How does government intervene in the economy? What are the consequences? What are the motivations behind passing these interventions? The lives of the people involved explain why they do these things.
The American Economy and the End of Laissez-Faire: 1870 to World War II
Presented by Murray N. Rothbard in Fall 1986 at New York Polytechnic University. Recorded by Hans-Hermann Hoppe.
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The railroads experienced both enormous growth and enormous government intervention. Land was closed off from settlement, causing farmers to oppose the privileged railroads. Markets were skewed. Waste and inefficiencies were high.
Economics is a constant fight between the market and the government. The railroad cartel did not work against the free market even with ideal conditions. Airlines were tightly regulated until the small airlines began to compete in quality. Deregulation followed.
Rockefeller's Standard Oil created a monopoly in kerosene refining by buying others out. A huge drop in the price of fuel followed, benefiting consumers, due to production efficiencies. Rothbard then discusses pietists, prohibitionists and the big political shift of 1896.
When pietists shift to the Republican party, they form the progressive movement of 1900-1920. Rockefeller- McKinley forms alliances with power brokers like Kuhn, Loeb & Co., and Harriman (versus the Morgans).
The Sherman Act outlawed restraint of trade. The Clayton Act added to that. Anti-Trust hysteria came in the 1940-50s. Whatever you did would be considered monopolistic. The charges didn't come from consumers, they came from whining competitors.
The progressive period saw a re-alliance of church and state - secularized extreme Pietism (Protestant sects) with government as savior by intervening in markets. The Pure Food and Drug Act was a prototype for the whole progressive movement toward purity of body, mind and soul.
State dominated cartels used intellectuals as apologists for the government. Big unionism was to transmit orders to the working class. Public utilities were government monopolies for fifty year terms, run without any checks by the public. It is the function of government to run everything.
Progressive movement came in in 1900 to eliminate political parties. Technocrats and bureaucrats take over political power. Rural versus urban. Eliminate mayors, eliminate voting altogether, have appointed bureaucrats only. The Progressive party was created by JP Morgan interests.
The Federal Reserve was created in 1913 by Morgan men to cartelize the banking system and limit competition. This is fractional reserve banking rather than 100% reserves. Rothbard thinks it is fraud. It increases the money supply in an inflationary manner by creating money out of thin air.
Where did Benjamin Strong - head of the Fed - come from? Rothbard continues to reveal the individuals who shaped our world and wars. Morgan's empire brought us the irrational and useless WWI. Foreign policy today rests upon this Morgan outlook.
Public housing, planned cities, government power plants, and coerced unionism were all part of the great cooperation between corporations and government through WWI and WWII.
With WWII, Morgans get their war in Europe; Rockefellers get their war in Asia. Both sides are happy. Rockefellers take over foreign relations and create the Trilateral Commission, while electing Carter President in 1977.
