1
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as these days i cant very tell

2
00:00:17,420 --> 00:00:21,19
and Martin peeing on whale

3
00:00:21,19 --> 00:00:24,189
the organizes into this conference
decided

4
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that they would make a recording

5
00:00:27,699 --> 00:00:31,130
which could be played as the conference

6
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and this is what I'm going to do

7
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the problem I headed cause was they
didn't tell me

8
00:00:39,829 --> 00:00:44,000
what I should talk about and I had to
decide

9
00:00:44,000 --> 00:00:48,559
what my subject should be I finally
decided

10
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that the title given to the conference

11
00:00:52,659 --> 00:00:56,189
gave me all the information I needed

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the conference his own market

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firmness and property rights

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and that covers everything and I would
want to say

15
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me start with talking about markets

16
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wanna things that people don't
understand

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is the market's our creations

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they're not something which

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we can find a market has to be created

20
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in the nineteen the general rule on
economics

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one India the issues I published an
article

22
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a on

23
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the plywood contract to be

24
00:01:43,930 --> 00:01:48,880
Sharon by the Chicago Board of Trade

25
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he was a very complicated said
negotiations

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the blade to the emergence in the
contract

27
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and then having tried it

28
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he'd play and this

29
00:02:06,119 --> 00:02:11,340
this here very much upset the organizer
miss to Richard

30
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sendo but it didn't upset me at all

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because her he showed just how difficult
it was

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to form a contract we cheer

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them people wanted to use

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in sufficient quantity has to cover the
costs

35
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more recently which is sendo

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has worked armistead wishing a

37
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climate exchange in China

38
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and that took passed a man onto

39
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Diego CA shin and in that case

40
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were successful and the

41
00:02:59,200 --> 00:03:03,49
can't counter this is

42
00:03:03,50 --> 00:03:06,99
to republish in need

43
00:03:06,99 --> 00:03:09,880
book which or view

44
00:03:09,880 --> 00:03:15,49
will be able to read today I thought
just died

45
00:03:15,50 --> 00:03:18,140
talk about the the subject

46
00:03:18,140 --> 00:03:22,329
of the conference markets firms

47
00:03:22,330 --> 00:03:26,349
and property rights now as I've said

48
00:03:26,349 --> 00:03:29,560
in the case in all markets

49
00:03:29,560 --> 00:03:33,500
they are creations a hint he kisses

50
00:03:33,500 --> 00:03:37,150
they are the result all

51
00:03:37,150 --> 00:03:40,980
people deciding to make a contract

52
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and making all the negotiations
necessary

53
00:03:45,140 --> 00:03:48,700
to bring it about firms

54
00:03:48,700 --> 00:03:51,980
are a little different

55
00:03:51,980 --> 00:03:56,459
perm I usually based

56
00:03:56,459 --> 00:04:00,840
initially on the family and they exist

57
00:04:00,840 --> 00:04:06,40
in net foam to a large extent

58
00:04:06,40 --> 00:04:09,450
today prime

59
00:04:09,450 --> 00:04:12,920
firmness on

60
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not to be analyzed

61
00:04:16,250 --> 00:04:19,949
in the way I did in the nature that for
them

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00:04:19,949 --> 00:04:23,69
nature the firm was a

63
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and an article

64
00:04:26,620 --> 00:04:29,659
although published in 1937

65
00:04:29,659 --> 00:04:35,360
which contained my ideas

66
00:04:35,360 --> 00:04:38,710
the dye developed as an undergraduate

67
00:04:38,710 --> 00:04:41,849
and as I know

68
00:04:41,850 --> 00:04:45,80
from a letter which I wrote to

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00:04:45,80 --> 00:04:49,270
run valor the ideas were

70
00:04:49,270 --> 00:04:52,460
all their by the time

71
00:04:52,460 --> 00:04:55,799
I graduated in 1932

72
00:04:55,800 --> 00:04:59,760
I didn't poppy sheet until 1937

73
00:04:59,760 --> 00:05:03,440
but that's understandable as I would

74
00:05:03,440 --> 00:05:06,750
went into teaching

75
00:05:06,750 --> 00:05:10,190
in 1932 I knew

76
00:05:10,190 --> 00:05:13,389
virtually nothing and had to give

77
00:05:13,389 --> 00:05:16,520
3 call shoes so I was

78
00:05:16,520 --> 00:05:20,39
pain motion my time preparing

79
00:05:20,40 --> 00:05:23,250
full my my neck choose

80
00:05:23,250 --> 00:05:26,810
but I did publish his shock this

81
00:05:26,810 --> 00:05:31,770
article in 1937 the nature the firm

82
00:05:31,770 --> 00:05:35,969
and deepen has been

83
00:05:35,970 --> 00:05:39,820
my shoe heard two much ninety

84
00:05:39,820 --> 00:05:42,860
although in fact is little more then I

85
00:05:42,860 --> 00:05:46,979
than an undergraduate is a

86
00:05:46,979 --> 00:05:51,490
heat

87
00:05:51,490 --> 00:05:55,270
in is also very

88
00:05:55,270 --> 00:06:00,510
poor article although it's been much

89
00:06:00,510 --> 00:06:04,180
referred to he talked about the firm

90
00:06:04,180 --> 00:06:08,510
as if you could talk about it as an
entity

91
00:06:08,510 --> 00:06:12,750
in economic theory I said as the firm

92
00:06:12,750 --> 00:06:16,330
grew bigger

93
00:06:16,330 --> 00:06:20,500
there was Jim diminishing returns to
management

94
00:06:20,500 --> 00:06:23,520
with this is

95
00:06:23,520 --> 00:06:28,810
treaty ages if it was

96
00:06:28,810 --> 00:06:32,90
for fiddler fertilizer mean bean

97
00:06:32,90 --> 00:06:36,869
yeah applied to land a new mation the
outcome

98
00:06:36,870 --> 00:06:40,780
idea was to prove fertilizer on land

99
00:06:40,780 --> 00:06:44,280
and first will you get and

100
00:06:44,280 --> 00:06:50,299
picture product the new promo running a
more product and so on

101
00:06:50,300 --> 00:06:54,690
then you put in more on any such killing

102
00:06:54,690 --> 00:06:58,410
and so you have diminishing returns

103
00:06:58,410 --> 00:07:02,590
to the fertilizer well firm's online

104
00:07:02,590 --> 00:07:05,960
and firms are organizations

105
00:07:05,960 --> 00:07:09,310
in which the different parts for the
firm have

106
00:07:09,310 --> 00:07:13,380
and then to change with other parts in
the firm

107
00:07:13,380 --> 00:07:16,680
he teach her the

108
00:07:16,680 --> 00:07:20,10
sociological problem rather than
economic

109
00:07:20,10 --> 00:07:25,659
problem and I learned a great deal about
the

110
00:07:25,660 --> 00:07:29,140
hell large organizations operate

111
00:07:29,140 --> 00:07:33,70
do my world war work

112
00:07:33,70 --> 00:07:36,780
when I was seen the

113
00:07:36,780 --> 00:07:40,559
think Cabinet Office

114
00:07:40,560 --> 00:07:46,360
and I'd made various studies

115
00:07:46,360 --> 00:07:49,970
which which had no influence at all

116
00:07:49,970 --> 00:07:53,190
and it was interesting because

117
00:07:53,190 --> 00:07:59,710
they weren't they didn't not use it
because the ideas were in good

118
00:07:59,710 --> 00:08:05,270
but because it wasn't in the interests
in the PT

119
00:08:05,270 --> 00:08:09,280
here partner the organization to do the
work

120
00:08:09,280 --> 00:08:12,659
hi made into a

121
00:08:12,660 --> 00:08:17,510
is demand for example of what the
importance

122
00:08:17,510 --> 00:08:21,940
we're going to be in and

123
00:08:21,940 --> 00:08:25,830
a certain year and they were going to be

124
00:08:25,830 --> 00:08:29,840
much lower then

125
00:08:29,840 --> 00:08:34,419
they had been I'm I would work today out
by

126
00:08:34,419 --> 00:08:39,890
taking Nina ships will be

127
00:08:39,890 --> 00:08:43,949
be lost ships that will be constructed

128
00:08:43,950 --> 00:08:47,640
turnaround time close shipman's own

129
00:08:47,640 --> 00:08:51,220
and I is to make you wear sweeney
imported

130
00:08:51,220 --> 00:08:55,590
importing say $36 million tonnes

131
00:08:55,590 --> 00:09:00,860
we could any import $25 million tonnes

132
00:09:00,860 --> 00:09:04,740
the cell the approximate figures as a

133
00:09:04,740 --> 00:09:08,620
remember them so on I went around

134
00:09:08,620 --> 00:09:12,680
to the various departments we with the

135
00:09:12,680 --> 00:09:16,589
someone from the economic section who

136
00:09:16,590 --> 00:09:21,220
really who'd had similar views and me
said to the

137
00:09:21,220 --> 00:09:25,180
the firms you've got a plan Paul

138
00:09:25,180 --> 00:09:28,699
a much smaller quantity in the
importance

139
00:09:28,700 --> 00:09:32,520
what a day to be and

140
00:09:32,520 --> 00:09:35,850
all the department said home

141
00:09:35,850 --> 00:09:39,640
we can give their opinion polls between
you ni

142
00:09:39,640 --> 00:09:43,680
can t do what we doing and so

143
00:09:43,680 --> 00:09:47,30
no plans were made

144
00:09:47,30 --> 00:09:51,360
the ship's picked up whatever was on the
wall of

145
00:09:51,360 --> 00:09:55,400
chicken feed all were doing was and
didn't bring in

146
00:09:55,400 --> 00:09:58,890
the things that were more important

147
00:09:58,890 --> 00:10:02,810
however since my

148
00:10:02,810 --> 00:10:06,920
predictions were pretty accurate by not
cutting

149
00:10:06,920 --> 00:10:10,290
and they made eight changes

150
00:10:10,290 --> 00:10:13,579
for next year say you had a whole year

151
00:10:13,580 --> 00:10:18,490
loss I remember now the calculation I
made

152
00:10:18,490 --> 00:10:21,930
more specifically dealing with the

153
00:10:21,930 --> 00:10:25,709
subject and I I was main concern

154
00:10:25,710 --> 00:10:30,20
and tanks comes

155
00:10:30,20 --> 00:10:33,460
rifles ammunition and sunshine

156
00:10:33,460 --> 00:10:37,260
well height took

157
00:10:37,260 --> 00:10:41,510
the number people who were in the
various theatres have more

158
00:10:41,510 --> 00:10:45,720
and said

159
00:10:45,720 --> 00:10:49,770
what they should have in new Wales
equipment

160
00:10:49,770 --> 00:10:52,780
an ammunition and so on

161
00:10:52,780 --> 00:10:57,560
and I found of course some here is a war
will well-stocked

162
00:10:57,560 --> 00:11:00,930
and some were badly stop

163
00:11:00,930 --> 00:11:05,979
and what should happen one was

164
00:11:05,980 --> 00:11:09,950
the we should rectified this

165
00:11:09,950 --> 00:11:13,330
and make sure that

166
00:11:13,330 --> 00:11:18,89
everyone got the proper amount

167
00:11:18,89 --> 00:11:22,80
in this report hi Cory the balance sheet

168
00:11:22,80 --> 00:11:25,190
miss produce sure about three months

169
00:11:25,190 --> 00:11:30,000
after which he was stopped and the
reasonably stopped

170
00:11:30,000 --> 00:11:35,240
was the showed where the deficiencies
were

171
00:11:35,240 --> 00:11:38,810
and no one wanted deficiency shown

172
00:11:38,810 --> 00:11:43,40
and so no one knew

173
00:11:43,40 --> 00:11:46,469
that they were deficiencies and that
yeah

174
00:11:46,470 --> 00:11:49,750
has been my experience and

175
00:11:49,750 --> 00:11:53,180
doing the statistics

176
00:11:53,180 --> 00:11:56,380
the people we're always pleased

177
00:11:56,380 --> 00:12:00,730
to get a good result publish they never
wanted a bad usual

178
00:12:00,730 --> 00:12:06,60
publish who is so it is that the people
who were

179
00:12:06,60 --> 00:12:10,719
running things always got a very wrong
idea

180
00:12:10,720 --> 00:12:14,670
to what the situation actually was

181
00:12:14,670 --> 00:12:19,380
well had

182
00:12:19,380 --> 00:12:23,30
what happened in in for in firms

183
00:12:23,30 --> 00:12:27,329
also I discovered a cause they were

184
00:12:27,330 --> 00:12:32,60
friendships and antagonisms within firms

185
00:12:32,60 --> 00:12:36,69
you know one partner firm

186
00:12:36,70 --> 00:12:40,290
would would feel that another par

187
00:12:40,290 --> 00:12:43,520
is always going to mess up what they
were doing

188
00:12:43,520 --> 00:12:47,310
and me detail operated

189
00:12:47,310 --> 00:12:50,910
in a different way from the way

190
00:12:50,910 --> 00:12:55,730
dozen economic theory where you have a

191
00:12:55,730 --> 00:12:59,770
affirm maximizing profits

192
00:12:59,770 --> 00:13:03,870
knowing all the beings that that
affected

193
00:13:03,870 --> 00:13:07,770
and acting accordingly

194
00:13:07,770 --> 00:13:11,390
he in in fact and

195
00:13:11,390 --> 00:13:14,810
it's very difficult yeah

196
00:13:14,810 --> 00:13:18,170
to imagine that firms act in the way

197
00:13:18,170 --> 00:13:21,380
that is described in the takes proves

198
00:13:21,380 --> 00:13:25,780
way you max maximize profits

199
00:13:25,780 --> 00:13:30,900
by equating marginal cost and margin
when you

200
00:13:30,900 --> 00:13:34,370
one other reasons one can feel did

201
00:13:34,370 --> 00:13:38,760
doubtful about this particular way I'm

202
00:13:38,760 --> 00:13:41,959
looking at things is that firms never

203
00:13:41,959 --> 00:13:45,500
have koolaid margin call us

204
00:13:45,500 --> 00:13:49,830
and so cannot possibly hecht in the way
described

205
00:13:49,830 --> 00:13:53,500
in seen it takes both well I think

206
00:13:53,500 --> 00:13:56,950
we ought to to study directly

207
00:13:56,950 --> 00:14:01,110
how firms operate and

208
00:14:01,110 --> 00:14:06,000
at develop a theory corning

209
00:14:06,000 --> 00:14:10,580
finally cause in this ok conference I
going to discuss

210
00:14:10,580 --> 00:14:15,880
property rights to do this you really
have to rely

211
00:14:15,880 --> 00:14:19,220
on the information gathered from

212
00:14:19,220 --> 00:14:22,650
know is however lawyers

213
00:14:22,650 --> 00:14:28,000
remaining interested in UC economic
theory

214
00:14:28,000 --> 00:14:32,990
to analyze legal doctrines

215
00:14:32,990 --> 00:14:37,290
my view is the gym these

216
00:14:37,290 --> 00:14:40,670
salmon want to be doing studies

217
00:14:40,670 --> 00:14:44,69
of hell the property rights

218
00:14:44,69 --> 00:14:48,130
have picked working at the economic
system

219
00:14:48,130 --> 00:14:51,709
and lot this had not been done

220
00:14:51,709 --> 00:14:56,310
Anna and I hope the one on the results
hope this

221
00:14:56,310 --> 00:14:59,449
comprends is that people would turn

222
00:14:59,449 --> 00:15:03,469
to do is and then who study

223
00:15:03,470 --> 00:15:08,170
markets firm and property rights

224
00:15:08,170 --> 00:15:15,170
in mind I consider the right play

225
00:15:18,960 --> 00:15:21,60
one the features

226
00:15:21,60 --> 00:15:24,599
who've the control home mediate running

227
00:15:24,600 --> 00:15:29,30
transmission has been the

228
00:15:29,30 --> 00:15:32,60
use love

229
00:15:32,60 --> 00:15:35,890
auctions to decide who should have

230
00:15:35,890 --> 00:15:40,530
rights it happens

231
00:15:40,530 --> 00:15:46,100
that I was person who introduces

232
00:15:46,100 --> 00:15:49,200
to the FCC which I did

233
00:15:49,200 --> 00:15:53,570
I think hearing I gave my presentation

234
00:15:53,570 --> 00:15:57,60
to the commissions

235
00:15:57,60 --> 00:16:02,959
and then when I finish place I wanted to
question me

236
00:16:02,960 --> 00:16:06,790
and the first question I received

237
00:16:06,790 --> 00:16:11,500
so astonished me that I didn't know

238
00:16:11,500 --> 00:16:15,340
what to say one of the commissioners

239
00:16:15,340 --> 00:16:20,190
said this is all a big joke the idea

240
00:16:20,190 --> 00:16:24,200
that you should actually happen auction

241
00:16:24,200 --> 00:16:27,200
small and

242
00:16:27,200 --> 00:16:30,370
rights to transmit

243
00:16:30,370 --> 00:16:34,269
yeah

244
00:16:34,269 --> 00:16:38,519
and electronic cig news who was
something that they

245
00:16:38,519 --> 00:16:42,910
had never even imagine they had thought
their job loss

246
00:16:42,910 --> 00:16:46,449
to choose the right people to use

247
00:16:46,449 --> 00:16:50,790
frequencies not concern themselves

248
00:16:50,790 --> 00:16:53,829
with the question what was

249
00:16:53,829 --> 00:16:56,959
transmitted when I

250
00:16:56,959 --> 00:17:01,660
I with large this is already

251
00:17:01,660 --> 00:17:06,220
Jan niceee down there with these people
about me

252
00:17:06,220 --> 00:17:09,279
I didn't know what to say and I said

253
00:17:09,279 --> 00:17:13,770
is his job to believe in me make an
economic system

254
00:17:13,770 --> 00:17:18,189
and I didn't get any further questions
up to that

255
00:17:18,189 --> 00:17:21,839
plan relies that was the way

256
00:17:21,839 --> 00:17:24,889
Minnesotans are in fact

257
00:17:24,890 --> 00:17:28,600
and they're they're usually

258
00:17:28,600 --> 00:17:32,850
determined in the american economic

259
00:17:32,850 --> 00:17:37,559
since he did so happens that I will not
first-person

260
00:17:37,559 --> 00:17:42,408
to mention this he will it had been
mentioned

261
00:17:42,409 --> 00:17:46,140
in a student note in the american

262
00:17:46,140 --> 00:17:50,870
in now munis you should come

263
00:17:50,870 --> 00:17:54,649
know a review and I Hans

264
00:17:54,649 --> 00:17:59,70
whose fumes sometime how did you get
this idea

265
00:17:59,70 --> 00:18:02,80
and she he

266
00:18:02,80 --> 00:18:05,820
say who I do

267
00:18:05,820 --> 00:18:09,379
combs from happen learner

268
00:18:09,380 --> 00:18:13,299
when he was teaching had me

269
00:18:13,299 --> 00:18:17,158
in a in america came this

270
00:18:17,159 --> 00:18:21,59
struck me as extraordinary because
happened

271
00:18:21,59 --> 00:18:25,820
Mizzou student of mine at the London
School of Economics

272
00:18:25,820 --> 00:18:29,418
and so we all said the idea came back

273
00:18:29,419 --> 00:18:33,409
to the London School of Economics anyway
either

274
00:18:33,409 --> 00:18:37,70
directly from me or indirectly

275
00:18:37,70 --> 00:18:40,279
from happen then who

276
00:18:40,279 --> 00:18:44,770
I might say was the home to numerous to
this

277
00:18:44,770 --> 00:18:49,129
he been improved printing business the
detailed

278
00:18:49,130 --> 00:18:54,139
I always said it was because he put
price equal to marginal cost

279
00:18:54,139 --> 00:19:00,990
venture that shows to chill have
relations were always very good

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and hugh ultimately wrote a book

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on the I think it was called economic
could help control

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and a very fine broke into his here is

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however someone whose socialist

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who believed that solution is it will be
fine

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the funny carried our their areas

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rules and regulations that he set in
motion

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I was very dangerous

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to see the title have a paper

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00:19:44,820 --> 00:19:49,80
that Richard post and was going to play

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present canes Ankush

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this is sick puzzle me

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because I've never had any relationship

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week aims all her

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word on the topic said he worked on

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I have never worked on

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me monetary system

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foreign exchange views

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government finance handed

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has these were all the topics

300
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said that Cain's worked on I was puzzled
about what on earth

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Posen a good say and their

302
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and I'm looking forward to hearing what

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he will say you know in these days

304
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England mister the class system

305
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and and Kane

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spoke in a different way from me and

307
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had a different hate each huge

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mmm Hughes he was in all the tone in

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and he was one of them

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not want a bus and I

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i felt quite different from from him

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spoke in a different way so on and

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I only had one contact with him once

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during the negotiations for the loan

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00:21:27,20 --> 00:21:32,400
from america after the war I was talking
to

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canes this is and and canes came into
the room

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and his assistant said

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00:21:41,770 --> 00:21:45,800
this is mister cose who's helping us
with this

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please take I don't think you know him

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kind took my hands and said no

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I don't think I do home on cul and that

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his mind I freak occasions so I

323
00:22:00,620 --> 00:22:06,189
my I'm very interested to know what
Richard posed I'm actually said

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although I never had any

325
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particular connection

326
00:22:14,410 --> 00:22:17,700
with canes or

327
00:22:17,700 --> 00:22:21,990
his policies indirectly

328
00:22:21,990 --> 00:22:27,150
they have any important influence on all
my work

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him trying to implemented Keynesian
policy

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meet wanted to

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estimate part ca

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what the expenditures firms would be

333
00:22:41,240 --> 00:22:44,430
because his you know the bases are
proposing

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00:22:44,430 --> 00:22:48,810
was that you estimated consumer

335
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expenditures business expenditures

336
00:22:52,380 --> 00:22:56,550
the expansion is required to produce
shrine employment

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and difference between

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and that amount and

339
00:23:02,610 --> 00:23:06,740
what was going to be spent by consumers

340
00:23:06,740 --> 00:23:10,90
and businessman miss the amount the
government

341
00:23:10,90 --> 00:23:15,260
should spend in order to maintain
full-employment

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show in order to do this

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Mead who is in a economic section

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00:23:24,40 --> 00:23:29,850
decided that it will be very interesting
to study

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00:23:29,850 --> 00:23:35,780
long-term contracts

346
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because they would tell one what terms

347
00:23:39,110 --> 00:23:42,370
we're going to Spain and would help him

348
00:23:42,370 --> 00:23:48,429
in his calculations so I was given

349
00:23:48,430 --> 00:23:51,180
boss number long-term contract

350
00:23:51,180 --> 00:23:55,550
which were given my by the firm's

351
00:23:55,550 --> 00:24:00,690
and which of course since he has his own
office

352
00:24:00,690 --> 00:24:03,990
control by Winston Churchill

353
00:24:03,990 --> 00:24:07,140
they were very please to do

354
00:24:07,140 --> 00:24:11,930
so i cant these contracts and I don't
add them

355
00:24:11,930 --> 00:24:15,470
and what I discovered was that they were

356
00:24:15,470 --> 00:24:18,600
want together to

357
00:24:18,600 --> 00:24:22,40
imprecise to they made

358
00:24:22,40 --> 00:24:25,659
wouldn't say when and

359
00:24:25,660 --> 00:24:30,500
good sure to be produced where they
would he be delivered

360
00:24:30,500 --> 00:24:34,740
and so on and this heading

361
00:24:34,740 --> 00:24:38,530
important affected all my thinking

362
00:24:38,530 --> 00:24:42,180
he was quite clear that firms

363
00:24:42,180 --> 00:24:48,230
dealing with one another did not depends
heavily on the contract

364
00:24:48,230 --> 00:24:54,140
butthead understandings about what
should be done

365
00:24:54,140 --> 00:24:57,160
had trust in one another's actions

366
00:24:57,160 --> 00:25:00,840
and the economic system

367
00:25:00,840 --> 00:25:04,389
obviously operated in a way different

368
00:25:04,390 --> 00:25:09,70
from the way it would if it was all
based on

369
00:25:09,70 --> 00:25:13,820
on contract which was because once first
deception

370
00:25:13,820 --> 00:25:17,460
budgets wrong and we ought to study

371
00:25:17,460 --> 00:25:20,570
the relationships between firms

372
00:25:20,570 --> 00:25:24,860
has a as a way of operating

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00:25:24,860 --> 00:25:27,770
in

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00:25:27,770 --> 00:25:28,790
an economic system