Stefan Molyneux
  • yesterday
The round trip of the trade dollar

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Transcript
00:00Good morning, everybody. Hope you're doing well. It is 8.20 in the morning on January
00:06the 31st, 2006. I hope you're doing well. I have two topics this morning. One is a sort
00:11of technical topic, which I think is kind of interesting, and another one is a rather
00:16more non-technical topic that's going to put me into one of my screaming heebie-jeebies,
00:20I'm sure. So we'll save the screeching till the end.
00:25The first topic is something that's interesting from a sort of technical or economically technical
00:31standpoint, and what it is is the question or the issue of foreign trade. Now, I know
00:39it sounds cripplingly dull, but it is sort of important to understand if you're going
00:43to sort of take the stand for freedom, because one of the things that I saw in an email that
00:49floated around recently, we get emails from one of Christina's cousins in Greece, and
00:56you know, she's, I guess, some sort of activist, but, you know, completely uninformed, right?
01:01I mean, truth is very hard, and truth is counterintuitive, and truth is often counter-sensual. I've mentioned
01:08this before. When you look at theories of physics, you know, the world looks pretty
01:12flat, but it's actually round. The sun and the moon look the same size, but they're not,
01:17and it looks like the sun generates light, and at night it looks like the moon generates
01:21light, but it doesn't. You know, there's lots of things that, in physics, just don't make
01:25any sense. It would sort of be, I guess you could say, basely, sensually self-evident
01:32that a bowling ball would fall faster than an orange, but, you know, I think it was,
01:37was it Da Vinci who threw them off the top of the Tower of Pisa and actually figured
01:42it out? So, there's lots of things that are true that are counterintuitive, and counter
01:49to the evidence of sort of common sense and the senses. One of those is foreign trade,
01:54and it's probably worth just spending a few minutes understanding a little bit about it,
01:59so that you can pompously lecture people at dinner parties the way that I do. No, I'm
02:03kidding. You've got to be nice, and you've got to be enjoyable for people as much as
02:06possible, because the truth, if it were easy, wouldn't be any fun to explore, right? The
02:11truth, if it were self-evident, we would actually be, you know, pretty much like a
02:15dog in terms of intelligence, because to a dog, I guess everything is self-evident, but,
02:20you know, mostly wrong. So, as far as foreign trade goes, the email that we got from Christina's
02:27cousin in Greece was something that you may have seen, where, you know, I won't sort of
02:32– I can't read the whole thing, because I'm driving, and I won't sort of go into
02:35the whole thing, but it was sort of like, you know, this guy, this American guy, you
02:40know, sits down in front of his Japanese-made television on his Malaysian-made couch, sipping
02:46his, I don't know, Korean-made beer, and flipping on his German-made television, and so on,
02:55and then wonders why on earth he can't get any jobs in America. Now, this is sort of
03:01a fascinating thing, I mean, when you think about it for a moment, and I can understand
03:06that it's like, well, if I don't buy American, then somehow I am harming America's capacity
03:12to generate jobs, and therefore I'm going to be jobless. But I gotta tell you, that
03:18sounds kind of like paradise to me. You know, this email, I think it sounds like a wonderful
03:23thing, because if I can get all of these people in these other countries to send me goods,
03:30even though I don't have a job, even though America's not producing any jobs, if all of
03:34these other countries are willing to just send us all these consumer goods, despite
03:38the fact that we have, you know, no economy, wouldn't that be fantastic? I mean, I'm not
03:44saying it would be good for them, but I mean, that'd be lovely, if I could call up Hitachi
03:48and say, listen, I'm not going to be working for the next year or two, can you send me
03:51a high-screen TV and some surround-sound, quadraphonic, noise-cancelling headphones,
03:57you know, things that would be tasty to have? But of course they wouldn't, right? I mean,
04:01they're not going to send me those things unless I'm going to send them something, because
04:07it's trade, right? Foreign trade. And so it's sort of important to understand that there
04:13is no, like as far as capitalists go, as far as the free market goes, there is no such
04:19thing as a country, there is only the minor inconvenience of currency. And that's sort
04:24of very important. Trading with somebody in Japan, aside from the overhead of currency
04:29and of course all the bureaucratic regulations and taxes and all of the other barriers, and
04:33sort of mafia deals that are throw up to impede and profit from honest trade, countries are
04:39completely irrelevant. We don't care. We just don't care one little bit about a country.
04:46And of course the question is why? Why, what does this mean, what does this matter? Well,
04:49of course governments are always going to want to promote nationalism, my country is
04:54better than some other country, because our country of course is defined as the geographical
04:58area that one mafia gang gets to operate in versus another mafia gang, and of course that
05:03mafia gang is going to want to make you nostalgic and happy that they are, you know, running
05:07your lives and ordering you around and telling you what to do and taking half your money,
05:12and you know, the other countries are not, for a variety of reasons. But all of that
05:16is just, you know, it's just propaganda in the service of evil. I mean it doesn't have
05:20any reality in the world. I mean obviously borders don't exist in the world, countries
05:25don't exist in the world, the only things that exist in the world are people and things,
05:29right? I mean it's, you know, and I guess people and things and the rules of physics,
05:34I guess we can say, are evident in the world. But, you know, there is no such thing as countries,
05:42you know, those are just sort of fictions invented by predators to keep the sheep in
05:48an enclosure, right? I mean countries have the same sort of role in human life as electric
05:55fences do on a cattle farm, right? It keeps people in the boundaries and makes sure that,
06:00you know, as much as possible the sheep are not going to wander off to be shorn or eaten
06:05by some other farmer. So I mean that's really the only role that countries have in the world.
06:11So it's sort of understandable that given that we're exposed to all of this propaganda
06:15about countries that we are going to feel that there's some fundamental difference between
06:20trading with somebody one town over and trading with somebody one country over. And of course
06:26the fact of the matter is there just, there isn't, there's absolutely no difference whatsoever.
06:29Whether you go 10 miles or a thousand miles to trade your goods doesn't matter and particularly
06:35it doesn't matter, of course, in telecommunications where, you know, your technical query can
06:41travel to India perfectly well, as easily as it can travel to the next town. In fact
06:47in certain circumstances if you're using voice over IP it can travel even easier across the
06:52world than it can across the country. And of course if you're dealing with computer
06:56code or video conferencing or knowledge transfers or, you know, anything which can be transmitted
07:01electronically from sort of faxes to emails to articles to papers to graphics to any of
07:08these things, it makes absolutely no difference where the other person is. So as I sort of
07:13mentioned earlier there are only two inconveniences to traveling, to dealing with other countries.
07:17I mean if you discount language, right, I mean language is an inconvenience, but language
07:21is sort of based on culture and convenience for the people in the country. So that's not
07:26specifically government regulated, although it would be very interesting to see to what
07:31degree, if the governments didn't run the schools, to what degree English or Esperanto
07:36would be put forward as the common language and humanity would be that much closer thereby.
07:41But so there's language which we're not going to count because it's not primarily a government
07:46function, but of course currency is a government function and regulations and taxation and
07:52import-export duties and all that, all of those are government functions and those are
07:57the only things which impede trade. So let's sort of follow the path of a dollar as it
08:04is spent so that we can sort of understand why it really doesn't matter at all whether
08:09you buy something made in Japan or something made in Minnesota or Ontario or you know whatever
08:14it is that you're, wherever it is that you're living. So if you are a fine Japanese businessman
08:21who has a wonderful device that I want, let's just say you have, I don't know, let's just
08:27say an iPod, I don't know why the heck they're made, but let's just say you have an iPod
08:30that I want and I have some noise-canceling headphones that you want. I'm assuming that
08:36I have more than one because without decent headphones I'm sure iPods aren't that great.
08:40Like any other portable music device you get, the headphones always suck. But, and let's
08:45just say that we're going to make this transaction in dollars, right? And let's just say for
08:50the sake of convenience that both of them cost $200. So they're, it's not a great iPod
08:56but they're really great headphones, let's just say. So if we have to make this exchange
09:02in dollars and yen, obviously, well then let's just say dollars. If we have to make this
09:06exchange in dollars, how would it work? Well, I would buy your iPod, sorry, you would buy
09:15my iPod in Japan. So you would send me a check for $200 and I would cash that and then I
09:21would have $200 and we sort of, we're really simplifying this, but I mean this is the basic
09:27of how it works. So you will send me $200 and I will cash that and I will have 200 American
09:33greenbacks and I will send you the iPod. Now, what am I going to do with this $200? Well,
09:41I can't spend it in Japan, right? Because Japanese businesses don't take US dollars.
09:49Now I know that some places in Mexico and Canada and some places around the world will
09:52take US dollars, so I mean, but I'm not going to switch it to a sort of more obscure currency,
09:58but let's just say that the Japanese in general prefer dealing with the Japanese currency
10:02rather than American currency. So if I've got these $200, there's absolutely nothing
10:07that I can do with them unless I want to frame them or sort of, I don't know, keep them in
10:11my pocket. There's nothing that I can do unless I am willing, unless someone is willing to
10:18take them in the US, right? The American dollars have to end up in the US economy at some point
10:23because it's US currency. So it could sort of be used, it could be used as fiat currency
10:27in other countries and so on, but even that would only be used because somebody in the
10:32US would be willing to take it. So let's say that, for instance, you sent me the $200,
10:39I cashed them and then the US government went bankrupt and was no longer going to honour
10:44the $200. Well, it would be a simple theft, right? I mean, not exactly a theft, of course,
10:50because it's not like you had put the $200 out there with the knowledge that the US government
10:54was going to go bankrupt. That would be the job of the politicians. But I would have no
10:59place to spend these $200 and therefore, you know, it would be as simple like I had lost
11:05an iPod and I hadn't gained anything in return. So the $200 that you send overseas in return
11:11for a foreign good must, if they are to get anywhere in terms of value for the person
11:16that you've bought something from, they have to get back into the US economy and they have
11:20to buy goods in the United States. There's simply no other way to use an American dollar
11:27overseas than to come back and buy something in the United States. And that's what I mean
11:32when I say aside from the inconvenience and overhead of currency exchanges, which are
11:36pretty simple these days, I actually, gosh, way back at the dawn of my computer career,
11:40I wrote a foreign exchange trading system for a RBC Dominion Securities, which is a
11:44trading company up in Canada. And it's pretty automated, a lot of this stuff. So it's not
11:51like you have to take your money down to the local money changers, doubtless being whipped
11:56by some devout Christian in front of the temple. You know, it's all electronic and it's all
11:59mostly automated. And, you know, to the degree to which it can be automated in terms of complying
12:05with customs and regulations and duties and excise taxes and so on, it's as automated
12:10as possible, although that's much harder. So in a sort of perfect world, let's just
12:15say that the entire process, and we're still going to talk about a free trade situation
12:20here. So this is the stateless society run by DROs and everything's managed to its sort
12:24of optimal level and there's no taxation and so on. But let's just say there are still
12:28differences in currency. You know, there may or may not be in a stateless world. We don't
12:32know. And it's maybe interesting to theorize about, but not particularly relevant to where
12:36we, the little hump that we have to get over in terms of getting rid of our existing governments
12:40might take precedence over life in a stateless society around the world. But let's just say
12:45that that world is in existence and we are completely electronically transferring both
12:51the product and the money, right? So I am buying a downloadable executable from you
13:01and in return, you know, we're doing a visa, whatever, transfer or something, the PayPal
13:06transfer, something that's electronic. Well, of course it would be completely, pretty much,
13:10well, it'd be completely labor-free if you don't count the amortization of the labor
13:13that would be required to program and set up the system of exchange. You know, I give
13:19you my visa number, you take the money out of my visa account and I download the program
13:24that I want to run and, you know, there's been no labor involved. No human being has
13:30touched the transaction. There's just been this sort of magical movement of digital
13:33numbers or digital bits from one place to another. Well, of course, this is about as
13:38easy as a transaction can get and it would not be any easier other than the minor overhead
13:43of hooking into some foreign exchange trading system. It would be about as easy as it would
13:47be within a country. There would be maybe a half a percent or a percent over and above
13:53the trade. In terms of currency exchange, that would be an overhead, but of course we're
13:58going to assume that, you know, the country that you're doing this kind of trade with
14:01has, say, natural resource costs or labor costs or some sort of costs that are lower
14:07than a one percent differential between the place that it's buying and the place it's
14:11being bought from and therefore the trade still makes sense. So if it's five percent
14:14cheaper labor but one percent overhead in currency exchange, you know, you're still
14:19four percent better off so the trade is going to occur. And, of course, that trade is going
14:23to occur relatively quickly because it won't take long for those labor costs to then be
14:28to rise to cover the gap, right? Because if there's a five percent difference in labor
14:33costs in a very tight competitive market, people are going to open up factories there
14:37and then that labor cost is going to, they're going to bid up the wages of the workers and
14:40the labor costs are going to diminish. So sort of in a perfect transaction with no overhead
14:45or almost no overhead, you know, this is a completely easy trade. Now, of course, the
14:50money that's ended up in the, that's been taken out of the US visa account, let's say,
14:56is in US dollars and therefore has to be converted to Japanese yen to be able to spend, to be
15:00spent in Japan. But, of course, somebody's only going to buy Japanese yen with, there's
15:05only going to be able to buy Japanese yen and sell dollars if somebody knows that those
15:08dollars can at some point be exchanged for goods in America. I mean, there's a reason
15:12why, you know, currencies which are no longer valid can't really be sold or bought except
15:19on the sort of collector's market but they can't be bought or sold for goods because
15:22nobody's going to honor them. So it doesn't matter where your dollar ends up, the only
15:26way that it's going to be transferred to anyone in any sort of economically positive term
15:32is if that person is convinced that they will be able to go and buy US goods with that money.
15:38Doesn't matter if you, if it goes through 20 people's hands, the only reason it's changing
15:42hands is at some point it has to be redeemed for US goods. Now, of course, sadly, US goods
15:50can include such ridiculously predatory financial instruments as, you know, treasury bonds or,
15:56you know, this sort of stuff. So, you know, that's one thing that I've always sort of
16:00chided people on or been a little bit more aggressive than chiding them on is, oh, we
16:04want to buy Canada savings bonds or, you know, treasury bills or whatever. And it's like,
16:10well, you know, let's say that you get, I don't know, 3% a year on a treasury bond.
16:15It's like, well, what, first of all, don't you have any sympathy for the poor? And second
16:19of all, like, don't you have any sympathy for your children? And third of all, do you
16:23really like your taxes going up? And, you know, this is always sort of startling to
16:26people because, you know, it's not that I'm so smart. It's just that they've never been
16:30taught any of these things. And, you know, of course, if you give the government money
16:34and the government gives you more money back later, where do you think they're getting
16:38the money from? This is not a business, right? This is not a profit. There's not innovation
16:43that improves profit. They're not reducing the labor costs or time costs of production
16:48of goods. They are the government. So they are only going to give you money back if they
16:53seize that money violently from you or your children in the future. So you're simply paying
16:59money up front to have your taxes raised later. And, of course, the taxes will be raised far
17:04more than 3% because, you know, the government takes the $100 you put in a GIC that's based
17:11on state bonds. The government takes that money and uses it to borrow, you know, $150
17:17or $140 or $130. So your taxes are going to go up catastrophically based on you giving
17:22the government the money. So, you know, if people do want their taxes to go up and do
17:28want their children to end up with, you know, sort of economically stunted lives, then by
17:33all means, you know, go for that 3%. But, you know, you're losing completely. Your money
17:38is just going. You might as well just make a big bonfire and send it on fire for that.
17:44And the reason why the poor have some sympathy for the poor is that, you know, the rich get
17:50by on insider trading and mercantilist trade policies, right? That's sort of the sort of
17:55tripartite division of the rich, the middle class, and the poor. The rich get by on insider
17:59information on political pull and, you know, to some degree on capitalist innovation. But,
18:05you know, they also generally, as Noam Chomsky has pointed out, there's a lot of public funding
18:10of innovation, which is then taken over by the private sector for profit. So computers
18:15and the internet and so on all started as government programs and then were all commercialized
18:19after the initial R&D had been paid for by the taxpayer. Then private entities come in
18:24and start making profit from it. Now, I don't know if that's true or not. I mean, I know
18:27it's true sort of factually. I don't know if it's true economically. But I will say
18:30that the rich do fairly well off the government, right? The middle class get shafted in the
18:37stock market and then generally herd it towards things like GICs, which they don't understand.
18:41And so their taxes end up being raised on the middle class, which, you know, the rich
18:46will escape through X, Y, or Z means, offshore trust funds and all this sort of nonsense,
18:51tax breaks. Or, you know, if the rich are being taxed to a high level, they still have
18:57the contacts and the funding ability to be able to get government favors, which, you
19:01know, will far exceed in terms of profit the taxes that they pay, right? And we know that
19:05because they do continue to do these sorts of things. So the middle class gets shafted
19:10in the stock market because they don't understand how the stock market is manipulated, or even
19:14if they do, they don't have the ability to manipulate it. And the poor, you know, live
19:18on, the very poor sort of live on government handouts and receive like many times back
19:22in services what they pay for in taxes. So, I mean, the rich do pay their share of taxes,
19:27and I'm not sort of talking about any Marxist interpretation here. And they do pay a lot
19:31of taxes, but it's the middle class who are sort of living paycheck to paycheck and not
19:36getting nearly as much out of society as they put in. And it's those people who tend to
19:42sort of move towards government bonds and so on. And the poor generally don't buy government
19:47bonds, right? So the poor will end up with, you know, the taxes being raised, regulations
19:52being increased, you know, government predations aggrandizing. And so they'll end up really
19:57shafted, right? Because they're not even get the nominal, and they don't even get the nominal
20:01interest out of the GIC. So, okay, minor segue, official minor segue. But so at some point,
20:09the money that goes overseas has to come back into your economy and buy things. Otherwise,
20:13nobody's going to accept it overseas. I mean, I'm not going to create my own fiat currency
20:18from the International Bank of Staff and expect to be able to buy a bunch of stuff overseas
20:22because people will say, well, that's a very pretty design, Mr. Mullen. But I got to tell
20:27you, I don't really think that I'm going to trade anything on it because nobody else is
20:30going to accept it. So, you know, what that means is that, I can't remember which economist
20:36came up with this metaphor, but, you know, if we had a magical machine that could turn
20:42wheat into cars, right? So you've got a big hopper and you shove bales of hay in the hopper
20:46and, you know, through some horrible clanking, arcane, magical, horrible thing out popped,
20:52you know, a month later out pop some fully formed cars, you would probably think that
20:57to be a rather beneficial machine, right? That would be a pretty good, wheat powered
21:02car factories would be pretty cool. And you would probably invest in something like that
21:07because to turn something as simple as wheat into something as complex as a car is a good
21:11thing, right? And so, but if you look at it sort of metaphorically, this is exactly what
21:18foreign trade is, you know, assuming that, you know, we grow the wheat in Kansas and
21:23we get the cars from Tokyo, then this is exactly the same. We send wheat over in a ship and
21:30then magically a month or so later, these cars come sailing back. So whether the machine
21:35is in America or is in sort of the quote machine of foreign trade is in Japan, it doesn't matter.
21:41It doesn't matter at all. And one of the things, of course, that makes foreign trade so beneficial
21:47is that there are differences based on sort of economic accidents and culture and history
21:54and so on. There are differences in the values and costs of various countries around the
22:00world. So for instance, there is a strong streak of the ability to speak English in
22:06India, especially among the educated classes because of the Rajas or the British rule that
22:10went on for so many decades. So, you know, well, if you have to choose, well, maybe we'll
22:15go with those guys, right? There's also strong engineering and computer science education
22:20in India. So if you're going to do software, you want to go speak English. Now, Brazil,
22:25of course, is on the same time zone as North America. So they're making their play for
22:29getting offshore work. And, you know, so there's lots of and so the costs for these people
22:34are very low because the cost of living is low and the opportunities are relatively minor.
22:39So, you know, obviously there's disparities, right? Now, this is not to say that all those
22:45disparities are based on natural history or accidents of economic history. The vast majority
22:51of these disparities, in fact, I would say, well, let's just say with the vast majority
22:55because I don't want to come up with the vast majority. They are simply due to state regulation,
23:01right? And government predation on the population. So, you know, I mean, one of the reasons that
23:06India is so poor is that, you know, it takes five years to open a business and you have
23:11to pay thousands of rupees in bribes. And if you declare bankruptcy, you can't sort
23:16of shrug it off in the way you can in North America. If your corporation declares bankruptcy,
23:21then the debts, I believe, accrue to you personally and you spend the rest of your life paying
23:25it off. So you don't have this sort of shield, entrepreneurial shield of corporate legal
23:30existence, which I'm not saying that I agree with that existence of a corporate shield,
23:35but I'm just saying that as far as the diffusion of risk goes, it's much more risky, much
23:40more difficult to start a business. You're taxed at a much higher rate and it's very
23:44uncertain. I mean, you can't even say when you start to create a business in India that,
23:49you know, it's going to be five years, it's going to cost you X. It could be never. It
23:52could be one year. I mean, you just don't know when you're going in. So, of course,
23:56investors who you can't give a fixed cost to are much less likely to invest. And so
24:01basically everybody stays with the big stake, with the big sort of monopolistic concerns
24:06or businesses that can bypass all these regulations through existing networks of
24:10bribery and corruption. So, I mean, sort of one of the examples of sort of why there's a wage
24:14disparity in India is because of the government, you know, forcing people to not do stuff or
24:19forcing them to do stuff that they wouldn't otherwise do. So those kinds of situations
24:25are very important to understand that, you know, where there are large price and wage disparities,
24:29it's because, almost always because of government regulation. And certainly if it lasts beyond,
24:34you know, half a generation or so, it's definitely because of government regulation or at least a
24:37generation. So, but the fact that there are these disparities is sort of what's important, right?
24:42So Canada, up here, we are rich in natural resources. So, you know, we do trade with
24:48Japan as Japan has very few natural resources. Japan, of course, a net importer of things like
24:53oil and food because, and wood and so on, metals, because it doesn't really have any
24:58natural resources. So, of course, it's heavily in sort of specialized manufacturing, knowledge
25:01workers and so on, because they take up less space and, you know, they can use that to trade for
25:08the natural resources that are produced by other countries. So, you know, that's sort
25:13of a geographical accident that, you know, Canada has these natural resources and other countries
25:17don't. So that's all sort of very important to understand that this kind of division of labor,
25:22like the division of labor that occurs within an economy, like I'm really great at coding and
25:27you're really great at farming. So, you know, I'll write your code for running your combine
25:30harvesters and you give me some food so that I can eat so I can code some more. All of that
25:35division of labor, which occurs within any sort of sophisticated modern economy, definitely occurs
25:40to a very large degree in the free market. I mean, I've become so over specialized that, you know,
25:44I'm sort of like a dodo. If anything changes, I'll have a significant challenge, which is actually,
25:49that's more true in the past when I had pretty specified technical skills. And now that I've
25:54moved more into sort of management and finances, I am a little more portable,
25:57I guess you could say. So, I mean, I'm mostly specialized in Microsoft technologies. So if
26:02Microsoft were to go bust tomorrow, not that I'm counting on that, my technical skills would be,
26:06it would diminish in worth fairly quickly, but management skills are much more portable.
26:10But the division of labor that occurs within an economy absolutely occurs between economies,
26:16right? So between countries. So countries can specialize based on accidents of history and,
26:22you know, geography and so on. Countries can specialize just as individuals do,
26:26and just as certain areas within the economy does. So, I mean, New York obviously doesn't
26:32specialize in farming. New York specializes in swearing. No, actually, New York specializes
26:36in knowledge worker stuff, right? So entertainment and financial finances, and also because of
26:42support, of course, they do traffic in goods and so on. And so, you know, even within a country,
26:49people specialize, areas specialize based on geography. Minnesota's big on farming because
26:54it's, well, Minnesota, so only farmers would want to live there. But no, because it's flat,
26:59and it's got good soil and so on, and that's why New York doesn't, and Los Angeles don't,
27:03because, you know, you can't grow anything in the area of Los Angeles anymore, I think,
27:06except tumors. So that's sort of important to understand that when you're looking at something
27:12like foreign trade, you know, the sort of buy American, I mean, is complete nonsense.
27:17If you buy American only, you are taking away jobs from Americans, because you are placing an
27:24artificial premium on something called, it was made in this country versus it was made in some
27:29other country, which means that you're buying things in an inefficient way, right? So if the
27:37sweater from Japan cost 20 bucks and the sweater from the States cost 25 bucks, then all you do,
27:43I mean, you can give your 25 bucks to the guy who makes a sweater in the States, but all you're
27:47doing then is you're not giving five bucks the difference, right? You're not giving five bucks
27:51to somebody who makes a bunch of pens or, you know, whatever you want to buy for five bucks,
27:56you're not doing anything better for the economy by giving 25 bucks to the guy who makes the
28:01sweater in the States versus 20 bucks to the guy who makes a sweater in Japan, because of course,
28:06the guy who makes a sweater in Japan is just going to go and spend those 20 bucks back in
28:09the States again, but all that's happened is that you don't have that five bucks left over
28:13to buy some other thing, so you're just destroying American jobs if you don't buy
28:17the cheapest and best goods that you please. It doesn't mean cheapest, right? It could be that
28:22you want quality and maybe the Japanese product is of higher quality. Well, if you don't buy to
28:28your best taste, right, to whatever your highest values are, then you are harming jobs in America.
28:35You are not, you're sending the wrong signals to people to invest, so there's going to be
28:39malinvestment. You certainly can't guarantee that people will continue to buy American,
28:46so you're going to create unstable job situations for people, which is pretty bad, right? I mean,
28:50you don't want to do that to your fellow countrymen, even if you are a nationalist.
28:53So if I say, well, I want to buy American, so I'm going to buy nothing but American sweaters,
28:57and let's say that I convince everyone else in America to do that, then, you know, everybody's
29:01going to start investing in sweater factories and everybody's going to get good at knitting and,
29:05you know, all this sort of stuff, and then all that's going to happen is that something's going
29:09to change, right? So, I don't know, you'd be able to download and print off sweaters from the
29:13internet or there's going to be a recession and then people are going to say, well, nice though
29:18it is to buy American, I'm now going to have to switch to Japanese sweaters because, I mean,
29:24I like to be patriotic and I like to wear my pushpin US flag, but the fact of the matter is,
29:28I simply can't afford the domestic sweaters anymore. So you certainly, if you come up with
29:34something unstable as buy American against your best economic interest, even if you do succeed in
29:40that, all you're going to do is cause people to invest in the wrong industries, right? And that's
29:44going to be a huge waste of capital, right? That money could have been invested in an industry that
29:49America could be good at, you know, like making weapons. So you could, you're not doing anybody
29:55any favors by creating a sort of buying American campaign and, you know, choosing to buy American
30:00with some sort of warm, cuddly feeling over buying to your economic advantage, because that's going
30:05to send the right signals to the American economy. And if everybody's buying to their economic
30:09advantage and you can always count on economic advantage in a way that you can't count on things
30:13like buy American. So, you know, there's just no way that that's going to create a stable situation,
30:19which is going to result in sort of long-term proper investment. And I'm not just talking
30:24capital, of course, we're talking people's livelihoods, right? I mean, to have to change
30:29one's career is, as I've mentioned in another podcast, the biggest financial catastrophe that
30:33can occur. So if you're giving wrong investment signals by creating artificial incentives,
30:38like buy American, you are not just causing capital to be invested, but people are going to
30:42spend, you know, thousands of dollars on factory, sorry, sweater manufacturing, factory school
30:49things. And, you know, they're going to learn how to do these, you know, manage and run the
30:53sort of sweater factory business. And then when that goes out, they're completely shafted, right?
30:57So they've still got 20 or 30 years to go or 25 years to go in their career, and they don't
31:02actually have any sweaters to make anymore. So they have to go and retrain, which is, as I mentioned
31:07before, a complete economic catastrophe. And that's really not what you want to do for your
31:13fellow anybody, right? So, you know, you always want to buy based on economic advantage,
31:18and don't come up with artificial things like buy American, and just out of compassion for people,
31:22so that you don't sort of send them down the garden path as far as economic incentives go.
31:27So in summation, and I guess I can use the phrase in summation, which I rarely use,
31:31because I actually just stopped off to get a muffin. So I had a moment to organize my thoughts,
31:35which of course is a fairly radical notion for me. But, you know, in summation, you know,
31:40viewing a foreign trade as any sort of substantially different from domestic trade
31:45is, you know, sort of mere, it's mere prejudice. It is an artificial preference for one set of
31:51predatory thugs over another in terms of the government. So, you know, don't sort of,
31:58don't fall into it. Don't get suckered in by this sort of nonsense propaganda about, you know,
32:04our gang is better than your gang kind of thing. And make sure that if you're talking to people
32:09about it, just say, you know, ask them, you know, you can put them in that sort of theoretical
32:13position. Just say, okay, well, you know, just this is sort of my understanding of it. And again,
32:18to sort of give you the tips of conversation that I've come up with sort of for better or for worse,
32:24you know, to say that, you know, this is sort of my understanding of it and I could be wrong. And,
32:28you know, that's always true, right? So, I mean, that's a fairly good thing to say,
32:32because you could always be wrong. I mean, I certainly can be. And, you know, just sort of
32:36say, well, this is sort of my understanding of it, you know, that if I buy something overseas
32:40with an American dollar, somebody's only going to buy it if they can use that dollar back in
32:45sort of my country, right? And people will always say, well, but there's an overhead,
32:49and blah, blah, blah. It's like, well, sure, that's why, you know, if there's an overhead
32:51where it's not profitable, then people aren't going to do it, right? So that's only an overhead
32:56if you can get, you know, your leather coat manufactured by people in China for, you know,
33:01one tenth the cost. And then you say, or you can say, once you establish that point, you know,
33:05although I think that that, you know, 10 times differential in cost is pretty bad, you know,
33:10it's pretty bad for American workers. And I strongly oppose, you know, stuff like, you know,
33:16violent unionism, sort of state backed unionism and regulations and, you know, ridiculous levels
33:21of environmental protection and all this sort of stuff. So, you know, you want to try and keep
33:25American labor as efficient as possible so that it can genuinely compete with all this sort of
33:29third world labor. And of course, the third world governments are completely evil for keeping their
33:33people in squalor, right? Which, as I've mentioned before, to some degree, I'm sure they're kept
33:37in power by, you know, governments and large corporations that really like having people in
33:43squalor so that they get cheap labor rates and so on. Which is, of course, not to their economic
33:48advantage in the long run, because you want people to become as smart and educated in economics
33:51in old times, so that they can generate great things for you from an economic standpoint and
33:56trade with you more effectively. But, you know, again, not the fault of the corporations, it's
34:00really the fault of the governments. So I hope that that sort of makes some sense to you. It's
34:05a complicated topic, and I'm certainly not saying that I've done anything more than touch on the
34:09surface of it. But, you know, as far as this kind of economic prejudice goes, it really is something
34:14we have to outgrow so that we can create a more stable work environment for our brothers and
34:18sisters in the economy, so that people aren't constantly having to retrain for new things
34:22because public whim changes. Whereas if you buy an economic advantage, it's something you can
34:26always count on, and a more stable economic life is then available for everyone, you know, which
34:31is a wonderful thing. You know, retraining is terrible, and losing your skills is awful,
34:35and not being able to predict the future is even worse. So, you know, buy an economic
34:38self-advantage to whatever you can, and you will be doing the best thing that you can for
34:43everyone that you know. Thanks again for listening, as always, and I will talk to you soon.