From the Easy Chair

International Free Trade, Protectionism

Professor: Dr. R.J. Rushdoony

Subject: Conversations, Panels and Sermons

Lesson: 5-214

Genre: Speech

Track:

Dictation Name: RR161AB52

Year: 1980s and 1990s

Dr. R. J. Rushdoony, RR161AB52, International Free Trade, Protectionism from the Easy Chair, excellent colloquies on various subjects.

[Rushdoony] This R. J. Rushdoony, Easy Chair number 154, September 11, 1987.

This evening Otto Scott and I are going to talk about a subject that is not an easy one to talk about, but is one which has very, very important ramifications. It may sound like a dull subject, but I think it is one of the most intensely interesting and important ones of our time. It has to do with international trade, with free trade, with Protectionism and the like.

I was brought up to believe in free trade. It seemed very logical. I never began, really, to question the subject until Otto Scott raised some questions about it, spoke against free trade at one or two economic conferences, created quite a bit of ruckus as a result, wrote in one periodical on the subject and it sparked quite a debate and a flood of mail.

Now the thing about free trade that suddenly came to me when Otto Scott raised questions about it and I began to think about it was this. It was so logical. Then I realized we are children in some sense or another of Hegel. And Hegel’s basic premise was that the rational is the real. If it makes sense rationally, logically, therefore it is true, therefore it is real. And that is the problem with free trade. It is logical. But it presupposes a world in which me are all logical and rational and which they all think in the same categories, in which there are no evil nations governed by evil impulses. In other words, the presuppositions precisely because they are totally rationalistic, rather than realistic, make the whole question of free trade rather questionable.

Now I believe Protectionism is also, but we will come to that later. But just a word or two more. When you have a false problem you have false solutions. A few years ago a great deal was said and some still are parroting the same old line about over population. Once you agree with these people that there is over population any answer you come up with is bound to be wrong, because you have begun with a faulty assumption.

Now behind both Protectionism and free trade, you have a doctrine of political, economic salvation, that if we come up with a right economic combination we are going to have the salvation of a society. And that is not true. It cannot make, as the old proverb tells us, a good omelet with bad eggs. So the best economic pattern, the best political pattern is doomed if the people are no good.

Well, with that introduction, I will let Otto now speak and get is unto the subject.

[Scott] That is quite an introduction, I must say, tremendous. I agree with you. And if we want to separate the rational from the real, we then have to look at the world as it is and not as we would like to have it. Now the world as it is is a harsh and difficult place. There are different cultures in the world and because we have people in this country from every ethnic and racial background in the globe, the average American is of the opinion that the whole world can operate the way the United States operates.

Now this overlooks several facts about American history. In the first place, we grew up as a nation under the wing of the English. And when we broke with England we had a common language, we had a common law. We had a common literature. We had a common idea of right and wrong. We had pretty much a common religion in Christianity, at least by the overwhelming majority. And we were able then to function in the world.

One of the ways we functioned, incidentally, was to steal the secrets of British technology from their textile plants in Manchester and Liverpool and throw up high tariff walls to protect our northern industries which then used the South as a captive market. And the southerners, of course, are very upset about this and were always for free trade. They received a lot of sympathy from Great Britain, because to Great Britain the South was a customer whereas the north was a competitor.

Now there you have essentially the backdrop of the great American debate over the tariff, over the north and the south. Somewhere along the line of the post French Revolution, the argument arose in liberal quarters for unlimited free trade based on some extrapolation of some Adam Smith. Now Adam Smith personally voted against free trade when the issue came up in his lifetime, because he didn’t want to injure industrial interests that he was acquainted with. But for a long time free trade, like one man one vote, has been one of the shibboleths of the left.

Russia wants free trade. Of course that means on their terms. Japan wants free trade on their terms. The Japanese farmers could buy rice form the farmers of the Sacramento Valley much cheaper than they can grow it. And they have said openly and officially they will never do that, because they will never dispossess their own farmers. They will never become dependent upon another nation for their food. Great Britain made that mistake when it eliminated the corn laws of the 1830s and within a generation they had lost two million people from their farms and Britain could no longer feed itself. It almost lost World Wars I and II for that reason.

So when I look at free trade I don’t look at it from an economic point of view, because I am not an economic thinker. I don’t believe in economics as a subject. I don’t believe it is a subject. I don’t believe it deserves a doctorate. I think economics is a part of a larger cultural study. We might say history encompasses economics along with many other things. If we taught history, for instance, we would not be repeating some of these economic errors which keep recurring through the generations.

And I think that to assume that people operate according to their pocketbook is to mean that you don’t know what people are. People operate according to emotion, according to faith, according to believe, according to opinion, according to pressure, many, many other reasons.

I spoke to an economic group not too long ago and brought up the fact that money was not necessary for a society and I thought at first that they were going to faint, but there is no money in the Soviet Union. You have to have whatever the ruble is plus a party card. Without the party card you cannot use the money. Of course, there is a black market, but you operate in the black market at the expense of your life and at the expense of your liberty and your freedom.

There is no money in China. We are rapidly reaching the stage where there is not going to be any money here. We ... we have, let me say, lost control of our currency. We lost control of our currency as long ago as the 1960s when the flood of dollars swept around the world to such an extent that one of the English financiers determined that you could use what he called euro dollars—and the term euro dollar comes from the fact that the Red Chinese were sending their dollars to a Soviet bank in Paris and that was where the term euro dollar came from because it was called the Euro Bank. All these American Bible Bolton decided, could be used as a basis of extending credits. And he began a pyramiding of credits based on the euro dollar which exceeded anything that the financial markets of New York did in the 1920s.

So we have more credits out than we can keep track of.

Walter Riston of Citibank called that a financial black market, using the instruments of instant communications they could transfer immense sums of money from one part of the world to another across national borders with the speed of light and the banks and syndicates, syndicates, then, began to form to lend money to foreign governments, beginning with Iran and then Italy and then third world countries by the billions.

And they have built this tremendous towering credit structure that we are caught in today.

Now if you want to discuss or if anyone wants to really, rationally look at trade, international trade today, he is going to have to include money. He is going to have to include the monetary system and the monetary system is out of control.

So what are we talking about? To define the terms in this area is extremely complex, because we are up against certain inalienable differences between cultures. Japan, for instance, has not defense establishment. We have not a defense establishment, but we have promised Japan we would defend her. We have promised Europe we will defend her. Forty percent of the billions we spend in defense are spent in Europe alone. Most of the money in our American defense budget goes overseas.

[Rushdoony] And we are not defended in the process.

[Scott] And we are absolutely stripped of defenses. We have sent our number one weaponry to Israel. And when a general chief of staff brought attention to that, he had... was forced to make a public apology.

Now this is a very strange stage of affairs.

[Rushdoony] Yes.

[Scott] This is not to say anything about Israel. If I were an Israeli I would say that is great and I don’t blame the Israelis for getting whatever they can get or any other country, but I think that we have done an about face here and I think the reasons for our peculiar position, 150, 160, 170 billion dollar trade deficit is rooted in our turn to the left at the end of World War II.

[Rushdoony] Yes. An interesting side light is the fact that when my father was a student he studied economics under the overall subject of ethics or morality.

[Scott] Oh, that is where Adam Smith taught it.

[Rushdoony] Yes. And it... he...

[Scott] Moral philosophy.

[Rushdoony] And he studied it in Scotland, of course.

[Scott] It was a branch of moral philosophy.

[Rushdoony] Yes. Then it was called moral economy.

[Scott] Fine.

[Rushdoony] So we have forgotten the foundations. we have divorced it from morality. And, hence, the problems we have.

Japan was mentioned and while we are pursuing free trade practices which are working a great deal of damage, Japan is producing protectionist policies that are also producing untold damage and which can sink the world. The Wall Street Journal for Wednesday, April 29, 1987 has an article by Claudia Rosette, “Japan: So Much Yen, So Little Else.” In other words, their inflation is created precisely because their borders are closed. They have no place to spend their money except on their own stock market, in their own real estate and so on. And a result... as a result, everything is so over inflated there that there is no reality in prices.

This could create a collapse and you know the scenario better than I as to what the Japanese stock market means to the world today. Perhaps you ought to comment on that, Otto.

[Scott] Well, the statistics are a little bit misleading. For one thing the yen is not as strong against the dollar as it looks. If you were to compare the standards of living between the dollar possessor and the yen possessor, you will find that the Japanese lifestyle is much more austere than ours. They don’t go in for the lavish expenditures that we do. And the actual relationship is more like 250 or 300 yen to the dollar than it is 140. So you could almost cut the thing in half across the board.

The other thing is that according to that article—and I have a copy of it, too, by Claudia Rosette—I didn’t read it when it first came out, but you brought my attention to it. She says in here that almost none of the Japanese land is for sale. Some thing like six or seven percent is traded. The rest is held. So if there is a collapse in the Japanese stock exchange it is not going to wipe the Japanese people off the way it occurred here, because here the Americans are leveraged up to their eye teeth and all kinds of homes are going to go sweeping down the drain when the so-called equity loans which are nothing but second mortgages or third mortgages are called in and the individual has reached the end of his credit.

Japan’s industries might lose some of their export markets. But Japan is a closed society. They are homogenous, like malted milk. They are absolutely all together as only one race of dominant race. They have a few Koreans and a sprinkling of foreigners and they may have, as you have mentioned earlier, untouchables. But they are all together.

Now at one time Europe was that way. I remember the first time I went to England everyone looked like they were cousins to me and they all did sort a family resemblance in people that come from the same racial stock.

We are not used to this. There is some argument now that the Japanese are being very narrow minded in ... in keeping their country the way they do and they should open their gates and bring in some other groups, but I doubt if they are going to do it.

What I am saying, in other words, is that a collapse in the Japanese stock exchange might affect us more than it would affect Japan. Now right now the Japanese are buying up a lot of our national debt and people say, “Well, that is pretty nice.” But what people overlook is that we have to pay the interest on that debt. The interest on that debt has to come out of the taxes. The average American is going to find taxes leaping upward more and more between now and the 90s. By the year 2000 just paying the national debt alone will take something like 16 percent of our gross national product. That means that everyone is going to be a lot poorer unless we find some way to liquidate the debt.

Now we have, I think, many Americans seem to have forgotten that this is our country and that it is our responsibility to protect ourselves.

[Rushdoony] Yes.

[Scott] We are not supposed to sit here and dissolve because mankind is offended by our existence. We can change these rules any time we want to. We can say to Japan or to any other country what Franklin Roosevelt at one point proposed and it was, I think, a sensible proposal. He proposed a reciprocal trade bill in which we would treat every nation industrially exactly the way they treated us. If they opened up their markets, we would open up ours. If they closed their markets, we would close ours. It is a very simple syllogism.

[Rushdoony] Yes.

[Scott] And that is the end of that. Japan’s great export surplus would evaporate over night, because, incidentally, the Japanese will not open their market no matter what inducements you give them. I think one of the things we might do with Japan is to say, “Look, you are a big boy now. You are richer than we are and we owe you money. It is about time you built up your own army, navy, air force and so forth and use some of those riches to take care of yourself, because ewe have decided to turn you loose.”

You know, birds get thrown out of the nest and we shouldn’t harbor former enemies on our back forever.

[Rushdoony] And we should say the same to all of Europe.

[Scott] Yes, we should.

[Rushdoony] I recall after the war someone telling me who had been over there at the time that the reason why Europe demanded as a part of our settlement of things after the war that we keep troops over there and their families...

[Scott] And their families.

[Rushdoony] Yes... was this. They wanted hostages.

[Scott] Hostages.

[Rushdoony] So that in case of an invasion American men, women and children would be involved and we would rush to their rescue.

[Scott] Well, we have ... before Mr. Johnson got out of office, Lyndon Johnson, the famous war on poverty commander in chief, at the very end of his term he wanted another... the Pentagon said, “We need another 200,000 men in Vietnam.” And he was all set to send them when the treasury said to him, “By the way, this means that we will have to cut back in other areas. We can’t afford it. In fact, it may destroy the dollar.”

Now he was literally shocked, because he had actually believed this school teacher who was... who when to a school teacher’s college in Texas, this ardent New Dealer, actually believed that it was no limit to the United States.

[Rushdoony] Yes.

[Scott] He actually believed that we were omnipotent and that we could do anything. And to be told that we had run out of money reached the limit of our resources, actually took the heart out of him.

He told that woman that wrote his biography that he expected to be a great leader in war and I peace at the same time. Anyone with that caliber of mentality is... it is a shame he got to where he did. But at any rate, we have reached the limits, therefore, a long time ago of our domestic capability and our international capability. Our government is still attempting to do what is impossible to do and that is to micromanage the United States. We have a judiciary that is micromanaging our economy. When we talk about economics, for instance, what are we going to say about Judge Harold Green, a federal judge who is supervising out telephone system in all its reaches? Nobody has ever given me a biography of where Judge Green got his expertise in communications, electrical communications, but, nevertheless, he is.

And this has a disastrous effect on economics. What we have here political ... political pressure which distorts economic rationality. Then we have international rivalry and on top of everything else, we have the great medusas head which no American likes to think about and that is the menace of the Soviet military.

[Rushdoony] yes.

[Scott] Now we are not going to stop it with lending them money. We can’t stop it without planes and tanks and men and ships and mine sweepers and all the rest. And in order to do this we are going to have to restore our steel industry. We have to restore our machine tool industry.

I took part in the debate with Elizabeth Bentley, Representative Bentley not too long ago and she is known ... well, they love her in Maryland because she defends the fastener industry. Now most of the people never heard of it, but these are the little instruments that fasten pieces of machinery and equipment together and she has discovered that our fastener industry is being dissolved by cheap imports, many of which do not hold and many of which has been bought by our military. So therefore we are sending people out with defective equipment in order to save some money. This great wealthy nation. They talk about 400 dollar toilet seats, but they are not talking about the fasteners.

Bentley says over a third of our machine tool industry has been captured. Really over half. The foundry industry has gone from 4000 plants to 2900. Under GATT, General Agreement on Tariffs and Trade that only the United States honors these agreements.

Now 60 percent, she says, of all the fasteners now used in American industry are made off shore; In defense 80 percent miss marks for heat and weight tolerance. Our weapon systems are riddled with these. They are in nuclear plants and missile systems, foreign military components amount to sabotage. How can’t get this into press.

[Rushdoony] No. I have talked to men in the navy who have told me horror stories about that sort of thing and these go back some years. But they are never talked about by the press.

[Scott] Well, we are going to have tanks made in Egypt and army pistols made in Italy.

[Rushdoony] Well, we are pursuing a ... a policy of free trade to our death.

[Scott] Well, this I the... the... you are so right on that Hegelian, a... if it sounds good, if it sounds fair, one man, one vote. What could sound fairer, excepting that it upended the Constitution of the United States. And everyone doesn’t vote anyway.

[Rushdoony] Sometime back without realizing all the implications of what I said I described libertarian thinking with its free market thinking and all as economic totalitarianism, because they were taking a few good ideas in economics and making them apply to every area of life. They were saying there should be a free market in sex so that all practices, for example, could be equally tolerated and approved. And this was taking one idea ...

[Scott] Extend it.

[Rushdoony] ... and extending it and saying every area has to be ruled by this sole economic concept.

[Scott] what is it? Reductio absurdum.

[Rushdoony] Yes. So it is a form of economic totalitarianism. Well, the Enlightenment with its rationalism has ruled us for a long time. And as a result, we take as truths things that are fallacious. We haven’t bothered to question them for generations.

[Scott] Well, we were taught free trade. I was taught free trade. You were taught free trade.

[Rushdoony] Yes.

[Scott] I was taught that the corn laws are responsible for the upward spurt of British industry. Not a word about the 400 years of conquest which lay behind this advance, the dozens of wars that the English fought with everybody on earth in order to get strategic areas and strategic resources. All of history suddenly vanished with the corn laws. Well, the idea of the corn laws was to reduce the landed gentry politically speaking. And they did reduce them. They destroyed the agriculture. Nobody told me that. They take one little sliver of history and yet if we go back to the military and we go back to Solon telling Croesus when Croesus showed him the gold he said, “The man that hath better iron than thee will be master of all gold.”

[Rushdoony] Well, obviously by raising questions about free trade and the primacy of politics and economics, we are challenging the whole of the present order.

[Scott] That is true.

[Rushdoony] Both sides of the debate.

[Scott] That is true.

[Rushdoony] And I think it is necessary to do this because we have begun on false assumptions. Therefore we have false problems and false solutions.

I think that we are going to see by the end of this century a real shake down on a great deal of thinking. Someone said a while back that by the end of this century it was hardly likely that most civil governments the world over would remain the same. They would all one way or another collapse or be dramatically altered. I would say it is because the presuppositions behind all of them and their operations are going down the drain and are doomed. This means that it is an important time for us to rethink the nature of things, because unless we have valid grounds for every area of life in the next century, we are going to drift in a dark age for some time to come.

[Scott] Well...

[Rushdoony] You were about to say something Otto.

[Scott] I have forgotten now what it was.

[Rushdoony] Well, let me go on with something. Some years ago in the mid 30s or when I was a university student at Berkeley, I recall a very interesting episode. One of the professors in the philosophy department, a man whom my father knew and thought highly of was George Plimpton Adams, an old fashioned New Englander in many respects. With the New England morality what with the loss of the old faith. However, in the course of teaching ethics, in one of his lectures he spoke about the hedonist fallacy, making happiness a goal. And he analyzed it and he said that happiness is a byproduct, not an objective. And it eludes us when we make it an objective. And then he went on to say that I dare say a great many other things in life that men prize are really byproducts and are missed when they become objectives.

I have never forgotten that. For one thing, after the class there was a great deal of discussion among the students, a great many dismissed what he had to say with profanity. They refused to accept the fact that you could not go after happiness and get it. Others debated the subject and chewed it over and never came up with a solution. But I felt he was on target. And I came to realize, too, that this is what our Lord was talking about when he said, “Seek ye first the kingdom of God and his righteousness and all these things which the Gentiles seek, shall then be added to you.” In other words, in a real sense, all things are a byproduct. Man’s goal has to be God and his kingdom or else everything eludes him.

I think that has been our problem in the modern world. We have sought the answers in the political and economic realms and the answers elude us and they will continue to elude us because no political combination and no economic combination will give us the results if we go after them in those spheres and forget that first of all man has to be under God.

[Scott] And much of modern progress has amounted to a regression in terms of man’s life.

[Rushdoony] Yes.

[Scott] We could go back to the 19th century and look at a farm. It was self sustained. In Lincoln’s day the women made the clothes. They spun the cloth. They cut the cloth. They sewed the cloth. They made the suits, the pants, the what not. Shoes were ... were made. Those farms could exist if the rest of the world dropped off the edge. Now there is a power blackout and they are becoming more frequent all the time thanks to the marvelous environmentalists who have stopped the expansion of power plants. And everything in my house is... I am out of business. My computer doesn't work. My electric typewriter doesn’t work. It is true. You are smiling. I could sit down and use a pen. But then I would have to drive somewhere to find somebody to type it. And I don’t...I hate to start that routine again.

[Rushdoony] Well, Otto, I use a pen all the time, but let me add when the lights go out it is not much consolation.

[Scott] But in a similar way we have become greatly reduced in terms of independence, both economically and physically.

[Rushdoony] Yes.

[Scott] As compared to our forbearers. We have lost the essence of independence, the essence of freedom which is the ability to live without. And it is almost impossible to live without. It is impossible practically speaking to live without a checking account, because you can’t send monies though the mails and so on and so forth.

Now of all times, this should be a period where our liberties would expand. This is what was promised. As technology improved we would have more leisure and so forth. But I read in the journal not too long ago a long article on how the social security system has compiling together with all the other agencies of the government into monster computers all the information about every individual in the country from birth onward and cross checking this information.

Just the other day in some state, I don't know where, they found some poor citizen who had escaped from a chain gang 44 years ago, had lived a very honorable life ever since and they are now struggling to keep from bringing him back.

Well, here we are. We are in a situation where laws are applied without reference to humanity in the name of compassion.

[Rushdoony] Yes.

[Scott] And our economics are very similar. The economics are much more divorced now from reality than ever before. I know you have read, we have all read that some of our entertainers have been making 57 and 47 and 37 million dollars a year. I don't begrudge them that. I think that is very fine. Some fellow wrote an editorial about it in which he said, “If merit prevailed in all areas then these kind of great rewards might be more widely distributed.” But I have never seen merit established in that form and I do think that there is an unreasonable disparity between 57 million and 25,000 which is the average wage. I don't think the average man should be surmounted at quite so astronomical a level. And yet we are rapidly reaching the point where, as I said before, we have no money.

From 18... 1985 to 1987 the American dollar lost 40 percent of its value internationally. Now I don’t know how many people realize that their money is worth 40 percent less than it as, but that is an awful lot to lose.

[Rushdoony] Yes. Yes.

[Scott] Even though it isn’t immediately reflected, it is going to be reflected.

[Rushdoony] We don’t appreciate the full force of inflation, because it is constantly disguised. The packaging gets altered so the box is smaller and there is not as much in it and we get used to a smaller size. And we don’t realize that we are not getting as much for our money. We also see the fact of inflation disguised from us in that equality is lowered. But a good way to look at inflation and even there it is disguised by the fact of federal subsidies, is through your postage stamps. It was not too many years ago that it only took two cents to mail a letter. Since the World War II, the 50s, it was only three cents. Now in 88 it is going up to 25 cents. That means inflation has been a few hundred percent and there is no end in sight.

Now that is a more realistic estimate, because even with that estimate from say 1950 to 88 from three cents to 25 cents, doubling again and again, you have the fact of federal subsidies.

[Scott] Yes. Of course. So the real cost is disguised.

[Rushdoony] Yes.

[Scott] And everything is disguised.

[Rushdoony] Yes.

[Scott] We are reaching this period that I read about in Byzantium where the fellow said, the historian said, “Byzantium reached the stage where honor no longer existed. It began with the destruction of the bezant, the destruction of their money and then proceeded to the point where the most unscrupulous of individuals made the greatest of successes...

[Rushdoony] Yes.

[Scott] ...where the worthy found every door closed. Now we have the rise of the unworthy and there is very few things more bitter to see than to see shameful people become successful.

[Rushdoony] And even president.

[Scott] Yes. Yes.

[Rushdoony] Yes.

[Scott] Mr. Lyndon Johnson made over 20 million dollars and it was never on the government... off the government payroll his whole working life.

[Rushdoony] Yes.

[Scott] And not a word was said. No inquiries or congressional investigations were held and the character assassins that now prance across the state were silent.

[Rushdoony] Yes.

[Scott] We... we are witnessing the most open hypocrisies on all sides. Now how can you have an economic system without character? That is not possible.

[Rushdoony] No.

[Scott] That is not possible. International trade now, I remember, you recall when I went to interview Hamilton Smith.

[Rushdoony] Yes. Hamilton Fish.

[Scott] Hamilton Fish.

[Rushdoony] Yes.

[Scott] He was in his 90s and marvelous, marvelous old man. And he said, “Isn’t it strange there has never been a congressional inquiry into these enormous overseas loans?” He said, “Isn’t it strange that nobody has ever asked if the banker’s nephew isn’t involved? If in somebody getting a commission.”

[Rushdoony] Yes.

[Scott] He said these are incredible sums of money that have been disbursed, dispensed and nobody knows who did it to whom, how, under what circumstances. There has never been an inquiry into foreign aid. Isn't that amazing? But, of course, it isn’t amazing because somebody obviously is benefiting more than the titular beneficiary.

[Rushdoony] Yes and the foreign trade corrupts both us and the world. And the foreign aid similarly.

Dorothy is rather fond of the Harry Kemmelman books on the rabbi, detective stories. And one she read recently was Monday Rabbi Took Off by Harry Kemmelman, published in 1972. So it doesn’t give us the most recent data, but in this book the rabbi goes to Israel and he does not give a favorable account of Israel.

Let me read something and I believe this can be duplicated from other accounts that are not as tellingly stated in other countries, other recipients of foreign aid. This is a conversation.

“Well, you know, things are not cheap here. Food is. At least certain things are cheaper in the States.”

“Yes, but everything else is apt to be more expensive: housing, clothes, a car, electrical appliances. Most people seem to have them, even though it would seem impossible on the salaries they are paid. How people live in their salaries. That is the big miracle of Israel. I keep asking people, but I haven’t got a convincing explanation yet. As far as I can make out you borrow to buy the things you need like an apartment and then if you don’t keep up your payments it is almost impossible to evict you so they just add the missed payments to your debt and you just sweat it out until the currency is devalued or the government passes some form of relief law.”

“Well, in the kibbutz you don’t have to worry about such things. Everything, all expenses are taken care of. And it appears to be a good life.”

“Yes, if we decided to settle here I would give it a lot of thought,” unquote.

Well, as I said, you can duplicate that all over the world.

[Scott] Well, yes, you can. But then you look at the terrible mistake, the terrible mistake that Israel has made in placing itself into a position of dependency.

[Rushdoony] Oh, yes. That it will destroy itself because of that.

[Scott] ...upon the... the United States. We don’t have a very good record for taking care of our dependents. As a matter of fact, we have betrayed a long string of allies. The only World War II ally that we haven’t betrayed is the Soviet Union, because we were afraid to. But I fear for Israel in the long run, because of its dependency and because it has created not greater love. If you become dependent upon another man you will grow to hate him. It is not possible. To lose independence is to lose the everything that is worthwhile. Israel should have really restrained itself, lived more austerely, done it more on its own. And that is not to underrate the energy or the brilliance of the people, but simply that they placed themselves in a very precarious position.

[Rushdoony] Yes. Well, what he describes there in Israel you can say is taking place in this country. People are going into debt more and more, expecting dollars to depreciate further so that they might be bailed out by that and then they go into debt again.

[Scott] Well, they are sure that in the long run the government will take care of them.

[Rushdoony] Yes.

[Scott] They will get old and they don’t have to worry because the government will see to it that all the old people are taken care of. Now I don’t know how many of the people who think this have actually gone into a government institution and seen the level of care. I have as a reporter gone into all kinds of institutions and I can tell you that we have very bad institutions. We do not have good ones.

[Rushdoony] Well, all this is a product of looking to the state for political, economic salvation when the answers lie elsewhere... elsewhere... when they are to be found in Christianity, not in politics, not in economics. And free trade has been one of those magic solutions that people have believed in and as a result it is one of the reasons for our downfall.

[Scott] Well let’s see. In 1968 was the peak of American power in the world. We produced that year 34 percent of all the goods that were produced in all the world. That is over a third of all the world’s goods were produced here. Today we produce about 15 percent. We have dropped in 20 years, one half our productive capacity.

[Rushdoony] And are continuing to drop.

[Scott] Now that is a tremendous drop.

[Rushdoony] Yes.

[Scott] Fifty percent in 20 years. And there isn’t anyway that you can prosper without a basis of work.

[Rushdoony] Yes.

[Scott] And we are talking about physical things. We are talking about steel. We are talking about copper. We are talking about machine tools and all the nitty gritty things that grow up to make technology. We still have coal, of course. We still have gold. Gold is getting a resurgence because certain people... lots of people are hedging with gold.

I said question sometimes arises in my mind as to who they are going to trade with if things get as bad as they fear, because, really, there is no security in gold anymore than there is, I think it is the only real money, but there is no security in gold, in money. There is only security in association. When times are tough you are safest as if you are linked in with others, if you are part of a church, if you are part of an association, if you are a part of a group. But to be caught alone is the worst thing in the world in bad times.

[Rushdoony] Yes. During the minutes before we were on tape we were discussing the fact that there are some people on our mailing list who are faithful contributors and listeners to the Easy Chair who are now out of work simply because some kind of step, a trade agreement or something has wiped out a segment of the American economy. In one instance, well known to both of us, this was a family business that went back a couple of generations and it ended, not because of anything they did, but what was done in Washington.

[Scott] That is true. Now I know that... that case very well. Part of the... the... he was operating in Mississippi and that is part of the sun belt which, as we know, is now depressed.

[Rushdoony] Louisiana.

[Scott] Louisiana.

[Rushdoony] Yes.

[Scott] Yes. And yet we are looking down the road right now at several shortages . We... we are looking at shortage of petroleum products, for instance. If we destroy a few more of our refineries, we will only have relatively few left. Then the Mid East countries will set up a quadruple or quintuple or eight times or 10 times the price of gasoline. The Americans may have to start paying for the fuel that they have received so cheaply for so long and which they never really appreciated. I mean, this cheap fuel, cheap energy is what made the American nation and its technology possible. And yet not one American out of 10,000 has a kind word to say to the industry that brought that cheap fuel to him.

[Rushdoony] Yes.

[Scott] Now in the foreseeable future we will be facing a petroleum crunch as severe as the early 70s. And what will our solution be? If we go by past precedent it will be to bow down and obey new economic masters. Now this is ridiculous. It was ridiculous in the first place to put up with a quadruple price increase from the oil producing nations. We should have taken a leaf out of the old English and sent a few battleships over there and said, “We will take the oil,” because it is almost like a man with a well of water in the desert saying, “I will give it to you if you give me everything you own.”

[Rushdoony] Yes. And they were producing it for, what was it? Under a dollar a barrel.

[Scott] Oh, 10 cents, 10 cents. They can’t possibly lose money. In fact, the oil was discovered by Americans and English. It was extracted by them. They did the work. They found it. They did the work. They conveyed it to the markets of the world. They created the great technology and so forth.

[Rushdoony] And they have established hospitals, housing, schools, everything in those countries.

[Scott] Well...

[Rushdoony] They have changed the life of those countries.

[Scott] That is true.

[Rushdoony] And yet they are punished.

[Scott] It gets back to Lord Belarus’ observations on the third world. He said, “We are now living at a time where we expect the industrialized nations to improve conditions in the third world, to lend them money, to send them technology, to teach them how to use it, to raise them up. But,” he said, “Europe itself did not elevate that way. The West did not become rich because Chinese gave it money and professors and technology and helped it out. The Europe—and we are part of Europe—grew through hard work through the centuries. And why don’t we expect other countries to do the same?

[Rushdoony] Yes. We believe that because the rational is the real, if we decree that a country that as in one particular instance it is still in the head hunting stage, is going to be brought up to the level of the American and the English peoples within 10 years...

[Scott] That is the Figis.

[Rushdoony] No, it is Papua New Guinea.

[Scott] Papua. Yes.

[Rushdoony] They have provided them, England has, with a constitution that is about two inches thick, written by lawyers in London that has no relationship to the realities of a country still inhabited by very, very backwards head hunting peoples.

[Scott] You think that there is a cetin level of civilization which turns people into idiots.

[Rushdoony] There is a level of unbelief that leads to idiocy and a good deal of the western world is now in that idiot stage.

[Scott] Well, to believe in these I phantoms and... and... without any basis in ... in... in reality, we have... I keep running into people who have strong opinions and no information whatever. I don’t know where the opinions come from, from the air, from the newspapers, from what the other fellow said yesterday afternoon. But they are... they are very firm about it. And especially on the free trade stage. I can’t tell you how many people I have infuriated by criticizing that idea. And yet I am not for pitting or putting up a Chinese wall around the United States.

[Rushdoony] No.

[Scott] We... we, of course we are a part of a world wide civilization and we have to trade with one another, but I think we should have a little common sense about it.

[Rushdoony] Yes. Well, consider the fact that some foreign countries have subsidized their airlines on flights from the United States to Europe in order to help wipe out our airlines.

[Scott] Pan Am.

[Rushdoony] Yes.

[Scott] Was done in that way.

[Rushdoony] Well, when Gary Mose and his family were returning from Sweden I found out on investigation it was necessary, if I wanted to save money, to buy the ticket here, because if he bought it there it would cost more. This was on a Swedish airline so that they...

[Scott] ...are charging less to fly from here on their airline than they charge their own people to fly their own airline.

[Rushdoony] Oh, yes. They are ready to capitalize on any American money being spent. But if someone in Sweden goes to buy a ticket, he pays more for it. Alva told me at the travel agency that for one person, Swedish, it was advisable because he had to be very careful of his money to send the money over here indirectly in a number of ways and have his daughter buy it in the country so that he could fly here at some reduced cost, that is, savings.

[Scott] It boggles the mind. Well, of course, air line fares boggle the mind anyway.

[Rushdoony] Yes. Well, our time is almost over. Is there anything you would like to say, Otto?

[Scott] Well, I think you said something very pertinent when you said we should really start to rethink almost all the certainties of modern life.

[Rushdoony] Yes.

[Scott] It is time to take another look because we are all in a swamp and we didn’t obviously get there by doing things intelligently.

[Rushdoony] Well, that rethinking is what Chalcedon is about. That is what separates us and gives us a following as well as gives us opposition, because we are challenging the accepted truths of the modern age.

Well, our time is over now. I want to thank you all for listening. I appreciate the comments of some of you and the fact that you say you do enjoy the Rush and Otto show. Thank you all and good night.

[Scott] I have never heard that. They are going to {?}

[Rushdoony] Yes.

[Voice] Authorized by the Chalcedon Foundation. Archived by the Mount Olive Tape Library. Digitized by ChristRules.com.