enough to take away everything you've got there's another side to this false generosity that we should be considering and uh but there are a lot of other issues you could raise too i mean look right at the moment with a half trillion deficit this year and an 18 trillion dollar national debt we have a president who's promising a seven percent what's a seven percent increase in spending it's like you know look at me i'm so generous but but the other side of the coin is he's putting the next generation deep more deeply into debt that's unconscionable isn't it i think we ought to remind people that when government runs these massive deficits to please endless constituencies it's in effect sending the bill to generations yet unborn and that isn't just bad economics that's lousy character how can you sleep at night doing that to kids you don't even know yet that's that is uh that's the kind of generosity that is as false as it gets i think so you know the real generosity is from the heart it's personal it's it's something that you choose to do and i'll just leave you with this little line because it makes me think of an example i like to use of the good Samaritan we think of the good Samaritan as being good why because he came along i came upon a man who had been beaten and robbed and was half dead and what did he do he didn't say call the emperor he didn't say uh go see your social worker he immediately chipped in and helped he did it with his own time his own resources his own love from inside that's the kind of real generosity that's lasting that's genuine that isn't subject to demagoguery and vote buying it's real and it's very different from politicians promising you something at other people's expense part of becoming a lover of liberty i think is the growing up process it's growing up to realize well i'm in charge of my life and i'm accountable for my actions and i do have some ability to meet my needs and i have no business expecting the rest of the world to give me a living that's that's what adulthood should mean but the welfare state sort of breeds babies by the boatload who are long beyond beyond their chronological babyhood but that's that's the nature of the welfare state the best way to impart character is to be the best example you can be especially with kids that's that's the way they learn and that's what they remember i think students and younger people even they can smell a hypocrite a mile away and so the last thing you want to do if you want to raise children of good character is to say one thing and yourself do another so maybe we all need to constantly ask ourselves am i being the example that i want others around me including my kids to be if i'm not i'm not a very good teacher of those values larry some would say that moral codes are not these objective list of do's and don'ts without a point of reference but that they're prescriptions for a higher quality of life do you believe that character is profitable that in terms of helping us create the results that matter most to us how does character stack up with alistair crowley's maxim of do what thou wilt yeah well i think personally i think character is always profitable in the long run if you've got a conscience and really doesn't have just about everybody have a conscience you want to put yourself in a position someday when you're about to check out that you can look back on your life and say i didn't solve every problem and i had plenty of flaws along the way but once i understood what was right i did my best to live by the loftiest of rules to do what was right to be a person of character that i think that is such an incredible goal to set in your mind that that's what i'd like to tell young people all the time at our seminars and other places you'll never regret that if you commit yourself today to a life of character even sometimes though it may be difficult to achieve there'll come a time when you'll look back and you'll be proud your conscience will be pleased and you'll be happy that you did your best to cultivate the highest of character it'll be more important in your mind than anything else you've done that's what you want carved on your headstone something about a man or woman of character not he produced a lot of stuff or or whatever i think the most important thing is to be regarded as a somebody who walk the walk and is that the phrase walk the talk talk the walk whatever somebody who lived to his standards that he preached and was an example for everybody i i just don't think of there's a higher calling than that i think we have time for one or two more questions what are the aspects of moral life do you think are important in the fabric of developing life that you could look back at at your death and say this has been a good a good travel beyond character it takes me requires a few moments thought because to me characters everything makes all things possible without it nothing else matters well i guess i'd put liberty a close second just in a personal a personal scale i hope to be able to look back someday and say i was very pleased with what i was able to do on behalf of liberty and if i'm disappointed it'll be because i missed an opportunity to advance it so i would say you know living for character advancing liberty they're way high on my list way down the list but still important to me are things like seeing the world and exploding stereotypes getting to know people of various cultures and places that's been a wonderful thing that's very important to me and just learning learning as much as you can regard learning as a lifelong endeavor never quit there's not a day that goes by that i'm not in just awe of Leonard Reed used to talk about this too i'm in awe of almost everything all the time and i every day i want to learn more about them why is that called that thing or where how that thing grow there where to come from um i think a person who is constantly in awe is a person who is automatically introspective automatically interested in learning not in bossing around and so maybe i'd say cultivate a sense of awe about what a wonderful world this is and so many things around us we should be grateful for a person who's not in awe tends to be to be a very ungrateful person and ungrateful people are not fun to be around larry you're a noted leader in the in the liberty movement and i'm sure you could put your energies into any organization why do you choose to put your energies into fee oh thank you john it's a great question fee you know has been very important to me from the earliest days that i became involved in this movement i was drawn to it to this movement i should say to liberty because of the soviet invasion of Czechoslovakia in 1968 and even before that the influence of the movie the sound of music as a 14 year old i just saw the message of that movie as one of uh you know here's a family and it hasn't done harm to anybody and they just want to be left alone and this rotten regime from next door is coming in taking over their country and drafting the father and i wanted to know more about that the history of that period and then later right next door to austria where the movie was set the soviets invaded Czechoslovakia in 68 i immediately joined a group called young americans for freedom because they were holding a demonstration in nearby pittsburgh to protest the invasion got involved signed up got a package of material loaded with fee stuff subscription subscription to the freeman and hassles economics of one lesson bastiaz the law and uh hyax rode the serfdom and the message was you know if you want to be a good anti-communist you have to know your moral philosophy and your economics not just be against violence in the streets so i had to deepen my understanding well i did that through fee uh from 1968 on so i've always felt a great debt to fee uh i started writing for fee in 1977 started speaking at fee seminars in 78 or 9 when roger reem our current chairman was you weren't your director of seminars at that time roger and then uh served on the board in the 90s chaired it for three years so it's always been in my blood uh for a long time since the teenager larry i'm sure i speak for many when i say it's been a great pleasure hearing you share your stories and insights for those of you who would like to interact with these ideas more deeply i encourage you to check out larry's book are we good enough for liberty also please visit the foundation for economic educations website at fe.org larry thank you so much for your time thank you tk it's been a pleasure thank you thank you thank you thank you very much it's been fast it's been very fast here


He has written in the fields of Marxian economics, comparative systems and monetary theory and is currently an assistant professor at George Mason University, an assistant professor of economics at George Mason University and a member of the Center for the Study of Market Processes here at George Mason University. As a matter of fact, Don wrote this introduction for me and presumably out of modesty omitted some of his most noteworthy and exotic exploits and areas of expertise out of prudence I will do likewise. I found that one of the big mistakes you can make when you're a conference director is to pick yourself as one of the speakers. You have no, you have so many other things to worry about that having to speak also is just an incredible burden, but I'll try to bear up under it. And the topic for our panel today is failure of central planning. Notice there's no attempt to be value free here and to this extent we are quite willing at this conference to come right out and say that central planning has been a total failure, but failure can be viewed from many different perspectives as the point was raised in one of the questions earlier. From the point of view of perhaps of the ruling parties in the communist countries, they haven't been failures. They've been able to hold power quite effectively, but that perspective on failure is not particularly interesting to me or to the main purposes of this conference, rather we would consider failure from the perspectives that are normally gauged by economists. Probably the two senses of failure that will be touched on here will be, in my session, failure from the perspective of the original aspirations of socialism. And then in Mrs. Greenslade's section discussing more or less the failures from the standard point of view of efficiency considerations, in other words just straight out and out waste that occurs, however I think it's important to keep in mind that the whole socialist movement was only born because it had inspired millions of people. It was a brilliant message that came down from socialist theorists who were systematic writers who inspired people very intensely, and this entire socialist movement was guided by the writings of Karl Marx and some of his followers. And so I think it is important even if all of these original aspirations have been so thoroughly abandoned that they're not even remembered by anyone anymore, I think it is important to try to recall what those aspirations were and to judge what the Soviet economy or those types of economies have done with respect to that kind of standard. My thesis will be that the original goal of the socialist movement was to entirely replace all exchange relations in the economy with administrative central planning by which is meant the abandonment of prices, of money, of markets of any form, of any kind of standard market kinds of relationships in any form. Now that is an extreme interpretation of what Marx meant and I think I have to spend at least a good part of my presentation trying to defend the point that this is in fact what Marx really meant. In fact, I really have to step back even further because many Marxists will deny that in a sense Marx advocated anything. They will say what Marx did was contribute a critique of capitalism but he didn't say anything about what socialism would be like. So we don't have a theory of socialism from Marx and therefore perhaps we can invent our own theories of socialism and graph them on to Marx's critique of capitalism or if we do find that there is some vague theory of socialism within Marx, well then if this is the extreme version that I've just articulated it's obviously so unworkable that we can abandon it quickly and move on to some other sorts of formulation of what socialism should be like and then work from there. But in either case still maintaining the original critique of capitalism that Marx articulated and that motivated the entire socialist movement and made socialism the main issue of this century in economics. Now then is there a goal to Marxism? The difficulty with that in the case of Marx is that he was what is sometimes called a systemic theorist which meant that he didn't focus much on what most economists consider to be policy issues like what the government should do that sorts of issues that was not of any concern to Marx. He was trying to totally restructure society and so certainly he wouldn't have involved himself in that kind of goal but also probably more crucially Marx had an intense hatred for utopian socialists the main form of socialism before he came on the scene. Marx's interpretation of utopian socialism or I should say the interpretation of Marx's critique of utopian socialism has generally been that any formulation of what socialism would be like is idle speculation as there's no point to doing it to talking about what socialism would be like or how it would work or what problems it would have because that's just speculation about the future and we don't have any idea how it would work. And in fact in many many Marxian quotations can be culled from the vast works of Marx that would suggest that interpretation. However I do think that's a misinterpretation of the essential message of Marx. I think when Marx focused on his critique of capitalism his point wasn't that one can never look at the issue of what socialism would be like in any sense and that one should only focus on what capitalism is like. Rather I think he was seeing the proper approach to studying socialism as doing it through a critique of capitalism that is to say the critique of capitalism and the positive theory of socialism are two aspects of the same endeavor. When one criticizes capitalism one is doing that from the standpoint of what this socialist utopia would be like and I use the word utopia in a considered way. I think Marx was a utopian in at least the minimal sense that he had a future ideal of what society would look like and that his entire critique of capitalism is built up from that image of what socialism would look like. We can't treat the critique of capitalism independently from the positive theory of socialism and so if we turn out if we conclude that whatever Marx's positive theory of socialism is is totally unworkable this is not going to be the end of the story. We're gonna also have to ask the questions of how that damages Marx's critique of capitalism. If there's any one aspect of Marxism that I think any critic has to grant to that point of view it's that it's an overall systematic approach that covers virtually all issues that involves itself even in some of Engel's work in the philosophy of science for physics and virtually every aspect of life is filled in by the Marxian ideology. Something about Marxism tells us how to do virtually everything and everything is all fit together and Marx throughout all his many volumes of work doesn't contradict himself very often for someone who wrote so much. He's pretty consistent. Now I think this applies to this case that Marx was consistent about what's wrong with capitalism from his point of view and looking at the other side of the coin what would then be right about socialism if that kind of system could be made to work. And so then I would say Marx is particularly the kind of person that you can't excise one part of his theory and expect the rest of it to stand intact. So then my conclusion would be if I can make this point that this is what Marx believed then it will follow that a great deal if not almost the entire bulk of Marx's critique of capitalism will also fall away as soon as we admit to the impossibility of the image of socialism that he had in mind. Now to buttress the argument that this is his image of socialism would take some time I can only illustrate it with a few examples. One of Marx's main themes in the volumes of capital for example is the waste of competition or what he calls the anarchy of capitalist production. And one of the ways he illustrates this is by the contrasting notions between production time, time that is spent in actually producing goods and services as opposed to circulation time, the time spent selling, buying, finding markets and so on. I think this is an example of the sort of analysis of capitalism which without coming out and saying it is really talking about how socialism should work. When he's talking about the circulation time under capitalism being a waste what he's getting at of course is that there's a way to have a modern technologically advanced economy without having circulation time, without wasting time going around trying to find markets, middlemen trying to sell your product and so on. And that therefore a socialist economy could spend all of its productive efforts in this other category in production time and directly producing goods and services. Marx's little schema to illustrate this thing would be maybe I can use the board for this. Holding of mine, buying a good going through a production process, turning it into a more assailable good and then ending up with a greater amount of money. This is the way, this is the sort of schema that he used to talk about the production process under capitalism. All of this amount of time then is counted as production time and the things on the end are totally wasted.  In other words involved in exchange relations. His entire early writings were concentrating on the notion of alienation. As Paul Craig Roberts has shown conclusively, alienation is not a psychological attitude that people have because they feel bad about being a worker or being ordered around the workplace by their boss or anything like that. There may well be psychological effects of what Marx meant by alienation but what he meant was the mode of production itself essentially exchanged relations. He meant the fact that people have to buy and sell goods. They can't just directly produce for use. They can't produce a good and actually see it come out as a useful product but instead they produce in what he calls commodity production which to him means you produce for an impersonal market, a market where you don't even know where it's going to end up or who's going to use it or why and that sort of division between the producer and his product or between the producer and the production process itself between some producers and other producers. All those sorts of divisions are what he called alienation and it should be clear that if this is the main thing he's focusing on when he criticizes capitalism then certainly if we can say anything about socialism certainly it must avoid this feature. It must not have alienation. It must have production for direct use, not production for markets. Exchange relations themselves as such are the culprit in Marx's theory. Planning for Marx then means really administrative planning and well it used to be the old sense of the term now it seems to be forgotten quite a bit by most economists. Planning isn't just having a central office that issues decrees every now and then about what they think they're doing or what in fact has already happened but it really meant controlling the details of production processes. It meant doing so as a replacement for the kinds of mechanisms that occur under a capitalist system for allocating resources that is mechanisms like prices and profit and loss and capital markets, advertising institutions, speculation, buying and selling as such. All those sorts of things would not be necessary. Angles in a famous quote even says that value, the whole theory of value is not even applicable to a socialist society but certainly prices and the ways that value manifest themselves in a capitalist society are all going to go by the board as soon as we achieve a socialist society. Another part of Marx's writing that illustrates this whole interpretation would be his distinction between two forms of the division of labor. Marx distinguishes between division of labor in the economy as a whole versus division of labor within the factory. Now oddly enough for a socialist you might think the way the division of labor was planned within a factory was an ideal for Marx. He liked the way it was, the plant was organized, the way from the start every department's activities would be prearranged and so that different departments would work together in a precoordinated way so to bring about a coherent coordinated result. And this is to be contrasted then with the kind of division of labor that occurs in society as a whole where of course nobody plans exactly where resources are being allocated but in fact it occurs spontaneously. It occurs as a result of clashes of different interests in a market environment, different competitors fighting each other for markets and the end result of this is a relative degree of order, a degree of coordination that's in Marx's theories manifested through his labor theory of value but it's the same sort of ordering mechanism that the classical economists that Marx learned from had talked about. There's a tendency to equilibrium as Marx might have put it and there's this coordination which occurs for Marx rather crudely, it occurs ex-post, it occurs only after the fact when people find that they're making losses in the kinds of production methods they had chosen but nonetheless there is an ordering mechanism that works and Marx saw it as incumbent upon the socialist movement that they find a replacement for this ordering mechanism. They must at least make the socialist society as well-ordered as a capitalist society is which he's continually disparaging as anarchic so at least it has to achieve that degree of order and in fact of course Marx felt that the socialist society would achieve a much greater degree of order. It would achieve it in Marx's theory through a system of administrative planning where everything is arranged ex ante, everything is arranged in advance, coordination occurs before production processes are launched and so only those production processes that are going to jive with each other they're going to be fully coordinated in Hayekian terms. Only those sorts of production projects are going to be engaged in. There's no need then for the waste of competition. Well in my view this is the most consistent theory of central planning that has ever been devised by a socialist. If you're going to plan an economy what you need to do is get rid of all the unplanned elements that are in the economy as we know it.  There's nothing to the notion of scientific planning that Marx always trumpeted certainly doesn't fit in with this other entirely different notion that has now come to control the socialist mind of planning as simply intervening into a market environment. Isolated acts of government interference of course are going to have reactions on the part of the market so long as you allow private ownership. Private owners are going to reallocate in response to every government action. A new tax of course will bring about new sorts of activity that will try to work around the tax. Any kind of government plan is going to find reactions on the part of private owners. In other words there's sort of a rivalry that goes on in any economy where markets are there. You can't wipe out the rivalry just by making one of the rivalist institutions have particularly strong power. Giving it power to tax and other sorts of powers doesn't take away the rivalist element or the competitive element of the environment. It simply imposes all sorts of constraints on the sorts of activities that are going to be undertaken. In fact I would liken what is really done and called planning in all countries of the world. I would liken that more to arbitrary interference in a mechanism that's working on its own rather than scientific planning that's actually guiding the resources of the economy. In fact I would say this sort of thing in government interference is no more scientific planning than applying an electric jolt to a computer what could be called electrical engineering. I mean you're not really controlling things. You're throwing monkey wrenches into the operation. You're screwing up the works of what's going on as a mechanism but certainly you're not planning. I think Marx understood unlike most modern socialists that the market achieves whatever imperfect order it does achieve as a spontaneous outcome of more or less anarchic forces. These rival plans that compete with each other. I'm not sure whether Marx understood all the beneficiary results of these rivalist plans that some of which have been elucidated quite well by Professor Kersner in his talk this morning. The fact that this kind of rivalry between entrepreneurs is what generates the competitive discovery process which in turn is what gives us the knowledge to know what sorts of avenues to invest in. But although Marx didn't understand that perhaps too well he did recognize that markets and planning are incompatible concepts. If we look then at the way the real socialist economies work and then ask according to this original aspiration of abandoning all exchange relations and instead imposing a central plan how does the real Stalinist mode of five-year plans actually work in comparison to the ideal. Well I think the socialists have really admitted the whole case when they use the terminology that Stalin coined of socialist commodity production. For Marx the idea of commodity production is by definition the opposite of socialism. There can be no such thing as socialist commodity production and so certainly those socialists in the Soviet Union have used that phrase. They've kind of given up the whole case. They've admitted that they are allowing commodity production which in Marx's language then means that you have alienation. It means you have all the kinds of problems that capitalism has. All you have that's different is you have a special particularly powerful central body there that can exert all sorts of pressure in the economy and of course redistribute wealth in its own direction. But that's certainly not anything like the goal of the original Marxian system. Now there are many Marxists that I've run across who agree with just about everything I've said up till now and then would conclude somewhat differently than I would that Marxism is quite innocent of all the failures that we've been talking about today so far. That in other words since as I admit the way the Soviet economy really works is not central planning. That they haven't come anywhere close to the sorts of aspirations of Marx. Therefore perhaps Marxians can defend themselves by saying well its socialism hasn't been tried. Whatever is failing over there can't be blamed on Marx's ideas or on socialism but it's just simply the failure of some aberration that occurred in a particular backward country in Europe. One example of this sort of Marxist would be Tony Cliff who wrote a book called State Capitalism in Russia and blames all the failures that we would blame on socialism or many of us anyway would blame them all on the institutions of capitalism that are still there in the Soviet economy. He would draw a reference to the fact that interest is paid on many loans and that there's profit incentives and there's differential wages paid and all those sorts of things which to us or to me I should perhaps say are simply reflections of the fact that this is the only way the Soviets can make the economy work at all is to allow all these things to happen but from the Marxist point of view this seems to pose as an excuse. However I don't think this this thesis can be maintained and I think again it's Paul Craig Robert's work that should be called upon to answer this point that is that the Soviet type system indeed is not Marxian planning but the original attempts to implement planning under Lenin were honest attempts to achieve what Marx had in mind that is destroy money, deliberate attempts were made to destroy money and market institutions to replace them all with planning and so I think here we have in what's now called the war communism period in the Soviet Union we have a clear case of an attempt being made to implement what Marx had in mind and a fairly obvious result that is it was so bad that even the dedicated leaders like Lenin himself and Buchan became quite convinced after a couple of years of this chaos having reduced the productivity of the economy down to about 10% of what it was before they gained power and of course they gained power already when they were embedded in a terrible war and had lost all sorts of resources in that direction so you could hardly imagine a more catastrophic failure of any kind of system and I do think that Marx's ideas can be blamed for this sort of failure so then I think you can really raise two kinds of arguments against the Marxian system the first one was the one that again I should refer to Kersner on the Mises's calculation argument seems to me on a theoretical level showed that no there is no way that the central planning office could have the relevant knowledge that it would need in order to plan an entire economy in this truly centralized planning manner that wouldn't just wouldn't have the kind of information and so there has to be a reliance on prices that alone is a sufficient critique of Marx's own system even without getting involved in the whole longer kinds of variants of socialism I think that alone has buried the original Marxian vision and all the goals that went with it to all and all the critique of alienation that went with it and then besides this theoretical argument of course the other argument the one I just mentioned the other catastrophe that fell or the fatal blow we might say that fell upon the Marxian doctrine is the fact that it was tried the fact that it was tried and and failed so badly was enough to to make all the Marxists who ever talked about how socialism works quite thoroughly abandoned the original ideas and in fact try to bury them in all sorts of obscure rhetoric about a transition period which was of course never talked about by Marx or any of the original Marxists and some sort of transition period is invented which is now supposed to have features of both capitalism and socialism which is an abomination from any kind of Marxian point of view and of course many Marxists don't bother to read Marx so they wouldn't know that thus in conclusion I think I could say that the the Marxists despite the difference between the real Soviet Union and their ideals cannot take much comfort in the fact that the Stalinist type system is not pure Marxian socialism I think that the only reason the real Soviet system is not pure Marxian socialism is because that it doesn't work at all that Marxian socialism is so bad that it can't last even a couple of years without totally destroying the economy and thus had to be completely abandoned and although the five-year plan type of system is extremely inefficient and that's the sort of topic I think that the next speaker will will go into but despite all those inefficiencies compared to the original goals of Marxism that kind of system works quite well thank you


So today guys, I'll show you how you can get Vladimir's secret very unique pistol man You don't want to miss this. How's it going guys? My name's DPJ and if you do enjoy the video, leaving a like really helps out and if you like what you see and want to see More be sure to subscribe Okay, so this weapon is a complete beast. I am having a ton of fun with it It's super powerful and it's definitely a unique for the collection Okay, so this is a weapon you can get quite early on but many people will definitely miss it So during a campaign missions a very early mission into the campaign missions is called Into the unknown during this mission guys, you will meet a dude called Vladimir This is done by you docking onto a space station called the eye Now upon coming on to this space station and talking to him You then should see a dialogue option of So you're retired from the Crimson fleet didn't know what happened upon selecting this and hearing Vladimir out You should then see an activity pop up on screen called visit Vladimir's house Now if you are past this point in the story Vladimir and the eye and into the unknown and you've checked your activities and this isn't there Vladimir can be found within the large within new Atlantis and Jameson and Alpha Centuary So head here guys and see if this dialogue option is there for you Now you will need a security ranking of a two minimum so you can unlock those advanced locks So once you have this and you have the activity you need to travel to Surma and then guys onto the planet Surma 7a and then land at Vlad's villa Once you have landed guys head up the hill to Vladimir's house Once you are in his house head downstairs and unlock the advanced lock blocking your way through this door What you have guys you are in this amazing rare pistol the mutiny is ready for the taking is on his desk So grab at this thing guys and have fun with it. But yeah guys That's how you get Vladimir's secret pistol the mutinier guys If you enjoyed the video leaving a like really helps out if you like what you see I want to see more starfield Be sure to subscribe and hopefully guys. I will see you on that next one