And welcome back to the next stock of SolarPunk 2077. We just heard the lovely Radio Cosmica coming from Mexico talking about how to heal through radio waves. And that's, I guess, a good intro into what's coming next. I'd like to welcome my friend, my own phone to today.  Guerrilla Living Syndrome or the Adelkis Hospital, as you also call it sometimes, sharing a bit about the imagination and other forms of living together in this planet. Welcome, my own phone. Can you please introduce yourself? Okay, hello. My name is Ma Yongfu. I'm an artist and curator based in Berlin, but I was living in China for many, most of the time in Beijing and Shenzhen and some other cities. But I'm doing a lot of different projects. It's kind of a non-traditional or non-conventional art project. So, but yeah, today I'd like to actually, I'd like to come to do the face-to-face interview, but I have to do the self-courting today because I have been outside of the Berlin for several days. So that's, today I'd like to introduce the project. It was initiated by Forget Art in 2011 and 2012 because the project named the Guerrilla Living Syndrome. It's like, you know, because in traditional China, especially in the faster developing big cities in China like Shanghai, Beijing and Shenzhen and Guangzhou, the many young people live there and to work there. But the government urges the young people to try to buy property according to their some tradition and concept, or some ideology. People think that if you become a successful man in China, you should buy some properties and buy some apartment. It's not like in Germany, in Berlin. You don't need to buy some property. I mean, it's after the communist China, it's become very harsh and very tough and very deep and capitalism in China. Actually, it's a mixture of the neoliberal capitalism and also I think the government tries to ask the young people to buy property because they want this young people to try to occupy their lives with money, with property, with cars, with luxuries, with entertainment. And it makes them have no energy to do any kind of resistance to some other very different ideas. Because if you have a lot of burden, like life's burden or some pressure, you don't have the energy to think how the community you are living. That's why in 2011 I have talked with some artists, architecture and some anarchists and also activists. I'll do some projects about this. This is very relative and feel very able to live in peace and try to against the very traditional and conventional idea about how to live in the big city or in the... It's also like today, we are trying to many new anarchists to try to reclaim the networks, to reclaim the online media. But on the other hand, we have to reclaim the traditional space because many traditional space have been abandoned like a street and factory and even the museum space. So a lot of space have been abandoned by the new generation because they spend too much time online in some social media. But this project tried to urge the young people to use their imagination. You can see this tricycle caravan, and with a maxim there are some slogans from a French philosopher, guide the ball, imagination at power. Actually I want to change a little bit. We can call it to empower your imagination. Today we also need to like anarchists, real anarchists, we need to empower our imagination to make some very alternative way to live in. That's the basic thinking about how to make this project in the street or in the square or in the occupied place or some squaded place. You can use the imagination to create and remake and recreate some living structure or some asylums. Or you can call it what you want. So we have asked almost 40 or 50 artists and young artists and architects to make some project in the street or square and some other places. Every artist and architect they can use their experience to create some griller living structure or living asylums. I remember one of the artists, one of the young artists, to make some easy to bring cuckoo.  He can bring it anywhere and open very quickly to live there. So it's very interesting. There are many interesting works and many interesting works appeared in the streets and also everywhere in the square and even in the forest. This picture was recreated in front of one of the art museums in Shanghai. It's MCE, Museum of Contemporary Art, Ming Contemporary Art Museum, Shanghai. And after 70 or 80 years this museum has commissioned us to recreate this project in front of the museum. So then I asked some people together to make the, you know, it's like an arcade camp in front of the museum. Also we have brought one of the art projects together with this camp together. It's an online podcast and the radio. It's uncut. It's also initiated in 2012 and with two other friends. And this online radio is dedicated to some socially engaged art, social action programs. And last year we have interviewed some, you know, Hong Kong pro-democracy activists in Berlin last year. So we combined this radio together. You can read it with this arcade camp together. You can see the caravan. There's a big maxim was installed on the caravan. And we can, during the opening and sometimes I also do some, you know, guerrilla Shanghai radio. And I did a live interview with some activists in Shanghai and some anarchists inside of this caravan.  And this microphone actually, it's according to my memory, it's come from the People's Commune, you know, in the 70s. It's a very big, it has a lot of, I mean, the voice is very big. It could spread 500 meters away or even 800 meters away. The voice is very big. And also the object of this arcade camp, it's a school. It's a primary school, it's a high school. Even students from high school can hear this voice and this program. Because most of the tracks are very sensitive in China. I have tried to build some platform in China, but it was banned. And they have deleted all of my tracks overnight. So I have to put this platform on SoundCloud. You can check all the tracks and archives from SoundCloud, SoundCloud Uncut. And also this Uncut radio, it's a motor with Uncut and Uncensored and Unlimited. You can talk whatever you want. We don't edit, we don't censor any of the content. You can speak whatever you want. So no one tries to censor you or manipulate you. So we combine this together. Because I haven't found some picture from 2011.  But that's very urgent. Especially in China, because in China, in the 20th and 30th of last century, the Anakin thoughts were spreading very well before the Marxism have appeared. Many activists believe in Anakin, since the CCP, the Chinese Communist Party, they took the power to become a very authoritarian government. So that's why I talk to some fans. That's the big difference between the Marxist and the Anakin. Because Marxists, if they have opportunity, they would like to take the power and become totalitarian. And the Anakinists, they don't want to take some power. They want to empower people. They want to share the power to other people. I think in China, people need more and more Anakinist concept and thoughts to share. But you have to add the Anakinism. Going back to the last point you said, you were saying that before the Nationalist and Communist Revolution, the biggest revolutionary movement in China in the early 1900s was actually anarchism. Is that correct? Yeah, it's a very short time, just 10 years I think. From 1918 to the 1928, maybe after that, most people believe in the Marxism, because we need to take down the Qing dynasty. Because we want to build a strong country. Because the activists asked the people, they let the people think, we were exploited by the imperialists, like Great Britain or some colonial power. That's why they try to let young people believe in Marxism. And not anarchism. Because anarchism is more libertarian and more individual. But today, in China, many people don't know anarchism. Because not many media and not many platforms have tried to promote anarchism in China. And people have tried to discredit anarchism. It represents some chaos and unsteady society. Your life will be getting influenced. The government tried to use people to study life. You can live a very good living. And anarchists represent some violence and vandalism. But it's not true. That's why we try to... Sometimes, I think art is a very good way to use and take advantage of contemporary art as a tool to supply some anarchism. It's easier to let people accept because they could find some fun and interesting things to share together. You don't need to tell them, oh, anarchism or something. But we use some very practical, substantial action and the community to let people believe we can do it. There are many kinds of practical ways to let people think, oh, this is a very idea. This is what I really want to do. Like many artists and young people, actually they want to do and they want to invent. They want to recreate their lives. They want to just leave a boring modern apartment or some living with some burden or pressure. Actually, they want to live an interesting life without burden. They want to have a tribal and make their things. Art project is easy to let people excited. That's why we try to do this project in the long term. So it's a long term project from back to until now. So we're still doing this and also we're still doing the uncut podcast. But it's kind of sometimes it's a random and also sometimes it's improvised media like uncut. We don't have a schedule to make an interview. If we found some interesting projects, we would like to do that. So we combine these two projects together to make a camp and some interviews and online streaming in front of the museum.  We would like to do it tomorrow in some streets and the city square. Actually in 2015, I was doing some refugee project in Belgrade and Serbia also in the public square. I was invented by the European alternatives to do some projects in the city square in Belgrade. So in some projects, I also think that artists should use their imagination to trigger some new possibilities for the social activists. And not just as a studio to do some that's my that's my basic thinking about today's artist is not the same studio. They should go to the. They should, you know, they should, you know, appeared in the street and to making that square. And some, you know, some offside, making some offside projects. Yeah. I have also made some project in in some in in the university square in in the university, University of Bologna in 2012. And because there's a big demonstration and the protest in the square. So I was asked to to make some projects with the students together. I made a lot of, you know, you know, as recycled cardboard and some, you know, banners. And to make and also some as I, and I, I springed some many sentence on and tried to make conversation with us local students. We're seeing people and I want to challenge in there. There's what what what they're seeking so that's a lot of a conversation in squares. That's a very interesting experience for me so because many students say they would like to come to write down right, right, right down there seeking We have, we have a lot of, you know, recycled cardboard, cardboard and some banners empty for their for them to use.  So that's, that's tried to make some a strict discussion with the students. Why do they come to protest and why what's the protesting it's carnival or so so because there are no, you know, opposite pressure like China in China you can't go to street to do any kind of protest and the demonstration after 1918, because the Tiananmen massacre, the Chinese Communist Party have cracked down any kind of protest and demonstration in the streets, you have no, you have no possibility to do that. And if you appeared in the street to do the demonstration, you will be, you will be get arrested in, in, in five minutes. So, so that's, that's why they, they try to crack down the pro democracy demonstration very big one in Hong Kong. And because of this, this, this, this committees party they come from the, they come, they took the power through, you know, through weapons so they, they, they truly believe in the weapon. And like the chairman most side is all the power come from the weapon. So they don't afraid any kind of demonstration. They use a very different, of course, after the now that they don't, they don't use the very violent massacre, like a Tiananmen square. Now they use a very different way, like, you know, online as villains and censorship. And now they use the infiltration and the, the user, you know, the gangster to manipulate the demonstration. So that they use a very, very, they try to use every resource to, to, to take down any kind of resistance in China. So that's, that's, that's a very, very tremendous challenge and fall for the Chinese activists. That's actually, that's why I, that's why, that's why I also I have left there and I tried to come to Berlin because sometimes you can't do any, you can't do anything. You feel very depression about what is happening around you. I tried to do something here maybe to help the people in China. But, but according to the, you know, the experience that I have, I have been working in the contemporary art field, I truly believe in today's because I, I believe in the contemporary art, most contemporary art today is very boring because it was very gentrified. And the deep, very deep, very, you know, it's very deep commodity. It's, so it's, so I, that's why I want, I want to create something in material. And, you know, in material and also some projects that try to know, try to make that, try to make the, you know, try to use some, you know, even for the anarchy, I think some, some of that, it's, it's also have problems. So, so anarchy hospital is maybe some kind of a self-heal, you know, because you have to self reflection and self thinking about what you're doing and then you can, you can find some, you know, cutting edge or some, you know, interesting idea to, to practice, to, to, so that's what I'm thinking. But it's interesting, I have, when I was living in Kalsberg, Berlin, I have found many, you know, many anarchist camps around Kalsberg and along the, you know, along the Spree River, and also the some squatting apartment. That's very interesting. And even in the 2018 in Kalsberg, we also have some movement to against the, you know, the Google camp and it works. It's very interesting. But also I'm, I'm looking with international activists and anarchists from China try to make some communication platform also and exchange, exchange some interesting idea about how to build some interesting commas and also, you know, to, to fight with, fight with today's, you know, unfair or some society and also the, yes, today's, and also the today's, the total control. And actually it's very interesting. You can, you can, you can find it today. We're also, we're living very, you know, technology time also, some, some philosophy called as a personie. We're living the as a personie time, a time, a time that as a personie. But actually, we have a lot of a lot of, you know, a exploitation, explore a lot of censorship, a lot of invisible and intent, intangible crackdown about people. And today's, today's control is sometimes the invisible. So you can't feel that. So that's, we have to, we have to find that that's less like last time we have talked about we have, we have to know exactly what they are doing like a government or this financial system. And they're, what they're doing then we are, and also this technology background, we should know something about this technology, and also this national nations, nation-state control. What's, what's their new strategy and tactical to how to control people, how to send the people, then we, we, we can know how to fight with them.  And we should, we should divide some new idea about how to fight with this, the new, new, new exploitation. Yeah, that's some basic thing thinking about, yeah, because according to the, you know, the experience and, you know, I have done, I have deeply believed it today, but we have to make the, you know, two, two different, you know, resistance online and offline, you know, but we have to find the weak points of this, this system and to, to fight with them and not just, you know, not just fight them blindly, you know, that's what I'm thinking all the time about this. But do you have some question or First I would like to really thank you for your reflections. Yeah, I, I am very, yeah, very moved by a lot of the things that you said, specifically this last part of how like we need to even go beyond this typical ideas or traditions that we have of anarchism. I really imagine other worlds and other practices of ways of fighting these structures of domination, like the state surveillance, the capitalist surveillance. Also had a hack all these technologies and into into different ways where we can democratize them or I don't know even as we heard before also from other cosmic and cyber girls like how to, how to like heal also through this, through these practices and I want to ask you maybe a little bit because you only touched barely on it about the anarchist hospital. What is it? How did you thought about it and and how can we make it a reality? Actually, Anarchy Health Hospital is kind of you know, we're thinking about anarchism because as maybe, maybe different, we have, we have, we have also, we have many, you know, and can many different kinds of anarchism before, but what's facing today is a new technology, new financial system and a new social structure. We need some new perspective to fight with today's institution and invisible enemies. So that means we anarchists, we should have, it's like a hospital, we go there to check all, all, you know, our weak points and then we overcome that.  That's, that's the basic thinking about Anarchy that means every anarchist have a need go to hospital to check by themselves and then in solidarity with other people and we can because maybe other people, it's a very good measure for you and like we have a lot of exchange about the new anarchism. So then we can find, oh, like we are, we are living in the hospital, we, we, you know, we, we treat each other and we found some interesting idea to work together, you know, that's the, the basic idea about Anarchy Hospital. Yeah, I see it in a lot of my, my friends organized here in the left in Berlin and other places like the need to really have a space just to reflect and calm down and not organize for a little bit. So then they can come back, you know, otherwise it's like we're burning ourselves into the fire, we're just going into the beast and, you know, by ourselves individually pretending that we can stop it, right? And I think maybe we do need to also take back, as you were saying, it's not just the virtual spaces but the physical space so that we can create, you know, Anarchy Hospital with, you know, with running water and, and everything else that we need, hopefully. And yeah, like in Exarchia, they have anarchist hospital that helps people when they don't have the ability to pay for healthcare, they can go to these anarchist station for pharmaceuticals and everything. Interesting, interesting. Yeah, actually, as a policy talk about the real hospital, physical hospital, it also works, because in the future, yeah, maybe in Germany, some, some poor people cannot go to a hospital to do, you know, to heal them self. Maybe it's also a good idea to have some, you know, public hospital to, you know, Anarchy Hospital to treat some people they want, they really want, they really need some doctors, also it's a good idea, you know. I guess it's also a way of decentralizing the knowledge of our bodies, like today, nobody knows about their own body, you know, like most people, especially us men, I feel like we never thought about our own physiognomy works and so on. We saw out of touch with it, and I feel like really creating a space where people can learn about these things. And then also healing each other is a way where like we, you know, can all be doctors somehow. I mean, that's very idealistic, probably a doctor will laugh at me, but you know what I mean. Yeah, yeah. Yeah. Yeah, so that's, yeah. Yeah, because now we have a very, we have the big, the very serious, you know, severe situation with the pandemic. After this pandemic station, all the country have, you know, have a stress and they, you know, squeeze the people's power and you know, trying to centralize the power, and the German government, of course, the Chinese government, they try to take down, I mean, they try to control totally 100% about people. So that's also the big hospital all around the world now.   Yeah, and how do we create those spaces for mutual aid, mutual care, that, you know, we can actually like build that bottom up health. Tomorrow we will have people from the hologram, Cassie, Cassie, forget her last name and Max Haven will be speaking about Cassie Thornton and Max Haven will be thinking a bit about this peer to peer health care tools so watch out for that tomorrow. And then the other thing my own phone I wanted to go back to in your, in your very interesting talk was about sort of the, this whole thing of the Marxist taking power and becoming totalitarian we've seen that happening in China and in the Soviet Union in many parts of the world really in Latin America as well. Some extent also. And so it makes me wonder right because now you know, there are many layers to this, like if you look at the debates now for democracy in Hong Kong, like you mentioned, and also Taiwan as a sort of like some people call it the other China or whatever. There is this sort of back and forth between China and Taiwan and also Hong Kong about, like, what is the real China, right and which one is communist and which one is capitalist. But in the end of the day, as you said, they're both, I mean, China is capitalist so they're both capitalist nations so for me I wonder if the future of China might be like an anarchist federation. As in like, you know, all these places can autonomously organize themselves, and then democratically decide over what what pertains to them without having this top doubt totalitarian regimes which just, you know, destroy the planet through their practices of exploitation and extraction of resources so I wonder if we can see the possibility of anarchist China, whether that's just in John War or or in the whole Chinese speaking world. China is a culturally invented term. It's not, we don't call it China before. We have because we have many dynasties like from Qing dynasty to Tang dynasty to Qing dynasty. So the every dynasty have a different culture.  It's a very complicated term. And for for the for the anarchist anarchism at the future anarchist future in China. I think in the rural area and some in some of the, you know, not easily controlled area it's, it's, it's dear. You can develop some anarchy community and, but now it's a Chinese community community they want a Chinese communities party they want to, they want, they want to make a very large commerce structure, like me is that it's like as a dynasty, like the chin dynasty. Because 2000 years ago China is a country. It's not like like Europe. It's like, it's not like a feudal system. It's, it's a today we call it authoritaria auto tell authoritaria or totalitarian. But it's, it's a structure have existed for 2000 years. It's a very strong structure. It's not easy to break down, you know. And also, because the maximum have a sprite in China, they combined this tradition, large, a large commerce structure together, and it tried to control every small commerce structure. That means that means anarchist group, or some, some nonprofit on NGO, all the, they, they, they try to, you know, crack down all these small groups, because they want all the other group, all the people, they want all the people become sand, become sand, and to believe to believe in the central government. Yeah, that's why the decentralization in China become centralize centralization, like, you know, what's what you call that was, what's the new technology. What's the English name blockchain, blockchain in China become a centralized blockchain. You can't imagine that. The technology in China have become the new weapon, a new technology weapon to control people. It's not to the future. It's not a bright brilliant future for people to share. It's not about anarchist. It's about control. That's a totally different, you know, perspective in China. So I think it's, it's still have some possibility to develop some anarchist, but not in the big cities, and maybe some rural area and some, you know, maybe, maybe in Taiwan or Hong Kong, Hong Kong, that's not possible now, because Hong Kong have a, they have controlled Hong Kong totally now, and Taiwan maybe. But I know there are also some, it has some small anarchist group in Wuhan and in Guangdong. They are active. I don't know what's the future, but I feel like it should, they will develop, they will evolve by themselves. But the central government don't like this, you know, apparently. I wonder why. Of course, because they want, they thought it's illegal or some illegal assembly, illegal assembly, illegal things. But at the same time, at the same time in China, well, it was interesting. Now you mentioned this whole like mixture of structures of like the sort of the ancient, the dynastical, patriarchal tradition with mixing and with this Marxist state socialism, and the construction of China as this mix of, you know, confusing China as when people talk about China, and oftentimes it's hard to separate between the Chinese people, the Chinese communist government, and like the place as it were. And oftentimes, I think that that is kind of like this construction of China you were talking about, that is so hard to, to tear apart, which is really just a very new historical thing, Yeah, and based on that, I would like also ask, like, what about these other democratic traditions that for example, our friend here who was in Rojava in Kurdistan was talking about, like you have these traditions of Taoist, Taoist, and also even Buddhism, wouldn't you say that maybe there is some sort of grassroots remnants there, or was it all chopped out by the Cultural Revolution in China? What do you mean? I mean the Buddhism or Taoism, they have some... Yeah, having these sort of grassroots democratic, I would say even anarchistic potentials in China or were they all like eliminated by the Chinese communist regime?   Yeah, because we have lived in some commune, like, it's really, I mean, in some small, in some small, you know, area, it works where? I have experienced a little bit of people's commune when I was very young, because I found a cave, for me it's very interesting, and also it's very, a lot of fun because you can meet a lot of people to eat together. So it's because they have a dining hall for all the people together. So that's interesting, because that's why some leftists in China, they like to promote and develop some new anarchist platform, and also they have a lot of, you know, media. And they have, they also have translated a lot of for article about, you know, about this anarchism. And is there a connection between the anarchists and the Taoists in China? Not very much. Actually, people maybe can get information from that, because Lao, the Laozi and the Zhuangzi also have a very, very, you know, very, very, very idealistic anarchism about. But it's, according to my understanding, it's kind of, they want to a small country like Europe, many different small countries together, and they don't want this like China now. That's, that's their idea is separate, many small countries separated, like Europe. But, you know, Yeah, but it's, yeah. They also, the Buddhists have their, their, their community is like the Christian hermit. But now the, I think, because the religion have been manipulated by the government, by politics also. In China. So the many religions, many temple and church, they have to, they have to, you know, listen to the Chinese community party at first. So that's, that's a big, that's a bigger, you know, challenging for religion in China. Religion is managed by the state.  That will censor, censor you, or you have to listen to the government as the party at first. And well, so because this is an uncensored place and we need to close down really soon. Do you have any uncensored ideas or comments you would like to share with the world before we close this, this round, my own home. Yeah, yeah. I at last I want to say that they will have a lot of space and you know, physical, physically or virtually to reclaim and recreate and redefine and reinvent, invent. So, so there are a lot of challenging. Yeah, for us to do, you know. Yeah, that's what I'm seeking. Thank you so much my own phone for your time and for your sharing your thoughts and of the imagination. My own phone. Yeah. Thank you. Thanks mom. Thanks my own phone. You're, you're frozen. You're frozen. Okay. What did you say? No, I just said thank you for your time and for sharing your thoughts and for allowing us to imagine what other worlds can be possible. Specifically from your experience in in China. Yeah, in just in general really with your art. Thank you. Thank you for inviting me to speak. Yeah. Thank you for many people as you see, the Stalinist and the Marxist are watching. As you know, I would like to end on this because there are many, many European Marxist look at China as the pinnacle of communism and the best place where it's often happened. And so maybe maybe you want to send them a message. But they also have a lot of anarchist, not only Marxist, Marxist, because China is a very complicated country. So of course, it has a lot of layers, layers and you know, in, and also entanglement. So it's not once, it's not one thing, you know, of course, of course, no, I just meant about the idealization of the Chinese Communist Party, like this big ideal socialist, you know, place where communism really happened and all this, because there is a lot of idealization or romanticism from Europe. I encountered when I came here about about China, they see it like the left traditional Marxist or more of those Maxis I would even call them are really sort of, yeah, romanticizing or idealizing China. And it's a bit, yeah, it feels opportunistic, I feel, you know, in many ways. If you encounter this yourself. 100% of the European leftist intellectuals they have idealized China. Especially the cultural revolution, they have been measured out that's idea. That's a place, but actually thousands of 10,000 maybe thousands of 1000 people have been have a have been, you know, killed and during that time. That's, that's a big nine Meyer, it's not. So that's the future is anarchism, it's not a maximum. Definitely. Thank you. Yeah. Welcome. Thank you, my uncle. Welcome. Super inspiring. Yeah. Wow. Good night. So now we take another small pause. Yeah, then we are back with circles you bi with Julio. Then we're going to make a nice massage to Julio. All right.


What's going on everyone Sam here with late in sports cards ripping two boxes for Jonathan Q We've got a 2020 tops chrome update sapphire edition and a 2021-22 penini chronicles basketball So good luck here Jonathan. We'll start with tops chrome update sapphire 2020 That's gonna update sapphire 2020 tops chrome update sapphire What's up, Sean? How you doing buddy? I saw them the numbered magic cards that Caleb pulled last night. They're so awesome looking. All right, we've got his money Tomas forgot about him Fuentes Eric Mejia and Robinson can now I'll see a big Yordan right here Yes, Yordan Bechet Lou Bob, I would say are the three big ones Taiwan Walker Chris Martin we've got Brian O'Grady for the Tampa Bay Rays on the auto Nice one there Brian O'Grady And Skybolt I wouldn't name Dave Castilla Kevin Ploewecky Red Sox legend Ian Miller and Jared Walsh Chris sale Steve C. Shek rookie. Hey Susie, Luzardo rookie debut and Billy Hamilton Yeah, that's true, too That's a good point Good morning, Sean Nolan are not yet. Yeah, Matt Davidson Alec Mills and Richie Martin Nick Denny Adam Plutko The moose Kyle Gibson. Yeah, it looks like a now. That's not a numbered card Jubal Cabrera Kyle Wright thought that was number but it's not Tyler Heinemann That's Chesler Cuthbert and Francisco Lindore still as a guardian 63 cards all to 500 only in boosters and collective boosters interesting for the serial numbered magic Alex Reyes Albert Poo Halls and green Joe Kelly 22 out of 45. There's a Red Sox legend. That is a Red Sox Yeah, he is he was Nice one there Jonathan.  Yeah, I remember one of the minor league teams for the Red Sox after that fight The next game that they had anybody's name whose name was Joe or Kelly got in for free and anybody named Tyler Or Austin was not allowed into the game. I Had a shirt that said Joe Kelly fight club after that. That's pretty funny. Well, I've only made the face at Korea, bro That face Bradley Beal. I love how much emotion he pitches with he does. Yeah, there's a Jalen green rookie Jalen slugs honors got Isaiah Livers hometown heroes 51 out of 75 for the Clippers nice one there clip shell Evan Mowley rookie and Zyra Williams Komingo rookie Aldam up. There's a Brandon Boston jr. This time timeless treasures 23 out of 99 Cameron Thomas Zyra Williams. We're actually out of it for personals right now Rubio Unfortunately had 12 boxes on the site and we had them up for two oh two ten. So two oh nine ninety nine and They sold out pretty much instantly. Trey Murphy. That's a bone Thailand. Are you talking about me? Yeah, silver Yanis Ant-Man and Chris Duarte How much sleep did I get I think five hours I ended up getting? Jalen green Sondra and timeless treasures Kominga to 249. That's devotion. Oh, yeah Absolutely. I went to bed about two woke up at seven seven oh five Key on Johnson. There's a blue Scotty Barnes to 99 nice one there Jason Tatum and Kyrie Irvin. We might get more. I'm hoping we get more in Rubio But the rest of them. I think we have is probably gonna be for group breaks Trey man Kominga honors Yeah, not terrible Jericho Sims to 149 for the Knicks nice one there Dude look at the size of this guy's arms. He's literally so strong Trey Murphy and Corey Kisbert.  That'll be 36 out of 99 That'll do it for your break right there Jonathan. Thanks again for jumping in appreciate it We'll get these right out to you, buddy


All righty. So our topic this afternoon is hyperinflation. And I'm excited to talk about this topic, perhaps even hyper to talk about this topic. Because I have certain natural, I think, supervillain tendencies. So I think about things like, if I wanted to destroy an economy, how would I do it? Austrian economics is very useful for this. So I have two plans. So one is to engage in widespread central socialism, very, very good way to destroy the economy. But I'm also not just going to have these destructive supervillain tendencies, but I'm also very lazy. Centrally planning an entire economy feels like a lot of work. I'd rather just mess up one piece of the economy and have the whole thing fall apart. That's what hyperinflation does for me. So it's a very useful topic for anybody that shares these supervillain tendencies. So let's talk a little bit about hyperinflation. I want to start by looking a little bit at the case of Venezuela being one of the most recent cases we've experienced. So the Venezuelan hyperinflation, instead of started around November of 2016. Now there are varying estimates of the degree of price increases that were experienced in Venezuela over the years following that. But the official estimates from the Banco Central de Venezuela say that in 2016, there was a 274% increase in prices. 2017, 863% increase in prices. 2018, a 130,060% increase in prices. But it got better in 2019 when it was just a 9,586% increase in prices. And naturally, I'm going to try to be at least a little bit of a good Austrian, we should take these numbers with a grain of salt. But if the central bank of Venezuela tells me prices are going up by 130,000%, they're probably going up pretty fast. The exact number might be off, but they're going up really, really fast. So I think we can call this a hyperinflation. Now there are other estimates out there, as I mentioned. The Venezuelan National Assembly, for example, they didn't really trust these numbers. They came up with their own. They suggested, if you look at the 2018-2019 period, that the peak was a 2.6 million percent in rate of price inflation. There are also other estimates out there as well. At the very least, prices went up very, very quickly in this time period in Venezuela. But it's not just price increases. And in fact, I'd suggest it's not the worst part about hyperinflation. We can deal with high prices. Just add zeros to your currency. And that's something we know that central banks like to do. Brought along. I think that at this point, Venezuelan dollars are mostly held by economics professors, or the primary source of demand for these notes. So I bought these back when the Venezuelan hyperinflation was going on. I got this nice set. So I, in fact, have $180 trillion in my hands right here. I paid $15 for them on eBay. And I was surprised to learn when they came in the mail that included these very nice plastic sleeves, which I would guess are more valuable in money terms than what's inside. It's kind of amazing. So we can always add zeros. All right. Anyway, so it's not that prices are high. That's the problem. It also creates disruptions in the way we have to behave. So for example, in 2017, looking at Venezuela again, Bloomberg reported that some Venezuelans had turned to video games to earn money, selling in-game currency or characters in RuneScape for real currency. I admit, RuneScape has a special place in my heart. One of the many great things the Mises Institute has introduced me to was RuneScape. When I was a fellow here, there was one day I was just walking through the bookstore. And one of the employees, I think it was a son of one of the full-time people here, was playing RuneScape on the computer because he didn't have any other work to do in the library. And I said, oh, what is that? So that's how I found RuneScape. It was right here in the library of the Mises Institute. And in the evenings, whenever I'd go home from my office, I spent probably too much time on that. But anyway, so people would play RuneScape, would level characters up, and then sell them to other players for real money. Because after all, it's not making much. Just a few dollars per day. But better to make a few dollars than far more bolivares, which are losing value very quickly. So that's what people would do. Also, another adjustment that we saw in Venezuela around this time, and this is still before things got the worst from 2017. This is before 2018, when things were really, really bad. In Christmas season of 2017, according to La Región, some stores stopped posting prices. Prices were changing so quickly, they wouldn't even put price tags on things. So you'd just have to ask, what is the price at this point of the day? Because it might be different if you come back in a few hours. Imagine trying to make any kind of economic plan at all over more than a few minutes in this type of structure. So I want to then demonstrate that hyperinflation does crazy things to prices, but it does even crazier things to the economy as a whole. Now, one of the first points I'm going to make as we now move into the theory of hyperinflation is that hyperinflation is very difficult to define with any kind of precision. But just to draw some lines, I would not, at this point, say that what the US is currently experiencing, the price increases we've seen that have been significant over the past year, I would not yet call this hyperinflation. I'm not seeing people having to do crazy things to adjust to what's happening with prices. Mostly we complain about gas being expensive, which we do anyway. We aren't seeing these enormous adjustments like we've seen in Venezuela. So we're not quite there at this point. So then how can we define hyperinflation? So being a good Austrian, let's go and look at what do Mises, what did Rothbard say about giving me definitions that I might possibly use? So hyperinflation itself is going to be difficult. So let's just look at the definition of inflation. So I start by opening Mises. Turns out Mises uses different definitions of inflation depending on the context. And he explains to us why. So here is a passage from theory of money and credit, chapter 13, section 7. I like to read Mises online, so page numbers don't help me. It's page 153. How am I going to find that online? But chapter 13, section 7, that's easy to find the way things are paginated on Mises.org. He says, observant readers may perhaps be struck by the fact that in this book, no precise definition is given of the terms inflation and deflation or restriction or contraction, that they are, in fact, hardly employed at all. And then only in places where nothing in particular depends much upon their precision. So Mises is very clear that he's not attaching a precise definition to inflation up to that point in the book, but he goes on. And he says, in theoretical investigation, there's only one meaning that can rationally be attached to the expression inflation. An increase in the quantity of money in the broader sense of the term that is not offset by a corresponding increase in the need for money, again, in the broad sense, so that a fall in the objective exchange value of money must occur. So summing this up, it's an increase in the supply of money that's beyond any increase in the demand for money, so the purchasing power of money must fall. Then he goes on to say, it follows that either inflation or deflation, being the opposite, is constantly going on for a situation which the objective exchange value of money did not alter, could hardly ever exist for very long. But he doesn't particularly find this useful in most discussions about inflation for this reason, which he tells us, so quoting again. So taking this definition, he says, it would be a ridiculous pedantry to attempt to provide an economist's contribution to the controversy as to whether this in this country or other inflation has occurred since 1914 by saying, excuse me, there has probably been inflation throughout the whole world since 1896, although on a small scale. In politics, the question of degree is sometimes the whole point. But once the economist has acknowledged that it's not entirely nonsensical to use the expressions inflation and deflation to indicate such variations in the quantity of money as evoke big changes in the objective exchange value of money, he must renounce the employment of these expressions in pure theory. For the point at which a change in the exchange ratio begins to deserve to be called big is a question for political judgment, not for scientific investigation. So he's very clear, he steers away from this term inflation, because he doesn't think it's necessarily scientifically useful, it's not really gonna help us. He says something similar, so okay, theory of money and credit, he's very intentional in explaining why he doesn't try to use this term much. A human action, he takes a similar stance in chapter 17, section six, he says the notions of inflation and deflation are not praxeological concepts. They were not created by economists, but by the mundane speech of the public and politicians. They implied the popular fallacy that there is such a thing as neutral money or money of stable purchasing power, and that sound money should be neutral in stable and purchasing power. From this point of view, the term inflation was applied to signify cash-induced changes resulting in a drop in purchasing power, so a very similar definition to what he gave in theory of money and credit, and the term deflation, cash-induced changes resulting in a rise in purchasing power. But then he goes on, he recognizes even at the point that he's writing here around the middle of the 1900s, that already the way these terms had been used and by the public have started to shift. And he says the semantic revolution, which is one of the characteristic features of our day, also perhaps even more so our day now, 70 years later, has also changed the traditional connotation of the terms inflation and deflation. What many people today call inflation or deflation is no longer the great increase or decrease in supply of money, but it's inexorable consequences, the tendency toward a rise or fall in commodity prices and wage rates. So he's already recognizing there's this shift in the definition, the way that it's commonly used to talk about price increases as being inflation. Now he gives another definition though, and it's a much shorter definition, and I think this was originally at the talk of our call correctly, but it was collected, it's called inflation and unworkable fiscal policy, it's in the collection of economic freedom and interventionism, which he says inflation, an increase in money and credit. This is slightly different than the definition he had previously given, even the one that he thought was best. Slightly different between theory of money and credit and this one from this essay. So I turned to Rothbard then. What definition then does Rothbard use? Well, so I flipped open man economy in state, chapter 12, section 11a, and there Rothbard tells us, the process of issuing money beyond any increase in the stock of specie may be called inflation. So he's imagining we're on a commodity based standard, if we're increasing the money supply beyond any increase in the availability of gold say, then that would be inflation. Then I checked the history of banking, chapter two close to the end of that chapter, where he says inflation, that is a persistent rise in overall prices, a dramatically different definition, two works by the same author. So at this point, having looked at two major Austrian authors, Mises and Rothbard, probably the most significant the institute I would suggest, I now have four definitions to work from. So Mises gives us that first definition that's increase in the supply of money that exceeds the increase in the demand for money, so you get a drop in purchasing power. This is a second definition, just broadly an increase in money and credit. Rothbard's first definition, the process of issuing money beyond any increase in the stock of specie, and Rothbard's second definition, which I think fits the popular one, a persistent rise in overall prices. I would suggest that if Mises and Rothbard, the two of them come up total with four different definitions, it's a hard thing to define. It's not going to be particularly precise, so there's going to be some vagueness involved. So one thing when we talk about hyperinflation specifically, I would say that Mises's point that he made that I quoted earlier about big changes in purchasing power being what people are looking at becomes all the more relevant. We wouldn't call it hyperinflation if prices go up 2% a year, typically. Well, maybe we might, but certainly nobody else would. 2% a year, that's not big. 100% a year, maybe, 130,000%, definitely. So where exactly is the line that's going to be unclear? So where do we have this very high rate of price inflation if we want to use the price-based term? So I'm going to just say, let's all take a deep breath. It's not going to be totally clear what the definition is. Now we can move on with life. All right, at the very least, we can agree that things like what Weimar Germany experienced between the World Wars, that was hyperinflation. What Zimbabwe experienced that led to these $100 trillion bills that I bought on eBay, that was a hyperinflation. What Venezuela experienced starting around 2016, that was a hyperinflation. So these particular cases are pretty obvious, right? We're not going to find much debate about that because we're not going to be looking at hyperinflation from an empirical standpoint. It's not going to be that important whether a particular country experienced a hyperinflation or not. We're going to think of it from a theoretical standpoint. What happens in a hyperinflation leads to these types of things happening. So now there is an arbitrary standard out there which I only may as well adopt it. It doesn't make that much difference. Is that hyperinflation occurs and there's a 50% increase in some reasonably broad price index over the course of a single month. As we're talking about very, very large increases in prices happening very, very quickly. It's what we have in mind. So as we're now moving further into the theory of hyperinflation, acknowledging there's some vagueness involved here, one thing we need to do is actually develop the theory of the demand for money a little bit further. It's really the demand for money that's going to play a huge role. Now we often start by talking about the money supply when we tell stories about hyperinflation and that is the way things work in time. Money supply has to do something first. But it's really the reactions on the demand side that are going to determine a lot of the dynamics that we see. So let's look at the demand side. So what is it that determines our demand for money holding? So in the mystery of banking, Rothbard describes five different factors that affect the demand for money. The first of these is the supply of goods and services in the economy. So if a very prosperous economy with lots of stuff out there, then I'm going to know that I want to buy lots of stuff, lots of stuff available, so I need to have fairly large cash balances to be able to buy that stuff. So more stuff we have out there, the greater the supply of goods and services, the greater demand for money holding we would find. Another factor will be the frequency of payment. So how often do we receive our income? So I know when I was in grad school, I don't know what it is, universities love to torture grad students along any possible line they can. So you don't get paid a whole lot. Based on the number of hours I worked, it wasn't bad. But you don't get paid a whole lot. And where I went to graduate school at Ohio State, we got paid once a month. You can bet I held on to that paycheck as long as I possibly could. I held a large percentage of my cash holdings for a very long time because it had to last me 30, 31 days. You're always very thankful for February. Didn't have to last quite as long. Oh, good, my car broke down, but it's February, I'm good. It's a few fewer days that I have to make it through. It's kind of amazing. But now, I'm part of the upper class or something and then I get paid twice a month. Which means I don't cling as much to those paychecks. I spend it all by the 15th, that's fine. I get my other paycheck on the 15th and I can spend it all then by the end of the month. So while it is probably strictly true that I do have more money sitting in my bank account than I did before, relative to my income, I certainly hold less cash than I did previously. And so how frequently we're paid? Pay people daily, they're not going to hold onto money very long, pay people yearly, they're going to hold onto it for quite a long time and hold large cash balances. I also points to clearing systems. If you have a developed economy with very good clearing systems, then we tend to see the banking system in particular hold less money proper. That's if we have this ability for us to cancel debts against each other, we don't have to have actual cash sitting in vaults to move from one bank to another. And then the last two are really the most relevant for us when we're considering hyperinflation. That is confidence in the money. Will the money continue to be used as money? Will it continue to be generally acceptable as a medium of exchange? The more confidence we have in the money, the more we're willing to hold. On the other hand, if I think people aren't going to accept it anymore, I'm going to move out of whatever was previously used as money and move towards something else. And finally, our inflationary and deflationary expectations using this price-based definition. So if I expect that prices are going to go up significantly in the future, then what that means is that my cash holdings are going to lose value very quickly. I don't want to hold onto an asset that's losing value. So I'll hold less of it. I'll minimize my cash holdings in that inflationary environment. On the other hand, if I'm expecting a deflationary environment where prices are going to fall, then I'm going to be willing to hold more cash. It's going to gain value over time. So I'm going to be holding larger amounts of cash. So having filled all that in, let's get into the three phases of hyperinflation that Mises describes. So the first phase is we have an increase in the supply of money, paired with deflationary expectations, and therefore at least a slight increase in the demand for money. Now usually the way this works historically is that this new money comes into being to help fund the government. The government's running significant deficits.  So we have to make up the difference. We make it up by creating additional money. Historically this is the way this is tended to work. So we have this increase in the supply of money. And we know from what Dr. Klein said in her lecture earlier this week, when new money comes in, it comes in at a specific point in the economy. It's driving up then certain prices. So the first reaction that we will often see people have is we see these prices go up. We go, that's weird. Everything else is looking fine. This handful of goods suddenly became much more expensive. Well, sometimes weird things happen in the economy. I don't know everything that's affecting every price. So I'm just gonna wait. These prices will probably come back down to normal because everything else looks normal. So we have this expectation that overall prices are actually going to drop a little bit from this unusually high level driven by it looks like just a few goods to start. So as a result we see some increase in the demand for holding money. This in turn is going to dampen the effect that that increase in the money supply has on the loss of the purchasing power of money. It's the first stage, things don't look too bad. Then we get to the second stage where we have a continuing increase in supply of money. Often this is because the government hasn't solved its fiscal issues. It's continuing to spend more that it can bring in in taxes. And it is now also facing the problem and the things that it's spending money on are getting much more expensive. So if we're going to continue buying the same stuff we're going to need to create more money to buy that same stuff. So we have an increase typically in the rate of money supply growth. But now this becomes paired with inflationary expectations. That people realize that this increase in prices is not temporary. It's going to continue. That's what happens then. Prices continue rising in part because we have an increase in the supply of money happening. And in part because people don't want to hold that money like they used to. They understand it's a depreciating asset. You don't want to hold on to this thing anymore than you have to. So better to buy now before prices get worse. And this especially happens with one of the big triggers is that we see these high prices. It's no longer concentrated in just a small set of goods. These higher prices have started to spread throughout the rest of the economy. And that's often a trigger psychologically for people to realize, come to their senses and see what is actually happening and to adjust their cash balances accordingly. So at this point we have an increase in prices that is actually faster than you would expect just from looking at the increase in supply of money since people are also trying to get rid of the money they're holding. Then we have the final phase. It's the most exciting phase for the supervillain. A flight to real values. This is where people totally lose confidence in the money. We don't want to hold it anymore. We realize it is losing value extremely quickly. So I would rather hold literally anything else than this money that is losing values. Immediately as soon as you get it, you run out to the store, buy whatever happens to be on the shelf if anything is there. And take that home because it's better to have a toaster that is gaining in monetary value over time than to have money that's buying less and less over time. So at this point, we can effectively say the demand for money is basically zero. Nobody wants to hold it anymore. But then we have a serious problem. If nobody wants to hold money, who is going to accept money? Nobody. What do we call a money that is not generally acceptable as a medium exchange? It's not money anymore, right? The economy just demonetized. So we lost the monetary basis. So what does that mean? Well, there are alternatives to having a monetary system. We could have a barter system if you know it's not particularly efficient. We could have an autarkic system where each person just produces for their own consumption, which is even worse.  Simple to do, just increase the money supply, keep increasing it. If that's not working, increase it faster. Eventually people will realize and you're going to succeed at totally destroying the economy. However, I say this, I hope that the people watching on YouTube know that I'm joking. I'm not actually a super villain. I'm way too lazy for that.  Nor am I in favor of destroying economies because I kind of like people, at least in theory. I want people to do well. Okay. All right, so anyway, but one thing that I think is important to point out is that this process is not inevitable. It's not like as soon as we see the Federal Reserve or the Central Bank of Venezuela or wherever start creating more money quickly, but oh no, hyperinflation must happen at some point. It doesn't have to. They can stop increasing the money supply. This is an option. It's a story is told, which I later found out this is actually not strictly true, or perhaps I should say strictly factual though I think I like to say there's truth in this fictional story. The story is told of Ludwig von Mises during the Austrian inflation, which was happening at the same time as the German inflation. We don't hear much about the Austrian one. There's a good reason for that. And so the way the story goes is that Mises was called up by one of the government officials. Oh, we're facing this serious inflationary problem. We'd like you to help us solve it. And he says, okay, well I want you to meet me outside of the printing office at midnight. The printing office is in charge of printing all of this currency. It's okay. So as they meet at midnight, it's crazy economist having these weird requests, but he seems like a smart guy. So we'll go ahead and meet him. So they meet outside the printing presses running in the background in the printing office. And Mises says to the official there, he says, well, you hear that sound. Make it stop. And then the Austrian government takes his advice and goes on and stops the hyperinflation. So we don't talk about the German hyperinflation. The Austrian hyperinflation, the same way we do the German one. So I did some research because I love this story. It's a great story, right? Yeah, Mises is a real hero here. This is the kind of thing that monetary theorists can do to save the world or at least Austria. Well, I found out the story isn't strictly true, but lots of elements are. So Mises apparently, when he was giving a talk, I got this information Richard Ebling wrote a piece called The Great Austrian Inflation for the Foundation for Economic Education. So he reports that Mises was giving a talk and the story about walking past the printing office, hearing the printers running in the background, that part is true, except that Mises was walking along with some people from the German Reichsbank. This is prior to the Nazis taking over as they were facing these problems as well. So they were walking by and he heard that. It's also true that Mises did play a significant role in the end of the Austrian hyperinflation as he played a significant role in reforming the central bank of Austria as they passed a new law in 1925 to re-establish the gold standard, which ended up ending their inflation. So it was not nearly as severe as North and Germany. It's not nearly as good a story. Mises heard the printer printing press and then later on, three years later, he helped rewrite this. It's not very exciting. So keep that story going. It's a great fable, even if it's not strictly true. So what are the consequences of hyperinflation? We've gotten through the process. We've increased the money supply and then eventually people losing confidence in that money and giving it up. And we can stop this by stopping the increase in the money supply potentially. So I would suggest that by itself, just the price level is not really a problem. And like if I go to Costa Rica, like all of the numbers on price tags are, I'm not sure off the top of my head, but several times higher than the price tags I see in the US, because one Costa Rican colon is not the same as $1 in terms of its value. Having high numbers on price tags is not a big problem. Instead what I would suggest is the bigger problem is redistribution and discoordination. The first, the redistribution process, this is something that Dr. Klein mentioned, counterfeiters creating additional money, what does this do? It's not good for the economy, but it's good for the counterfeiter. And the exact same thing happens, though in an extreme way during a hyperinflation, those that receive the money first can benefit substantially. So you have this huge redistribution that happens and that creates huge changes in the way that people think about the economy, the way that people think about their ability to plan their lives, and the way people think about the society in which they live. So all of these are going to be significant social problems we're going to have to face. Secondly, we have the discoordination problem, which arises from the fact that rapidly increasing prices really messes with our ability to use economic calculation accurately. So imagine there's going to be a fairly mild case.  You say you buy $100 worth of product and you do some work on this, then you can sell a product worth $120, say. You have what looks like a $20 profit. Well, now as long as the value of the money is fairly stable over that time, then you can accurately say I created value and I can perhaps grow my business over time. On the other hand, what happens if instead say that overall prices have increased by 30%? So you paid $100 for whatever inputs you needed. It takes you time to transform that into whatever the product is worth 120. I just made $20. And it's not that that $20 is worth less than before. It's that full $120 can't actually buy the inputs you started with anymore. They cost 130.  So we end up with this really serious issue because if we have significant price inflation paired with that time gap that always exists with any production process, it can really mess up our ability to use economic calculation. So as a result, we end up destroying that basis that allows us to use the division of labor in our modern economy. Without economic calculation, operating according to the division of labor is exceptionally difficult. So eliminating the social division of labor, now we're going to spread poverty. That's a problem to me. A couple of extra zeros on a price, not a huge deal. Spreading poverty because people can't actually engage in the social division of labor effectively to be productive. That's a serious issue. But I'd also add to this, it's not just these economic problems, but hyperinflation is actually an attack on our own personalities. And this is a point that was made by Dr. Salerno, which I'll actually have to thank two people in the room, Dr. Salerno for writing this paper, and also Dr. Neumann, Dr. Jonathan Neumann pointed this paper out to me. Not intentionally, it wasn't to me personally, just mentioned it on Facebook while I was preparing this lecture, look at all. Yes, I remember hearing Dr. Salerno talk about that a few years ago, I should talk about this, because it's so good. So the paper was called Hyperinflation in the Destruction of Human Personality. Great title, wonderful title. So what does Dr. Salerno tell us? He tells us that the private property order in the social division of labor encouraged the development of certain personality traits, what I think we might call habits of thought and action. Things that are successful in this kind of system, in a market-based system. So things like having a goal orientation. You're going to be more successful if you make goals, if we live in a market-based system. Or thinking about our own self-interest, but not selfishly. We also have to have an other oriented interest. I'm only going to succeed in a market economy if I can serve other people well. So my self-interest is tied up with understanding what other people want and serving other people, which is an awesome thing at a market-based economy. So we have this combination of self-interest balanced by having to have an other orientation as well. Thrift, this was something that a few years ago, actually over the course of several years, I was trying to read Marx's Capital. I don't recommend it. It's not necessarily the best use of your time. But one thing that he understood about the capitalist system is that we don't like waste. We don't just waste resources in a capitalist system. Instead, we have good incentives to be thrifty, to save resources, to use everything we have in a productive fashion. And this includes treating time as a scarce resource. We don't just waste time. I'm either going to use it effectively for leisure or effectively for productions that I am making my leisure more, all the more effective at improving my well-being. And so we treat time as a scarce resource. We have a future orientation. So our goals, many of them, are oriented toward the future. So we have to think about the future and plan for the future. All of these are things that become personality traits that are encouraged by a market-based system of private property and the social division of labor. So what does hyperinflation do? It destroys the social division of labor. It destroys the private property order as we basically end up with random stuff during this flight to real values. And as a result, discourages the development of all these habits. It makes us much more animalistic. We don't have that future orientation. We're just trying to survive day to day, rather than being able to plan for a better tomorrow. I would also suggest the property in the social division of labor are central to the external expression of our place, of our plans and of our preferences. We tie our identities in part to our employment. I am a professor. My wife is an author. When people ask my kids, what do you want to be when you grow up? They give answers like architect, slash YouTuber. Animal researcher, slash YouTuber. Teacher. He hasn't figured out slash YouTuber yet. I'm very thankful my five-year-old hasn't quite hit that point. And then my three and a half-year-old cowgirl. Good plan, right? So we talk about like, how are we going to fit into the social division of labor? That's part of who we are. I would also add that those of us who have time for leisure have part of our identity tied up in leisure time. And the way we use that leisure time, whether it be spiritual pursuits, hobbies, fandoms, but all of these tend to be tied in some way to the use of property. A religious congregation needs a place to meet. Even if nothing else, right? My own religious tradition is fairly simple in our worship. We still need a meeting house. We have to meet somewhere. Or a gardener, right? Needs seeds and soil. A trekker nowadays needs a Paramount Plus subscription. A powerlifter needs a bar, a bench, and plates. A D&D player needs dice, books, dice, and more dice. Okay, so now I'm starting to identify who plays D&D. Good to know, good to know, right? But all of these are tied up with the notions of property and the social division of labor. So hyperinflation doesn't just mess up the economy, it messes up who we are and our ability to express who we are. I suggest that it's not an accident that the more prosperous an economy is, the more diversity we see amongst people's interests. Because it's possible to express diversity and interests when we are a prosperous economy. It's not possible to do that when we're all on the brink of poverty or then we can all express our desire to survive not much else. So, another point that Dr. Slarnow makes in this paper is that economic calculation allows us to envision our futures. He says, knowing what my net worth is, allows me to know what my retirement's going to look like. Am I going to be spending it on the golf course? Personally, I wouldn't, I don't like the heap. But am I going to be spending it in leisure or doing something I enjoy? Or am I going to have to have a part-time job to make ends meet? Having a sensible measure of my net worth, being able to see what my net worth is allows me to make these plans. By messing up economic calculation, hyperinflation makes it impossible for us to really make good plans about the future. So then, hyperinflation attacks aspects of our personality by compromising the division of labor and destroying economic calculation. And as hyperinflation makes our economic life more difficult, the great irony is it makes economic life consume more of our time at attention as we've lost productivity. So we have to spend all of our time trying to survive. I occasionally liken my lectures to give a garden update. I think I may be one of the few people on earth who gardens ironically at this point because I'm not very good at it. So I mostly do it so I can tell stories about how bad I am at it. So this year, I think I have time for this. So this year, we decided we were going to do a three sisters bed. So the idea of the three sisters bed, it comes from American Indian tradition. First you plant corn, and then the corn stalks provide a structure for you to then plant pole beans that would want to climb up that structure. Pretty cool, right? So we have this symbiosis going on. And then you also plant squash, which has these nice, wide, low leaves that then helps to protect the ground and the moisture in the ground to preserve it from the heat of the sun. So we have this nice reinforcement, kind of a division of labor of sorts right amongst the plants you put in your garden. So I decided, yeah, let's try it this year. I bought some corn seeds. I put them in the ground at the time I was supposed to, according to the company I bought the seeds from. And so I don't have a very big bed. It's like four feet by four feet. So I'm not wasting a lot of our yard on my very poor gardening skills. But I put in a room here for 16s, four by four, right? Four by four, 16 stalks of corn will go in there. I wait, corn is kind of slow to come out of the ground. It takes about two weeks. So I wait two weeks, and I think I have three or four stalks have come up. Not a very good success rate. Maybe the weather hasn't been good, so I try to water well, that kind of thing. Wait another week, no better. Three to four stalks came up. This isn't gonna work, right? They're not even going to pollinate each other. So I pull them all out, I say, okay, I have a trellis. So I failed there, but I at least have a trellis. Pole beans can climb the trellis. So I put out the trellis, I plant my pole beans right next to it, and then I have to go away for a week as my family took a vacation. I come back, and I have rabbits that live in my backyard. I no longer have beans, but I still have rabbits that live in my backyard. Okay, well maybe they'll recover. I can still, fortunately, zucchini, it's almost impossible to screw up zucchini. I have managed to get some zucchini that was the squash that I chose. So what happens then if we destroy the division of labor to somebody like me? I can have my ironic garden now, or all it really does is give me stories from Isis U. If we destroy the division of labor, I'm no longer a professor.  I need to spend a lot of time actually getting good at gardening. I like gardening as a leisure activity that I don't have to worry about, but suddenly now I have to spend a lot of attention, a lot of time on economic pursuits that I didn't previously have to do. And that is one of the great ironies of hyperinflation. As it makes economic life more miserable, it makes it consume our lives all the more. And then I'd also add to this political problems.  Well, suddenly they are ripe for someone to come along and provide them with a new identity. So we have strong authoritarian leaders that can come in and suggest that, well, you know, you could always serve the purposes of the state of your people and so on. Dr. Salerno goes into great detail of how this process played a role in the rise of Hitler in Germany after their hyperinflation. Or I like to also look at the, this was a great quote from a very important scholar. The quote says, people who have no hope are easy to control. The scholar was Gamork, a character in The Neverending Story. So, yeah, it's a great movie, it's great stuff. Not great effects, but you know, it was the 80s, early 80s of that. All right, so anyway, so we get political problems as well arising as now we have room for tyrants to take over and people are happy to receive some kind of purpose to their lives. So let's get to talking a little bit more about Venezuela and their experience. So how did things start in Venezuela? They had a budget deficit in 2016 of about 11% of their GDP. This is big, not enormous. Come forward two years, it was nearly 30%. Venezuela was depending heavily upon oil revenues, the price of oil fell. Now they still have all these promises they've made in terms of social services and the like. We can't just cut back government spending because our oil isn't selling very well. So we print the difference. We have this enormous increase in the money supply in order to fund the government, which is the typical thing we see happen in hyperinflations. So what actually happens then to the money supply? This is again based on the official numbers from the Banco Central de Venezuela. There are measures of M2. If you look in December 2015, they say there were 40 million bolivares in existence at that point in time. Come forward to December 2016, it was 104 million, so an increase about two and a half times. It's more than a doubling of the money supply over that year. During that time, prices increased basically in line with what was happening with the money supply. Two and a half time increase in the money supply, two and a half time increase in prices. Then from December 2016 to 2017, we went from 104 million bolivares to 1.3 billion bolivares, an increase about 13 times. Interestingly, according to the official numbers, prices are lagging behind this. So prices are going up a bit, but not as much as you'd expect, right? Just from the money supply alone, stage one hyperinflation. People are saying, okay, this is weird. We're gonna hold back a bit, see what happens. From December 2017 to December 2018, we went from 1.3 billion to 804 billion bolivares. 620 times increase in the money supply by the official numbers from the Banco Central de Venezuela. At this point, prices are starting to run ahead. People have realized, right? Prices are not gonna come back down. They're gonna keep rising. We need to get rid of the money we're holding. And then come from December 18 to December 2019, we go from 804 billion bolivares to 20 points, I'm sorry, 40.6 trillion bolivarius, an increase about 50 times. So things are calming down. Instead of the money supply growing by 620 times, it's only growing by 50 times, and prices are still running ahead. People are still expecting things are going to continue to get worse. Come forward then, from 2019 to 2020, we go from 40.6 trillion to 563 trillion bolivari. It's an increase about 14 times. So things are calming down. They're taking that kind of misadvice or slowing down the printing prices even if we're not stopping them. But the prices are still running ahead. People are still expecting things to get worse. And then come forward to December of 2021, so fairly recently, and we have, we went from 563 trillion to 4.1 billion bolivaris, an increase about seven times or so. I might say trillion to billion, how can you say it's an increase of seven times? They rebased, they cut off a number of zeros from their currency. So that actually would be equivalent to 4.1 quadrillion bolivaris the year before. It's still just a seven times increase. So things are slowing down there. Now another thing we see in Venezuela are some of the standard tricks. The governments try to fix this problem. So what do we do? Region domination is a very common thing. So like I just mentioned, let's cut off a few zeros. It's a very common thing you'll see governments do when they're experiencing this hyperinflation. I guess the idea is if people see zeros, they think things are hyperinflating. If they don't see those zeros, they stop thinking that or something like that. And so their original region nomination actually happened long before this hyperinflationary episode. It actually goes all the way back to 2008. So what I have here, I don't know if you can see the number on that, it's a two. This is dos bolivaris from 2007. When I first started teaching, I had a money in banking class and a student came up to me and said, oh, I've been to Venezuela and we talked about different currencies. I said, oh, so here's a dos bolivaris note. And I said, oh, that's really cool. And I tried to hand it back to him. He said, oh, it's not worth that much. Go ahead and keep it. This was in 2007. Somebody asked me, what is this worth now? Well, they rebased. So these dos bolivaris would be worth, you'd have to divide it by a thousand the year following when this was printed. So you add a couple of zeros and put a decimal place in front of this. Then come forward 10 years after that, they converted from, converted from the, that was the bolivar fuerte, it was when they cut off three zeros. Then they converted to the bolivar subadano where they cut off another five zeros. So divide this first by a thousand, then by a hundred thousand. And then they just recently in 2021 converted to the bolivar de Tietal where it cuts off another six zeros then divide by another million. So what is this worth? I'm gonna round to zero. I'm not gonna go past six or seven decimal places of zeros. This is no longer worth anything in terms of money. Instead, it's worth a great thing in terms of the propremises you. So this is a standard trick. Let's cut off a bunch of zeros and then issue new money with fewer zeros on it. This doesn't work. This is what matters is the increase in the money supply not just how many zeros are there, not the level so much. Another trick that they tried which is also not uncommon is withdrawal limits. So this was introduced late in 2016. So very early in the hyperinflationary episode, they started placing limits on how much people are allowed to withdraw from their bank accounts each day. So recently, I forget exactly the date on this, the equivalent in American currency is that people can basically withdraw about 20 cents a day from their bank accounts at this point. It's a really interesting article that I read about this and I found out physical currency in Venezuela only accounts for about 5% of their M2 money supply. So by comparison in the US, which we think of as a fairly digitized economy, it's 10% of our M2 is physical currency. So they're more digitized in Venezuela than here and a big part of that is that they literally cannot get physical currency out of the bank. Instead, most of what happens is that people line up outside the bank at the beginning of the day, we'll make the withdrawal and then use the physical currency to pay transit fares because the transit system, at least at the time I read this article, couldn't handle digital payments. So it's kind of an amazing thing. You also have political turmoil, the ongoing presidential crisis where we have the New National Assembly led by Guaido against Maduro and the two of them fighting over who has controlled the country and the international community, they're being a significant disagreement as to who exactly is considered to be in charge of Venezuela at this point. Even have at the moment, I believe the EU doesn't actually recognize either of these governments as legitimate. So nobody is in charge of Venezuela according to the EU. So political turmoil as well. Unemployment, estimates from Armando, Pernia of Banca de Negosia suggests that the unemployment rate in Venezuela, we don't have official numbers, so we have to estimate these things is around 35% as of late 2019, which then I suggest is probably tied to significant emigration we've seen out of Venezuela. Venezuela has a population of just under 30 million people and has seen just under five million people leave the country over the past few years. It's an enormous portion of the country just leaving. Well, one in six people roughly gone, amazing. Now, what is happening in Venezuela? How do we deal with this? Well, one thing that we do often see in modern times is that rather than devolving to barter, we start adopting other currencies. Monetary systems are helpful in having an economy work, so we switch to something else and we do see that happening in Venezuela. In 2019, that same author, Armando Pernia, Banca de Negosia reported that 90 to 95% of companies in the private sector had paid bonuses denominated in foreign currencies. So almost all private companies are paying at least partially in a currency other than Bolivares. Even Maduro himself has been very clear that the Bolivar isn't always will be the official currency, he accepts. This is a good escape valve that strengthens the economy to allow dollars and euros to be used in parts of it. We even have Venezuelan banks as of January of last year, 2021, offering dollar-denominated debit cards. And also Al Jazeera recently reported that as of March, 2021, 56% of transactions in Venezuela were carried out in dollars or in euros. Just given up on the local currency, over half of transactions moved right to other currencies. So I think if I'm going to sum up here, which I should, negative two minutes remaining, money is important. And if money goes wrong in an economy, everything else is going to go wrong too. So we need to get that right. Thank you.