Jonathan Doyle

FULL TRANSCRIPT

📍 Well, Hey everybody, Jonathan Doyle with you. Once again, welcome aboard to the supply side podcast. Just a short episode for you. Just a couple of reflections on something that has been. I guess rumbling around the corridors of my mind. As I begin to explore this area of predictive classical economics and supply side theory.

Having come to it very late in life. I like to say I had the world’s worst economics teacher in the 11th grade. I missed the boat friends. I’m 47 years of age right now. And I wish that, uh, if I’d had that teacher then a really good teacher, I may have been way ahead of the curve, but maybe what I can bring here is some freshness, right. Coming into this space and encountering.

Economic theory later in life and the perplexity of it all just. Fascinating the idea of all these different economic models that everybody has, these different visions of how things really work. And of course, uh, you know, interestingly the desire for some economists to see it as a hard science, but then how can it truly be a hard science when you’ve got humans involved? Right. Humans in individual human decision-making.

So all this is new to me. I’m really enjoying the space and I hope as the podcast develops over time. We can keep bringing you these great guests we’ve had on recently. But, uh, hopefully I can just bring the, the freshness of these reflections. And the one that I want to bring today is really around the limits of government. So I’ve been thinking obviously with the, uh, the pandemic and the lockdowns and the arbitrary nature here in Australia this week has just been ludicrous. It’s just, I mean, you just like flipping a coin based on what any state premier of my American listeners. That’s like a governor is going to do at any given moment. And it’s, it’s.

Well, it would be funny if it wasn’t basically destroying the working class in the middle-class in the process. And driving this seismic polarization of wealth. It’s extraordinary. And I just have this deep inherent suspicion. Of overt amounts of control. And does that make me a libertarian, I guess it does. I see a role for government. And I’ve often said in previous episodes that if you look at Roth bards book, the case against the fed, he talks about the, the, the three.

Roles of government, which I memorized. And those three were. The, uh, national defense. Number two was the enforcement of contracts. And three was guaranteeing personal and private safety. So in terms of, you know, Property and personal safety. Three things. That’s all we had. And I think you’ll agree with me. The government seems to be somewhat interested in doing more than three things these days. I guess the question now is what things doesn’t the government do?

What things does it not have its prodigious snout firmly wedged in. So that got me thinking about the limits of government, right? Like it’s, it’s an important aspect of political economy of philosophy. Of economics. I want to share with you some interesting quotes. It got triggered by yesterday. I listened to an extensive interview on a real vision.

Between rail Paul and amylin, Roy. I’m Lynn. Roy is the head of global macro research at state street global advisors. Formerly is with credit Suisse and has had an extensive career over many decades. And it’s really quite an excellent interview. So if you jump on YouTube, got a real vision. And just do a search for the latest one between Amlin Roy and rural Paul. It’s fascinating.

Rand. It’s all about demographics, but a, and sort of micro demographics as well as That’s very, very interesting interview now. The reason I mentioned is because right at the end, you know, Amlin, Roy basically talks about this masters of the universe concept central bankers. And he’s like, I mean, this is a guy that’s really been exposed to it all. He’s operated at the highest levels with the IMF and all sorts of things.

He’s basically saying that there’s a problem that these literally use that language, these masters of the universe in terms of politicians and central bankers. Creating extraordinary. Outcomes in the world. And it struck me because, you know, he’s really been part of that world, but he was critiquing it.

This idea that. You know, this. I mean, I think Peter Schiff, might’ve said it at some point that, you know, at the fed, right? Yeah. You have these governors that 12 people that sit around once a month and basically direct the economic trade winds of the world. So it’s this idea that these, these 12 magical people that are so utterly brilliant.

That without them. You know, the economy can’t run, which leads to my other insight, I guess, that I’ve, I’ve often shared that the us fed has over 1500 PhDs on its books on staff. 1500 economics PhDs on their staff. Now I’m not, as far as gum famously said, I may not be an intelligent man. But you got 1500 PhDs in economics and.

You got your.com crisis. You’ve got your 2008 global financial crisis. You’d got so many things unfolding. I mean, you’d think with 1500 PhDs at the world would be, you know, A bit less of a debt crisis. Right. Anyway, it’s just an opinion. What do I want to do is share with you just a couple of quotes. One from the economist, Judith, Judith Sloan.

And the final one’s from another brilliant, radical Henry Ergas. So Judith Sloan was writing a piece on the, on, on government overreach. And what she’s saying is that we’ve got to this point in history where governments have convinced themselves. That they can create all sorts of outcomes. So she makes an interesting point to start where she says, you know, governments are very happy to claim.

You know, success when anything positive happens and she’s talking about COVID here, I’ll give you the direct quote. She says the willingness of governments to claim success when infection and death rates head in favorable directions. But to steer clear of taking responsibility of things go South is bound up in the pretense.

That governments can precisely control the outcome of this disease. That’s an interesting insight. Isn’t it? The minute there’s any kind of spin, any kind of success in the COVID space of the economic space. The governments are very quickly to, you know, foot on the accelerator, trumpeting their incredible brilliance.

But the minute something goes wrong. Have you ever heard the government say, you know, Really it’s on us guys. Sorry, we got it. We did it. It was us. We got it wrong. We made terrible decisions. Oh, yeah. I don’t know what we’re thinking, but say give us another chance, right? You don’t hear that a lot. And here in Australia and with the Victorian government, we had over 800 people die because of government mistakes in the quarantine system. I mean 800 people and never has there been an apology or a, you know, there’s been reviews and.

All sorts of stuff, but no, one’s responsible nobody, but let me tell you friends, the minute there’s a slight improvement in anything anywhere they’re all over that. Like, uh, you know, like a big kid on confectionary. So. The end of the day. It’s interesting to note that. And here’s the second quote. She says the increasing tendency of governments to think they can determine all sorts of outcomes, including economic and social ones, even weather events.

If, if not, if only the correct set of policies are put in place. Frigid Von Hayek had another term for the same phenomenon. He called it the fatal conceit, which he used to critique the errors of socialism. The fatal conceit, the belief that governments are full of the smartest people in the room, they’re way smarter than, you know, all of us punters sitting in the bleachers, sitting in the stands. And we should be grateful for the amazing things that they’re doing. Sorry. I have three young children. I’m not excited about the world at the going into right now. So, uh, you know, in terms of.

Employment and opportunity. So this idea that governments can just manipulate and control all sorts of outcomes. You know, I think it’s fair to say that left alone, the free market tends to do a pretty darn good job of that. It’s the information theory of capitalism, right? Like vast numbers of buyers and sellers trading information and trading.

All sorts of ideas and goods and services. The invisible hand seem to do a pretty good job when they’re left alone. Most of the time. So the fatal conceit is obviously something we’ve got to be really concerned about and, uh, It’s been a big thing for me to, to get to this point of, of moving from complete trust.

In this idea that government was always going to figure it out. I think we need to get back to this. Accurate vision of reality. An accurate vision of reality. I might go deeper on this in another podcast, but I, in my email signature, I have a great quote from Ayn Rand, and she said this, we have to submit to reality.

Money and technology and ideological terrorism can only keep reality at Bay for so long. I always liked that because you know, the problem with what’s happening with government is that they have a broken view of the truth about, you know, Philosophical anthropology, which is basically what humans are, how we operate and how the world operates.

The world is not infinitely malleable. You can’t control everything. You know, governments have this idea that they can just structure reality. Through policy and everything’s going to work. And I think we need to have. I think we need to have way lower expectations of government. All of us need to have an idea. That means it’s on us.

Getting back to this basic idea of it’s on us. We don’t need policy for absolutely everything. We don’t need regulation for absolutely everything. I want to wrap this up. Henry Ergas wrote a piece that I really liked. And he’s talking about, um, Hagle. And Hagle sort of writing and philosophy of culture and.

And society. And the quote was this Hagle said that the state. Is not a work of art. It exists in the world. And hence in the sphere of arbitrariness contingency. And era. One more time. The state is not a work of art. It exists in the world and hence in the sphere of arbitrariness, contingency and era.

Now Hagle is just smarter than any of our current politicians, anywhere in the world. I mean, this was, you know, philosophical, academic genius. And he’s making the point that the state cannot be infinitely, perfected. We tried that it was called communism. It led to poverty and starvation and death on a mega scale.

The state is not a work of art. It exists in the world and exist with human brokenness and sin and greed. You know, arbitrariness, contingency and error. So all of this is not, it’s not negative. It’s I’m not like saying I’m not a pessimist. I’m going, I think what we’ve got to. In terms of political economy, is this belief that the government can fix everything. I know you’re listening this, you might, you probably don’t have that belief, but my friend.

Vast numbers of people do. It was starting. You might’ve heard that. Heard them referred to a sheeple. People who have shaped, who just go along and, you know, and when do you think UBI is going to take us? Right? What do you think UBI is going to take us when people are encouraged not to work and take funny 📍 money?

And do nothing. And then the government’s just going to have a policy for absolutely everything. So that is why supply side manners. That is why classical economics matters, because it has an incredibly positive view of what individual men and women can do when they’re pretty much left alone to work it out.

So let’s talk about the limits of government. Please leave a comment. If you’d like to, if you new to the podcast, please press subscribe. Wherever you’re hearing this. The supply side podcast. We’ve got more. Great, great guests coming up for you very soon. Reach out, leave a comment. You can find everything else on the website. Supply side partners.com.

My name’s Jonathan Doyle. This has been the supply side podcast. And I’m going to have another episode for you very soon.