Feb 9, 2022
In this episode we talked about:
• Richard’s view on Government Policies
• Covid Mandates
• Effects on businesses
Part 1: https://workingcapitalpodcast.com/mandates-lockdowns-and-the-law-with-richard-epstein-part-1-ep89/
Transcription:
Jesse (0s): Well, welcome to part two of our two part series with Richard Epstein. We talked a little bit about the pandemic and its global impact last week. We're going to continue that conversation today for those that don't know, Richard is a legal scholar. He's been practicing law for 40 years, was a professor at New York university and is also part of the Hoover Institute. So without further ado part two, what I'm curious about is we've had a number of different policies. You're at the state that you're in right now in California and New York state is probably most similar to a lot of the policies that we've had Canada wide now to the, the Supreme court.
First of all, it's interesting to see Clarence Thomas actually talking now and asking questions. I feel like he's, he's there to fill the, fill the Scalia void, but on these policies of mandates, this is what I'm curious about. I have people like we all do family members that are on opposite sides of this that maybe experts may not be experts. But what we're talking about is from a constitutional point of view, I guess, in the states and in Canada, we're facing a number of different policies most recently in Quebec, not surprisingly Quebec, their premier Francois legal, just basically put forth.
I'm thinking that they're going to try to put this into law to actually tax the unvaccinated as a, as a group. There's a number of legal scholars in Canada that think that that is a impingement on our charter freedoms, so that I'm sure is going to be played out over the next few months. But from a libertarian perspective perspective, a classical liberal perspective, the, the very aspect of somebody saying you can't do something or you have to do something. Maybe you could talk a little bit of, of how that is, is happening in the states and maybe extrapolate that to, to what we're seeing in.
Richard (1m 56s): Yeah, this was when I mentioned that the ups at the opening of the show that we got ourselves into mind, all that is not forbiddenness required. And so there's nobody in the middle. The reason why this is a terrible situation is that knowledge essentially equates in two different ways, this sort of background knowledge about the overall distribution of certain kinds of cases. And then there's private knowledge that you have about where does it fit into that particular distribution. So for example, if you know that you're at St my age and there's a very high risk of getting COVID, if you've got co-morbidities and you know, you don't have any coat, that is, was what bothers you is scout, which is not a comorbidities for these purposes.
Then what you do is you tamp down. If you're in other direction, you tamp up. So the theory is that in all of these cases, you have this two tier situations, generalize information is provided by collective authorities. That specific information is gathered by patients or in consult with their doctors. The moment you start putting these kinds of mandates on what you're saying is a certain kind of information matter. And it turns out it matters enormously. So, you know, you know that all 10 year old boys, they could have shoe sizes from four to 10.
You know that you, a little Johnny is at five. You don't want to give them a seven size sheet because that's what the median person starts to take. And you do the same thing with drugs and with dosages and everything else. And the common law on this subject in both Canada and the United States is, you know, you're a drug manufacturer. You have to sort of put out the generic things about what's going on. It turns out by the way, they're not very good because they are driven by fear of liability. And that's where you get these voluntary organizations who put out an alternative set of them, which are more reliable and are used.
But then when you see the distribution, you've got a particular case. You go to a doctor and you start figuring out a plan in which you combine private information, public information. And what they're doing is they're saying that the second stage doesn't matter, and that just can't be right, because the moment you have a variance, everybody has to know where they are on that particular distribution. And you can't answer that from the center. So this is just a horrible mistake because it may be some cases for which these vaccines are really counter indicated. So you remember, we talked about the case of Jacobs in Massachusetts all the time.
It's a 1905 case in which it was basically said that the state had the right to force you to take vaccinations in sunset. Well, there are a couple of things about it that most people tend to forget. First of all, it wasn't an order of compulsion. It was an order to either take the vaccine or to take a farm. All right. And the fine was $5 about 160 bucks today. So it's not a terminal figure, but it wasn't an award. And the second reason is, well, this guy, wasn't just some random person came up and says, I don't mind this.
It was a person who said that he was dealing with a number of childhood illnesses associated with various kinds of diseases. And he thought himself to be at very much higher risk. And so he said he didn't want to go into the pool. And that's exactly the kind of differentiation. What talk to you about the judge who decided the case? He's a man named John Marshall hall, who was a sometime with the terror, not a complete one, but a partial one. And what did he decide? He said, look, I'm not going to allow for these individuations to take place.
I'm going to essentially push this thing in the very hard dimension. And I'm going to make everybody called them the same thing. Well, that was also, and of course it was instructed. It wasn't somebody who said, gee, I've taped all out his back to him and he's not just fine with them. It was somebody who actually had a serious risk. Well, you don't want to put together a system which denies that kind of information. Now, the next case that came out was very different. And this was a case in which you had to be Baxendale in order to get into a public school. Now you can't get out of this one by paying the phone.
And if you now have the same conditions that you all did there, are you going to let these people out from the vaccine school? Are you going to push them out of this school? And after the case, people inside and say, well, you really have to now have an administrative law procedure to decide whether you're going to do it not. Well. You can say, Hey, but you know, it's a choice. Either go to school, you don't go to school. That might be true with private schools, but it's not going to be true with state schools run on state policies because now you have a monopoly. And the general rule, respect to monopolies is always the same.
A government was monopoly. Power was, is under fiduciary duties to use them to promote efficiency, but not to use them in a way that essentially forces people with the dangerous position and monopoly power can be used in either method. And you have to figure out which is going on. It's a rather hard inquiry. I actually wrote a book about this called bargaining with the state saying when it is at the, state's doing an efficiency versus a kind of antitrust restrictive situation, you've got to go through it. So they start putting these procedures together. Then they get too complicated, right? And then you get some of the real anti-vaxxers and they just go going crazy.
Yeah. I don't know if you knew the situation with respect to autism being called by the various DPT vaccines, having to do with the theory and tetanus and so forth. Those kinds of frauds. As far as I can tell, and the guy who put them forward, Andrew Wakefield was eventually remove this license, but it took on my beloved Atlanta journal, 12 months, 12 years to re check the column or to repudiate something which had been published in 1998 and had been paid for by the 0.2 slips.
I mean, so this is once you get the government monopolies, it's just the most dangerous situation in the world because you're never quite sure whether you got the guys with the white hat challenge or the guys with the dark hats in charge. And you don't know whether it's going to compound the problem with save you from oblivion. Well, I have zero confidence in the people in the public health profession, in the United States that are running this business. I think they're all essentially just not fully informed on what's going on. If you look at the CDC website, it's essentially this we're a private party doing this and our malpractice case for informed consent.
It would not be defense because you go back to the swine flu cases and not warning about tiny risk was thought to be an adequate. And these are huge risks. That is systematically. Not only that you understand, by the way, Jesse, there's another very strange problem that takes place here, which is the correct solution. In many cases, for people to take the vaccines is to take them, but to take something at the same time. So there's a respectable school, which says you take something like crest, or in order to reduce the clotting risk.
They do the same thing with baby aspirin and you'll put it together. And I suppose what the government did was to announce to the world, then you really should get the vaccine. But given the fact that there's a small risk of X, Y, and Z, you'll be well advised to do these other two things, right? If they did that, there'll be large numbers of people getting the full set of information would do nothing at all. So instead of saying, here's a small list, which we can minimize, we say, there's no risk. Just take it anyhow. So you look at the CDC site and what it says is, oh, you may get a shoulder allergy for a couple of hours, sit around the place for 15 minutes and talk.
You're good enough to walk home. Well, what's going to happen is by basically soft coding the difficulties, they're gonna increase the risk of side effects. And this is just unconscionable. But if they told the truth, they'd never be able to face themselves because zero risk is easy to quantify, right? Small risk. How small, how Sarah is, what bro, that's the, so they don't do
Jesse (9m 37s): So. W what is the response to, and this is, this is the challenge I've had for somebody, you know, I've traveled for personal, personal, and for work. So like yourself, you know, nobody cared, but I took it in protest to a certain extent, but I did largely believe that I was in a COVID or contra-indications from the vaccine. I saw myself in a very tiny, tiny percent chance of complications group. Now, the challenges you have, what I find interesting. I was reading a paper recently on scientific, scientific knowledge in general.
And it talked a little bit about people that have passionate claims or passionate views on science, whether it's global warming, whether it's the vaccine where, you know, at the end of the day, most people left or right. Don't really read the IPC reports. They don't really read the, the, the literature that you're talking about today. So some of the common sense conclusions make a lot of sense to me on both sides. So one of them being you'll have somebody that's my age that perhaps is either getting pregnant or is around there they're older, older relatives.
And they say that they don't want to take it because they don't know the long-term effects. And then on the other side, you have an epidemiologist that says, you know, yes, we don't have laundry, laundry, longitudinal studies, but we've been analyzing this stuff for a long time. It is definitely safe. And now you're in this position to say to the person that doesn't want to take it, what would make you feel comfortable? And for them, you know, part of the government kind of botching up the, the actual communication for so long, those people are there at this point. They don't want to trust anything they say, so you've kind of lost them.
So, you know, what is, what is the right analysis from that perspective of when somebody does say I haven't seen long-term long-term studies because it's just been two years.
Richard (11m 26s): Yeah. Well, I mean, it turns out there was at least one study that I read a kind of a meta study, which says that when you do run long-term studies, the kind of serious side effects often tend to mature only four to five years after the truckers. But of course, that's the longterm stuff. I mean, if you have somebody who takes the vaccine and collapses within the next day or two, you could argue that though, there just was an epileptic stroke or something like that. But nobody's going to believe you, because what you do is you cannot pose a hypothetical cause for something, from which you have a potential wheel cause out there.
Right? And we know you took the vaccine. Why would we assume that having spent 72 years ago life without having epilepsy on just the day after you take the vaccine, you got an epileptic fit. I mean, you can't persuade people on that. And if you left it to a jury, you'd get convictions all the time. And so what this does suggest to you is you cannot let the government have a monopoly over the sources of information, with respect to any project. What you need to do is to get independent voices to speak, like my friends who ran the great Barrington kind of situation, what makes this work is there is now a kind of unholy Alliance that is taking place between Google, Twitter, right?
And the other various kinds of services, all of which are run by overtly the Facebook liberal people. And what they do is they work with the government in an effort to try to figure out what to do with respect to misinformation, roughly defined as those things, which I believe in which they think of more. And so they kind of escaped in petty defamation. Like then they say this, somebody who's been working in this field for a very long time, you know what we think this is really bad. It's misinformation that goes against who it goes against the CDC.
We're going to basically take you off the air. And well, at that point, what you've done is in the control of the monopoly space, on information, you stop the creation of an independent dialogue that other people are going to take. So it's a totally disastrous situation, but like everything else, it's an enormous, complicated, legal problem. Is this a natural monopoly or a common carrier? Is it not? I've written both sides of this things at various times. And my current position is so long as I have no active current competitors.
You should treat them as though they have a kind of common carrier duty. The moment somebody else can start up and come in, you don't so that the status is not indelibly done, but it turns out, you know, networks like Paula, they really have never taken off after they were, was there stuff. When you look at the dominant three or four, and they still control all the 80% of the market and they coordinate with one another, what, how do they coordinate? Do they meet? I don't know. They may. But the other thing is, is a huge literature in antitrust law about communications through public signals.
And one of the things that you find it very difficult to do, although you're trying is you sort of sit on that. I would want the prices to go up in a given area. So if I raised my price, will you come and raise your price? And so when you're trying to do is to get a card cartel without coordination, that's hard to do, right? But in this particular case, I know if Mr. Zuckerberg gets up there and he has a misinformation program and the Twitter guy has one eye and Mr. Whatever it is running, some other network has one who get or five people, and they are talking the same game coordination with respect to keeping information out of the system is much easier to do than coordination of prices, which are constantly moving for all sorts of independent raisins.
So we have a tricep on our hands with respect to this stuff. And when you really have to do is to stop the electioneering from the president and all the other plans of people said, there's only one right answer. And what you have to do is to kind of encourage other people or there's something else you should do. I mean, in climate change, there was a proposal made several times by amongst others. People like Steve Koonin, an extremely knowledgeable man. And I said, we'll have a red team and we'll have a blue team do a panel like a military.
We'll give our view as to why climate change is really dangerous. We'll give the other. And so, you know, this goes everything. That was just another story today, claiming that in Hawaii and national aeronautics, alpha is fudging the data in order to make it look like there's a steep rise as opposed to a gradual rise. So, so what my basic reading of this situation is, most of the recent data is relatively flat, which is not a particularly disastrous scenario you're talking about. Well, one, okay, so you get these guys.
They try to do the two teams to have them talk. It's interesting. Everybody who believes that climate change is an existential threat is opposed to blue team versus red. They say science is always a business of collaborative cooperation. What they're really saying is amongst friends, but not amongst the opponent. And the whole point of the team situation is to force everybody to meet somebody who really believes in the, a game on the other side, and then to figure out what's going on.
And, you know, I always been willing to do this. I have entered into several debates and I've now found for the first time in my life, I get abused. I mean, just playing out crazy, whether it's antitrust network industries and so forth. Climate change what's happened is the cancel culture has killed the debate along with all of these regulatory sorts of culture. So shows like this, you know, you have a fine audience, I'm sure, but I don't think it's 850 million people unless you've got virtues. I don't know about so that, you know, you can keep this thing alive because you can't shut down almost the communication, but you don't need to be a monopolist to have be short only on the opposite.
If you have only a hundred percent of the market, you get 80 or 85% of the market, it changes everything. And it gives you a very strong level of a political dominance. If you could do it now, what's happening today is I think the whole establishment is now for the first time I get, I think in Canada, as well as in the United States, there is no longer presumption of legitimacy of government debt. People are seeing just enough guff coming up. I've just been up people and it's Cumulus. Oh, is Mr. Pharmacy a crook because its finances are sort of, so is Mr.
Bouncy a cook because he basically conceal stuff about the wool buyers is Mr. Pharmacy, because he's had some sweet business deals with major drug companies who have proprietary advanced. Now they may all be wrong. And you know, one of the things I like this to say is I'm a professor of law. Not a fact. I'm not somebody who can tell you whether these charges or what, what you can do to see that the cumulative effect is beginning to take its weight and that what you use the question take without question, you're now starting to question on, on every level and in part it's because of colossal, miscalculations on prediction and in part, because what happens is these other voices are kind of being heard at the edges and people starting to kind of move.
And I have to say in my experience, I've been at law professor in apple, 53 and a half years. So pretty long time, I started very young. I've never seen an intellectual climate as bad as the one that we have today, either here or in Canada or anywhere else. And it's not just a hosted issues. I know we're coming to the answer I just mentioned, but the issue of global warming and stuff, you've got all the COVID and disease stuff, or you got all the critical race theory kind of stuff. You got all the antitrust kinds of stuff. You've got all the poverty and welfare trust, traditional kind of stuff.
You got all the criminal laws that having to do. How do we deal with various kinds of offenses? And you know, you hear proposals and you say what's going on. So the last one that a friend of mine sent to me at the phone proposal, and I'm sure I do have children. I don't know. Oh, well, but let's assume you did. Right. And the new proposal is the only way we can deal with blinding inequalities of wealth is to introduce Plato's Republic and say that all parents have to give up their Cho who have randomized across other couples.
So as to prevent the privileged from going from one generation to another and the parental rights, oh really? Huh? Well, or defund the police, it's the same kind of thing. And so what's happened is the American left has pushed itself further and further off. They're all things on the right, which are symbol, right? They're not in Charlottesville, but this is the big difference. All right. Was a big term two years ago. Right? You hear much of it now, almost nothing.
Right? Because it got repudiate. You think people went back to Charlottesville to do another ride in 2018. Do you think that there was anything that January 6th, 2022? No. So the left is trying to keep all this stuff alive. Whereas on the other side, I mean, you get some serious problems. So I'm Jewish. I don't know whether you want it doesn't matter, but you know, you hear what happens in Texas and Cooley bill, whatever the name of that town.
And I mean, I can tell you the number of vigils that took place in the states in Jewish communities and many of sympathetic, one was very, very long. You first hear that the guys, the brother of the woman who's in jail, but of course he's not. Then you see, how did he get into the United States? No explanation. Then what you do is you see, he takes over a Jewish operation on the Sabbath, threatens to kill people unless this person is released. And the FDI to his infinite disgrace, I said, was this an anti-sematic incident?
Well, nobody in their right mind can believe them when they start to say that Mr. Ray just discredits himself Mariko and is the attorney general? He is Jewish. Not that it should matter. But then he come out and say, well, this case is all too painful. We have a terrible problem trying to figure out how it is. We deal with Muslims intent upon death of other people in 99.9% of that population is now at that point, you could start having a serious discussion, but to deny that it's an issue rather than that's where people kind of start to say, but, and it's the same thing that the fund that please send all the rest of us.
So what's happened is the silent majority that they used to speak about people who were not interested in education or in politics and so forth. People want to, they are now actually, because all of a sudden they realize, Hey, this stuff applies to everybody. And that means me. It's going to be my kid. Who's going to have to wear a mask in school is going to my kid is going to happen to learn that the United States engages in genocidal war against anybody that ever deals with themselves. I don't want them to be taught that way.
I don't want to be shot that way. I don't want the college market to be that way. And so what you've done is you've raised the stakes, which means you're going to transform. Who's going to be participating. So you're going to see two things. And one of the reasons why in 2016, Trump pulled out from the woodwork, people who were never in public law. I mean, so I mean, one of my friends that he went from Philadelphia to Pittsburgh in Pennsylvania, in early December or late October of 2016, he said for every Hillary Clinton sign that you saw in these rural counties, you saw 50 shops.
Okay. Now what's going on? Well, it turned out, remember Nate silver, he's a smart guy. And he got 40, 99 out of a hundred state's rights in 2012 and 28 missed only one state. By one point he got everything wrong. And so you ask, okay, Nate, why didn't you get it? He said, I knew the sentiments. What I didn't get right. Was a massive change in the, and somebody who looked at those signs along that road, who realized that these rural counties, which normally give you 800,000 boats are going to give you 1.2 million and that's that's, what's going to happen more generally.
And the Democrats, they still find it. Go back to January 6th. Look, the many people belong in jail. Nobody wants to deny that the president is one of them. He is in many ways, but you can go back and you'll look what happened in Portland and Seattle. All those people released on their own recognizance is when they engage in an act of acts of violence. I mean, that's not so good. And so what's gonna happen, I think is there's going to be, unless Biden changes his position and the Democrats back off is going to be a tsunami in the United States.
Yeah. These guys are going to be voted out of office because they have no respect for the common sense of the decency of the ordinary man or woman. Who's. Now all of a sudden been politicized by events behind his or her control.
Jesse (24m 19s): Well, Richard, we're going to have to get you back on because I'd love to get your predictions on a pivot onto some of the, the inflationary aspects and implement policies on that point. This, this leaves me kind of rereading the fatal conceit FAA hike. And it just, it reminds me of one of my favorite quotes by him. The curious case of, of economic or curious task of economics is to teach to man how little he knows about what he imagines. He can design. And I feel like we're in that space right now with a lot of policymakers, leave us on a, an Epstein positive note here.
What, what is something that you, you see in 2022 or 2023 as a potential positive or something that if we're going to go in the right direction, this needs to happen. I do think
Richard (25m 7s): The substantial chance that will basically sweep the Rascals out. I mean, I've gotten to the point where I, I never have dreamed myself as a Republican. If you're a Jewish kid growing up in Brooklyn in the 1950s, you didn't know anybody in 52 or 50. Well, I wasn't in Brooklyn, 56, whoever voted for a Republican included why nice and how, I mean, I still find, you know, I got a case of the twitches when somebody says, and I'm not a Republican, but what's happened is you look at the choices between these two parties and all of a sudden, if you could get the good beast on the Republican side out, you'll get moderate support for free trade.
You'll get general tolerance on an issue that I care a lot about. You're not going to get an antisemitic rent with respect to Israel and all the rest of these stuff. And I think that those forces are now that are, and I, I myself have become much more politically active or mitigation active than I've ever been before. And I do so because I have a genuine sense of anxiety about the way the dominant my pinpoints out. I mean, you know, take George Floyd and so forth. I mean, what on earth happened?
You couldn't get anybody to say, Hey, that moment had a lot to do with this. That because they had failed those being three, he was at 11, you know, that's kind of a diff and then everything that followed after that, I just don't believe that we are in that kind of frenzy. And what we really have to do is to make sure that we are a little bit more tentative in our judgments. If you noticed, I didn't tell other people how to run their part. It was on whether they do it, do not take the backseat. I give them incident and BICE.
They want it. But what we have to recognize is that high X great contribution was not as positive contribution. That is how we would organize it though. But it was the notion that somehow or other centralized knowledge always beats decentralized knowledge. And he was wrong to say that you can't do any central planning. I mean, you can't have a highway system put up by hook or by crook, right? But it turns out you don't need zoning to figure out what should be an industrial and which should be a manufacturing and what should be a commercial district or residential district and so forth.
And I think that that message is the one that you view and have to get across the today is figure out where the space is for individual choice. And don't treat everything as though it's a giant public health crisis or a prisoner's dilemma game. I think people in this country are beginning to get that. And it's because of the anxiety. You mentioned inflation, right? You know, the people like Paul Krugman said, you know, life is a perpetual motion machine, no matter how much you borrow, you're never going to raise the interest rates. Right? Well, I mean, it's always stupid some portion of the distribution for some reason, but whatever it is, this is now a serious problem.
And 7% just transforms everything. Here's a simple way. You talk about real estate guys. I'm going to give you my one sentence real estate. So somebody tells you that the raising the interest rate from three to 5%, 2%, what's the difference right now? That's not what the ratio is. It's you raise it from three to five. It's an increased. The 67% is the way you have to understand. And you're in the real estate business. You kind of know what I'm saying. And some people just don't get that. And when they don't get that, they don't get the pain that is going to be inflicted on people.
And they don't understand that when you think the pie's getting smaller, what's going to happen is people are going to become much more anxious. And then you keep on having the wrong shores, all this stuff, price controls, paint on a work enforced antitrust law, ain't going to work, right? And so you're happy to get people to understand that the cures you want us to get rid of the regulations that you have in many cases, rather than the adding on new ones to compensate for the ones that are already there. And I think that the, this notion that the way we deal with bad regulations with good regulation is going to be replaced.
And I'll end on this note where bad regulation is best handled by repeal or modification. So thank you Jesse, for having
Jesse (29m 15s): My guest today has been Richard Epstein. Richard, thank you again for being part of working capital. Thank you so much for listening to working capital the real estate podcast. I'm your host, Jesse for galley. If you liked the episode, head on to iTunes and leave us a five-star review and share on social media, it really helps us out. If you have any questions, feel free to reach out to me on Instagram, Jesse for galley, F R a G a L E, have a good one take care.