The Atlas Society Asks Raymond C. Niles

August 09, 2023 01:01:08
The Atlas Society Asks Raymond C. Niles
The Atlas Society Presents - The Atlas Society Asks
The Atlas Society Asks Raymond C. Niles

Aug 09 2023 | 01:01:08

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Show Notes

Join Senior Scholar Richard Salsman for a special The Atlas Society Asks with Professor Raymond C. Niles. He holds a Ph.D. in Economics from George Mason University and an MBA in Finance & Economics from the Leonard N. Stern School of Business at New York University. Before embarking on his academic career, Niles spent over 15 years on Wall Street as a senior equity research analyst at Citigroup, Schroders, and Goldman Sachs. Raymond Niles is also a longtime Objectivist who has published numerous articles in scholarly and popular publications, including The Objective Standard, on issues tied to economics, internet policy, and government regulation.

Check Out More From Raymond C. Niles:

Website: http://www.raymondniles.com/

The Objective Standard Articles: https://theobjectivestandard.com/author/rniles/

AIER Articles: https://www.aier.org/people/raymond-c-niles/?v=7516fd43adaa

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Episode Transcript

Speaker 0 00:00:00 Hi everyone, and welcome to the 164th episode of the Atlas Society. Asks, my name is, uh, Richard Salzman. I'm a senior scholar for the Atlas Society. We are the, uh, leading nonprofit organization, introducing young people to the ideas of Ein Rand in creative ways, uh, like animated videos, uh, and graphic novels. Now, today, I'm very pleased to be joined by Professor Ray Niles. But before I introduce Ray, I wanna remind those of you who are watching us on Zoom or are on Instagram, Twitter, Facebook, LinkedIn, YouTube, various other social media, you can use the comment section, uh, to type in your questions. Uh, we'll get to as many of them as we can possibly during the interview, but definitely at the end of the interview. Speaker 0 00:00:49 So, welcome all, and, uh, now to our guest. Uh, Ray Niles is a PhD and a senior fellow at the American Institute for Economic Research. Also currently teaching economics at St. John's University in New York. Uh, he earned his PhD in economics from George Mason University in Virginia. He, earlier than that, earned his M B A in finance and Economics from the Stern School of Business at N Y U. Uh, now, before embarking on his academic career, which is more recent, he worked for over 15 years on Wall Street as a senior equity research analyst at places like Citigroup Schroeders and Goldman Sachs. Uh, he's a long time objective. He's published numerous articles in scholarly and popular publications, including the review of Austrian economics, including the objective standard on various issues related to economics, to internet policy, and to government regulation. And as to, as a first affiliation, I highly recommend that you go to a ier.org and search for Ray Niles, n i l e s. Uh, he issues, uh, essays periodically. They're very good. They're very well done. They're very interesting. Ray, it's great to see you again. I know we've known each other for years. There's the full disclosure, but I really want to get into how you're doing what you're doing. But, you know, we normally start, 'cause this audience really likes what we call origin stories. So the origin story idea is how did you get to Objectivism? How did you get to Ayn Rand's writings? How early your initial reactions, really curious about that kind of origin. Speaker 1 00:02:31 Well, so I've been an objectivist, I would say it's over, over four decades. Wow. And I, um, it was really serendipity. Uh, I was in a used bookstore at age 13 and looking for something to read, and I saw Anthem on the shelf of a used bookstore. And, you know, I pulled it out. I looked at the cover, the Man with the light bulb. It just intrigued me. And I, I was very interested that that was when I was reading a lot of sci-fi, some dystopian books like 1984, which scared the heck out of me, Uhhuh <affirmative>. And, uh, and it, it, it really, I, it changed my life. It, I thought it was very profound, uh, discovering, I discovering the value of yourself, that you should live for yourself. And I immediately proceeded to read all of Ayn Rand's books. And it was funny though, I was 13, so I said, well, um, I'm gonna, you know, read her fiction first before the nonfiction, but I'm gonna read it in the order that she wrote it. Speaker 1 00:03:30 Huh. And the reason I said that, so I, I, you know, I read, we, the Living then Fountain had, then Atlas Shrugged, you know, after Anthem. I said, because I'll be older and more able to appreciate and understand Atlas, which I knew was a very important book, you know, just as thick as it was. So I was about age 15 when I read Atlas. You know, I declared to my parents that I was an atheist. I was raised Catholic, you know, a lot of fireworks with regard to that <affirmative>. And, um, you know, I, I, uh, the other thing, one little tidbit, you know, you and I met, and I think it might've been 1985, right? Yeah. So I went to the very first objective Speaker 0 00:04:07 In, in New York. It was in New York City. Right? We were both in, well, Speaker 1 00:04:12 Maybe it was, so maybe we have to talk about that, because, uh, I thought it was might've been at the Thomas Jefferson Speaker 0 00:04:17 Conference. Oh, LA Jolla. La Jolla Speaker 1 00:04:19 In La Jolla. So I went, I went to the first two, the very first Objectives conference ever given. It was called the, the Thomas Jefferson School. Right. Yeah. You know, right. A year after Ein Rand had died. And, um, I was all of like, uh, 18 or 19, you know, I was pretty young, and I thought, I took like, you, it took all my savings to do this. Ah. And I thought, I better go. Yeah. Because there may never be another conference like this. Ah, wow. You know, so I've gotta go. So I, and you know, and, and, uh, I've found it very interesting. And so, you know, I've been in objectives ever since. I found it very practical and helpful, uh, uh, in my life. Speaker 0 00:04:56 You know, uh, one thing you're unique about is objectives and economics. There aren't that many objectivist economists now at the time. Those conferences are run by George Riesman. Right. Who taught at Pepperdine for many years. And he knew both Rand and Mes, which is an interesting lineage, you know. So having met the man who knew the two giants, uh, nor Biner, I think was another economist at the time, but there weren't that many, many Han Sholtz were given a lecture every once in a while. What were your initial impressions of Reman? 'cause he eventually came out with that u huge great, wonderful book called Capitalism later. But he, he was lecturing at those conferences in the eighties. Speaker 1 00:05:32 Oh, yeah. And he organized them as well. Yeah. And, and, and my impression is, you know, a young kid, young adult, but I thought he was such a gracious man. That's sort of what really struck me. Just gracious. Like, it's just his bearing, um, very, um, open and, and, uh, you know, like kind type person. Like somebody you felt you could really talk with. Right. Uh, you know, so I, that's, and I, I enjoyed how he ran the conference. It was very, you know, sort of punctual. And he had interesting guests. We had Edward Teller, the co-inventor of the hydrogen bomb. Right. Come and talk and Right. Peter Beckman, the physicist. Speaker 0 00:06:10 Beckman the physicist. Yeah. Didn't he invited, I think he invited Walter Williams one year. Walter was great. Speaker 1 00:06:15 Yeah. I don't think I attended then. So Walter Williams was one of my professors at G M U Speaker 0 00:06:19 At gmu. Me too. Me too. We both had him. He, he was wonderful, wasn't he? Speaker 1 00:06:24 He's wonderful. Wonderful. Um, uh, yep. A a great professor and, and enjoyed him very much. Um, you know, he was a funny guy too. Speaker 0 00:06:32 I mean, what I also remember about the Reman lectures is they were the beginnings of the chapter of that great book. So we were getting it live, so to speak. We were getting it in real time. Yeah. Uh, each summer. That was, uh, just wonderful. I'm just curious, Ray, well, going back to what you said earlier, atheism came up very soon. The fiction isn't overtly Ray Atheist. Uh, so how did you, so how did you, did you just kind of sense that that's what the philosophy was about? Or were you questioning it separately because that, that's a big thing to break with a Catholic family, uh, parents over that kind of thing? Did you get Yeah, I was books, or was it part of your kind of sense of life? Speaker 1 00:07:07 I, it was, it was a little bit part of my sense of life too. I was, I was an altar boy as I think you were, Richard. I Speaker 0 00:07:14 Believe you were. No, no. I, I wasn't. You weren't. I was raised Catholic, but I, I didn't have the, uh, the benefit of being an altar boy like you did <laugh>. I <laugh> I, you've told me some collegial stories about the altar boys, which are just, I don't know if they should be off, off camera or not really hilarious. Speaker 1 00:07:28 Well, I was never, you know, nothing ever. I was never molested. Let me just, Speaker 0 00:07:31 Oh, that, okay. Good to know. Speaker 1 00:07:34 I actually, I, the experiences were pretty positive as far as being an al I was very young. Right. But I was already having doubts about religion. Like age 12 or 13. I wrote a poem for my eighth grade student literature paper where I was kind of questioning the existence of God in a very mild way. Right. And then, I don't know what clicked, you know, I began reading her nonfiction probably at age 14 or 15. So it's sort of, as I was reading the, the, uh, fiction and I learned she was an atheist, and I felt it made me certain about being an atheist. Like, you know, if I was having doubts, ironing gave me that certainty. And, you know, my, I I had a kind of a very traditional Catholic family, you know, going to church every week. So it didn't go over well with my, with my father. But, you know, hey, you know, that's another thing Objectiveism teaches is the virtue of independence. And that was the lesson I definitely took to heart. Speaker 0 00:08:22 Wow. That's wonderful. Also, if, if you get the sense that, listen, I still have a morality here. It's not, uh, atheism is so tied up with, well, you must be an immoral monster. I mean, once people start realizing, no, no, I've, I've, I've got the morality here. I'm learning a, a secular morality, that helps. Um, Speaker 1 00:08:38 Yeah. It gives a scientific basis. Morality. Yes. You know, it's scientific. That's, I really like that a lot. Speaker 0 00:08:46 Now I wanna just hear, uh, I, I know this, but the audience should really hear this. Why did you go to Wall Street first? First of all, where'd you go to college and what was your major, major, and then how did you get to Wall Street? Speaker 1 00:08:56 Well, yeah. So I was an economics major at, as an undergrad in, at the University of Florida, which is where I grew up. And, uh, uh, you know, after business school, actually in, in business school, I didn't really know much about Wall Street. I had previously considered being a lawyer before that and worked for a year or two as a paralegal just to check it out. And no regrets not becoming a lawyer. I no regrets. But, um, I discovered this field, uh, that's called equity research, where Right. You analyze, uh, you know, uh, stocks in an industry, and then you advise, uh, uh, fund managers, hedge fund and mutual fund managers on where to invest their money. And you specialize in a certain industry. I loved working on Wall Street. I'll have to say, I, I really, really enjoyed it. Yeah. It was very good. Speaker 1 00:09:43 While it was good, I mean, I did see some ugly things during my, in my experience on Wall Street. And, you know, it's, uh, uh, uh, not, you know, not because, you know, it's not a flaw of capitalism, but there, you know, you find good and bad people in any field. Yeah. But also, you see the effects of regulation. You know, there's, it's one of the most highly regulated industries in the economy. I mean, everything I read, I wrote had to be read by an attorney. I got fingerprinted just to do my job. Like I'm a crook uhhuh, you know, they see a crook at the outset. Right. The vast majority of people I met were, were really moral good, you know, honest people who, you know, and, and there was something clean about the Wall Street environment where your goal was to make money. And it was un, un people were, you know, unashamed of that. And it, and it was, I, I liked that environment. Speaker 0 00:10:34 Now on Wall Street, they, you know, Ray, they call it the sell side. And then there's the buy side. And since the sell side is trying to distribute stocks and bonds and equities, it, they're often the analysts, uh, not just the investment bank, are often charged with being non-objective. How did you handle that? 'cause here you are, you're coming in and you're becoming more and more of an objective list, and it requires an objective, you know, means of knowledge and things like that. Did you ever face any kind of problems with that, where you couldn't be objective 'cause you were underwriting the client? Speaker 1 00:11:03 Yeah, I did. Uh, and I, um, by the way, I mean, it's, it's, it's probably more than we really, we can really talk about here. But, uh, the government, I'll just tell you very briefly, the government changed. They intervened in Wall Street in the seventies. It was something, they called it the Big Bang. And basically what they did is they forced, they stopped Wall Street firms from agreeing on a minimum commission for trading securities. Right. So, pushed the revenue Wall Street firms would get from trading securities way, way down, which meant that trading stocks, uh, was no longer much of a, a revenue generator for the firms. Instead, what became the big fee generator was investment banking, underwriting securities, offering new stock. So what that resulted in was a bullish bias among Wall Street firms. So I was an analyst. The way I interpreted my job, you know, was simply, I, my job is to give a fair recommendation to my investors. Speaker 1 00:12:01 Yeah. Now the thing is, in a bullish market, yeah. You know, it's easy to be bullish. Right. On stocks, you know, and, you know, it's just the all, you know, the whole stock market's going up. But where, you know, where, because they're, they're so skewed to that towards underwriting securities. Right. If you are bearish on a stock that is a cl an underwriting client of the firm, the firms don't like it. And I had that experience. I, there was this industry that I covered, which was the electric utility and power generation industry. And I was the first, uh, uh, bulge bracket or first analyst period to turn negative on power generation stocks. And unfortunately, my firm, you know, didn't like it. And, uh, they, you know, they advised me to stop publishing to change the titles of my reports. Oh, wow. It was very, very demoralizing to me. Yeah. Very demoralizing. But, you know, I, I have a big, and, and ultimately it led me to go on onto the buy side where I tried to manage my own money, which I did for a little while, where Speaker 0 00:13:00 I hedge Speaker 1 00:13:01 And manage myself. But that's why I did it. So before though, when, when companies didn't have that miss unbalanced incentives, if they made more money from trading, they would, they would welcome bear Correct. Bearish calls because the, the trading clients of the firm, you're making money for them. So, for example, when I made this bearish call, fidelity sent a block of trades to our firm. They were really happy about it. Yeah. <laugh>. But it's like our firm says, oh, we made a hundred thousand dollars from this, or a million dollars from this versus 50 million we could get from underwriting a new stock. Yeah. Which won't happen anymore. 'cause now is bearish anyways, just, it's a, to make that long story very short, um, uh, I was totally correct. Yeah. Uh, in one case, there was a c e o of a firm who was very upset at my downgrade. He blamed me. I said, look, I'm the messenger. You know, you're building too many power plants. The margins are collapsing. He lost his job, his firm went bankrupt. You know, and I could give, you know, many more examples of that. But it ultimately, the experience led me to, to, uh, look away from Wall Street. And, and, you know, I ended up in academics Speaker 0 00:14:09 Having followed your career over the years, and you and I talked about, I know there are so many instances when you were under pressure and you performed so aim admirably so objectively. And it wasn't always easy, you know, but I like how you defend Wall Street generally. I mean, it does still pay for merit. And I don't know if you think that's changed over the years, maybe it's changed over the years, but it is that kind of perform or else kind of, uh, place. What, what do you say to a student who says, uh, finance is parasitic. The whole financial sector doesn't add value. Absolutely. Did you ever hear that? Did you ever hear that from students or, sure. Maybe, maybe even from other finance professionals. <laugh>, Speaker 1 00:14:48 I have feel guilty. Speaker 1 00:14:50 Yeah. There's an infamous anecdote, and I, I think it's true. I think I looked into it. It was true. You may have heard the same thing. So there was this guy on Wall Street, and he traded an esoteric security, I forgot what it was like, you know, third world debt, derivatives of a certain nature. And this, this, it's, you know, the story is his nine-year-old daughter. One day they had to take your dad to workday or, you know, take your daughter to workday. Right? And, or, and she said, daddy, what do you do? And he's trying to explain it to her. He couldn't really do it. And then she's saying, well, what value do you provide? And he couldn't answer it. Couldn't answer. He was unable to answer Yeah. The val value of his own profession. But now to this guy's, I'd say both his credit and his idiocy. Speaker 1 00:15:33 So his moral integrity, this is on a Friday. He resigned his job on a Monday. He said, I don't see the value that I'm providing. I have to resign my job. Yeah. But his idiocy, because if you understand the economics of finance, it's all value added. I mean, you what, and the simplest way to look at it, as, you know, Richard, is, uh, anyone in finance, any aspect could be trading the most arcane security. You're redirecting capital to its highest valued use. Yeah. You're, you're, you're moving money into the Steve Jobs is of, you know, of the world and taking them away from that WeWork guide, you know, and it's a continuous process of reallocating capital to where it can create the most value. All of Wall Street serves that function. Yeah. And it's said that, you know, people aren't taught this in their finance classes and their economics classes and their philosophy classes. Speaker 1 00:16:25 So anyone in finance, I mean, you could email me and ask me, you know, but, you know, uh, it's moral, it's good. Now, lemme just say one quick thing. You know, this firm I worked at, I guess I won't just say the name on this, but it was a large bank that also had an investment banking division. It's one of those three firms you mentioned. So, but as a bank, they effectively are subsidized by the Federal Reserve system. Yeah. Now, you know, back when I worked at Goldman, for example, it was a private investment partnership. So it, it didn't have that going on later on that changed this bank, this, which is the largest bank in the world at the time I worked for it, was getting a subsidy from the Federal Reserve, which meant that its cost of capital was artificially low, which meant that they could afford to do dumb deals, and they could do afford to not listen to their analysts saying, don't, don't invest further in this power generation industry. Don't underwrite more stocks in this industry. Yeah. You know, advise firms to pay off their debt because it, it's going through a downturn, you know? But so, and I found that I worked like bring Goldman to this other firm, the quality of the bankers. When they, when the, when they had one firm getting this big subsidy from the Federal Reserve, and this other knot, the quality of the bankers with the firm, with the subsidy was much lower. And they made worse investment decisions. So, Speaker 0 00:17:48 Subsidies, we often talk about finance being regulated, but maybe they're regulated because of what they call moral hazard ray, where they do reckless things because of these subsidies you mentioned. So what, what would these include? Like, uh, deposit insurance or the two big to fail or discount window, those kind of thing. Discount window liquidity, bailouts, those kind of things are making them more reckless. Speaker 1 00:18:12 Absolutely. And it, it gives 'em a lower cost of capital. I saw this firsthand. I was involved in deals at both firms and, you know, the subsidized firm, for example, they, they would actually buy an equity offering Yeah. By offering super low cost loan to the firm. Uh, and said, we'll give you this low cost financing, basically subsidized by taxpayers through those three mechanisms. You talk about, if you give us equity offering, when I was at Goldman as a example, and I don't want to, you know, Goldman has its own problems, but when I was at Goldman, they had a higher cost of capital. Yeah. They couldn't do that because they were paying, they had to pay a market price for capital. They had to make better banking decisions. So a lot of the problems you hear about are due to government intervention. And in the, in the, uh, in the wall, in Wall Street, a lot of the problems are like that. Speaker 0 00:18:59 So your experience on Wall Street, other, uh, others of your peers, uh, lots of smart cerebral people, brainiacs, uh, traders, fx, you know, underwriting capitalists as financiers versus capitalists as advocates of capitalism. What did you find, were your peers mostly pro capitalists, ideologically, were they mostly repub? You know, the standard view that the rich, uh, country club, they're all Republicans, they're all pro cap. Did you find that amongst the rich folks you worked with on Wall Street? Or did they lean le? Was there any kind of pattern you noticed politically? Well, you Speaker 1 00:19:35 Know, oddly enough, I never really talked about politics usually. Speaker 0 00:19:40 Oh, you did? Yeah. Yeah. Speaker 1 00:19:41 So, you know, but my guess is it ran the gamut. Uhhuh, you know, even the same place like Goldman, you'll find, you know, you know, left, left wing, you know, all, all across the spectrum. But, um, you know, generally we're just busy, you know, making money focused on Yeah. Helping to direct capital to its highest valued use is <laugh>. And now, Speaker 0 00:20:01 I don't know if you have the experience I have had with students that were born, uh, you know, they were younger during the oh 8, 0 9, uh, financial debacle and crisis and recession and all that. And they ticked an anti-capitalist view out of it. And remember Occupy Wall Street of a question. In fact, uh, one of our viewers here ask the question about what do you think about the Occupy Wall Street protests of 2010 that was in reaction to the Wall Street bailouts? What, what do you think caused that crisis? And should, and what was your reaction to the government bailouts at the time? Speaker 1 00:20:31 Yeah. So I, it's one, it's an article. I did write it, it, uh, while I was still, uh, you know, sort of winding down my Wall Street career, it's called 80 Years of Subsidies. And I talk about the causes of that 2008, uh, financial crisis. Um, basically the government, uh, uh, you know, has been subsidizing home purchases by subsidizing mortgages since the 1930s. And what happened is they ramped up the subsidies dramatically in the 1990s and the beginning of the two thousands. So, you know, and it was a bipartisan thing, you know, uh, Democrats and Republicans, you know, George Bush, uh, Clinton, you know, George Bush would say, more Americans need to own homes. Well, yeah. Right. Let's just imagine that the fir the people who have gotten mortgages already are your, your have a have a higher credit quality, a certain credit quality. How can you get more people to, to buy homes? Speaker 1 00:21:25 The only way you could do it is to go to the deadbeat borrowers. Yeah. And they would do this by subsidizing mortgages to the point where you could buy a home for a $250 down payment, and then even $0, they were working in $0 down payment homes. So what the result of this was, this is the fundamental cause people have written a lot, you know, about, cause this is the fundamental cause the real price of homes. So the real price of homes, there's a chart you can find out there on the internet from 1890 to 1996. It's essentially unchanged the real price of homes across America except for a dip during the 1930s. Then from 1996 to 2006, the real price of homes doubled. Doubled in one decade. That's not the market. Yeah. That has nothing to do with the market. Yeah. So what happened is, as the home prices went up, you know, there were securities issued that were collateralized Yeah. Speaker 1 00:22:21 By the inflated value of homes and unsustainable value of homes. Now, there's other things that went on. Uh, interest rates were pushed artificially low by Fed Chairman Allen Green spent, who even encourage people to get these, uh, uh, adjustable rate mortgages, which are great when interest rates are low, like the 1%, uh, short-term, you know, rates at that time. And then, but then when rates go up, your, your mortgage payment goes up dramatically, and people begin to default on their mortgages. So it's a combination of these two things with subsidies being the fundamental cause. And I look at those mortgage, the interest rates is sort of the, the proximate cause of the crisis, but it made no sense for housing prices to double, uh, in, uh, 10 years. Uh, you know, the Wall Street firms that got involved with this, you know, uh, you know, they were, they were sort of, uh, only they only behaved this way because of the government artificially propping up the price of homes. A hundred percent of government created crisis. So the Occupy Wall Street, uh, people should read my article. Yeah. They should study economics. Yeah. You know, economics takes some effort to actually understand things, take some effort. Right. Rather than memorizing slogans, you know, and, and, and, you know, but unfortunately, you know, this is what you and I are both professors, so we're there to help educate people. Right. <laugh>, Speaker 0 00:23:37 Maybe they should have occupied Fannie Mae and Freddie Mac, the lobby, the lobbies of those, uh, uh, hybrid agencies remember so much promo, I think Ray, they call them subprime loans. Yeah. Subprime, subprime means low quality. What in corporate, like we would call, what we would call junk bonds. Gee, how, what could possibly go wrong? They're promoting junk loans. Yeah. And then, so my, Speaker 1 00:24:01 My brother, he had, uh, he was a lawyer at the time, and part of his practice was doing real estate deals. Yeah. To his credit. Well, what happened there was, so one day he's at his desk and, uh, his hairstylist comes in, Uhhuh <affirmative> to his office. She's gonna buy a home. She's gonna buy a home bigger than my brother's house. Now he's a lawyer with his own practice. He was making a decent income. He was getting one of these, like practically zero, do dollar down payment loans with an adjustable rate mortgage. And my brother said he is, you know, he is not an economist, but he is like, something isn't right here. And he, he sold that part of his practice right away. So he got out of it before the House of Cards blew up. <laugh>. Speaker 0 00:24:45 Wow. Uh, I have a question on the side here. I'm looking at the chat and social media. Keep the questions coming in. They're really very good. I'm trying to get to the ones I can. Uh, Andrew Jackson famously was against, uh, the second bus Ray, 1830s. Yeah. Against, uh, they didn't call it central banking then. Do you think the Fed should exist? Speaker 1 00:25:04 No. Why? No, it's in fact, well, part of the reason is I'll tell you, I'm, I'm actually, I just finished reading this book. I'll do a little plug. Oh. Because this, this man was a professor of mine at G M U Lawrence H. White, I love Speaker 0 00:25:17 Lawrence. And he's Larry, Larry White. I love him. You Speaker 1 00:25:19 Know him very well. Larry White, you know, uh, you've, you know, he's the leading expert on free banking. You know, so what banking would look like under Leslie Fair and, and, and the history of banking and gold-based banking. And actually, the reason I, I'm actually gonna review this book for the, uh, review of Economics. Oh, great. Good Speaker 0 00:25:37 Months. And I, and I, and I noticed the subtitle is Gold, Fiat, and Bitcoin. So he's ex he's comparing and contrasting all three as monetary system. Yes. Speaker 1 00:25:46 Okay. Yeah. So what, what's great about this particular book, which I could recommend a lot, if anyone's interested in central banking or whether we need a central bank, he is comparing, like, if the government got out of the way, like imagine a laissez-faire world, okay. First of all, we would, we wouldn't have fiat banking because that means there'd be no central bank, which is a government run bank. So fiat banking just sort of, you know, falls by the wayside. It's inflationary causes, business cycles, all kinds of problems. So he's asking the question, given laissez-faire Yeah. Would, which would work better, which would emerge and be dominant gold-based banking or Bitcoin based banking. Yeah. And he really gets into the economics of it. And, you know, if you read that book, it definitely is, you know, even in making this, discussing this issue, it's clear that we shouldn't have a central bank. I mean, you know, and I think though, but the base, so a banking system, though, it doesn't have to necessarily be gold. Yeah. I think it, it should just be free. You know, Uhhuh, <affirmative>, the banking contract should be free. And the, the base money that's at the root, at the banking system, you know, let the best money emerge. It could be gold, it could be Bitcoin. I mean, who knows? Speaker 0 00:26:57 Now, back to the, that's great stuff. Yeah. Larry White is the best. I think. Uh, I met him in the late eighties. He totally influenced me on free banking and the gold standard. He was great. Speaker 1 00:27:05 Yeah. And you've written a couple good books, uh, you know, on the subject. Yeah. Speaker 0 00:27:09 Ray, let, I wanna get now to the transition to academia. But what, let me, let me, uh, learn about this. Uh, while you were in finance, I mean, wall Street is a very, I know what you did. That's a very intense, uh, long hours, very intense, lots of travel. While you were doing that, were you also, uh, kind of self-educating on reading Austrian economics, MES, Hayek, trumpeter, you know, the usual, maybe even Milton Friedman. Tell us about that, because people do juggle careers with, you know, uh, learning, and you don't always have to go to school for that. Were you reading stuff on the side, so to speak, while you were working on I finance? Speaker 1 00:27:49 I did, at first of all, was a very demanding job, as you know, as you know. I mean, I, I had to be at my office by seven 30 to eight in the morning. Sometimes I'd wake up at four in the morning and write an article to be out to, to get to the lawyers by 6:00 AM to be, you know, uh, uh, you know, o uh, read before the market opens and Yeah. You know, traveling, I wouldn't even know which city sometimes I was traveling to. So I didn't have a lot of time for outside reading. But yes, I did. I, I read, uh, you know, you mentioned George Riesman, uh, uh, Friedrich Kayak, who's actually my favorite Austrian economist Speaker 0 00:28:23 Uhhuh. Okay. Uh, Speaker 1 00:28:25 And, and then, you know, more recently, I didn't read till I was, uh, till the right when I was transitioning into academics. Uh, uh, my, uh, I took a graduate course at Columbia in the history of economic thought when I was thinking about going into economics. And that's when I read Schumpeter, who's actually my favorite economist Uhhuh. But, but yes, to answer your question, yes, I did do a lot of reading. Now, when I really got to read these people in detail, that was when I was at George Mason University getting my, uh, PhD in economics, which is the leading Austrian economics graduate school in the world. I mean, Speaker 0 00:29:00 It is. So now those who don't know, Joseph s Schumpeter, if I remember his dates, Ray 18 83, 19 50. So when Austrian, but he also taught at Harvard. Right. He was a Game to America, was very influential. Tell me why you like him so much. Tell me what, what his der contributions are. Speaker 1 00:29:17 Yeah. First of all, he's, he's, he's funny. He's actually, I, I like his style. It's a very big, grandiose style he had, you know, there's a lot of errors in his thought. So I'm someone I, I just sort of pick and choose. You know, I, I get Uhhuh, although Iron Rand, I basically agree with essentially everything, but, you know, I pick and choose. But, um, uh, what I like is he has the most, you know, certainly it's the most original theory about business cycles among all economists. Hmm. That's quite a statement. That's quite a statement. Yeah. Go ahead. It is. So, his, his book that really influenced me was written in 1911. It was called The Theory of Economic Development. It was actually written one year before Luban Lui wrote The Theory of Money and Credit Money. Yeah. He first described the Austrian theory of the business cycle. Speaker 1 00:30:05 They were classmates together at the University of Vienna. Wow. Uh, but, but, but, uh, what Scho bidder, uh, uh, uh, talks about is he was interested in, in progress. Like what causes a rising standard of living. So, you know, it's the same thing Adam Smith was concerned about. Right. That was the, his full title of his book was about, you know, the origin and nature, whatever of the, you know, I, I forgot now, but, you know, rising standard of living, what causes it. Right. So it should be said is that, first of all, he said the mode of driver of progress. Now, this is in 1911, right. This is also way before I Rand wrote about this. Right. Uh, was the entrepreneur The entrepreneur, yeah. The men of the <crosstalk> entrepreneur. Wow. So I call his theory the heroic theory of the business cycle. Wow. Very cool. Speaker 1 00:30:51 Heroic. Yeah. Yeah. Where I talk about that way, because he really puts it on the shoulders of the entrepreneur. And he has a heroic vision of the entrepreneur. He said, the entrepreneur, these are the people who break through obstacles, you and have an original idea. Right. A new idea they create to use, show better's words, new economic space. Right. Right. New economic space. Think about it. It's like a new economic realm that never existed before, like Henry Ford with cars. Right. Like Steve Jobs with the iPhone and smartphones. These didn't exist before. And, and he, uh, you know, computers, uh, you know, intel with computers and, and Bill Gates, computers, you know, it's, it's expanding the economic world now, where he's interesting. He said, in the process of bringing these innovations to the market, the entrepreneur has a disturbing effect on the economy. First of all, if it's a big innovation, part of a big innovation, uh, like, you know, we can look back in history like the railroad boom in the 1840s in, in, uh, in England, you know, like during the 1920s in America, which is a boom driven a lot by electric electricity, electricity related industries, also chemical, chemical industries and things like that. Speaker 1 00:32:05 You know, maybe in the mod more modern recently could say maybe the internet industry in the 1990s. But what happens is these big changes, uh, cause the creation of new financial capital, as these entrepreneurs are bidding away the factors of production from their existing uses. So they're hiring workers, they're bidding up salaries. Right. They're renting office space. They're bidding up rents. They're paying for steel, they're bidding up the price of steel. Yeah. And a general boom occurs throughout the economy. Yeah. And, but the, but the, but then what happens is, and this is, he's well known for this term, we're probably about to say it, but creative destruction, right. That's his, you know, term famous, which he wrote about later on famous term. Yeah. What does that mean? But what happens is, is that, you know, then there's a winnowing out of the winners, winners from the losers, and that's when you have a recession. Speaker 1 00:32:55 So what choppier describes is a pattern in the economy where it's, it's the, the secular trend is upward, but with these ups and downs Yeah. As you go upward. And this actually pretty accurately describes every capitalist economy Yeah. In the world. Now, the problem is they're all mixed economies, not purely capitalistic. And there are other causes of these booms and busts like, uh, uh, government inflation and the money supply, for example. So, you know, but, but, but what's interesting is if you look at how people look at the boom and bust cycle, right? If we look at it, here's, here's, I could summarize very quickly how all economists look at it. Okay. Um, uh, left wing kind of Keynes, the economist, so real left-wing, a Marxist would say, yeah, look at those booms and busts. That's gonna lead to the commiseration, the impoverishment of the worker. Speaker 1 00:33:46 And that shows that capitalism is evil. Right? Well, Marx was wrong. Right. We got wealthier, even though we had booms and busts. Right? And then Kane said, well, you know, those booms and busts are also, it's an, it's kind of an indictment of laissez-faire. So we can intervene like crazy with fiscal monetary policy, sort of try to smooth out the booms and busts. Then you had people on the right, okay. Milton Freeman, the Austrian economists who said, yeah, those booms and busts are bad, but they're all due to government inter intervention. Yeah. And if we have the right policy, maybe we can smooth out the booms and bust, and they're all across the board on this. Yeah. So, you know, you have like, the monetarists say, well, mil Freeman said, if you have a, a smooth upward rise in, in the mon the money supply. Speaker 1 00:34:31 Right. You know, uh, the Austrian say like, you know, maybe Larry White, you know, would say, if we just had pure free banking, it would smooth out the business cycle. Then you have some other people who claim to be pro-free market. They, and they, they consider the consider themselves part of the Austrian school who actually wanna intervene on the market because they say, yeah, the market is gonna have these booms and busts, and it's due to fractional reserve banking. So we gotta abolish that, have a hundred percent reserve banking. But what's interesting is they all think the boom and bust is, uh, is bad. Right? Uhhuh, <affirmative>, it's harmful. Right. And they just differ, you know, on whether it's, you know, inherent in capitalism. Some of them say that, or whether it can be controlled or not. Some of them disagree on that, but they all think it's a bad thing. S Schumpeter says, Hey, it's an unavoidable side effect of, uh, technological innovation. Right. And it's, it's, I, he's the only guy who says that. So he's pro-list. He's, you know, yeah. He's basically pro Leslie Fair. There's, you know, some people disagree about whether he is or not, but, but, so this is what, this is what I'm writing about. This is what, you know, floats my boat. I wrote part of my dissertation on it. That's the, that's the area that interests me. Speaker 0 00:35:43 This is a profound integration on your part, um, to see Schumpeter's theory of the cycle and relate it to the wide gamut of other theories. That's really remarkable. Ray. And again, it sounds like the lesson you're learning, or the lesson he's teaching is, don't worry so much about business cycles and don't just presume that boom bus means artificial. Um, uh, the, the, the whole creative destruction thing is something like, uh, you know, automobiles replace horse and buggies and the light bulb replaces candles. And, uh, that kind of, the telephone replaces letter writing. Right. It's not like all those products don't still exist. We still have war some buggies in Central Park, but, uh, that's what he is talking about. Right. Don't worry if there's cyclicality due to that. Something like that. Yeah. And, and the promotion of the entrepreneur, I guess today they call 'em disruptors. Um, let me ask you about the transition. Let's get to this transition. How did this transition occur from finance to academia? Like, how did you go about thinking, you know what, I really wanna be a professor? 'cause you are, you are now, congratulations, what, from four or five years now more? Yeah. First of economics later in life. How'd that happen? How'd that work? Speaker 1 00:36:52 Well, there are two reasons. Um, so I'm, I'll, I'll mention one. Um, so I, uh, you know, I, I, when I was winding down my Wall Street career, uh, I wasn't sure what to do. And so I, I took, uh, a course you could take, do this at Columbia University. You could take almost any course, uh, uh, for credit. But as a non-degree student, it's, it's a really nice thing. So I took a graduate course in economic, in the history of economic thought, I'm sorry, the history of economic thought. Right. And I, I, it was like, it's one of my two favorite courses I ever took in economics with the other one being my very first course as an undergrad. I mean, I adored the course. Right. And I discovered Schutter in the course, and I wrote my term paper on Schutter. And then, so that, that was going on. Then Richard, you're the other reason, you're the other reason because you got your PhD later in life, your PhD in political economy, and became a professor, which you are at Duke University. And, you know, so I, I kind of had that role model. There was also a, a, another fellow that we both know who unfortunately has died. Uh, John Lewis. John Lewis, Speaker 0 00:38:04 Yes. The same thing. Yeah. So it was also in business for many decades. Yes. Before he became a classical scholar and Speaker 1 00:38:09 Objective as well. Yes. Yeah. It became a classical scholar. I know. So it's, you, you and John and I actually met and had dinner with both of you one time. Yeah. When Speaker 0 00:38:18 I was thinking Speaker 1 00:38:18 About this. I remember that. Yeah. And so then I was, so you two guys brought an inspiration that it can be done. Right. And then I went back and I had dinner with, uh, my professor after the course was over, this guy at, at, at Columbia University. And I said, you know, I, I think I wanna go into academics, but I'm, you know, I'm not, I'm older than your typical person. Yeah. And yeah. And, and he just looked at me and he said, he said, Ray, some people are late Bloomers Speaker 0 00:38:44 <laugh>. Yeah. I, Ray, he said, do it. When I was making it, when I was making the transition, and at, I don't know, age 47 or so, I needed a letter from my M b a professor from three decades earlier. Speaker 1 00:38:57 That's happened to me too. I did the same Speaker 0 00:38:58 Thing, which he thankfully remembered me and wrote a letter. But his favorite expression was, uh, I don't know if this'll work, Richard, you're too old to mold. And I said, what does, what does that, I like the rhyme, but what does it mean? He said, no, no. We like young 22 year old PhD students that we can mold and, you know, make them, uh, automatons of us. Uh, older means you're, uh, setting your views, you know? And, uh, so if you can get over that and get over the bias that might be associated with late, as they call late bloomers. Well, I'm so glad you made this move. 'cause I think you're very happy with it. You first taught, well, you got it at G M U. Was that hard? How long did it take, and how did, how was the experience getting it at George Mason University in Fairfax? Speaker 1 00:39:41 How'd that? Yeah, so, well, yeah. I mean, I got accepted there and it gave me a little fellowship and whatnot. Yeah. But I, I, I finished my PhD in five years now. Uh, it was a little bit slower. I, um, I did get some course credit, as I imagine you did for my M B A I. I, I did. But, uh, but my wife, I'm happily married. I've been married now 11 or 12 years. But, uh, you know, we live in New York City and G M U in Northern Virginia. Yeah. So every, just, almost every single weekend I would go back to New York. I would generally take a bus. I didn't have a car. I'd never owned a car, actually, I drive, but I never owned a car. And, uh, so, you know, I did that for like, the two years of coursework. And, you know, occasionally my wife, I'd be, you know, talking to her and, you know, uh, or FaceTiming, and she'd say, Ray, you just look really tired. Stay in Virginia that weekend. Oh. You know, and I would just, but, you know, our marriage survived. And, and I, you know, no regrets. 'cause I'm very happy teaching. I'm very happy doing what I do. Uh, so no regrets. But I had a, a similar experience. It was, it was tough getting a job immediately. So I, my, my advisor, a very, uh, a well-known Austrian economist, who I like very much. He was also my dissertation chairman. That's Peter Beke. Peter's Speaker 0 00:41:00 Great. Yes. Peter Becky. He's great. He was, he was helpful on the job front. Speaker 1 00:41:05 Yeah. He was. And, and so he said, Ray, you just gotta, like, start working somewhere, even if it's further away. So for two years, I worked at DePauw, D e p a u w a liberal arts, private liberal arts college, DePauw University in Indiana. And I was commuting every two weeks by plane to New York. Wow. And I did that for two years. Wow. So now I'm settled down in New York City. Uh, you know, it's still trying to make it a permanent gig, but I'm hoping it'll turn out that way. It's a full-time gig. And, and I love it. I teach history, economic history. So I'm teaching economic history, and I'm teaching history of economic thought. So economic history, and then also the history of, of economic development, of economic ideas. And then I teach micro, macro, you know, different courses like that. Speaker 0 00:41:50 Wow. Uh, that is quite a, that is a kind of a role model, but how do you do this late in life and how do you get the jobs? And what if you are anchored geographically in some place, and you have these other values. You have a beautiful, wonderful wife I know. And family and all that. Uh, well done. Not easy. Uh, also going into it this late, it's almost like you're not gonna get tenured. You're gonna have to put together some, uh, contracts. Right. A multi-year contract. Yeah. Speaker 1 00:42:15 I mean, I, I have a one, I have a renewable one-year contract. Yeah. Um, there's a, at my university, there's a, a actually, for a decent chance I could convert it into a tenure track position. Yeah. Oh, great. Speaker 0 00:42:26 Great. Speaker 1 00:42:26 But generally, you know, it's funny about tenure is, um, uh, you know, I, my whole career, your whole career, you know, I never had, there's no tenure out there in the non <crosstalk>. Speaker 0 00:42:37 Not really. Yeah. It's actually, yeah, it's actually on the decline, isn't it? Speaker 1 00:42:41 What's that? Speaker 0 00:42:41 It's actually on the decline as an institution, it seems. Yeah, it Speaker 1 00:42:44 Is. And so, I mean, on Wall Street, you could be fired literally on a moment's notice. And if they fire you, they don't just, they don't give you notice. They walk you out the door. I mean, 'cause you might have trade secrets and Speaker 0 00:42:56 Data. I know. Speaker 1 00:42:57 I mean, I liked it. It was great. That's why they pay you a lot of money too. You work your butt off and maybe you get walked out the door, hopefully. Speaker 0 00:43:05 No. Uh, Ray Ayn Rand's, 1967 book Capitalism, the unknown ideal part of what she said was unknown, uh, was its history. And I know you love economic history. Uh, here's, here's, so here's the question. Do the students you deal with, or, you know, not just at St. John's, but elsewhere, do they know economic history? Do they know the history of capitalism? You know, what, if they said to you, why do I care to know, you know, what industrial production was in the late 1880s? Give me, give me theory. Give me, uh, I s l m curves, give me, what, what would you say the importance of economic history? Speaker 1 00:43:42 Well, I think, um, you have to, it's the evidence, you know, economic history is, you know, I'm, you know, if you're interested in, um, understanding the economy, you need to understand economic theory. You need to understand economic history. I think it should be required for any economics degree. Uh, I think it should be offered by every history department as at least as an optional course. Yeah. But every, every now G M U, uh, I don't know if they, they didn't mandate it, but they offered it, you know? And, um, uh, but it's your evidence. So for example, the theory, the, you have different theories, right? Marx says, capitalism results in poverty. Right. Well, what happened? What, what's the history of capitalism show? It actually shows opposite. It shows a rising standard of living for everyone. Right. For the, the so-called workers, right? Yeah. The people at the bottom, as well as the people at the top who are also workers, even though Marxists don't call them workers. Speaker 1 00:44:36 Yeah. Uh, you know, so I think it, it, it, it, it, it's, you, you need to know the history of capitalism to understand our economy. The other thing you need to understand is you need, you know, when I look at the economy today, we have a mixed economy. It's a mixture of freedom and controls. So when I see things that don't, that seem to work well, or that don't seem to work, right, you can't just say, oh, that's capitalism. Right. The way a leftist would they just call what we have capitalism? No, it isn't. It's a mixed economy with capitalistic elements and socialistic elements. And if you study economic history, it helps you to tease that apart. Mm-hmm. <affirmative>, you'll see what's contributing to the results we see out there in the economy. Speaker 0 00:45:19 I think these two interests of yours, very interesting history of economic thought, you know, from probably, uh, Smith, right? Or the Physiocrats Smith Malus Marx up Kanes, uh, current day samuelsson uh, com, combined with the knowledge of the details. The empirics is a nice combination. 'cause these theorists should be looking at, should be looking at the world and saying, this is the way the world works. Why would they get it wrong? Let me ask you this, Ray, we've had now, uh, more than a hundred years of, I don't know, 25 or 30 quote unquote socialist experiments. And we still have famous people like a O C and others, and Bernie Sanders and others pushing socialism, whether they call it Democrat. Why do people still want socialism or maybe maybe younger students mostly, but what, what, what is that all about now that they, now that the record is in? So I bring it up because now that the economic history is in, you know, it's not, we're not talking about loving it in 1916 before the Russian Revolution. We're talking about loving it in 2023. What, what are you, how do you explain that? Speaker 1 00:46:22 Yeah. Our world with iPhones, jet travel, antibiotics, you know, uh, nuclear energy, you know, everything else. I, it's a great question. And actually, this is where I think Objectivism helps ein Rand's ideas because, uh, she talks about that. And, um, you know, she attributes it to the morality that people hold. And I, I think that, uh, understanding that, that people's moral beliefs really influence how their framework as to how they evaluate the world, it, it sets their framework as to what counts as important evidence, what does not mm-hmm. <affirmative>, right? Mm-hmm. <affirmative>. So, for example, a a Marxist, you know, there'll be an instance of a bat of a, of a mean, uh, uh, factory owner, you know, who mistreated the workers. And he's all on that. But that's the important fact, not the fact that over time, the standard of living rose, the conditions of the workers got better, their lifespans increased, their health increased. Speaker 1 00:47:26 That's not, that doesn't get focused on instead that one, that one thing gets focused on. Or for example, this, this, um, I'd say almost pathological, uh, focus on inequality. I, I, you know, I've never understood this. A lesson I learned early on is not to envy what other people have. Hmm. Except that, you know, maybe if they have something that I want, I can go out and earn it and buy it for myself. But not to say, oh, my life is miserable because someone else has 120 foot yacht, or they fly around in the helicopter, whatever. It's, yeah. So, um, so the, the, you know, the morality that I'm, I remember talks about is this morality of outros. You know, that the moral purpose of a person's life is to serve other people. And if that's the case, you know, if anyone has more than another person, they should feel guilty about it and hand it all over to the person who's poor. Speaker 1 00:48:16 Now, economics will tell you, if you try to do that, if you try to do that in law through government policies, it will result in death, misery, destruction. Every communist state had famines, okay. That tried to implement this. Right? But, so Ayne Rand has this idea. She says, you know, the moral is the practical. Right? It's certainly impractical to do that, but it's also immoral to do that. So the, the positive message you get from objectives is that your life, my life is of supreme value, you know? Mm-hmm. <affirmative>, and I have the right to soar. If I can soar like an eagle to the highest heights like Steve Jobs, right. To become a multi-billionaire by selling all these products that benefit all these other people, I have every right to do it. And that the moral is the practical that person's gain is not any harm to me. Yeah. But it actually expands that economic space to use Schumpeter's words that we all are richer and are better off. Yeah. Speaker 0 00:49:13 Now, in, in, uh, introductory economics, you know, this, I've seen this, uh, what do you make of the standard textbook distinction? You'll hear right up front, well, there's positive economics, and then there's normative economics. And never the twain shall meet, you know, this normative, the second one being the morality or the justice of, well, what do you make of that? Is that a legitimate dichotomy, or is that a good way of splitting it? Speaker 1 00:49:35 It's, I think it's a terrible idea. So the idea I use with my students, we talk about this like, especially in my history of economic thought, but I'll talk about it in my regular intro micro class as well. Um, and I say, um, you know, think about a doctor. What a doctor does right now is a doctor indifferent towards the health of his patient. Does the doctor have to be indifferent towards the health of this patient in order to be objective and factual? Yeah. In how he does his work? No. The doctor has a normative goal, a normative interest, which is the health of this patient. The doctor is pursuing a moral goal, and that doesn't get in the way of being objective. Yeah. So this moral, this positive, uh, normative positive dichotomy, there are two roots to it. You know, one root to it is that there's this fear that if you have a moral, uh, goal, you can't be objective about your work. Speaker 1 00:50:32 Yeah. So as an economist, you know, we don't, we wanna be objective, we want to be empirical, we wanna be factual. So I'm not gonna think about, you know, any kind of moral goal in my work, you know? Yeah. I mean that it's extreme. It would mean like, you know, I could, you know, I could equally work, you know, for a dictator or for, you know, the American president or whatever. But, but the other aspect of it is, um, uh, uh, the other aspect of it is though is this, is, is is from a philosophical error, which stems from a religion actually, which is this idea that morality is arbitrary, that it's sort of made up. It's a matter of faith, right? And we're scientists, you know, we're scientists. We don't wanna be messing around with morality, which is the realm of religion and faith. So we're gonna be positivists. So, you know, IAnd says that morality, you need a morality to live. It's an objective requirement of life. And you can know the right morality through an objective process, through a scientific process, a scientific philosophical process. So, you know, I think of myself. So that doctor analogy is a good one because I think of an economist as we're doctors, Uhhuh, <affirmative>, we're doctors concerned about the economic wellbeing of Yeah. Of people in society. We want prosperity. Speaker 0 00:51:46 Yeah, right. I, I remember Reman once said, it should be as controversial for a, an economist to advocate capitalism and prosperity as for a doctor to advocate, you know, health and nutrition. Like, why would that be controversial? Ray, I'm gonna, we only have 10 minutes left, so I'm gonna go to some of the questions that have been submitted. The, probably the shorter the answer, the better. Um, sure. So here's a, um, uh, here's a good one. Um, does teaching the ideas or holding the ideas you have in, in university, uh, uh, make you vulnerable to being canceled? <laugh>? Speaker 1 00:52:20 Yes. Speaker 0 00:52:21 Uh, well, Speaker 1 00:52:21 I'll give it a simple one word answer. Speaker 0 00:52:23 Yeah. Yes, yes. Uh, I mean, <laugh>, yeah. Now, okay, here's another one. Uh, what do you think of the current state of the business cycle? Think that we're on business cycles, uh, how high interest rates will go, uh, you know, you're basically your outlook for, uh, the US economy and maybe just the us uh, generally, you know, intervention or not pro capitalism, anti-capitalism, or not. What, what's your kind of outlook for the Speaker 1 00:52:47 Yeah, I don't have a specific, uh, viewpoint on, on where we are in the current sector right now, which, you know, it's probably more your domain, Richard, with your professional work, but I, I, I'm not, uh, looking at the economy at that level. Okay. Okay. Uh, but, uh, you know, as far as maybe a broader perspective, um, I'm bullish. I'm bullish, you know, I'm bullish on, uh, on, uh, you know, economic growth, the world, and I think the right ideas, these ideas are getting out there, even though sometimes it doesn't seem like they are. Speaker 0 00:53:16 Yeah. And I noticed, I noticed over your shoulder, is that super abundance? That book is, Speaker 1 00:53:21 It is. Oh, yeah. Speaker 0 00:53:22 I talked about it recently. It's really a very optimistic take, isn't it, on creativity, entrepreneurship. I, I mean, I, even if policy is bad and the government's fiscally outta control, sounds like you're pretty high on what kind of entrepreneurial stuff's going on in tech and elsewhere. Right. There's a lot of good news out there. Speaker 1 00:53:42 There is, I mean, you know, new cancer treatments and ai, AI think is a good thing. I'm not, I'm not afraid of it, you know? Yeah. This book, super abundance, by the way, is something I really can recommend. Yeah. Um, it's a good work in economic history and the history of economic thought. But what's amazing, what these authors do is they calculate, they look at historically up to the present, how much time of, of your work does it take to produce the money to buy a, a good, so for example, like a meal, uh, 150 years ago might have taken four hours of your labor. Yeah. Today it might take 10 minutes of your labor Yeah. To pay for meal as an example. I mean, I, I'm not using those exact numbers. Yeah. It shows how dramatically Yeah. Our standard of living has improved. Yeah. It's a good book. Speaker 0 00:54:34 Yeah. It's amazing the time, price of things. This is, it's a brilliant book. Martin Tope, I think it's a human progress project also over at Cato that he's associated with. Um, uh, very good as well. Uh, here's another one. Um, would you recommend that, uh, that young students start with ay rand's fiction or nonfiction? Speaker 1 00:54:56 Uh, that's, that's kind of a nice question. I mean, I think the <laugh>, I think it'd start with either I've met people come RAs ideas and they begin either way. Um, I found the fiction really powerful if you're, you know, in a way it is funny. I'm almost would say you're gonna enjoy the fiction more the younger you are. It's just, it's like, I found this in general, like if I read Victor Hugo now, yeah. I wouldn't have the same experience as I did in my twenties when it just rocked my world. So, you know, maybe that would tilt towards starting with a fiction, but I think you can go either way. Read capitalism known on ideal, read the virtue of selfishness. I know someone who got into objectivism through Introduction to Objectivist Epistemology Speaker 0 00:55:37 <laugh>. Wow. Speaker 1 00:55:38 Which I wouldn't recommend as a first book unless Speaker 0 00:55:40 You, uh, right now you're a New York City guy for many, many years. Here's one. Could, could you explain for those who don't live in New York, what these housing lotteries are. I don't know if we wanna get in the weeds here, but I thought I would combine this with me noticing that three or four of your A I E R essays are on housing. You seem very interested in housing, the economics of housing, how it could be messed up. Quick thoughts on housing in America, that sector, how it's treated in New York. I know you hate rent control. Why is housing interesting to you? Speaker 1 00:56:11 Well, part of it's 'cause I live in New York City and I suffer. This is the most regulated, intervened in housing market in the country, which would result that there's a, a real, uh, ins there's insufficient new housing being built every year. The result is we pay the highest either rents or apartment prices in the country, sometimes in the world. Yeah. So I care as a New Yorker. Uh, also, it's just, I've decided I'm gonna focus more attention in this area. You know, just, I wanna focus on something that, and business cycles are kind of, I'm gonna focus on for now. I also, uh, learned there's a major, major lawsuit underway right now to, uh, to, uh, try to get rent control declared unconstitutional. It's an amazing effort. I met with the lawyers involved in it. This is a very serious effort. It's led by the leading groups of apartment building owners, regulated apartment building owners in New York City, and their goal is to lose in the courts. Meaning they're gonna lose on the, on the New York state level. They know they'll never get a, you know, they'll never win in New York State. And they wanna get it up to the Supreme Court. I think just today, uh, reply briefs were, were, uh, were made on this. And so, you know, I find it inspirational. I wanna do what I can by writing economic articles like I am on this topic. Speaker 0 00:57:31 I'm reminded in the chat also that we interviewed the author of Super Abundance here at the Atlas Society, Martin Dupe, I believe our C E o Jennifer Grossman did that. So go to YouTube, Atlas Society, search for Super Abundance. I do remember this now that I think about it. That was a great interview. Uh, okay. Uh, last question. Uh, I'm gonna intervene here and ask the last question. Are you, are you optimistic, pessimistic, something else? The future of Objectiveism, the objectivism movement, the spread of Ayy R'S ideas? You've been in this 40 years, you have a perspective that few have others have. Right. What's your take on whether Ayn Rand's ideas are gonna spread, take, hold in what ways? Any thoughts on that? Speaker 1 00:58:20 You know, I think one thing to bear in mind, it doesn't take many people to move the world, huh? Right. Yeah. Uh, like in terms of entrepreneurs, you know, someone like Steve Jobs or someone of ideas, Ayn Rand, she was just one person, and she's having the impact she's having. So I guess I, I will say I'm optimistic, although, you know, uh, I do think, um, uh, you know, uh, people are, seem to be less conceptual, less thoughtful than they used to be. And, you know, if people aren't conceptual thinkers, I think it's harder for them to, to, you know, they, they, they're not very good at thinking abstractly. I also think people's education levels have really sunk in terms of just knowing things like history. Like, you know, when did World War II happen? When did the Civil War happen? You know? Yeah. Things like that. Yeah. But, you know, having said all that, I think I'm optimistic because, you know, reality will win in the end. But, you know, it might take many, many years. I don't think I'm gonna live in a cat in a le farewell in my lifetime, but I think I can live in a world where I can have a very good life. It's, it's significantly free. And I, I know, I think in the end, the ideas will win over some long timeframe. Speaker 0 00:59:31 I like that. She also said, those who fight for these ideas live in it Today. We're, we're, we're talking about it right now, I feel like I'm in a universe. That's wonderful. 'cause I'm with Ray Niles talking about great ideas, you know, that isn't that what we want? A world where there's a bunch of people like that. Yeah. I, I think also your insights on entrepreneurial, someone in academia years ago told me, don't just be an academic, be an entrepreneurial academic, start journals, uh, go to conferences, stir the pot. Uh, you know, so I think it's interesting, your interest in entrepreneurialism and your history of this. You combine that with academia. You can be an activist, academia, academic, and still be a scholar, you know, not a, yeah, not a crazy person. That's, that's how to do it. We have, unfortunately, Ray, we could do this for three hours, I think run out of time. Speaker 0 01:00:16 So I wanted to thank you and very much for this. I, I, I enjoyed it a lot. I hope the audience, I think the audience did, and I wanna thank all of you, uh, who joined us today. Uh, if you enjoyed this video or any of our other materials, uh, please consider making tax deductible [email protected]. And also for next week, be sure to join our C e O Jag Jennifer Grossman, who will be speaking with British broadcaster and comedian Andrew Doyle. And that's on the next episode of the Atlas Society asks Professor Niles, Ray Niles, great to see you, uh, great to talk to you. Continued success in your remarkable, remarkable career. Speaker 1 01:01:02 Thank you, Richard. It was a real pleasure. Okay. Speaker 0 01:01:04 Real pleasure. Thank you. Bye-bye. Bye everyone.

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