Scott Horton Show - Just the Interviews - 4/22/22 Ryan McMaken on Capitalism and Peace

Episode Date: April 26, 2022

Scott talks with Ryan McMaken about free markets and free trade. They begin with a discussion about the role of the Mises Institute in the push for sound money. Scott then asks McMaken about the nuances of debating capitalism vs. socialism while living under a mixed economy. They then discuss the changing role of the United States in the world. McMaken does believe a “rules-based international order” existed after the fall of the USSR. But that the U.S. destroyed it by invading Iraq in 2003. McMaken argues that the best path forward is a commitment to the classical liberal ideals of free markets at home and nonintervention abroad.  Discussed on the show: Scott’s Kennedy Appearance  Mises.org Creature from Jekyll Island by G. Edward Griffin “The "Rules-Based International Order" Is Dead. Washington Killed It” (Mises Wire) Ryan McMaken is a senior editor at the Mises Institute. He has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre. This episode of the Scott Horton Show is sponsored by: The War State and Why The Vietnam War?, by Mike Swanson; Tom Woods’ Liberty Classroom; ExpandDesigns.com/Scott; EasyShip; Free Range Feeder; Thc Hemp Spot; Green Mill Supercritical; Bug-A-Salt and Listen and Think Audio. Shop Libertarian Institute merch or donate to the show through Patreon, PayPal or Bitcoin: 1DZBZNJrxUhQhEzgDh7k8JXHXRjYu5tZiG. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Free access ends August 24th. Visit Ancestry.ca for more details. Terms apply. All right, y'all, welcome to the Scott Horton Show. I'm the director of the Libertarian Institute, editorial director of antire war.com, author of the book, Fools Aaron, time to end the war in Afghanistan, and the brand new, enough already, time to end the war on terrorism. And I've recorded more than 5,500 interviews since 2000. almost all on foreign policy and all available for you at scothorton.4 you can sign up the podcast feed there

and the full interview archive is also available at youtube.com slash scott horton's show aren't you guys on the line i've got ryan mcmakin he is senior editor of the meases institute website over there at meases dot org welcome back to the show ryan how are you doing i am great it's great to be with you I bet you're thrilled. I finally said your name right. Yes. Well, I don't hold it against you. It's okay. We're cool. All right, good. Virtual fist bumps. All right. So listen, I was on the TV, the Kennedy show, where I get interviewed from time to time, like your colleague, Jeff Dice, seeing him on there. And the subject came up about price inflation and how not only is price inflation,

inflation bad, but the reason for it is so to make the wars seem free. But then that's what causes the boom and the bus. It was funny. I later got to see, because you can't really see the panel while you're talking, just looking into the camera, you know. But later I got to see the crazy, twisted, head-shaking, funny, cognitive dissonance expression on the face of the Democrat lady. When I was saying, that's why we need a hard gold money, a hard money, gold standard, so that we can't have these wars anymore. And she's going, what? So that was fun. But then the point is Kennedy then says to me, she says something like, oh, so the gold standard and it's opposite the terrible paper money thing we have. Where would people learn about that?

And I said, well, I got my own little old Libertarian Institute. That's true. But the one and only answer to that question is meases.org, the Ludwig von Meeses Institute. You guys, the Austrian School Economics headquarters there. Mises.org. You're the only ones, really out of everybody who understands money at all, and that includes all the classical capitalist economist and even the Chicago school guys. But is that really right? What's so smart about you anyway than if you know it better than everyone else, like in my claims? Well, it was very kind of you to plug us on the show, and I think you're

right, though, right? We're really the only research center that has, long focused on money and has really made business cycles, business cycle research, understanding the role that money plays in that a real focus of a lot of our research. And certainly our readers figure that out. If you look at which of our articles are most popular, it tends to be nowadays inflation articles and boom and bust articles. And it's really just at the center of how modern economies work. because now since Bretton Woods was put into place in the 40s,

this is the system in which the dollar basically became the basis on which the international monetary system was put. And then when gold was taken, gold still had a small role in international exchange up until 1971. And then that disappeared. And then it's not a coincidence, I don't think, that at that time the real standard of living, that is the real purchasing

power of your dollar in relation to the cost of goods has declined that the cost of living in real terms has been going up since that time, the ability to save and a variety of other economic factors

related to wages, saving, economic stability. All of these have deteriorated far worse since that time. And part of that reason was erasing the role of some commodity that actually anchored the value of money so that you couldn't just print money willy-nilly. Yes, the U.S. was printing money before that time, but it didn't have free reign to do so because the U.S. still had to make good on international obligations in gold. And the reason Nixon took the U.S. off of that was so that they could just print money nonstop all the time as much as they wanted.

Now, some restraint was built in, but over the last 20 years, especially since 2008, 2009, and accelerating even more so in 2020, the amount of money printing is unbelievable. And so much of what people blame capitalism for in terms of declining real wages for many groups of people, the difficulty in saving, the fact that the ultra-rich have become fabulously wealthy at much faster rates than ordinary people are building their own wealth. this is all closely tied to the fact that money is now totally in the hands of government, and you can just create more of it at any time. Yeah. Well, you know, I was just having a similar conversation with Mike Swanson earlier about this and about how essentially all of this is just a huge advertisement for socialism. I mean, as I know you know from living at least part of the time on Twitter and so forth,

you see how they call this late stage capitalism. this is the markets in practice is exactly this now of course for every libertarian we go no no it's the congress that created the fed that has the police power that does the things that it does and then they say yeah it's all capitalism just like when we say when Stalin was stealing grain from the Ukrainians that's communism you know this is capitalism with a central bank of course they had to take us off the gold standard to print money. Otherwise, how could they keep us at war? Which is also part of capitalism is government contracting. Again, it's certainly not the kind of thing that we praise at our libertarian institutes, but it is part of what happens. When you have a state

at all and you have big businesses, they become rent seekers. And the number one rent seekers of all, other than I guess the bankers themselves, are the arms manufacturers. And we can see how, as my friend Adam puts it, it's the flea wagging the dog there, where you have these weapon salesmen who are looking for a policy. And if it can't be Russia and China now, we'll go to the Middle East for a while.

And then when that runs out, we'll go back to Russia and China again. And as long as we're still getting rid of Lockheed products to the captive market that is the Pentagon. And I'm not like, you know, piling in with the commies here. I'm just saying, you see how easy it is,

for people who are just more or less generally speaking on the left half of American society that living through this same time that we are now, this is pushing them further and further to the left instead of making them hard money libertarians like us because they don't see that, you know, that kind of unique point of view that we have, that no, no, no, no, no. It ain't the capitalism that's done this. It's the statism intertwined with it that has, which, you know, to them, I guess, would be even a distinction without a difference if we made it. It sounds like an excuse. Well, since we live in a mixed economy, and every country is a mixed economy to some extent, right? You have to use actual arguments, observations,

maybe even some statistical stuff, really, to really draw out some of these correlations and to really look at what helps an economy become better, what helps it great? What helps it grow what helps regular people pay their bills. And so as long as you've got an economy that has both socialistic elements and capitalistic elements coexisting at the same time, which certainly describes our economy, then both sides are going to be able to claim that the other side is the bad part of the economy. Now, we of course would argue that the good part of the economy, the resilient part of the economy, the economy that actually makes it possible for regular people to have a decent standard of living is, of course, the market part of the economy.

And you used to be able to point that out pretty easily. You would look at the part of the world that was avowedly socialist, Eastern Europe, the Soviet Union, China. These places clearly were more socialist than the rest of the world. I mean, not only did they embrace the title, but we can just look at how much of those economies were controlled by a central authority and resources were moved around in order to allocate resources politically, which is basically the definition of socialism. So anywhere you looked, you could see that those countries were clearly poor, clearly worse off.

They were more polluted. Human rights were violated even more so than in the West. And you said, hey, look, nobody wants to be like that. And it worked to a certain extent. But because, of course, there's always those elements, both capitalist and socialist in all of these economies, you can still just point to anything that was bad and say, yep, the capitalist did that. And then, of course, the argument is always, well, the Stalinists, they just did socialism wrong, or the Venezuelans, they just did socialism wrong, and that's why people ended up poorer there. But what I like to point out is that, and unfortunately, some libertarians actually make this mistake. Anytime somebody points out something that's wrong in the economy, they say, well, it's not a purely capitalistic economy.

So until we reach that and there's any socialistic elements in the economy, well, then that just makes it impossible for us to judge how good free markets are. But that's not really true at all. A free market person should never argue that you need pure market capitalism in order to reap the benefits of it. And we can see that anywhere. We can simply see that economies that have more market freedom are richer, that people are better off, that there's even generally more respect for human rights in those cases. And so unlike the socialists, you don't need pure socialists. You don't need to somehow cross over to that dictatorship of the proletariat.

It doesn't have to be, quote, unquote, real capitalism. Just partial capitalism will save your economy from collapse if you're currently barreling toward a famine or something like that. And we saw that at the end of the Cold War when a lot of these economies were still functioning on price controls and heavily socialistic economies. And they had massive food shortages and huge standard of living problems. The more they embraced a market economy, the more they embraced a market economy, the more standard of living went up. And so you don't have to go all the way over. You don't need some libertarian paradise to do better. You just need to start introducing some market elements and then you'll just be better off. Yeah. And I could see how if somebody leans left, it sounds sort of the

same kind of excuse making. Oh, that's not real communism. That's not real capitalism. But there's a real argument here about and each and every time. I don't think it's just confirmation bias because it's my confirmation and my bias. That, yeah, no, you can see. where the distortion is almost always the government's fault. And by that, I mean, some businessman bribes it, right? And it's not like all businessmen are angels and it's the government employees who are all bad. They all play their part in it. But I mean, this is what's unique about the libertarians, right? Is we're not conservatives. And our free market approach is not a conservative one. A conservative one is more like the bankers and the different major industrialists climbing

in bed with the government a hundred years ago to preserve their privileges at the expense of everybody else. And by privileges, I mean, things they are not due that are, you know, granted to them by state power. It's the same sort of thing. I mean, the ultimate example, right, is Nazi Germany. That's all the way to the right where it's, you know, or in, or fascist Italy, where you got the richest, most powerful industrialists support the right-wing party and the right-wing parties control over industry because they also have that much influence over the party back again, or at least that's the gamble they're making, is to go ahead and climb in bed with the state. In other words, a lot of the times there are no bigger enemies of real free market capitalism

than businessmen themselves. They're as bad as any socialist a lot of the times. Yeah, the conservative, and it's such a label that's unfortunately very confused. right because very broad yeah right what's a conservative in america is very different from what's a conservative in western europe and obviously what's a conservative in 1990s uh russia would have been a communist right an old Stalinist right uh and it's all very confusing but yeah in the i think in the in the american idea the the conservative is has become very much at home with the idea of using state power to achieve conservative ends and certain cultural ends or certain economic ends.

I think this betrays a certain lack of understanding of how economies work and the idea that you can somehow centrally plan an economy, that you can have wise policy makers who will figure out where you put these resources and that resources and that this will somehow lead to more prosperity. That generally ends in grief when you try and manage an economy from the center. And we saw that, of course, throughout Eastern Europe during that period. The idea was that you had a bunch of smart people who can figure out what it is that everybody needs and what everybody needs to be doing for a living and what the most quote-unquote efficient thing is,

and then it fails miserably. And some conservatives still haven't figured that out because I can continue to see in their publications, the idea of if we just get the right people into these positions of political leadership, then we'll be able to use the power of the state to make family. more secure, or to protect institutions that we as conservatives value. But apparently never thinking a couple steps ahead, the case in point being that public schooling was invented by conservatives. It was invented in order to beat the foreignness out of immigrants, to teach anti-Catholic religious

values, and to generally spread what were seen as conservative cultural values. And guess what? They didn't. They lost control of that institution. And now probably public schooling is the most anti-conservative institution in America today. And they should have thought ahead. They should have focused on private education and keeping it so and decentralized. Hang on just one second. Hey, y'all, the audiobook of my book, enough already. Time to End the War on Terrorism is finally done. Yes, of course, read by me. It's available at Audible, Amazon, Apple Books, and soon on Google Play and whatever other options there are out there.

It's my history of America's War on Terrorism from 1979 through today. Give it a listen and see if you agree. It's time to just come home. Enough already. Time to end the War on Terrorism, the audiobook. Hey guys, I've had a lot of great webmasters over the years, but the team at Expanddesigns.com have by far been the most competent and reliable. Harley Abbott and his team have made great sites for the show and the Institute, and they keep them running well, suggesting and making improvements all along. Make a deal with Expandesigns.com for your new business or news site. They will take care of you. Use the promo code Scott and save $500. That's expanddesigns.com.

Hey guys, Scott Horton here for Listen and Think Libertarian audiobooks. As you may know, the audio book of my new book, enough already. Time to end the war on terrorism is finally out. It's co-produced by our longtime friends at Listen and Think Libertarian audiobooks. For many years now, Derek Sheriff over there at Listen and Think has offered lifetime subscriptions to anyone who donates $100 or more to the Scott Horton show at Scott Horton.org slash donate or to the Libertarian Institute at Libertarian Institute.org slash donate. And they've got a bunch of great titles, including Inside Syria by the late great Reese Ehrlich.

That's listen and think.com. Book club on Monday. Gym on Tuesday. Date night on Wednesday. Out on the town on Thursday. Quiet night in on Friday. It's good to have a routine. And it's good for your eyes too.

Because with regular comprehensive eye exams at Specsavers, you'll know just how healthy they are. Visit Spexavers.cavers.cai to book your next eye exam. Eye exams provided by independent optometrists. All right, so a couple of things here. I mean, one thing is, you know, when I was a kid in the 90s or, you know, late teens, early 20s, I was a creature from Jekyll Island guy, and I didn't even really realize how often he cited Rothbard and Mises and friends in there. And, in fact, I remember seeing Mark Thornton's endorsement on the back and thinking,

huh, I wonder what the Ludwig von Mises Institute is. it sounds like a bunch of economists who wouldn't be interested in my kind of politics, you know, I don't know. It wasn't for years until I figured out that, oh, this guy, you know, anti-war.com is Lincoln to Lou Rockwell.com and he's the chair over at the Mises Institute, and that's that guy from the back of Jekyll Island and this, you know, kind of put two and two together there. And then one of the things I loved immediately about Lou, because, you know, I did spend, I was never a culturally right-wing guy, but I always read a lot of John Bert stuff. You know, William Norman Craig and Ed Griffin himself. There's a lot of good stuff there, you know.

But then I read Rockwell. One of the first things I read by Rockwell was him saying that the right-wing is all wrong about China. And we should not have tariffs on China. We should not have an economic war against China. And Lou is a pretty conservative kind of a character, obviously a hardcore libertarian in his politics. But he's a right-leaning sort of a fellow, and he's saying, yeah, yeah, I know they're chai-coms, but they ain't near as bad as they used to be, and there's so much reason to just completely reject the right-wing even take on China, and especially on trade with China. And I wonder if you could talk a little bit about that, because that's something that, you know, certainly distinguishes Missessian libertarianism

from the right-wing consensus, which a lot of the times, they can. sound like us, especially when Democrats are in power, they sound very libertarian on economics and constitutionalism and stuff a lot of times. But this, to me, seems like a pretty important dividing line. Yeah, I think what really does distinguish the Mises, Rothbard, Rockwell people, is their embrace of the hardcore classical liberalism vision. So we're talking Richard Cobden, talking Bostia. We're talking about these Western Europeans from the 19th century, and we carry on their tradition now, which was always peace and free trade, and how much of really the free market view is really centered around peaceful international relations as well. And at the core of that

was always free trade and also anti-militarism. And this was simply just par for the course, it was a core ideological part of the thinking of liberals in Western Europe. This was true in France. This was true in England, where a lot of gains were made in terms of free trade. And a key part of making those gains was also taking the position that foreigners were not the enemy, that they were not some sort of special breed of human who couldn't understand you, and that by working together with foreigners to improve their standard of living, that this somehow, this was some sort of zero-sum game that would make you worse off. the reality is totally different, is that the fruits of free trade and peace were always so great

in terms of building relations between different peoples and, of course, peace itself always is the friend of gains in the standard of living in human rights, in people being better off economically, quite contrary to the fantasies of the Marxists who thought that capitalism somehow required imperialism to expand markets. You don't need that at all. free trade accomplishes that and peacefully so that the real economic gains are in actual things that you need and which build up society, unlike weapons and bombs, a peace-based trade and foreign policy builds up things like food, agriculture, manufactured goods, stuff that actually improves the lives of people and doesn't destroy things.

And that has always been a core part of that classical liberal vision, which of course definitely distinguishes it from especially post-World War II conservatism in America, which has always been heavily cold war-oriented and very much into an activist and interventionist foreign policy. And Wayne's back and forth, waxes and Wayne's back and forth on protectionism and all of that, which brings us to this piece that you wrote about the rules-based international order is dead. Washington killed it. And so I wonder to what, degree that's just a euphemism for the American Empire as you see it. I mean, that does include sort of the status of, and this is kind of the root of our whole discussion here, right?

As I, you know, forget the old days, but just since the end of the Cold War, we haven't had libertarians in power. We've had liberals, neoliberals, Bill Clintonites, Joe Bidenites, right? And so instead of just having, you know, a Rockwellian policy toward China, we have all of these trade agreements with the World Trade Organization. We have, of course, NAFTA, and now it's been rewritten, I forgot the new name of it, for North America here. And you have, what was the common market is now the European Union super state with its, you know, NATO standing army, and it's still called NATO so that America is the dominant force in Europe still. And then, so you have more and more, as you have these, you know, political blocks. Again, this isn't,

Ron Polly in Foreign Policy. It's a Clintonian George Bushian one. And so you have all these power blocks along with the trade blocks. And, you know, I don't know if you saw this, but I read this piece in, I think it was Bloomberg. I was saying this is the end of the second great age of globalization. And World War I ended the first. And the, you know, the second one began after the second World War. And it's coming to an end now too. And we're going from globalized trade systems. to the West versus the East and with, you know, back to the non-aligned third world countries, you know, as the, you know, playing the game in between and whatever, but that it's even, I think the way they were putting was it's even worse than the Cold War era, essentially. You're going to have so much more of the world

broken apart from each other. All the barriers going up between us and China and on and on like that. But anyway, so, and all this, of course, is part of the consequence of the war going on in Eastern Europe. But anyway, so I just wonder what you think about all that massive, complicated stuff. Well, I've given a lot of thought to it, like you, right? Is that what would this new Cold War world look like, right?

Cold War II. And I disagree with the idea that it would be worse because the ability of the U.S. to dominate a bipolar system is much less. But let's rewind a few years, right? when I had the idea for the article about how where's this rules-based international order? I don't see it existing anywhere, and I don't see the United States ever adhering to it. To a certain extent, it's just borne out of the fact that I'm an old geyser now of 44 years, and so I can remember what the politics were, the international politics were, in the 1990s.

Now, I think there was a time when it might have seemed plausible that there was a rules-based, international order. And this was back in the years following the end of the Cold War. So we're talking about 91, 92. The Russians were very weak. The U.S. was really in its unipolar moment where it really dominated the international scene. And there was this constant refrain of multilateralism. And this was a big, big deal in both Bush won, but he didn't have much time to work with it, but especially in the Clinton years, where everything the United States is going to do now in the international sphere is going to have the imprimatur of the UN, and it's all going to be multilateral, and it's all going to be based on international law. So when you saw

things that were policies in reaction to say the Yugoslav wars, a lot of effort was given to getting international organizations to sign on to that. And so I think you could maybe claim that, and I would disagree with this, because I think it was in the end really U.S. dominating the system and getting what it wanted, but I think you could claim at the time because you did have at least a rubber stamp from a variety of international organizations when the U.S. was involving itself in Serbia and in Kosovo and imposing those trade embargoes, those starvation embargoes, really, on Iraq

in the 1990s. And I think the U.S. at the time could claim, oh, yeah, this is all rules-based stuff. Look at how most of the world is supporting us, and we have the backing variety of organizations like the U.N. But that all came crashing down in 2003,

because at that point, it became clear that the U.S. was not going to wait for approval from international organizations like the U.S. in order to do whatever the heck had wanted. So the U.S. made up its mind. It was going to invade Iraq, and it made up a bunch of stuff about weapons of mass destruction and at least domestically claimed that Iraq was somehow connected to 9-11.

I think they knew that the world wouldn't be duped that easily, so I don't think they tried that outside of the United States. But nevertheless, that was basically the claim. And they, of course, did not get the sort of international support they were. wanted. And so then they just started villainizing the countries that wouldn't support the U.S., like Germany and France, and were told to embargo French goods. And the people we do support are like the Ukrainians in the polls. See, those Ukrainians in the polls, they understand the value of invading sovereign countries and occupying sovereign countries. And they supported

the U.S. in that. So we talked about those countries were new Europe and not like useless old Europe, like France and Germany. So U.S. was just rewriting the rules. It was completely forgetting about the rules-based international order that it claimed was so important during the 1990s. And that was it. It was over at that point. It became clear to everybody. The United States just invades whatever countries it wants, and it says nothing to do with any sort of rule. And so I think that's what the world we're living in now. And so it just makes it silly for the United States then to claim that, oh, look, the whole world was committed to following all these rules to international law. And here goes Russia. They ruined.

everything. The reality was that Russia was just behaving like the United States and in fact using a lot of the same excuses like there's weapons, there's Nazis and such in Ukraine which are a threat to the Russian homeland so we have to preemptedly invade Ukraine

I mean there is basically they were reading from the US playbook on that and so the idea that they have struck this wound against this wonderful international law system that the United States created is just obviously nonsense. Yeah, but what about the good part of globalization, the globalization of trade, and how much of a hit that's going to take

and what that means for our future? And you have one minute because I've got to go. Well, the good news is that the United States no longer dominates global trade in the way it used to. I don't think the U.S. can create this whole, oh, we're not going to trade with Russia. That means the rest of the world isn't. I think at the end, the rest of the world, which doesn't buy that whole rules-based lie is going to keep trading with whatever countries they want to trade with. And so they're not going to just take orders from Washington. And so I don't think there will be this idea of first world, second world, third world, repeated again like had been during the first Cold War. Great. All right, listen, I'm so sorry we're out of time. I could talk to

you all afternoon. But I got to go. So I talk somebody else. Something else is going to talk to me. Sure. Thank you so much for your time, right? Yeah, no problem. Have a good one. All right you guys. That is Ryan McMakin. He is senior editor over at the Mises Institute, the Ludwig von Mises Institute. That's Mises.org. They're the only ones who got money, right? And check out this one. The rules-based international order is dead. Washington killed it. The Scott Horton Show, Anti-War Radio, can be heard on K-P-F-K, 90.7 FM in L.A. APSRadio.com, anti-war.com, Scott Horton.org, and liberal. libertarian institute.org.