Jeff Deist joins me to discuss Bitcoin and the application of Austrian economics in understanding Bitcoin. Topics:
- Market selection of money
- The potential for a hard money standard to restrict govt spending
- Why Austrian Economists are split on Bitcoin
- Why credit would be much tighter under a hard money standard
- The deflation and ‘hoarding’ argument – dispelled
- The educational strategy pursued by the Mises Institute
- Jeff’s recommended Austrian economics books for Bitcoiners
Jeff Deist and Mises Institute links:
- Jeff’s Twitter: https://twitter.com/jeffdeist
- Mises Institute: https://mises.org/
- Mises Institute Twitter: https://twitter.com/@mises
Stephan Livera links:
- Show notes and website
- Follow me on twitter @stephanlivera
- Subscribe to the podcast
- Patreon @stephanlivera
Podcast Transcript:
Stephan Livera:
You’re listening to the Stephan Livera podcast focused on Bitcoin and Austrian economics. Listen in as I interviewed the best and brightest improving your Bitcoin and economic knowledge. Welcome listeners, this is your host, Stephan Livera. Today my guest is Jeff Deist. Jeff is the president of the Mises Institute and he previously worked as Ron Paul’s chief of staff having previously worked as a tax attorney in private equity. Jeff is also an excellent writer and public speaker delivering some excellent talks. He also hosts Mises weekends, which is a great podcast featuring Austrian economists and some fellow travelers. Now personally, I am a big fan of the Mises Institute and I’ve learned so much from reading the countless books, articles and listening to talks, watching Mises Institute YouTube videos over the years. So I donate money to the Mises Institute and I’d encourage my listeners to also consider that if they get value out of the Mises Institute. So Jeff, first of all, welcome to the show.
Jeff Deist:
Well thank you so much. Let me open with a question for you. How’s that? Tell us the state of the Australian libertarian movement in Australia and how you came to find out about Mises Rothbard, etc.
Stephan Livera:
I would say the scene in terms of Austrian libertarianism in Australia is relatively small. How I actually found it. Funnily enough, I was a kid, I was sort of 14 or 15 years old and I was on an IRC channel and some guy in an politics, IRC channel linked to Mises daily article. And he would regularly link to those. And at the time I was a kid, I thought, what is this crazy anarcho-capitalism Austrian economics thing. But then over time actually started to read that and as I understood more around that, that was what sort of started me going down that rabbit hole of then reading, you know, the grits such as Mises and Rothbard and Hoppe.
Jeff Deist:
Well, I’m glad to hear it. I’m glad you stumbled across us.
Stephan Livera:
Yeah, no, that’s exactly it. And I think Bitcoin is something that well, Austrian economics is something that’s helped understand Bitcoin in some ways. So, so Jeff a couple of months ago, I think this is around August 2018 you actually interviewed Saifedean Ammous on his book, the Bitcoin standard. So let’s start off with a little bit on your thoughts on Bitcoin generally.
Jeff Deist:
Well, I’m glad I interviewed him. I’m glad I read his book. It was recommended to me by a great friend of ours in the Bitcoin community named Caitlin Long. Some of your listeners might know her. And here’s the thing, what you or I think about Bitcoin doesn’t really matter. At the end of the day, it’s for the market to decide. And that’s what’s so beautiful about it is it’s not a government issued currency and it’s not issued by any big institution. It at least in by design, it’s starting to have some problems. But by design, it’s a peer to peer network with a currency sort of glommed on top of it. So when we say, well, is Bitcoin money, or does Bitcoin work well, or is Bitcoin a Fiat, or is Bitcoin susceptible to this or that? Well, you know, all these are questions for the marketplace and whether people want to use blockchain for all kinds of things, whether they in particular want to use Bitcoin for monetary exchanges, whether they want to use some other coin instead of Bitcoin.
Jeff Deist:
I would side with Saifedean on that and say that, probably not, but that’s a matter a very vocal opinion on both sides. You know, these are all questions for the market. No one person can decree anything. And so none of us can decree it as money. And, and that’s both the, that’s the beauty of it is that it’s something that is arising in the marketplace or attempting to arise in the marketplace. So, you know, all of us who are libertarian minded are worried about central banks. We all wake up in the morning and say, Oh my God, these banks are completely out of control. They’re you know, putting the liquidity into places in the market where it shouldn’t exist. They’re keeping interest rates too low. They’re encouraging all kinds of malinvestment and more and more importantly, it’s not just economics, it’s a form of control.
Jeff Deist:
You know, money is half of the equation in every transaction. On the one side, you’ve got the good or service being purchased. On the other side, you’ve got the money being given for the good or service. So the idea that government controls such a big piece of every transaction ought to scare us not just in terms of our economic wellbeing, but in terms of our control and in terms of our sovereignty over our lives. I would assume that well, socialism is sort of coming back as you may have noticed, but for most of us listening, we understand that socialism has been refuted both empirically throughout the 20th century, and also theoretically by great writers like Mises and Hazlitt and Rothbard and Hayek. So, most of us would reject the idea of a currency of a planning board to sit around for wheat or for automobiles and say, well, in Australia next year, manufacturers should produce this many automobiles, the workers should be paid this much per hour and the cars should be sold for this price.
Jeff Deist:
We would all say, no, no, no. That’s central planning, that’s a recipe for disaster. And that’s what happened in the former Soviet union. But in effect, it may be a bit overstated, but if in effect, that’s what a central bank boards do, they sit around and determine the supply and price of money in an economy or in a society. And I think that that’s very worrisome. I think it’s a pretty new experiment too, especially in the United States, it’s only about a hundred years old and so Bitcoin or cryptos as an attempt to build something, not a parallel system, but a separate system is something that I think we have to encourage.
Stephan Livera:
Fantastic comments there, Jeff. And so I suppose then obviously projecting out much further into the future, obviously if it is mass adopted, do you believe that Bitcoin could enforce some sort of financial restraint or discipline on what are currently very profligate and destructive and wasteful modern nation States of today?
Jeff Deist:
Oh, absolutely. Bitcoin and cryptos, if they were successful, they could be a political challenge to central banks and also put the brakes on them. And as a matter of fact, that’s what Nassim Taleb says in his intro to Saifedean’s Bitcoin standard book. He says, look, even if Bitcoin fails, we prove now it can be done. And that alone ought to give central bankers a bit of pause. I mean, it is a potential form of competing currency. And that’s exactly what Hayek talked about. When he wrote his essay on Denationalized money. I think that as I mentioned earlier, the relationship between money and the state is a deadly one. It’s one that finances Wars and inflation and all kinds of government mischief. And so I think anything that can take us away from government money is, a wonderful development. I also think it’s a scary development for central banks and profligate national government. So I think if Bitcoin ever got a lot more attraction, let’s just say they would be rooting against it and whether they would be openly or surreptitiously acting against it. Is it different question, but it’s know, we shouldn’t put it past them.
Stephan Livera:
Yeah, definitely. And now one of the comments that Saifedean often echoes is that in many cases the central bankers will be some of the last to actually understand Bitcoin because they’re just sort of trapped in a certain paradigm of thinking. Do you have any comments on that?
Jeff Deist:
Well, it’s true and it’s, what’s the saying? I’m paraphrasing here. It’s hard to make a man understand something when it’s in his self interest not to, in other words they make a living providing us with dollars and interest rates and determining the money supply. So you know, it’s like a surgeon, who any ailment you present him with, he suggests surgery. I think that central bankers tend to think that they run the world and that they ought to run the world. So sure they have a self interest in sort of ignoring it and hoping it goes away. And if they can’t do that, we’ve already seen signs that they’ll attempt to co-opt it. Certain countries have said, well, maybe our national bank will issue a national crypto and then even if it’s one step removed from the national government or a national central bank itself. If you just go over to the investment bank houses, which in the U.S. are basically almost cousins of the fed, the primary dealers who avail themselves of new bank reserves first.
Jeff Deist:
You know, when a city bank or something like that starts talking about or a Goldman Sachs is talking about developing a crypto or a blockchain or using crypto or even hypothecating crypto, then you know that they’re nervous because they’re trying to take a look at a new industry and figure out how they can run it and co-opt it. So we really have to avoid that. I think any, any sort of intermediary in the cryptocurrency world needs to be fought against that. We don’t need any Goldman Sachs. We don’t need any Citibanks. We don’t even need a Coinbases and Coindesks. We need, you know, true peer-to-peer wallet currency. That’s, that’s my strong opinion that middlemen brokers, Mt. Gox is one example. Middlemen are bad news and they go against the whole point and the whole purpose of cryptos.
Stephan Livera:
Yeah, that’s actually a really well nuanced take. I think many Bitcoiners many of the more hardcore Bitcoiners would really agree with you there. Whereas a lot of the people who are not so steeped in sort of the philosophy and the ethos of Bitcoin would be more sort of comfortable with trusting the third party, let’s say.
Jeff Deist:
Yeah. And we see where third party financial intermediaries have gotten us. Right in the past hundred years or so. I mean, banks aren’t most people’s favorites. And the sad part about it is that they aren’t even lending on actual savings of local people. And it wasn’t that long ago, just a couple of generations ago. I mean people really lent money based on someone’s based on how much money they had to lend. And there were small local banks and somebody like my great grandfather obtained a loan because, he was known around town and people thought he was trustworthy or whatever. And yet, you know, halfway decent job. And so we’re so far removed from all that when we’re in just in this, this era of digital money and this, this era where central banks can create dollars out of thin air, use those to purchase bank assets and inflate their balance sheets. You know, we’re so far removed from what banking was ever meant to be that you know, we really have to say that it’s, that we have to just get rid of it. I don’t think there’s any saving the banking systems in as corrupt as they are, at least in the West.
Stephan Livera:
Right. And I think, sort of a related question that just came to my mind now. One of the great Austrian monetary scholars Guido Hulsmann has spoken about how in the past under a sound money standard, they actually wasn’t as much. There was some level of credit, but it was more, it wasn’t so much like as much of an extending loans as what we have now, but it was more like extending commercial terms to a business. So let’s say you know I’ll give you these goods and you pay me within 30 days, that kind of thing. Do you have any comments on what we might see from a debt versus equity sort of worldview? If we move to a more quote unquote hard money standard such as gold or Bitcoin?
Jeff Deist:
Well, I think we’d see a lot less debt. I don’t who I was reading, I was reading a, a Twitter stream the other day. I think again, it was a Nassim Taleb and somebody pointed out, he said, look, credit should always be difficult unless you’re some absolutely blue chip borrower, whether that’s a company or an individual, somebody with lots of assets to pledge against it, you know, collateral. Somebody with a proven track record, credit should always be tight. Credit should always come at a fairly a stiff rate of interest. If we think about it naturally. I mean, people loaning money that they might not get back and not only risking, not getting it back, but for going that what they could do with it here and now, you know, that should always carry a price.
Jeff Deist:
If we just think about it in human terms, we prefer money today to money 10 years from now, that’s why nobody wants their dream house when they’re 90. Right?
Stephan Livera:
Yeah.
Jeff Deist:
You want your dream house when you’re 40. So you might borrow some money to get it and that’s okay as long as everyone’s a willing to do it. But the problem is of course is that central banks have come in and made the process of borrowing and lending, so different than it would be otherwise. But I think we’d see a lot more things like our grandparents saw. I think we’d see a 15 year mortgages would be the norm, for example, with at least 20% down and no more than let’s say loans, no greater than let’s say three times household income. That was a pretty standard arrangement not that long ago.
Jeff Deist:
And it turns out that when you loan people money and they’ve got 20% down, default rates are much, much lower. I mean that because of skin in the game, people stand to lose money. The money they put into something and they’ll fight much harder to figure out a way to get a second job or get some roommates or do whatever they have to do to keep paying their mortgage. Let’s say if they get, if they become unemployed from their regular job. And we saw of course the exact opposite, especially in the U.S. Housing market and the run up to the 08 crash, we saw all kinds of undocumented loans, liar loans, people getting borrowing, multiple times their annual income to buy 10 condos and all this kind of crazy stuff. And you know, none of that would happen. In my opinion, in a rational market based lending system, it would just be a lot harder to borrow money.
Jeff Deist:
And a lot of people don’t want to hear that. They would, our neoliberal friends would say, Oh, come on, that’s just going to be a huge drag on the economy and we’d all be poor. Well, if what we’ve got today is prosperity, it’s a false prosperity. It’s sort of like saying, well, I had a $10,000 limit on my credit card. I had nine grand charged up. But then they sent me a letter that said they’re raising my credit limit to 20,000. So I now can go out and charge $11,000 more. Well in that period where I’m charging that additional 11,000, my neighbors might look over and say, wow, he’s doing pretty well. He seems to have all kinds of new stuff, a big TV or something, whatever. But you and I both know that that’s artificial and that’s not based on a foundation of actually increased earnings to justify the increased spending.
Jeff Deist:
So that’s how I kind of look at the economy, the economy in the West. And of course I include Australia weirdly when I say the West you know, it, there’s an artificial, there’s an artifice to it. Now, look, you gotta hand it to the central bankers. They’ve managed to keep this thing going an awfully long time. And we have more debt worldwide than we had in 2008, both at the governmental level, at the business level, and at the individual level, way more debt worldwide than we had in 2008. So you’ve got to ask yourself whether anything has been solved. I think the answer is no.
Stephan Livera:
Yeah, fantastic comments there. And the other thing I obviously I agree with you about, credit should be tight in a full reserve banking system. However, some difficulties I sometimes face when I’m trying to explain this kind of system to people is I think, Oh but how would I afford this house? Because housing is so expensive. But then ultimately we have to understand that actually using Austrian economics, we can sort of try and understand the world and understand why many of these things are overpriced as they are now.
Jeff Deist:
Well sure. There’s no question that prices, prices always adjust, but there’s more of a, almost a moral cultural question involved. If you read, you mentioned Dr. Guido Hülsmann, if you read his books, the ethics of money production, which I think is free in HTML form on our site, the ethics of money production. If you read that book, you start to realize that maybe we have bigger houses and fancier cars and nicer vacations, than we deserve. I mean, nobody wants to hear that. Nobody wants to hear austerity, but what if that’s the case? What if things are artificially swollen in our economy? That, I guess you could make a weird argument that that’s a great thing. And that central banks and in tandem with fiscal policy have sort of created a prosperity that wouldn’t be there. But the flip side is as if it all comes crashing down. You haven’t done anyone any favors, you just sort of fooled them. So there’s, you know, we talk, we think of these things in financial and economic terms, but there’s a much bigger society and cultural component to it as well.
Stephan Livera:
Yeah, exactly. Precisely that. And look, so I think there are some relevant things for Bitcoiners that they can learn from Austrian economics. There are many key concepts that I think apply. So are there any key concepts where you believe Austrian monetary theory can help a person understand Bitcoin?
Jeff Deist:
Well, of course. I definitely think there are, and this is, it’s great that you brought this up because again, there was another Twitter feed, the Twitter dispute going on the other day about whether someone needed to know any Austrian economics to properly appreciate Bitcoin. A lot of people were arguing yay or nay. I kind of agree. I don’t think you have to know much about or in particular Austrian variant of economics to appreciate what cryptos could be. I think you could just be wary of the banks. And wary of the state. I mean that said clearly Menger’s ideas about the origins of money that had arises as a commodity with some sort of preexisting use of value. Is definitely applicable here. There’s, I’m not really interested in the nuts and bolts or the weeds of the argument about whether or not Bitcoin satisfies Mises’ regression theorem.
Jeff Deist:
And, and just very briefly, the regression term is the idea that if we go back far enough, Bitcoin or any other money would have had some use, some preexisting use other than as money itself. It would have had a commodity use. And some people say, well, Bitcoin is just electronic network and it wouldn’t have had any use. And another people say, no, no, no. The technology itself the ability to conduct transfers with a ledger that technology is the value. That’s the underlying value. And so we can’t just be thinking in terms of, you know, the old analog world and physical things as commodities that in the new world there could be an intangible thing that’s a commodity. I guess I’d lean a little bit towards that latter view, but I’m not worked up about it because again, as I mentioned earlier, whether Bitcoin is money is up to the market to decide it’s not it’s not for us to decide by, by arguing and hashing it out.
Jeff Deist:
Our opinions, don’t much matter. And we don’t want big opinion makers when it comes to cryptos. We don’t want certain people with lots and lots of crypto who can sort of move the market and make arguments one way or the other. We want to decentralize, we want spread out. We don’t want a hub and spoke. We want a loose sort of spiderweb network when it comes to crypto. So yes, I think Austrian concepts of the origins of money in Menger I think Mises his regression theory. I think Hayek in the nationalization of money, that’s more of a political theory than an economic argument, but maybe most of all just the, the, the calculation debate. I mean, if you understand why socialism fails in the Misesian sense and in the Hayekian sense because you can’t, without profits and losses, you can’t figure out what prices should be and you can’t figure out where to allocate things and where to place your capital and your time and your energy properly because you don’t understand what’s working and what’s not without profit and loss signals.
Jeff Deist:
And I think that that same argument applies in spades to central banks. They don’t know who can know what interest rates should be for 300 and you know, 50 million Americans, nobody can know that. Nobody can know what’s the best interest rate for everybody. If you happen to be an older person who’s no longer working and hoping that your savings will last you ,you might want interest rates to be 15%, so that without take, without going out and having to buy risky thing stocks or whatever, you can just make 15% on a simple money market account or something like that. If you’re a young person wanting to buy your first home, you might be thrilled. Like Trump said, real estate loves cheap interest rates. You might love it if you get 2% interest rate. So there’s no one size fits all policy possible. There’s no economic calculation possible. Central bankers don’t have a magic wand or a crystal ball. So I would say that all of these, all these concepts are great. And I think really cryptos came out of an Austrian community. If you read most of the originators most of the early adopters, these were people who were familiar with Austrian economics, which is of course one reason why some of our neoliberal progressive friends like Paul Krugman don’t much like it. They don’t like the people behind it.
Stephan Livera:
Yeah, exactly. And I liked the points you mentioned there around the calculation debate. And I think another component that maybe you could touch on is sort of related to how Dr. Bob Murphy did a talk years ago and he called his, his talk almost defense against the dark arts, right? So with an Austrian economics understanding, we can help understand you know, why we shouldn’t be worried about, say, the mainstream deflationary kind of hoarding argument. Do you have any thoughts on where Austrian economics can help kind of inoculate people against faulty beliefs on money?
Jeff Deist:
Wow. Deflation. Some of your listeners probably know Jim Grant of Jim Grant’s interest rate observer. Really brilliant guy. He said, deflation is the process of a society getting richer because the goods and services become cheaper and things that used to be available only to the very wealthy come down the ladder a little bit, become very become available to ordinary people like air travel, which was once just the province of the very wealthy. And now we fast forward a few decades. We find things like all kinds of things are very, very cheap. That used to be expensive, like laser eye surgery, like a DVD player. I mean, you name it, deflation is actually a good thing and people need to get over the idea that deflation means that the economy is suffering. As far as people hoarding money, look, there’s a set, there’s a form of satisfaction from money held.
Jeff Deist:
If somebody is hoarding money that that generally tells you a couple of things. One is that they fear the future. So they want to have some money put aside and maybe they fear the banking system if they’re literally hoarding it at home, but presumably they’re hoarding it at the bank. And number two is they, they’re uneasy enough that they get more psychic satisfaction from having in the bank than they would from the stuff they could go buy with it. And so why is that a problem? Who, who are any of us to tell someone how much money they need set aside for a rainy day? What an absurd thing. I mean, how perverse. Imagine what our grandparents or great grandparents would think they would all, they’d all be thrilled if they knew we had a bunch of money that we were hoarding.
Jeff Deist:
They’d say good, good thinking because they endured things like the great depression and two world Wars where there was, they were thrust into great uncertainty in life. So I don’t buy this hoarding business at all. That’s a, that’s nobody’s business. None of us has a responsibility to get up in the morning and stimulate the economy with all of our spending. And if you want to look at that on a big picture scale, a macro scale, the Keynesians are just wrong. You don’t create a better economy by, encouraging people to using excuse me, fiscal and monetary policy to go buy stuff. You don’t need to stimulate demand. We all want stuff. The question is whether we lead productive enough lives to pay for it all. So what the focus of any healthy economy is increasing and accumulating capital and then using that capital to create ways to make the provision of goods and services more efficient, more productive so that every person can produce more.
Jeff Deist:
We in a round about way get a higher and higher standard of living as a society. So it’s saving money through via profit and capital accumulation and then deploying that capital that makes us rich not spending we all want stuff. And if they make credit cheap enough, we can, most of us can get the credit to go buy stuff that we haven’t earned the money to buy. So that’s not the problem. The problem is creating an economy that’s more productive per capital and that’s not harmed by people holding on to money.
Stephan Livera:
Yeah. Fantastic thoughts. Okay. So Jeff, you were touching on this earlier potentially with some of the comments around the regression theorem requirement for physicality. I’m just curious, do you have any thoughts on why there is a slight split between some Austrian economists who are more bearish or anti Bitcoin versus some who are not necessarily, think it’s going to go to 10 million or whatever, but some who are more open to the idea of Bitcoin?
Jeff Deist:
Well one, a short answer is age. The boomers tend to be a little more skeptical and the millennials tend to be a lot more pro. I’m stuck in the middle as a genXer so. I’m pretty pro crypto. But I don’t, I don’t focus on it in that. And I certainly don’t think Gold’s going away. I think gold will always play a role in the world economy. And I think if you doubt that, ask yourself why central banks hold so much of it. And a lot of central banks around the world are increasing their gold reserves even as we speak. And the reason they’re doing that is not because gold is super special or it’s some magic metal, it’s just that it has always served as a store of value in a certain times. And so even if it’s just this lump of metal that sits there versus it’s much a sexier, modern cousin, Bitcoin it still serves a purpose of dealing with uncertainty because for all of our great talk about monetary policy, nobody really knows what’s going to happen.
Jeff Deist:
And that includes brilliant central bankers and quants who went to Ivy League colleges in Wharton. So in response to that, the thing to do is to hold some assets that in the past with the the best knowledge we have of history have held their value when things got a little sideways or a little rocky or even a little backwards. And, gold still serves that purpose. So I’m not somebody who likes to dismiss gold and gold bugs you know, out of some sort of feeling of superiority or something like that. I think that’s foolish. And I think a gold standard could still be a great thing for the world. I’m not sure that we’ll ever get close to it, but I mean, you know, even Alan Greenspan said that his job as a central banker was to try to mimic a gold standard of sorts. Which seems a bit ironic now. So, I think the split is, I think it reflects age, like I said, a generational thing. And I also think it just challenges old orthodoxies and that’s part of it. People don’t like to give up a certain way of thinking. And I, sort of understand that on both ways because I like gold and I like crypto too.
Stephan Livera:
Yeah, no, I think that’s a very insightful commentary to add on the topic. I think some within the Bitcoin community. And look, I think I’m sort of partial to this idea that gold may hold some level of, you know, store of value in the future. I think some people in the, some of the Bitcoiners, might argue that, Oh well see gold didn’t necessarily fail from a technical point of view. It just sort of failed from a centralization and therefore getting corrupted by the government point of view. Do you have any comments on that?
Jeff Deist:
Well, sure. I don’t think gold has failed, but it’s the, government’s made it difficult. There are legal tender laws. You can’t go pay your taxes or other bills in gold for example. And also gold is not that as a result, gold is not just that easy to use. It’s just something you have to hold onto. And then also a lot of gold is owned by people who don’t hold it physically. So you’ve got this metal and all of a sudden you’ve got a counterparty risk. And that could be something as simple as your local bank and with its safe deposit might not let you in one day it might have a bank run or something much bigger where you’ve got your gold held abroad or, or it’s just in a gold money account that it’s not in any way, you know, it’s commingled with other, with other gold and you know, you never really know about or see the physical.
Jeff Deist:
So there’s, you know, gold became an asset almost like a stock or bond for a lot of people where they don’t hold it physically so that that can be a big problem. And you know, like you said, it just sits there. It doesn’t pay any interest. It doesn’t you know, issue dividends. It’s just, it really is sort of an insurance policy. And of course, the irony like it is like with regular life insurance, let’s say, is that okay, insurance is a good thing to have in a rainy day. But in a real deluge insurance companies would go under and you wouldn’t get paid in a real day luge. You might not be able to use physical gold for anything. So it’s just one of those imperfect approaches where we have to say, look, there’s never been a time in human history where gold wasn’t worth something. There’s never been a time in human history where grandpa died and left us some gold coins and that was a bad thing. But there have been times in human history where grandpa died and left us a bunch of worthless stock certificates for a company that doesn’t exist anymore. So, you know, the anti gold arguments, all I can do is shrug my shoulders and say, who am I to say I’m better than people for thousands of years who have given it value? You know, that I’m not interested in bucking that.
Stephan Livera:
Sure, sure. And I think a, that’s like you were mentioning earlier with Nassim Taleb, that’s very much like that whole concept of the Lindy effect, this thing that because it’s been around for so long, it’s more likely to now continue to be around for longer.
Jeff Deist:
It’s the best we can do. You know, it’s so much of this is muddling through. I really think oftentimes libertarianism is just private solutions and the best we can do and better than government but not perfect. And I think better not perfect ought to be our rallying cry as opposed because it helps us not only sound like, but also steer ourselves away from utopian thinking.
Stephan Livera:
Yeah, I think that’s a very insightful comment as well. What a great way to explain it. Let’s switch gears a little bit, but on this same idea of better but not perfect maybe something I really admire about the Mises Institute is that it doesn’t try to be a think tank or a beltway libertarian Institute, but rather focuses on education and keeping the message true to libertarian private property principles. And I think it might’ve been a, I’m not sure who, I think it might’ve been Lew Rockwell who explained it as this concept of doing an end run around the state. So maybe you could just comment a little bit on that educational strategy and the results so far.
Jeff Deist:
Well, we’re definitely not interested in public policy. We don’t think there ought to be public policy. I don’t think we need a housing policy or an oil policy or a Bitcoin policy or else I think the market can, it can work these things out. So I personally find the term public policy problematic. To use the awful parlance of our time. Problematic. It’s awful. I mean, public policy and anyone who uses the term unironically I think they really come across sounding pompous. Don’t you agree? You know, public policy. C’mon. I mean the last thing we need is a bunch of a 28 year old liberal arts majors deciding how society should be organized at think tanks. You know, what we need is humility even in the libertarian world, but especially outside libertarian world. There’s just hubris everywhere. And social media really intensifies that.
Jeff Deist:
It really encourages us to be dogmatic and to absolutist and to sort of cross our arms and say we’ve got all the answers. And of course Liberty is about, is all about saying we don’t have all the answers. That’s why government so dangerous. Nobody ought to be in charge of organizing millions of people’s lives. It’s a recipe for disaster. So I really think libertarianism is a humble doctrine. I think it’s a doctrine of humility, and letting private solutions, local solutions work. And so I hope anyway that, we apply that at the Mises Institute and say, look there are some brilliant thinkers out there who a lot of whom are dead, some of whom are still around, some of whom are just coming up. And you ought to be reading and learning from them, but you’re not going to get them.
Jeff Deist:
In your public schools. You might not even have econ in high school, what we call high school. You might not have it in undergraduate and even if you do you won’t get very good economics. And even if you go do, get a graduate degree or a PhD in economics, you might not hear a single word about me since you might not hear anything about the history of economic thought. And this is often the case with the aforementioned brilliant young economists, Ivy League Economists who populate the federal reserve bank staff for example. So we’re really here to just be a private school of sorts an end run around this, this academic gatekeeping that wants to decide what kind of econ is taught, what kind of, I don’t like the term mainstream, but current mainstream economics.
Jeff Deist:
Cause it wasn’t always the case that we, that we thought stimulating demand was the be all end all. And, by being a kind of alternative school, we can, we can be exactly as much or as little as any particular student needs. In other words, some of our students are long haul truckers who have SiriusXM radio in their cab. And can listen on the road. Some of our students if you want to use that term are stay at home husbands or wives. And they you know, listen at home and some of our students actually come here and be, when they want to be a summer fellow with us and they want to get really deep into it and use our library and research. And then they say, Oh my gosh, I love this stuff but I want to go be a PhD Economists.
Jeff Deist:
They actually, you know, go off to some university and do that. But some people just want to follow our Twitter feed and maybe occasionally click on an article or two. And just by doing that, they know more economics than they otherwise would. So we want to be there for any kind of student, any age, any point in their life where they can just consume as much or as little of our free content as they desire. And you know we hope that we strike a cord with some people and we do our best to do so with the understanding that we’re probably never going to be a majority or mainstream view. That’s just, that’s just sort of the way it is, at least at the present moment. I think we have to accept that and not water things down to try to be bigger because I think that never works.
Jeff Deist:
But instead say, look, you know, throughout human history a five or 10%, a devoted Vanguard of people can make huge changes. And I’d rather be trying to create a really great 5 or 10% than trying to sort of full or pull one over on 51% to get them to start coming over to our side.
Stephan Livera:
Excellent. And as Ron Paul often said, he spoke about this concept of the Remnant.
Jeff Deist:
Yes. It’s a bit of a loaded term, but it’s true. And what’s so funny is because a baby boomer, no offense to anyone. The Remnant is actually younger today. And I found this out working for Dr. Paul. Sometimes a a parent would come in with their 22 year old college student, a son or daughter and it would be the son or daughter that got them interested in reading some Ron Paul or some Austrian economics or whatever it might be.
Jeff Deist:
It wasn’t the parent influencing the child, it was the other way around. And so younger people today are really more interested in some of these ideas because I think they face a tougher road than their parents and grandparents did. So they’re just looking around saying, well, what happened? What happened to the economy? What happened to why do I do I have all this student loan debt? Why do jobs seem harder to get? Why do people switch jobs so much more frequently than my parents? Why aren’t there pensions anymore? Why isn’t there tenure anymore? Why isn’t there a quicker, easier track to partnership in a CPA firm or a law firm? Why isn’t being an MD nearly as good as it used to be? You know, all these things that, that were so rock solid for the parents and grandparents are sort of shifting sands for them. And as a result of that, younger people are interested in these ideas. They’re also interested in socialism. Unfortunately, it’s a double edged sword, but the bottom line is they’re searching and it’s up to us to do the best we can to help with the narrative and hopefully pull some people over.
Stephan Livera:
Fantastic. And now on this topic of education. I’ve noticed that some people who come into Bitcoin, they then become more interested in learning Austrian economics. So do you have any ideas on how these people can best learn? And do you have any suggested resources or book recommendations from the Austrian school?
Jeff Deist:
Well, yeah, absolutely. I think, you know, if you read the Theory of Money and Credit, which Mises wrote, it’s really his first full length book. He wrote it at about the age of 28. So it’s a little more than a hundred years old now. And I swear there are so many sentences in that book that just jump right out of you that absolutely apply today. And it’s so interesting to read that, you know, when the US fed wasn’t even created, of course the Bank of England existed then, but to, to see how prescient he was. And there’s really no better book written. I think about money. If you, if you can read and digest that book and it’s, it’s a lot easier to read. If people know about Human Action, they find that daunting, which it is. The Theory of Money and Credit is, is really an easy read.
Jeff Deist:
And of course an even easier read is Murray Rothbard’s little 98 page pamphlet, which we have on our site free called What Has Government Done to our Money. Now, obviously it predates cryptos, but it’ll really give you the low down on the, the quick and dirty lowdown on what, what money is and how government corrupts it. But I look from an Austrian perspective, there’s no better book you can read on cryptos than The Bitcoin Standard by Saifedean Ammous. And not only does it explain cryptos, but it also gives you a little mini history lesson about money about Austrian economics. It’s really a fantastic book. It’s not super long. And, I think pretty much anybody can, can digest this book. It’s really written for a lay audience, which is refreshing and it’s such a great book, so I recommend it very highly.
Stephan Livera:
Fantastic. Okay. Look, I think that’s pretty much all we’ve got time for so, if you’ve got any closing thoughts and also just tell the listeners how they can find you and find the Mises Institute and also just if there’s anything to keep an eye out for, you know, that’s coming out from the Mises Institute.
Jeff Deist:
Well, we’re working on, on some fun stuff this year. We are having events around the country, not your way unfortunately. But really we’re getting more and more into the podcast space because for whatever reason, a lot of people like to consume and digest information that way. We’ve got some great new books coming out this year, but you know, just if you have some time, go to mises.org and look around. We’ve got all kinds of stuff there. You spend the rest of your life reading some of these books and papers and, and watching some of the videos we’ve got there. Find me on Twitter. My name is Jeff Deist. It’s D-E-I-S-T so it’s all one word, jeffdeist on Twitter. And you can find out or keep abreast of pretty much everything that’s going on at the institute.
Stephan Livera:
Fantastic. Well look, Jeff, it’s been a really great conversation. I’ve really enjoyed speaking with you and thank you for coming on.
Jeff Deist:
Yeah, it was a blast. Please have me on again.