You, you have a very different system, I would suspect, than if you try to live by them most of the time.

And so I, I think your...

the, the connection with Lord Moulton is right.

If you-- people may or may not remember, I suggest that if they listen to that podcast, after they finish listening to this one, of course.

Um, the thing about... that Lord Moulton said is that there are a bunch of things that are wrong that are not illegal, and we have to do that because people have to be capable of self-control.

And Patrick Deneen, in his book, a professor at Notre Dame, in his 2018, uh, Princeton University Press book, The Failure of Liberalism, said that he thinks liberalism is failing because it has come to the view that anything that is not illegal is moral.

Now, I think he's mistaken about that as a matter of definition, but I think I am uncomfortably close to agreeing with him that there is that potential, because it is possible to say, "Well, since it's not illegal, you're allowed to do it," but you still shouldn't do it.

And the choices we make to what we put under public policy's purview is, is, is then crucial and, and recog- it recognizes that because the groups don't always work as well as we might like, doesn't mean we should do everything in a group, and we certainly shouldn't do everything alone.

I know Coase explained why firms exist, but what happens to a firm when AI drives some transaction costs towards zero?

It's an interesting question about whether the optimal size of a firm is zero.

That is, if I could make all of my buying and selling decisions on the spot market every day, and if I could automate that with AI, and if I could then use Ethereum for smart contracts to make most of the management decisions, I can just put on bunny slippers, put my feet up, and watch YouTube, and the money comes pouring in.

The problem is that there's two problems.

One, to the extent that that happens, then we see these giant platforms become more and more powerful because whoever is running the AI system, AI by its nature, there's big economies of scale and there's network economies.

So we're going to have very large firms.

So I have been predicting for some time a bifurcation.

Okay.

So what are the mechanisms that we're going to use to distribute health care resources if we've decided price is not an

option? Gosh, darn it.

I mean, the problem is I'm a professor and you've asked an economics question.

So I hope you have 45 minutes.

I'll try to do it in three.

I'll try to do it in three.

So first, there are four different ways that we can ration things that are scarce.

And so what do you think the historical record has said? What does historical record say from your viewing of it that kind of validates or invalidates Ken Arrow's arguments? Because I think that's the underlying discussion, right? Am I getting that wrong?

Uh, Mike, tell us a little bit about this rivalry, its intensity, and the challenge that provides to the people who sell the tickets.

I'm happy to get a chance to talk about this.

Uh, basketball is very important in North Carolina.

It's important in other states also, Kentucky, Indiana, so I, I don't wanna claim that North Carolina is, uh, best, but it is certainly up there in its-- the importance of college basketball as opposed to professional basketball or other professional sports.

So, um, I was an undergraduate at Davidson College.

We always played Duke and got killed.

Um, then I moved to University of North Carolina, where I was much more initiated into the sort of cultic dislike of the other.

We will

Is that correct, Professor?

It is correct, and I think to understand that, you have to understand the sensibility of the time.

So an anecdote.

Suppose that it's 1820 and your daughter had a fever.

You would call a doctor.

The doctor would come, and given the theories of the 1820s, would say, "Ah, she has a fever.

That means she has an excessive amount of the humor, sanguine.

What is that? We have a couple of minutes, Professor.

What was, and what does it mean, regime uncertainty? Good evening to you.

Good evening to you.

Well, the-- throughout American economic history, there had been, uh, recessions.

Some of them were quite sharp, some of them were devastating, large losses of jobs and, uh, wealth, and banks closed.

Some people would lose their savings, but always the recovery had been fairly quick.

And in the 1920s, there had been a very large expansion in the amount of debt.

Uh, there were a number of instabilities in the economy, and then there was the sharp, uh, great fall of-- in the stock market in October of 1929, and a lot of assets that he-- had before been sound now were unsound, and it seemed to have a cascading effect.

For example, this, the Bank Holiday was a success.

(laughs)

Capitalism is a set of market... specialized market institutions that allow time travel, and it's time travel that breaks a chicken and egg problem that thwarts the development of many nations.

And the single word that gives the argument for capitalism is one that I think most people don't expect.

That single word is liquidity.

Liquidity is a way of transitioning from money or resources that have value and can be transferred into fixed capital, which is resources that have value because it increases the productivity of labor, but that cannot be easily transferred into something else.

So, usually, capital is a big bank account or line of credit where I have money, and I can devote it to buying things and create a factory, buy land, uh, hire a bunch of consultants, create an organizational structure.

So, th- this is money that can be moved around.... a physical factory, a place where I can build automobiles.

(laughs)

Am I imagining this? What are your thoughts?

Um, a, a bunch of shocking things have happened.

The-- i-in, in the Middle East, the collapse of Syria.

In Argentina, the rise and continued popularity of Javier Milei.

Um, and then in the US, the, for many people, unexpected not just victory but dominance of what you might call the Trump coalition, um, have put them in a position to be able to try to do things.

Now, I've been a libertarian since two thousand and four, and by being libertarian, I mean Big L libertarian.

I have been active in the Libertarian Party since then.

[laughs]