a lawyer. good afternoon and welcome to capital account i'm lauren lyster here in washington d.c. these are your headlines for monday september seventeenth two thousand and twelve a wall street journal report that the u.s. treasury isn't going for g.m. the offer to buy back two hundred million shares from uncle sam can be distilled to something a little like this g.m. gets a fifty billion dollars bailout from taxpayers but executives getting sick of pay restrictions flying commercial and that has the stigma of government motors wants to buy back shares at a price that would cause taxpayers to lose billions of dollars in the deal. let me ask you this can argue capitalism is still what we're working with here folks will

talk about it and the anniversary of occupy wall street begins today with planned nonviolent civil disobedience actions again bringing issues like corporatocracy to the streets of new york these are relevant issues today to be sure the question is how we deal with them we'll have a discussion with libertarian philosopher professor and austrian economist walter block plus is this a metaphor for the free market. is to you for of is can only one time zone. kids fighting for their lives that's terrifying no wonder people are scared to compete with market forces our guest brought the metaphor up as an example from a national newspaper in a recent speech to illustrate how free enterprise has been terribly misunderstood

i'll try to clear it up once and for all let's go to today's capital account. it's monday and it's a good day to have an open minded philosophical discussion don't you think i mean i can't think of a better day because occupy wall street is again protesting in new york on the anniversary of the start of that movement and a year later the same issues seem just as relevant what's interesting is that we've had people on the right and left of the political spectrum on this show who agree with the complaints of the occupy wall street movement though they may have different ideas about how to address them investors that hail from the ranks of the

one percent have come on this show to identify with protesters over issues such as corporate welfare bailouts and too big to fail in fact i think my first guest on this show exhibited all of those traits we've also had coast keynesian economists neo classical debunker an economic professor steve keen who spoke to protesters about the failings of the economics profession back at protests around a year ago and he talked about occupying the classroom and he advocates q we for the masses so the point is our guest do not all share the same ideological framework or framework however all views are welcome here mostly alternative we don't all have to agree with every tenet of an ideology or believe system in order to adopt some of its principles or at least to understand the principles we just think it's important for people to keep an open mind and taken as much as they can and as discontent with the establishment political parties grows in the united states we see growing interest in alternative frameworks and ideologies and one

example would be libertarianism for example and with this come different economic theories too so on that note joining me now from our new york studio to talk about some of those libertarian austrian ideas is walter block chair of economics at loyola university in new orleans and off there of defending the undefendable there's one of his. right there and mr block walter block professor i should say actually welcome to the show thank you so much for being here thanks for having me on your show it's a pleasure to be with you it's a pleasure to have you because you know i think a lot of our audience would probably have an idea in their head of what they consider libertarianism to be whether they are libertarian or not but but i think that as we've seen growth and that movement we've seen people like ron paul who is touted as a libertarian but with you know trying trying to run for president under the republican ticket there is there may be a lot of confusion a lot of misconceptions about what it means to be libertarian so i just want to

throw out there what is a libertarian well a libertarian is the the left nor right to live in turn is something sewage and there is so unique are very different than the left broad spectrum libertarians agree with the leftists for example on legalizing drugs and agree with the rightists on i don't know private property and free enterprise so we're neither fish nor fowl the way i see the political economic map it's like a three legged stool is conservatives here liberals they're right wingers with the conservatives progressive liberals and then there are libertarians and we are very different both of the others and we are just as for apart from either of them as we are from each other so it's really a three legged stool so what is libertarianism now that i've said where it is and where it isn't libertarianism is based on two axioms or two sides of the same coin and one of the sides of the coin is the non-aggression principle namely keep your

mitts to yourself don't grab other people without their permission don't grab their property just be cool and don't invade or aggress no murder or rape that or any of that stuff. and the second one is private property rights because in order to determine whether something is theft the not we have to have a theory as to who owns the thing in the first place so our theory a libertarian theory if i can speak for that and you know you get ten libertarians in a room you're going to leaven different opinions but i think this consensus on this and that is it stems from john locke and mary rothbart homesteading the way you get to own natural resources or virgin territories you mix your labor with the land and then you get to own it after a while and one of the other legitimate ways of owning things well given that we first homestead stuff and now turn nature of virgin territory into our own territory other legitimate title transfers are trade barter gifts

gambling anything peaceable where. property transfers from one person to another now as i've explained it i think most people would say yeah we're libertarians i mean it's pretty uncivilized and barbaric to advocate rape or murder or theft or anything like that the difference between libertarians and the ordinary folk who would accept this and this is just the criteria of civilization on bamber barbarism. the difference between libertarians and other people who might give lip service to this on a superficial level is that we really mean it and we apply it to everything and we make no exceptions for it for example take drug legalization suppose i'm stupid enough to take heroin or marijuana or whatever have i presume a invaded anyone else's territory or property no so it should be it should be illegal similarly with take the minimum wage law suppose i make

a deal with somebody to paying three dollars an hour and he agrees and he's an adult have i violate anyone's rights have i been guilty of an invasive act with regard to anyway. no therefore the minimum wage law forgetting about its effect which is an economic issue but just from a libertarian point of view the minimum wage law should be abolished which would put me as a right winger and legalizing drugs as a left winger so as i say libertarians are unique we are sui generis with different than all the other political philosophies but we have here rigidly to this idea of non invasion non-aggression ok and then you mentioned minimum wage laws and this of course ties into economics so i want to know because many people associate libertarianism with austrian economics do you have to be a libertarian to be an austrian economist or to subscribe to those principles do you have to be an austrian to be a libertarian or can you be one without being the other how do they relate or or

differ the two are totally different libertarianism is a theory as to what should be it's a normative theory that says what's right and what's wrong. you can omics as a branch of economics or is better school of economics has nothing to do with what should be it's rather what causes why. so when i say that the minimum wage laws should be repealed i'm speaking as a libertarian because i'm talking about what should and should not be but if i were to talk about what are the effects of a minimum wage law and namely that it creates unemployment for unskilled workers a lot of people think the minimum wage law is the law under wages and the higher it is the higher wages go but the truth of the matter is that the minimum wage was more like a barrier and the higher it is the harder it is to jump over and if it gets real high hard to get a job. so that would be an economic thing so one could be an austrian economist or an economist i think most economists would agree with that and without being

a libertarian for example you could say it's a little weird but you could say look the minimum wage law will create unemployment for unskilled workers particularly blacks or on their unskilled workers but i hate them and therefore i say with a minimum wage because i don't want them to be unemployed so i would be a bad libertarian but a good austrian economist or a good economist so the two are subtly different but very importantly different one is a positive thing it's a descriptive it explains reality the other is a normative it's pretty scripted says what should be and what shouldn't be but the fact that the two seem to go so hand in hand is that just because many of the same tenets or so are shared or do they go together necessarily speaking. well the two people that converted more people to libertarianism than anyone else is on ran and ron paul on ran with a book atlas shrugged which came out in one nine hundred fifty seven and still selling tons of books and ron paul who we all know has he goes to

a college campus and he gets ten thousand kids to hear him. both of these people were libertarians on rand would reject the label but she certainly favored virtually all of the terrorism and ron paul is a libertarian so i think that the reason people associate the two in their minds is because the two people who have converted more people to both the austrian economics and libertarianism combine both but it need not be it's logically possible for one to be a libertarian and not an austrian or to be an austrian and not a libertarian but as a matter of fact there's a high correlation i think virtually all austrian economists that i know of nowadays are libertarians and of all the economists who are libertarians i would say ninety percent of them are also an economist ok so a lot of crossover there so now let's get into a few of the debates because one that we had in our editorial meeting this morning when we were discussing your interview was the issue of the corporation as an

individual we know the supreme court ruled essentially that a corporation is a person libertarians are defenders of individual rights so isn't there a conflict and a hare and practicing unbridled law is a fair economics when corporations have the same rights as people. well corporations that wouldn't be an individual they'd be a group of stockholders in the corporation and what they're what they are is a limited liability corporation so if you deal with me let sam wal-mart and i say that the contract is such that if you have any problem with me you can sue me but you're only able to get the money that's in the corporate till you can't come after my private fortune and if you don't want to deal with maybe. i don't deal with me so i think it's just a contract i don't think it's a special privilege i think corporations are perfectly compatible with the libertarian ethic look i suppose you and i form a corporation and now we sell groceries the people only put

a little sign up on the top of our store and says if you deal with us we're a limited liability corporation you can only sue us first for the amount of money that we've got in our in our corporate till and if you don't like it go to someone who isn't a corporation and then you can sue them for all the money that they have in their personal fortunes so i don't see any in compatibility between making this sort of a contract with people and that's all that a corporation is a corporation doesn't have any special privileges it's just a certain contract then and contracts between consenting adults or capitalists x. between consenting adults are certainly compatible with libertarianism but the way corporations are today and the united states is that not how you would see corporations as being treated. well there are two kinds of corporations good corporations and bad corporations and there is two kinds of people good people and bad people and the good people are those who surprise surprise and here to the non-aggression principle and the others are the ones who don't and the good ones i

call it here in civilization there capitalism in the other ones i call it here and sort of crony capitalism bailouts getting money for detroit getting money for wall street getting money for you know you're too big to fail so we give you we shove taxpayer money down your throat now i don't single out corporations if the government bails out an individual that would be improper that would be a crony individual and i don't make any real big distinction between a crony corporation and a crony individual i put them both on the crony side and then i don't make any difference between a good capital corporation and the good capitalist individual i put them both on the good side so the the dividing line is between crony and laissez fair or not between corporations and individuals i think it's a false dichotomy to look at the individuals versus the corporations and that is a fear of capitalism which libertarians favor and which austrians say have good offense is actually do with you sink or swim and you can and walter block we're

going to hear so much more about this after the break about sinking and swimming and the crony capitalism alter block author and chair of economics at loyola university of new orleans there is there is still much more to come with our gas you do not go away he mentioned bailouts i want to talk to him about g.m. he wants the government to lose more money on that one there's so much more but first your closing market numbers.

like millions of americans i've lost thousands of dollars in retirement funds and i haven't had as bad as many that's not just about the them it's about me to. me ma'am. ya got. some. missing. jeev. needed. now. since this is my film i get the last word this financial crisis will not be turned off like a light sleep. welcome

back i don't want to waste any time i want to go straight back to our guest who is talking to us today about libertarianism and austrian economics he is representative of both he's walter bloch chair of economics at loyola university new or a lens also an author and i want to get straight back to this because you mentioned

too big to fail you mentioned bailouts let's talk about g.m. because today there's a story out that just reminded me of how screwed up things are you have g.m. bailed out fifty billion dollars by taxpayers now they're getting sick of being called government motors they're being sick of dealing with not being able to fly in their corporate jets or having pay restrictions so they want to buy back some of those shares from the government but in doing so it would amount to if they bought back all the shares at this price at fifteen billion dollars loss for taxpayers so my question to you i know you would say you're opposed to bailouts is there a libertarian austrian inspired solution to winding down too big to fail and ending corporate welfare which seems to have to do with the entrenched interests in washington well it's wrong paul said about iraq we just more then we can just march and say to send the bill amounts we just more. let's first go cold

turkey and not bail out anyone else and then let those bailed out companies sink or swim i don't see any reason the bailout anyone in the laissez faire capitalist society of the just society the only way you make money is by satisfying consumers are getting a better product at a lower price but to get a bailout is to take from customers in the form of their role as tax payers what they were unwilling to give to you in their role as consumers. general motors should have gone broke chrysler should never have been bailed out years ago and never should have been bailed down then oh and if we drive japanese cars or the swedish cars. who cares i mean we i mean mozart was an american we we listen to mozart what should we do bail out there or give a subsidy to american composers when we have a mozart it's very silly and it's really a violation of rights and what you're doing is taking money from rich and poor and

giving it to rich people who are associated with. the auto companies and general motors and others chrysler and i think it's a shame and disgrace and the people who did it ought to be no one and if we have a libertarian nuremberg trial now i'm not saying that they're nazis but i'm saying if libertarians ever get into power we might look askance at the people who gave the bailouts because that was just taking stolen money from taxpayers and giving it to people who never should have gotten the money and and if we're serious about no fat when we should apply and so when government does it too and what about with corporate welfare is there any kind of workable way to unwind that because to me it seems to be very much related to the entrenched interests in washington of the lobbying campaign contributions the bureaucracy that gets built up around these industries and that all have a presence in washington well there are three kinds of welfare there's corporate welfare there's the nest the fair to supposedly poor people and then there's the

foreign aid namely international welfare and all three are just the horrendous things they they don't they're not efficacious in the they don't lead to good conclusions and they're a violation of rights it's look if i come up to you with a gun and i say give me a money and you protest and say well that's against libertarians i thought tut tut i'm going to give it some poor person it doesn't make it any worse than then and then in the other way so what when the government has welfare whether it's corporate welfare individual welfare frost sensibly poor people or foreign welfare it's just wrong and welfare has very very deleterious effects. what happened you know the is this experiment if you throw. frog in the boiling water it will jump out its metabolism such that it will jump out and if you put a frog in cold water and you heat it up gradually it'll stay there and get like us boiled to death yeah well well slavery was like boiling water with regard to the

black family. after the slavery was ended in one thousand nine hundred eighty five the black family was almost as intact as the white family all through the eight hundred seventy s. and eight hundred eighty s. black people were trying to get together and in the one nine hundred ten census the rate of family formation between whites and blacks was just the different a little bit in favor of widespread was pretty good then we had welfare and the black family is not only breaking up but filling the form of the first born i think this is something like three quarters of the. black three corps a black kids are raised in an intact family and intact families are very important an intact family means that you have less criminality less drugs less prostitution let school leaving all sorts of things and the welfare just undermined the black family so your welfare that's split let's back up a second let's back up a second so you're suggesting that welfare was the problem in the african-american

community because i'm sure there are many people that would very passionately disagree with that and argue that there isn't an episode stance or enough to help people that have the odds are stacked against them in that regard well you're quite right there are people who would argue against that but i beg to differ from them the statistics are clear until one nine hundred sixty five on welfare really got going the black family was pretty intact but as troels murray in his book losing ground demonstrates i think very well what welfare did is made a young woman who was pregnant a much better offer then the young man who impregnated her in effect she married the state and it's not just the black thing in sweden where there are mostly white people in. have welfare of the family is becoming an intact there too so it's not a black white thing is just a. an indication of the vicious the praise and immoral effects of welfare and you know everyone says it sounds good you know it sounds like motherhood and apple pie but it breaks up families and families are very important for the economy monetary

policy is to win getting rid of the fed is also and getting rid of the minimum wage and unions are too but a good family formation is. an indication a precursor to economic welfare as well so we should get rid of corporate welfare the mess the welfare for poor people supposedly and and also foreign aid and what we should do to help the black family is first of all legalize drugs in terms of african-american community they are disproportionately in jail or dead due to shootings with each other ron paul is accused of being a racist and yet he is the only one not obama well gary johnson also now who is relevant to the race the libertarians are the only ones who are saying we should legalize drugs and if we did an awful lot of young black men wouldn't be dead who are now dead in an awful lot of them would be out of jail because they all they did was buy and sell stuff and buying and selling is part of free enterprise only they

bought and sold them marijuana and then i'm sorry professor block we're out of time i do appreciate you sharing sharing all of your views i also want to express our audience that i don't want to generalize an entire population are raised in terms of what we're talking about but thank you for bringing up all of those perspectives and sharing them with us today that was walter block author and chair of economics at loyola university in new orleans thanks for having me on your show thanks for coming. all right let's wrap up with loose change let's talk about the donald dimitri because we've heard him say a lot of crazy things but he may have said something that we can get on board with

that on c m d c's closing bell last week he uttered some interesting comments regarding quantitative easing. the numbers or forces being created. people like me made better through typically good for the economy. what do you know is the donald saying i think he went on to talk about how it benefits the rich people i mean this is something that i could get on board with when it comes to the donald who we've heard say so many crazy things with birth or ism and things like that but does the abhisit own kind of vested interest to thank you i don't know what it is besides i really don't know i was nervous of the going to for him there's always something in it for this guy plus he's i think that the thing is he go down as he goes become too big to fail and i mean good point that's kind of a greeting point leaving it to the rest of us if you generally do so that's against his best economic interests by speaking out about his interest and i think it's as though his ego has gotten so big you know you can't help himself yeah but easy

money is good for someone like donald trump because he's got a real estate and that's going to you know it's going to it's going to help him and he was saying that maybe this is political because i'm pretty sure that he's not obama supporter maybe trying to take to sock it to another let's move on to meet your kids this is a really good story i want to get to debt collectors they usually make news headlines for all the wrong reasons take a look. abusive debt collectors threatening to put people in jail for debts that it turns out they do not owe the federal department of crime prevention is going to come near house where your family's house and the rest you unless you pay a debt that you don't really know the other taking advantage of people who are under duress trying to get extra cash out of people's wallets in the emergency room getting people to sometimes pay cash. take out a credit card at a time in their life when they're not thinking straight. but now essentially we can add this story to the list it's horrific debt collectors are sending out warnings borrowing the letterhead of the local district attorney's office prosecutors and

giving them the go ahead saying it allows us to go after bigger crimes and they got a little bit of a kickback for the fees that the debt collectors collect this pacifist a collusion between the district attorney's office and these horrible debt collectors were i was i was i'm not i'm just doing a logo no they're not stealing they are allowed they're allowed to do it why i do with these guys should be there should be oracle earnings are there and so that i really feel that way but i don't do everything not literally ok got collaterally record all right but they're ok dimitry thank you so much for watching be sure to come back tomorrow and in the meantime you know you can follow me on twitter and lauren lester give us feedback at youtube dot com and have a great night. well

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