The assumption that we can keep societies open and free to everybody is going to have to stop. We are going to have to recognize that some people simply are not qualified and do not want to belong a civil order. Until we begin to make discrimination along those lines, then I think we are going to be extremely vulnerable.

If you create an artificial scarcity through public policy, artificial rent so to speak - setting up a new import quota or giving out a particular office that is very beneficial - people are going to invest money, time and resources in trying to secure that opportunity. If the value is created independently of the search for it, the search for it is wasted.

Politically, sometimes you get situations where rent control will go through. It is especially true in an emergency, where there is a sudden, sharp increase in demand for housing or a cut back in supply. People will simply not allow the marketplace to allocate housing resources and so you get pressures for rent control. Once you have it, it is hard to eliminate.

Rent control is one policy that economists universally would oppose. It is a grossly inefficient way of allocating housing space and, of course, it inhibits construction and creates the very thing it is supposed to alleviate. It is one of those things where people simply don't understand simple economics and, therefore, put in for political reasons what will damage the very people that it is designed to help. Minimum wage levels are another classic example.

I have long been in favor of a balanced budget restriction at the level of the federal government of the United States. Because the federal government has money-creating powers it can, in fact, be very damaging if it runs a series of budget deficits. With the state government in the United States, they don't have money-creating powers. The automatic discipline imposed by the fact that they are in a common monetary unit and don't have control over the money power means that the balanced budget restriction is less needed.

We try to prevent the creation of artificial rents. Rather than setting up quotas to stop imports we levy a tariff, that would be better. Or we pay wages in the public sector which are roughly equivalent to the productivity in the private sector and we don't therefore make it a special benefit to get a bureaucratic position.

Liberals have lost the soul. We haven't recognized the necessity of defending our own system at the level of ideas. We have to get people to treat the idea of a free society as a civic religion or a faith. We need to fight for that faith.