Mandeville, LA – Exclusive Transcript – You have to have trust in the price system and the market. That’s really one of the great fields of unexplored study in mainstream discourse in the United States, the study of actual free market, the way markets work and the way the price system is the greatest regulator and distributor of resources in the history of man. Check out today’s transcript for the rest…
Begin Mike Church Show Transcript
Mike: Mike in South Carolina, you’re next. How you doing?
Caller Mike: How you doing, Mike?
Mike: All right.
Caller Mike: For your Memphis thing, or actually for your national thing, think about it this way. The next time it floods, those housing units they build will just be flooded out again.
Mike: Then we’ll get the joy of subsidizing the rebuilding process.
Caller Mike: Exactly, they can feel the pain, too. You made a statement about you’re for free trade. I’m trying to figure out why you like free trade instead of fair trade.
Mike: What’s fair trade?
Mike: That cannot and probably has not ever happened. If it did or it does, it is to the injury of one of the parties.
Caller Mike: If you have a trade deficit, then the other person has more tariffs supplied to them.
Mike: You can have a trade deficit and not have tariffs. What if we don’t grow coffee beans in this country and the only thing we import is coffee. Would we have a trade deficit?
Caller Mike: A good possibility, yes.
Mike: Would that be a negative or would you rather do without dry-roasted Folgers in your cup? The best part of waking up is Folgers in your cup, Mike.
AG: Mike, is fair trade coffee the type of thing you’re talking about? I remember in college the big thing was we’ve got to have fair trade coffee in the college bookstore. That ultimately didn’t seem efficient or cost sensitive. It didn’t seem to be the best value.
Mike: Are you talking about the hippy fair trade where we have to pay union scale wages to coffee bean pickers in Bangladesh?
Caller Mike: Hell, no. I’m talking just for trade deficit. I don’t want to see any type of government-dictated you’re going to drink Folgers and only Folgers because that’s the fair trade product of the day.
Mike: I think one of the best treaties you could read on the subject that you are bringing to the discussion today is “An Inquiry into the Nature and Causes of the Wealth of Nations” by Adam Smith. I believe it comes in several volumes. Smith answers your question. Smith also explores — by the way, Smith a great Scotsman. Smith also answers the question about, not the cost of labor, it’ll come to me in a moment. Smith answers the question about the means of production and about minimizing labor costs and what have you, how this ultimately produces net good….
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I’ll tell you another one. If you want to talk about fair trade and how things balance out at the end of a year, get Henry Hazlitt’s Economics in One Lesson. It’s a compendium of the great Henry Hazlitt who used to be a financial writer for either U.S. News & World Report or Newsweek, I can’t recall. It was assembled by the Mises Institute. Hazlitt’s book won’t take you very long to read. You can probably read it in an afternoon. There are at least two chapters that I can recall where he answers the question and the charge about trade deficit, some of the questions about labor and how if you build the machine, the guy who builds the machine benefits from the moneys he receives from building the machine, but if the machine is built to replace a worker who is previously doing the job and now is out of a job because the guy building the machine, that’s a negative. We can’t have that. That’s horrible. As Hazlitt writes, no, that’s not. You have to have trust in the price system and the market.
That’s really one of the great fields of unexplored study in mainstream discourse in the United States, the study of actual free market, the way markets work and the way the price system is the greatest regulator and distributor of resources in the history of man. [mocking] “You gotta have regulation. You can’t just have prices.” Prices are regulation, you nitwit. The price system is a regulation. The price goes up as the supply goes down. The price goes down as the supply goes up. It manages and allocates resources. Things cannot be built if you do not have the resources to build them. If you’re going to run out of something or something is in short supply, less of them will be built and they’ll cost more. The economic activity will then direct itself somewhere else, or there will have to be someone who will innovate. They’ll say: We don’t really have to build it that way, we don’t have to use that; maybe we can use this and accomplish the same thing. Now you’ve got trillions of decisions that are made on a daily basis, billions on an hourly basis that constitute a free market.
But this is not discussed in polite quarters, folks. You’re not allowed to talk about this because government is our friend. Only bureaucrats who have no training whatsoever, no expertise, and probably suck at whatever it is that they do in the private sector, which is why they joined the government to start with, only they can tell business people how to properly run their business, how to not kill people in restaurants. The price system could never do that. As candidate Ron Paul tried to drive into people’s heads — and of course he was rejected as I’m sure I will be, as well as Hayek, Mises, Rothbard, and Roepke, the great Austrian economic thinkers have all been rejected by the mainstream. Test our theory out. It is the only theory of economics that actually works, not only in theory but in practice. It’s the only one. You can read what Hayek or what any of those guys that I talked about, what they say, what they wrote about. No, you don’t have to be an egghead and get into the formulaic of it. Just get into the principle of it and you see that the price system works.
In the United States, we have moved away from the price system. We have moved toward, instead, the caste, the corporatist system. We have government that is paid to regulate. We have government that’s paid to set prices. We have government bigwig hotshots that don’t know beans who sit there and say, [mocking] “That product costs too much. We have to have the FTC come in and regulate that. You’re making too much profit.” There is no such thing. There is no such thing. Too much profit can only be made by someone who was selling something that people desired to purchase. In a free market, no one is making you buy anything. No one is telling you that you have to go to the store and buy that widget or you have to have that particular piece of fruit. You choose to buy it. You choose to go and buy the latte. You choose to go and buy the phone. You choose to go and buy the rake or whatever else it may be.
The country that supposedly values freedom so intimately and personally doesn’t seem to really care for it when it comes to the price system. [mocking] “That costs too much. Somebody ought to do something about that.” Well, maybe that’s what it costs to manufacture. Maybe the reason that price is set where it is set is so that individual or company can continue manufacturing it. Otherwise, if they were to lower the price without any means to reduce the cost of manufacture, then they wouldn’t be making products for very long. Gee, but that would be trusting in the actual free market to do things. We’re Americans. We don’t trust the free market. We talk a good game. We blab about it all the time. Do we actually practice it? When you hear about all these tax breaks and tax shelters and tax incentives and everything that are actually meted out to various industries on an industry-wide scale, do you think that’s part of a free market of exchange of goods and services that is only regulated by the availability or scarcity of something, do you really?
It’s like with energy. If you want to solve the problem with energy and you want to be like all the decepticons and media [mocking] “This country needs to be energy independent,” okay. Well, there is one surefire way that that can happen, and it’s not through a Department of Energy policy. The only way that could possibly happen is if government gets out of the way and the ingenuity, what George Mason called the genius of the American people, is actually allowed to come to bat. Then I bet you you’ll find all manner of delivery systems and delivery mechanisms to provide energy where they do not exist today. Or maybe they exist but they’re too expensive today.
End Mike Church Show Transcript