From the Easy Chair

The Global Economics

Professor: Dr. R.J. Rushdoony

Subject: Conversations, Panels and Sermons

Lesson: 88-214

Genre: Speech

Track:

Dictation Name: RR161BU132

Year: 1980s and 1990s

Dr. R. J. Rushdoony, RR161BU132, The Global Economics, from the Easy Chair, excellent colloquies on various subjects.

[ Rushdoony ] This is R. J. Rushdoony, Easy Chair number 236, February the fifth, 1991.

Otto Scott and I are going to discuss in this session global economics.

There is a great deal of stress on the global character of economics today. An interesting book on this has been written by Kenichi Ohmae, O H M A E, The Borderless World: Power and Strategy in the Interlinked Economy, published by Harper in 1990.

However, the idea of a global economy is nothing new. Much of what is being said today rests on the approach made to it, the approach that has in mind the kind of thing that George Bush and Gorbachev talk about, the new order. Economy, historically, has always been more or less global. It has been international. One of the books that I read in the 30s by a professor of considerable stature at the University of California at Berkeley was entitled Rome and China. And it was a study of the trade between Rome and China in the pre Christian and early Christian era. And the author, Tennant, pointed out that it was the disruption of those trade routes that led, in part, to the long depression into which Rome drifted.

So the economy of the world at that time included Europe and Asia and Rome’s trade included a good deal of Europe and north Africa. So the idea of a global economy is not new. What is important in the current discussion is the kind of framework these people see the global economy having a place in.

Now, Otto, do you want to deal with that aspect of it?

[ Scott ] Well, recently the financiers have decided that it is one world and that the control of the global economy can be accomplished through various financial transactions. Using computers which operate faster than the speed of light they have been able to exchange currencies and even properties at a rate that go across international borders and have largely escaped the control of national governments. One of the developments of that has been the creation of international blocks or groups, the EEC. And, as you know, Margaret Thatcher lost her position as prime minister because she didn’t want to completely surrender British control of its own financial house to the European common market and so forth.

Now, in my opinion, these are... these have been well discussed and often described. I think they are very short sighted and I don’t think that they have taken into consideration the shape of the new world as it is beginning to emerge.

Let’s say, for instance, that India becomes an industrial power, which it is on its way to being, that eventually China will become an industrial power, which it is on its way to being, that the Soviets using German technology begin to become more of a productive power than they are today. They really are a big industrial power which most people don't seem to understand, but they lack transportation facilities. All they have to do is to build a transportation network and they would be a very formidable competitor. Europe, eastern... half of Europe, at least eastern Europe would come forward. Then we would be confronted in the United States with a different kind of global economy. What we don’t appreciate which was pointed out recently by a very interesting writer, its hat the Cold War, in effect, under Stalin pulled eastern Europe and the Communist block out of the global economy. So therefore we functioned with only half the world as a competitor. If we have the whole world as a competitor we are going to be... have to work an awful lot harder and an awful lot smarter.

[ Rushdoony ] Yes. The world has, since World War II, broken up into a number of trading blocks which have been more or less at war with each other. We have had ours. The EEC is one. Russia has had its, a sick one. The Japanese have had theirs, the South Africans theirs, Taiwan its own and so on. And all of these have worked more or less not merely in competition with one another, but attempting to wage war, as it were, on the others. They have been closely tied to politics.

At the same time there has been a complicating factor. I mentioned Ohmae’s book, The Borderless World. One of the interesting aspects of that book is the fact that he never touches on the monetary situation. And what we have had since World War II is the growth of what used to be called multi nationals. Ohmae raises the question whether IBM is a Japanese or an American organization and he raises the same question with regard to some Japanese firms. In other words, there are now so many interlocks. And one reason for it is that money does not cross borders very well, because there is no gold exchange standard and, as a result, the only way you can keep your profits in a particular country is to invest in that country. So we have been talking about a global economy and we have, in the process, been destroying it by our paper money economy and compelling industry to an expedient it was not happy about. It does not like to be under multiple political jurisdictions, but it has been compelled to be.

[ Scott ] Well, most of the multi nationals today are non American. We have lost in the world market place our position as the leading producer of the world. And our heavy industries have been melting. We have lost 90 percent of our steel industry compared to what it was in, say, 1950, 90 percent. We have lost 25 percent our textile industry. We have lost a great large percentage of some chunks of other industries, our mining industry and so forth. We have switched from heavy industry or manufacturing into finance. But our big banks are no longer in the top 10 internationally. We don’t have a single one left in the top 10.

[ Rushdoony ] That happened in the 80s, I believe.

[ Scott ] Yes.

[ Rushdoony ] So it is very recent.

[ Scott ] It is very recent. Now Pirelli Barnet wrote a very interesting history of the fall of Great Britain which caused a sensation over there and I don’t believe very many observers have looked at it over here. He traced the downfall of Great Britain from the introduction of free trade in the 1840s, the... what they called the Corn Act which removed the tariff protections from English agriculture in 1840. In 1850 when they had the great fair in London everyone says that was the peak of the empire’s prosperity. What the professors here never seem to have discovered is that by 1870 one generation after the passage of the Corn Act four million Englishmen had left the farms and New England was no longer able to feed itself for the first time in its long history. It had relied upon imported food.

Frederick Lease, a German economist whom... whose advice Bismarck and others followed, took the opposite approach. He said, “There are certain commodities which no responsible government would allow to fall into foreign hands. One of them was food another was steel. And he named a number of industries acknowledging that they would not always be most efficiently functioning because of the lack of competition. Nevertheless for national reasons had to be protected, otherwise the people of that country would fall under the control and domination of other powers. The Japanese, for instance, are well aware of Frederick Lease, but I believe that it fits their own pattern anyway, will not release, lower their agricultural tariffs and accept American rice, because, they said, “We want to be in charge of our own food.”

Now England not only destroyed its agricultural business, as it was warned it would, but its other industries began to lag behind modernization of Germany, England, Australia and Canada in the pre World War I period. It remained a very large and rich power, but it was an obsolete rich power. It was vey active, however, in financial circles. It continued to exercise a dominant position in world international finance even after the difficulties of World War I up through the 30s. In fact, it was in large measure English advice that led us into the Depression.

[ Rushdoony ] You called attention to something, I think, that is very, very important, what happened in the Britain, the destruction of agriculture. Some years ago, in fact, in the 50s or the beginning of the 60s I heard a very able conservative economist lecture on the disasters that were underway because every country in the world was concentrating on industrialization rather than the development of its agriculture. And this is a very real problem. This same man said, also, that the United States would have been—even more than it has been since—the world’s supplier of food and raw materials, but for the fact that Hamilton began the subsidy of manufacture. And we have ever since been subsidizing manufacturing when, logically, our country could be the greatest food producer the world has ever imagined or could imagine. And, of course, we know how many magnificent farms have given way to urban sprawl. The whole area around San Jose was once one of the great food producing areas. It has all disappeared.

We see this and the economic consequences for the global economy are serious right now. We have been warned by some that the world could face in this decade and within a year or two serious food problems. California is now in its fifth year of draught with another year likely and California is the major food producer for not only the United States, but for many parts of the world. But an important fact that you have called attention to in our staff breakfast more than once—and I think it needs repeating again and again—is that well over 50 percent of the population of the United States lives within 50 miles of the ocean and or the oceans and the gulf, but uses most of the water in the United States instead of turning to desalinization.

Well, this fact right now is important because the state of California is cutting off all water to farmers. It is cutting back on the water to the cities, but it is eliminating water to the farmers. In Kern County alone the news last night said 100,000 acres in {?} crops will not be planted. The was an interview with a man in the delta region not too far from here. He has 700 acres, 500 of it normally planted in row crops which he cannot plant this year. He is buying water from a neighbor in order to keep 200 acres of walnuts alive. He does not expect a good harvest, but he wants to keep the trees alive.

It is this kind of short sightedness, its urban orientation that is hurting the global economy. Everybody acts as though food is and all over the world food production is giving way to industrialization.

[ Scott ] Well that is true. The ... we are sort of moving back and forth between the regional and the global in this conversation.

[ Rushdoony ] Yes.

[ Scott ] You just bring up the regional. There was a draught, a previous long draught in California, I understand lasted seven years. And we are probably going to see a repetition of that. The same thing was true in the Southwest in general. Texas, in particular, was a place where you either had chickens or fathers, because people would flock in during the fertile periods of Texas and then, of course, they would go broke because of draught and sand storms and everything else and they would flock out again in rags.

On a... and I read recently a rather interesting comment on this whole business of if we have semi desert out here as ... as everyone seems to have forgotten. It has to be constantly irrigated. In a real desert like Libya, which is 90 percent desert, Khadafy is hitting the underground ancient pools called aquifers and he is going to tap these aquifers which have been pools of water down there since prehistoric times way below the desert level and wants to bring them up and use them to set up a series of pipeline irrigations of the Libyan desert. That is something to look at in the future, because if he succeeds in this effort, which, incidentally the geologists are against, I don’t know why, but they look upon it with disfavor. If we go back to the global, one of the greatest producers of food in the world was Russia, Georgia in particular. If ... if in the future Russia pulls itself together, which, of course, it will eventually do, because we are talking out hundreds of millions of diligent and intelligent people, the United States will no longer be the place with ... the world will get its food from, because it will have competition from that area, from Eurasia.

This is what I am talking about in terms of the global long range. If the Chinese pull themselves together as they are trying to do, maybe not in the best of possible ways, but autocracy has its time in the sun. When you consider the incoherent condition of China in, say, the 1950s an effort at coherence may eventually result in a more productive country and India, similarly.

So we are going to have to, I think, stop thinking in global terms because we have had a great rush of conceit to the head in the United States. We keep thinking as though we ... because we emerged victorious in World War II that we are the lords of the universe and we are not. This country has taken off a big bite of what it hoped to become world control and it is now very evident that neither this country nor any other is going to control the world.

[ Rushdoony ] Yes. To go back to something you said, the aquifers are underground lakes, deep underground. Now just as on the surface, we have lakes and we have rivers and creeks. So underground there re rivers and creeks and lakes, the aquifers. As a matter of fact, our place is on the golden river, an underground river at about 100 feet in depth. What happens when you tap the aquifers is that the ground settles. That means that the streams...

[ Scott ] A pocket closes.

[ Rushdoony ] Yes. And the streams do not flow then. The earth compacts. The San Joaquin Valley, which is the world’s greatest food producing area has in this century subsided 20 feet. Now that is quite a bit of settling and it is not as in Florida where you have a sink hole developing and a building disappears, but it has been an even drop so that nobody’s house has been torn apart.

[ Scott ] From what cause?

[ Rushdoony ] From too much water being taken out.’

[ Scott ] From tapping the aquifers.

[ Rushdoony ] Yes. Now.... well, too much from the streams and wherever there are small aquifers. Now one of these problems goes back to the problem of the urban areas draining water. It is one of the facts that very few people recognize that the area you and I are living in today, the Sierra Nevadas are the greatest area of... well, the greatest watershed in the United States. This is why California can survive four, five, six, seven years of draught in a way that other parts of the country cannot. If you have draught one year in many parts of the United States everybody is in desperate trouble. But because of the water storage we are able to survive.

However, now that has been interfered with. You remember we were discussing the other day the fact that in California because of this one man one vote business, the counties and the representation has been destroyed. Counties no longer have a senate representation just because they are a county. They are now in terms of population so that ...

[ Scott ] Same as the house.

[ Rushdoony ] Same as the house, so that several mountain counties have to go together with some of the valley and urban areas to make up one Senator.

[ Scott ] They have lost their political leverage.

[ Rushdoony ] Exactly and with that the cities have come up into the mountains and claimed the right to take the water.

[ Scott ] So the parasite is killing the host.

[ Rushdoony ] Exactly. And this is what is leading to the land subsiding.

[ Scott ] Now suppose, going back to Khadafy, he taps his aquifers which, as I understand it, are much deeper...

[ Rushdoony ] Yes.

[ Scott ] ... than the ones...

[ Rushdoony ] Some of them are very deep.

[ Scott ] Yeah, very deep. An the geologists are against it because they say it is ancient water and I don’t know exactly what they mean by that or why... I... I just wondered when I read the description whether that meant it didn't have proper mineral content or whatever.

[ Rushdoony ] No. It will cause subsiding.

[ Scott ] It causes the desert to sink all down.

[ Rushdoony ] And it will mean that it will compact so that...

[ Scott ] So that not more water will be developed there.

[ Rushdoony ] That is right.

[ Scott ] Ok.

[ Rushdoony ] It will be difficult for them to come through. For example, in the last draught we had and we were here then, there were springs that dried up. We had a lovely spring way up near the top of our property that dried up. What happened was that when the water was no longer there everything compacted and therefore when the water began to flow again it took other channels and went elsewhere. So what Khadafy is going to do is to cause the area to compact.

Now there was something being done there prior to World War II by the United States. We were sending over men into north Africa to reforest those mountains which were just bleak, barren dirt and rock piles. We did it because at the time we had a certain amount of authority. They were colonies and we were able to enforce the rules, mainly that the areas where we planted the trees had to be kept free from goats and sheep to give the trees a chance to grow and, second, that there was to be no cutting in those areas.

Well, of course, the minute Colonialism ended there, then goats, which are the most destructive of all animals in that they will, well, the old saying is that cows will starve where sheep will grow fat and goats will grow fat where sheep will starve. So they eat even the bark of trees and kill them. So what was beginning to happen as a result of our work in a variety of places such as Mauritania, was that as these trees were beginning to grow there was some water retention and streams were beginning to show signs of reappearing, at least for a time. But that has been destroyed.

[ Scott ] Well, that is interesting. And I do agree that industrialization in some areas of the world was a grave mistake. I think that is no obvious because these are... in some of these areas they did not have the infrastructure to maintain an industrialized civilization. Eventually they will have to fall back on their agricultural resources in order to stay alive. The United States, however, has done something else. The United States has turned itself into an agricultural exporter at the expense of its manufacturing and industrial position. And the United States is also made a big switch by lowering its tariffs under the Roosevelt one world theory and substituting the income for tariffs.

We have done two things. First of all, we have allowed a flood of foreign goods to press our industries to the wall and, secondly, we have taken from our people the fruits of their labor. Now these are two wonderful grindstones to be caught in.

[ Rushdoony ] Yes.

[ Scott ] Because it has made us a much poorer, much poorer nation. Our wages are lower than they were before. Our living standard is not as good as our parents. We don’t have servants. We can’t order things from the grocery and have them delivered. This is a how to and do it yourself country today because we can’t afford the amenities that we used to enjoy.

[ Rushdoony ] Yes. Well, there have been dramatic changes in our lifetime so that when you think back to what was commonplace in the 20s and into the 30s you know that you are living in a different time. of course, you and I, as you observed yesterday, belong to a generation that will probably endure two depressions, live through two or at least live into the second.

[ Scott ] Just lucky.

[ Rushdoony ] Well, you can be sure we have the most exciting and interesting of times.

I think we ought to take a moment or two to call attention to the fact that the global economy of our day is not a true economy. It is a political economy. I thought of this as I encountered this item from the Washington Times, January 11, 1991, namely Michael {?} managing director of the International Monetary Fund yesterday praised President Bush’s recent proposal for easing the Soviet Union into IMF, International Monetary Fund, membership as a good and pragmatic one. And he ... and the article adds that Albania may soon apply for IMF membership and other central European countries already have programs in place.

Well, at the same time the Washington Post for January 23, 1991 has an article that the Soviet Union has bought U S wheat for the first time under a new credit guarantee arrangement and it has subsidized prices about one third below the going export rate so that the Soviet Union is now buying wheat at a lower price than previously and, of course, we have always had a subsidized price in our foreign trade.

Sot he global economy is an artificial economy. You and I pay the full price for produce whereas other countries will buy it at a subsidized rate.

[ Scott ] Well, the United States government seems to be under the impression that it is a charitable organization and that the American people have a duty to support the world. This is what I was talking about before when I said that the hubris...

[ Rushdoony ] Yes.

[ Scott ] ... that has attended our post World War II situation we really and truly believe this myth of the super power. Now we have never been a super power because there is no such thing. We were a great power, yes, but not a super power. Events have been occurring quite regularly beyond our areas of control even in the political area that you mentioned and it is true that we have moved into a period when governments now feel that they have a duty to regulate economies and the people have accepted this and said, “Well, nothing really bad can happen to us because the government will take care of us.” Unfortunately, as Adam Smith pointed out, governments are incapable of controlling any economy. They kill everything they touch, because compulsion comes in. When compulsion comes in, innovation stops.

[ Rushdoony ] Yes.

[ Scott ] A man who is under orders cannot think for himself. He is not allowed to. He can only carry out orders. It is a very simple syllogism which seems to have evaded a great many of our intellectuals who themselves don’t want orders, but who want to give them. So they kill.

In Nicaragua, for instance, had a booming agricultural export business under Somoza. It was the wealthiest country in Central America. It had... except in Mexico, of course, which was much larger. It sold its agriculture around the world. It had all kinds of untilled land that was available so the old Marxist idea that there wasn’t enough land, property and so forth was absolutely off base. Under the Marxists, where they began to control and collectivize, they are starving. Now this has been true in every Socialist country in the world without exception. And yet our government is moving into he direction of command and control under the Clean Air Act. Farmers as well as manufacturers are accused of being polluters because insecticides and so forth and so on.

We are going to be, in terms of the global economy a poorer country like Great Britain after World War II. We have wasted our substance, not necessarily in wars, but in foreign subsidies and foreign aid to now we are involved in a foreign adventure we cannot afford. So the net result of a man spending more than he earns is that he gets poor.

[ Rushdoony ] Yes. Well, the controls of World War II led to the kind of farm subsidies that have existed since. I recall in 19... in the 1950s how the farmers were very bitter here in California about the whole business. First of all, during the war, of course, farm prices rose, because there was the need to ship food to our servicemen and agricultural products, of course, went up in price. Then after the war the federal government stepped in to subsidize these things supposedly to protect the farmers. It did this against the will of almost every group. Only one group, the cattlemen paid quite a price, because they were punished for it, resisted subsidies.

[ Scott ] That was meat shortage.

[ Rushdoony ] Yes.

[ Scott ] ...when they withheld the cattle from the market. Do you remember?

[ Rushdoony ] Yes, but they were not going to have subsidized prices. And the price dropped dramatically, I think, around 51, just crashed. But the cattlemen said, “We prefer it that way.”

But what happened, thus, was that, say, the raisin growers were receiving per ton a war time shortage price when raisins were in plentiful supply. Huge surpluses were being created. Those surpluses were then being shipped overseas at half the price and sold to various countries. And the farmers were told this is the way we are creating an international market for your produce. But meanwhile certain things were happening here.

In the era before World War II raisins were very widely consumed by Americans. You remember the little boxes of raisins...

[ Scott ] Very much so.

[ Rushdoony ] ...that were packed with your school lunch.

[ Scott ] Oh, sure.

[ Rushdoony ] And the advertising. Have you had your iron today and that sort of that?

[ Scott ] I hated it, because I never liked raisins.

[ Rushdoony ] Well, I did. But ... and I used to eat them by the handful. But those things disappeared because the average American was put out of the market as far as buying raisins except during the holiday season to make a fruitcake or something like that. So the domestic market was destroyed by the subsidy in the name of creating a global or a world market by selling abroad at subsidized prices.

This made it easier for people in certain foreign countries to have raisins than it was for the American people.

[ Scott ] Well, we are in the process with the Clean Air Act of driving out a great many manufacturers in the country to Mexico and to the Pacific rim nations and other places which will not have the same EPA rules, regulations that we have. And I think in that regard it is interesting to note that the courts have allowed the IRS to practically write out their own subpoenas to go in and investigate and commandeer records to conduct an ongoing investigation before the placing of a charge. And then as a result of the investigation to make a charge, to conduct arrests to write out, what, in effect, are warrants and seizures before conviction, before trial.

Now the EPA, the courts have allowed this. And the country has allowed it and the people have gone along with it. We all pay our taxes dutifully and so forth. That precedent has now enabled the Congress and the EPA agency, the EPA to enable all the new inspectors to do the same thing. They will be able to go into a plant and at every violation they find they discover, they can write out on the spot a fine of up to 5000 dollars. And they can do this without getting a subpoena to investigate or to search or anything else. They have the power to go in to find a violation, to fine you and to start a whole proceeding against the corporation beginning and including the fact that the senior officers can be criminally charged.

Now this is what the EPA is now empowered to do.

[ Rushdoony ] Yes.

[ Scott ] Now. I... I can’t quite understand the paralysis of the American people who are cheering this sort of thing.

Do you realize that General Motors could be put down tomorrow morning?

[ Rushdoony ] Yes.

[ Scott ] And the chairman put in the penitentiary. Stalin blamed all the difficulties of the country on sabotage by the engineers, agents, he said, of the British secret service.

Well, we simply call them polluters.

Now on a global scale we are talking about the global economy, mind you. We are talking about the... you brought in the effect of politics on the... on economics. And I am continuing the theme that you have introduced. On a global scale they keep talking about liberty as though liberty consists of a certain form of government, the fact that you can vote.

[ Rushdoony ] Yes.

[ Scott ] Now the fact that you can vote in the United States does not mean that you are free. You are actually governed by party oligarchy. Two parties pick up all the candidates. You have a choice between these two candidates. You never heard of them before. You don't like either one, but that is all. You are not with your vote choosing your leaders. You are choosing which of the two leaders, which of the two parties give you a chance to choose. In that same sense you are not economically free. There is not a single area of economic activity today that is not governed. And that is true not only here, but it is true in Great Britain. It is true in France. It is true that the Soviet is discovering that it cannot maintain political power while enabling economic freedom to emerge. So if we want to talk about the global economy, we are talking about a return to regionalism. We are talking about the decline of the reach of the super power in the governing sense and we are talking about a poor world, because it is a world that is turned away from the industrial system which Christendom once introduced.

[ Rushdoony ] Yes. You mentioned voting. Just as a little aside, I understand Nevada introduced a measure whereby you can vote for, instead of a candidate, none of the above.

[ Scott ] Oh, that is a marvelous thing.

[ Rushdoony ] And it is...

[ Scott ] There are many. None of the above is winning.

[ Rushdoony ] Yes, none of the above is doing very, very well.

[ Scott ] Did you read where some man once tried to get his name changed to none of the above and the courts turned it down?

[ Rushdoony ] Well, I am sure you read, as I did, something in the Daily News Digest for January the 30th and I am just going to read a portion of it to show what happens when politics intervenes in domestic or global economy. This is on page two.

“Which of the president’s sons has a financial stake in the Persian Gulf that would be lost if Saddam Hussein is not kicked out? Answer, the oldest son George Bush, Junior who is a director, a large stock holder and 120,000 a year consultant to Harkin Energy Corporation of Dallas. In 1986 Harkin Energy merged with Bush’s Midland Oil Company Spectrum Seven Exploration Corporation. In January 1990 Harkin signed an agreement with Bahrain 200 miles southeast of Kuwait for the exclusive right to explore for, develop, produce, transport and market oil and gas. At the time Forbes magazine in an article that never mentioned Bushy quoted an analyst as saying, ‘This is an incredible deal, unbelievable for this small company.’ And then which oil company ... oil producing company took care not to patronize the Rockefeller empire banks which, according to professor Murray Rothbart financed George Bush’s first oil company? Answer. Iraq.”

And so on and on. And equally devastating is R. E. McMaster’s The Reaper, volume XV numbers 12 and 13, January 24 a section I won’t quote, but many pages long entitled “Cosmos: Dealing with the Missing Piece in the War Story.”

Now I don’t know how true these are. I have no reason to doubt them, but I have no way of confirming them. But what I am saying is that once politics enters into the economic sphere radical and total corruption then ensue. This is as old as Rome and it was old when Rome was an empire. It means that the economic sphere becomes an area of manipulation by those who are powerful in the political sphere.

So instead of a global economy we have a political economy and a corrupt economy and the consequences of that, I think, will be deadly.

[ Scott ] Well, we are, to bring this into some more immediate terms, we are in a very peculiar position in the United States. We have gone from a creditor to a debtor nation. Foreigners are buying increasing reaches of our property. We have paralleled the English, after World War II in the sense of no longer being masters of our own house. And we have, at this point, a recession. There is somewhere between seven and eight million unemployed. It is an awful lot of people, an awful lot of people.

We have a continuing inflation which the press insists does not exist. But when the president announces a one and a half trillion dollar budget, you can appreciate the extent of the currency deflation. The ... a trillion was an imaginary figure up until a decade or so ago.

[ Rushdoony ] Yes.

[ Scott ] You can hardly conceive it now. It is at a million billion is a trillion. We could go on. We also have the APA. We have a war. We have heavier taxes than we have ever had before despite the reduction in the percentage because of all of the deductions practically have been outlawed and now, of course, congress is talking about raising the percentage. Don’t be fooled by the fact they are only going to hit the rich. They always hit everybody. There aren’t enough rich to go around as you and I know. We think there should be more rich, but it doesn’t appear likely that there is going to be too many more.

So we seem to be facing, as you said before, a second depression in one lifetime, which, I think, is too much of a bad thing. And I see very little recognition of very little sign that we know how to get out of it.

Now Margaret Thatcher tried to get the English out of it, but the discipline was too much for them. And I don’t hear as much about Prime Minister Major as we used to hear about Prime Minister Thatcher.

[ Rushdoony ] Indeed.

[ Scott ] England has lost a lot of stature...

[ Rushdoony ] Yes.

[ Scott ] ...in that transfer.

[ Rushdoony ] He is going to avoid rocking the boat, apparently.

[ Scott ] Well, a man that doesn't rock the boat doesn't seem to understand what kind of water he is in.

[ Rushdoony ] Yes.

[ Scott ] The short term prospect for the global economy is bad times, because we are going into bad times and we are still a big financial power. Japan has lost about half of its stock market values in the last six or seven months. That is a sickening problem. England is in shaking condition. Germany is going to spend all of its money absorbing East Germany and helping the Russians and I would take very seriously the anti American demonstrations in Germany that are masquerading as peace demonstrations.

After 45 or 50 year of denunciation the Germans don’t want to hear much more from us. Now that was almost a predicable reaction. At first they were covered with guilt. They paid a penance. They put out billions of dollars in reparations and so forth, but there is a limit to the denunciation that any group of people will accept from the world. I would say that Germans move to the East is a very serious and significant one which is going to change the global economy, because German is going to be the strongest nation left in Europe.

So all these comments about where we are going add up, in my opinion, to the fact that we are going to have to give up this great big floating ideas about the new world order that we are going to be in charge of. We are not going to be in charge of anything. We will be lucky if we can pull ourselves out of the hole that our leaders have led us into.

[ Rushdoony ] There was a point made by Ohmae in his book that I thought was very interesting. He said that one of the things that big companies need to do is to relearn the art of invention. In recent years this has subsided and I think, partly, because of the tax structure and, perhaps, to a great extent the tax structure.

The last great wave of invention marked the closing years of the 50s and the early 60s and it led to computers and related activities which many said marked the third industrial revolution, but since then there has been a slowing down of this sort of thing.

Well, a couple of years ago someone told me something... Well, before I got into that, do you remember as a boy, Otto, how many people were tinkerers inventing something.

[ Scott ] Oh, sure.

[ Rushdoony ] That was one of the most common things.

[ Scott ] That was because there was a patent.

[ Rushdoony ] Yes.

[ Scott ] Privilege. And you had a monopoly over your invention for 28 years or whatever. Now the patent office decided that that was not nice. You shouldn’t have a monopoly. They minute they grant you a patent, you are forced to license everyone who wants to use it and content yourself with a small royalty. So the urge to invent practically vanished.

[ Rushdoony ] Yes.

[ Scott ] The idea was that a monopoly of any sort, even a limited monopoly was unequal and unjust. Everything must be equal. So consequently everyone went back, the average man went back to where he was before the patent office started. The hell with it.

[ Rushdoony ] Yes.

[ Scott ] If you are not going to be able to collect the fruits of your invention, why should you suffer and sacrifice in order to do it?

[ Rushdoony ] Yes, well, that brings me—and our time is almost over—to an interesting point that someone made to me two years ago that the modern atmosphere politically has discouraged inventions, but that in recent years some very interesting work has been done here by the one element in the population stubborn enough to go ahead anyway, predominantly Christians so that it would appear that the Christians are going to be the sources of the most {?} inventions for the next century. Some remarkable things taking place. And it should not surprise us.

Lou Rockwell in a recent monograph said, and I quote, “The de Christianization of public policy has resulted in an environmental movement that is not only anti capitalist, but pro pagan,” unquote. I think he is absolutely right. But I think what is happening is that in every sphere including inventions and the economic sphere, Christians are making a come back.

[ Scott ] Well, yes, because though the home school and the Christian schools are being taught to read. And someone asked me once years ago if I wasn’t upset over the growing illiteracy and the expansion of stupid things and stupid people for that matter around the world. And I said, “No, not necessarily. It just makes it easier for the rest of us.”

[ Rushdoony ] Yes. Well, on that note we will conclude. Thank you all for listening and thank you for your letters and comments and God bless you all.

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