 My name is Sahid Malami and I am the student director of the mill series at Lafayette. Tonight we have a debate on capitalism and democratic socialism. The format of the debate is simple. Each debater will make a ten minute opening statement followed by two questions from the moderator. Then we will open it up to the audience for a Q&A followed by five minutes closing statements from both debaters. Tonight we have with us Yaren Brooke. Yaren Brooke is an Israeli American entrepreneur, writer and activist. He's an objectivist and the current chairman of the board at the An Ryan Institute where he was executive director from 2000 to 2017. He will be arguing on the side of capitalism. Sam Arnold is a professor of political theory at Texas Christine University. His area of focus is in liberal egalitarian theories of justice, especially the work of John Rawls, the division of labor and work, consumerism and voluntary simplicity. Socialism and alternatives to consumer capitalism. He will be arguing on the side of democratic socialism. Hi everyone, due to some audio issues at the outset we lost the first few seconds of Sam Arnold's presentation. He began simply by stating that he will focus on one core problem with capitalism, namely that capitalism creates a class society. He then says, quote, a tiny elite owns most of the stuff, unquote. We pick things up there. This is just an undeniable fact about American capitalism and indeed about all capitalist societies. So here are some facts to back this up. According to the Federal Reserve 2016 survey of consumer finances, the top 10% of our country owns 77% of the country's wealth. Top 10% owns 77% of the pie. The bottom 60% owns 3.2%. Just 3.2%, the bottom 60% of the country. According to the New York Times, the richest 1% in our country now own more wealth than the bottom 90%. And according to, from a global perspective, things are of course even more unequal. So according to a 2019 report released by Oxfam, globally the richest 26 people on earth own as much wealth as the bottom 50% of humans. So 26 people, the richest 26 people, own as much as the bottom 3.5 billion. Okay, these are just the facts about capitalism. Capitalism is a class society in which a tiny elite owns most of society's productive resources, whereas most people own nothing. Now, inevitably, defenders of capitalism will reply, and this is a reasonable reply. Who cares? Who cares about wealth inequality? As long as everybody has enough, who cares if some people have more than enough? See, you might even think it's just envy or resentment that motivates socialist complaints. It's like we want to be like the 26 billionaires who own as much as the bottom 3.5 billion or something. But this reply fails. It fails because, first of all, not everybody has enough. Certainly globally not everybody has enough. Many basic needs are not being met. But even within our own extremely affluent country, not everybody has enough. So here again are just some facts. The UN Special Reporter on Extreme Poverty took a trip to an unexpected location in 2017, not Haiti, not someplace in South America, not someplace in Africa, instead to the United States. And the UN Special Reporter on Extreme Poverty did not like what he saw. He described our situation accurately, in my opinion, as private splendor and public squalor. And he added that the US has the worst poverty in the developed world. Indeed, according to the Rootledge Handbook of Poverty in the United States, nearly 100 million Americans live either in poverty or near poverty, 100 million Americans, 2.8 million kids live in households earning less than $2 per day. And there are over 600,000 homeless people in the United States. We could, 44% of them, by the way, work. We could go on. The point is, the capitalist reply, who cares about wealth inequality, as long as everybody has enough, who cares about inequality, and my initial response is, well, hold on, not everybody has enough. So isn't it morally grotesque to allow billionaires to keep their stuff when we have 600,000 homeless people? Secondly, and perhaps more deeply, even if everybody did have enough, even if we did get rid of poverty, still, wealth inequality would be a problem. This is so for two main reasons, although in the interest of time I might just stick with one, which would make sure he gets extra time, too, yeah. Okay, all right. As a socialist, I want equality, so make sure, all right. I'll go for two problems then. I could go all day about the problems of capitalism, but I'll restrict myself to two. So the first problem, the first reason why wealth inequality as such is a problem, even if we got rid of poverty. This is so obvious that it almost doesn't even need mentioning, but wealth equals power when you have a tiny class of people, the top 10%, top 1%, top 0.01%, that owns most of the stuff, they're going to dominate politics, economy, and society. This is not just me making this up. So in 2014, some influential political scientists from Princeton and Northwestern released a really important paper in which they found, quote, ordinary citizens have little to no influence on public policy at all. So who does have influence? No surprise, quote, it is individual economic elites and corporations which are largely owned and controlled by wealthy elites that affect public policy. So 2014 academic study finding that ordinary people have literally no influence on public policy, whereas economic elites drive public policy. So the first problem here, people, is that we don't live in a democracy. We live in a plutocracy. In our system, it's wealthy people who run the show economically and politically. Now, inevitably, capitalist defenders will say, well, who cares? A lot of my students say this when we talk about socialism and capitalism. A lot of my students are conservative at TCU. And they will, at this point, reasonably say, well, you know what, rich people probably know what they're doing. They didn't get rich by accident. So if anybody is going to be in control, rather, they're rich than the poor. Well, there are two problems with this reply. First, that ain't how democracy works. We didn't sign up for plutocracy. We signed up for democracy. We're supposed to have political equality in this country. We're supposed to share the government together. But again, perhaps more deeply, the problem with this reply is that it completely ignores class conflict. Here's the reason why it's a big problem, that the rich control everything. The interests of the rich are not identical to the interests of ordinary people. In fact, they're often quite deeply conflictual. So one could illustrate this in a million ways. But let me pick almost at random something from the New York Times from this past year. Here's a headline. Koch brothers killing public transit projects across the US. Nashville was considering spending about $5 billion on a new public transit plan. The Koch brothers poured money into some sort of lobbying group or organization called Americans for Prosperity. Americans for Prosperity descended upon Nashville and convinced enough people to vote against the project to kill it. Now, you might think the Koch brothers just have an interesting theory of what would be good for the people of Nashville. Maybe, but I think more informative is the fact that a lot of the Koch brothers' concerns are bound up with oil, automobiles, and asphalt. And so I think that's a more plausible explanation for why the Koch brothers are killing these projects. Okay. Let me move on to, so thus far I've just been criticizing capitalism, right? It's a problem because we've got wealth inequality and that's bad. So what's an alternative? The alternative is democratic socialism. This can sound scary and a little unfamiliar, but I think really it's quite simple. So I'm going to explain this in two quick steps. First, just start with what economists call the Nordic model or social democracy. Countries like Sweden and Finland, Denmark. These countries are market economies with regular profit-seeking firms, but they have high rates of unionization. They have very high levels of taxation and they have very high level of social spending that goes to fund universal social benefits that goes to everybody. So universal healthcare, universal higher education, et cetera. Now, I think this would be a gigantic improvement of what we have now. And quite honestly, if we just moved to, say, Sweden, moved our country towards Sweden, I'd be happy. Socialists want to go even further because the problem with countries like Sweden is, although they're more egalitarian, there still is a capitalist class that owns most of the wealth. So the solution, from the socialist perspective, is to replace private ownership of productive assets with collective democratic social ownership of productive assets. This is, it could be difficult to see how to implement this in practice. Maybe in, I don't want to take any more time. So maybe in my next time, I'll say more about it. Sorry for going over. Okay, great. So to be continued, thank you. All right, so I think the way we're going to do this is I won't comment as much on the comments and then we're going to do rebuttals, like five minute rebuttals where I'll comment more on my disagreements with pretty much everything you've just heard. But that's okay, he's going to disagree with everything I'm going to say. So we're doing this in a friendly disagreement. But fundamental disagreement. So the first thing I want to do, which I think is well always important in the debate or in a presentation generally, is to find terms. I think it's important to define your terms. Because one of the things I find when I debate people on socialists or the various categories of socialists, is that they never define capitalism. And what they use is what they do is they assume the world as it is capitalist and therefore all the ills of the world today are blamed on capitalism. So three and a half billion people around the world are truly unbelievably poor. They're so poor that their net worth is negative. So indeed I'm probably richer than like a billion of them. Just me alone, and I'm not a billionaire. Just me alone, because they have negative net worth and you would add negative numbers, what do you get? A big negative number. So it's easy to be richer than a lot of negatives. But are they living under capitalism? Is the real question we should ask ourselves? And clearly they're not, like people in Africa are not living in capitalism. People in Asia are not living in capitalism. Indeed, I would argue, and will argue vehemently today, that we in America don't live under capitalism. And there is no country in the world today that is a capitalist country. Capitalism does not exist in the world today. What we have is lots of countries that are mixed. A mixture of socialism and capitalism. Socialism being statism, the state involvement, heavy state involvement, heavy state redistribution of wealth. And some property rights that are regulated controlled by the state are not true property rights, because I can't actually do what I want with my property. I have to get permission for almost everything that I do with my property. I used to live in California, that was the case. You need to get a permit to chop down a tree. You need to get a permit to redo your house. You need to get a permit for everything. That is socialism or statism, some form of statism. It certainly is not capitalism. So what is capitalism? So the definition of capitalism is a system of real free markets, where the state does not intervene in the economy. Does not intervene at all. That is, capitalism is a system in which there's a separation of state from economics. In which the state does not intervene in economics at all. So I agree, cronyism is bad. Having a lot of money, therefore gaining political power, is bad. And indeed, the only way to prevent that and still be a little free, still be free at all, is by restricting the ability of the politician to have any influence on the economy. And therefore, there's never any reason to lobby the politician, because he has no influence on the economy. He has no way of gaining favors or penalizing the competition, because that is banned. So capitalism is a system in which economy and politics are separated, in which all property is private property, in which the state does one thing and one thing only. And that's protect individual rights. Protect individual rights in a way somebody like John Locke would have conceived of individual rights. That is, the freedoms, freedom from coercion, the freedom to do, act, produce, live by your own judgment, based on your own ideals. And the only job of government is to protect you, make it possible for you to do that, and protect you from whom? Or from other people. Because when we live in a society, there are going to be some people who crooks, fods, criminals, bad guys. And since we don't want to live inside, at least I don't, there might be some anarchists in the room, but hopefully not. Since I don't want to be carrying all the time to watch myself, we institute a government, an institution, whose sole responsibility it is. It's to defend each one of our lives, to defend our property, because property is essential for life, and to protect our ability to pursue our own happiness. But basically, to leave us free as individuals, to pursue the values that we believe are necessary for our own survival, for what we believe are necessary for our own life, to leave us alone, right? So capitalism is the system where individuals pursue their individual values, their individual happiness, free of coercion, and the job of the government is to make sure that they are free. That's it. That's what capitalism is. I don't see it in America. I don't see it anywhere, indeed, in the world. To some extent, I would argue it's never existed. To the same extent, I think the socialist would argue that socialism has never existed in his kind of form. I don't think capitalism has ever existed. I think, but I will say this. So let me complete the moral argument, and then I'll get to the practical argument. Now, why is this good? Why is the system right? Why is the system just from a moral perspective? Well, what is moral? What is good, evil? What is right versus wrong? Well, the standard for me for determining whether something is moral is is it consistent with human survival? Is it consistent with human flourishing? Is it good for human life? That which is good for human life. That which furthers human life is the good. That which destroys human life, attacks human life is bad for human life is evil. That to me is good and evil. That's right and wrong. That's the essence of morality. And it's an individualistic morality. Because what is human life? Human life is your life, my life, each individual. There is no class here. There is no group here. We impose those ideas on people. But as human beings, we're just us. We're just individuals. And as an individual, the values that are good for you, the values that long term lead to human success and human flourishing are the good and the things that lead to human failure are the bad. Now, what is the most important thing if you believe in human flourishing, in human success, in human progress? What is the most important value for human beings, for individual human beings? What is it that makes possible success and flourishing as a human being? Well, we don't have time to go into all of it, but please ask about this. It's our human capacity to reason. It's our capacity to think. It's our capacity to know the truth. It's our capacity to integrate the data from reality to capacity to shape reality in order to fit our needs. That's what makes it possible for this human race to survive, because look at you. You're pretty pathetic animals otherwise. We're weak, we're slow, we have no fangs, we have no claws. You're not gonna survive out there in nature without a capacity to reason, to think, to strategize, to invent, to innovate, to produce. What makes us different than any other animal is we're not programmed to survive. You actually have to figure out how to survive. So the most important thing about being human is our capacity to think. Now, thinking requires freedom. It requires the ability to try stuff out, to fail, to experiment, to do a variety of different things. Knowledge is not just embedded in our minds. We don't know what's right, what'll work, what will succeed. We need to go out there and live and choose and make decisions. And again, fail sometimes and get back on our feet. The most important thing for human intelligence, for human mind, for human beings to flourish is their ability to think freely and to act based on those thoughts within freedom. Free of coercion, force, authority. Okay, I didn't see the signal. Force, authority are the real enemies of the human mind. They are what limit our ability to produce, create, and really live out there. So you want a system that protects our ability to think and act on our thoughts. That's capitalism. It's a system that eliminates the one enemy of thought, which is violence, fraud, people using guns, people using authority to dictate how you should live and how you should think and what you should do. Think Galileo. Now I'll just end with this. It turns out that when you leave people free, when you let people think, when you take away the authorities, when you take away state control and limitations, to the extent that you do that, and I said there's no ideal capitalist country yet, but they're being attempts to get there, to the extent that you do it, to the extent that you practice this freedom, to that extent you produce economic wealth, you produce economic success, you get rid of poverty, to that extent that you practice capitalism, you are successful in bringing about rising standard of living, rising quality life, longer life expectancy. In every dimension you improve human life. And to the extent that you do the opposite, to the extent that you use coercion, that you use force, you use authority to suppress human freedom, primarily the freedom to think and to act on that thought, to that extent you become poor, to that extent you suffer, to that extent life becomes miserable. That's the difference between capitalism and socialism. The one is a system based on individual freedom, the other is based on individual suppression and incursion and the consequences are obvious. One leads to wealth, one leads to disastrous poverty. Thank you. So in terms of definitions, I agree they're important. I'm surprised by Iran, right, Iran's definition. Because as he says, by his definition, there are no capitalist countries on earth. So just notice what an extreme position he's defended. I take it you're defending an economy with no state involvement whatsoever. So that's setting the bar high for you, which I know you know, but I wanna make sure they know. So okay, that's point number one. That's a pretty extreme situation, well why? Well think about all of the things that government does, not in spooky Venezuela, but in USA, baby. All the stuff that the government does right here to promote, I'll use your concept here, freedom, which as a liberal egalitarian, I hold dear to my heart as well, freedom. I think people who defend the sorts of positions you're defending misunderstand freedom. So there's formal freedom, which is freedom from interference, very important. There's also effective freedom, the freedom to actually accomplish things in the world. Both are important. Government, it's true, can be a source of interference. It can prevent you from dumping that coal ash in the river that you just really wanna dump. You know, you just, to live your best life, you wanna dump that coal ash and the pesky government won't let you do it. Admittedly, it's a restriction on freedom, formal freedom. But it also yields freedom dividends, obviously. So when we impose restrictions on pollution, we augment the effective freedom to say develop in a healthy way without coal ash in your water. Without government, we would have much less effective freedom. I would point out that all, different point now, we shouldn't fetishize private property or any kind of property from the standpoint of freedom, even formal freedom. All property rights are restrictions on freedom. This is my pen, he can't have it, okay? This limits what he can do. If he comes and tries to take my pen, which I hope he won't, cause he's bigger than me, the police will come and, well, they probably won't, but I could theoretically call the police and get them to interfere, right? That's what we have at Monterey. That's right, that's right, that's right. That's right. But the point is simple. There's no simple mapping from property rights to freedom, even formal freedom, because all property rights represent interferences with people. Ask yourself how free homeless people are in our society. They ain't free at all. They aren't free, they don't have formal freedom. If they try to sleep someplace, what's gonna happen? The police will evict them. So even from the standpoint of formal freedom, a sort of libertarian capitalism with no safety net at all would be a disaster. But finally, in defining what, making the moral case for capitalism, you mentioned that that which furthers human life and flourishing are good. Well, I agree. That's a good definition of good. That which promotes flourishing is good. Well, I just am wondering how taxing, say Bill Gates, so that he can't buy a seventh yacht in order to fund, say, vaccines for kids or public education, or any of the valuable public purposes that our government serves. How is taxing Bill Gates for that purpose not furthering human life and human flourishing? So I submit that even by your own standard, you shouldn't embrace this kind of radical libertarian capitalism. The government does many good things. May I stop there? Thank you. That's all right. Yeah, okay. Just the ash in the river. Let me just comment on that quickly. I'm sure there'll be environmentalist questions afterwards we can cover. But look, if the river's mine, you ain't dumping your ash in my river. And my definition of capitalism, the rivers are owned by somebody. They're not just out there aimlessly owned by nobody. So you can't dump your coal in my backyard. You can dump your coal in my river. So the solution to externalities, what we call externalities in economics, is to privatize. Once you privatize externalities, the most part go away. I'm sure there'll be more questions on this. Let me make, I wanna make one crucial point. By the way, I embrace the idea that I'm, what did you call it, extreme? Absolutely, I'm radical. I don't like the word extremism. I don't think it means anything. I'm radical. I believe in this all the way, right? And in its purest form. Wealth is created. Wealth doesn't appear. There is no pie that we then get to divide up among people. Somebody has to create the pie. You create a pie, you create a pie, you create a pie. You can't then just take, and this is the definition of private property. The pie you created is yours, because you created it, because you build it and you do build it. You made it. You bought it. It is yours. Indeed, private property is not a rejection of freedom. It is a necessary aspect of freedom. There is no freedom without private property. Because to live, I need property. Whether I need property in order to grow vegetables so I can eat them, or whether I need property in order to build the machine that I'm gonna sell and make a lot of money, or the factory that makes the iPhones, or whatever the property is, you cannot have life. And indeed, life sucks where there's no private property. I mean, life sucks. I really mean sucks. Really, really, really bad. So freedom necessitates, or private property. You cannot have one another. But let me go back to the pie. So the pie is not a social pie. It's not we created this pie now. We get to decide how to divvy this pie up. No, I created a pie. Keep your hands off my pie, right? That's capitalism. I want to give out some of the pieces of the pie to some of you. I want to trade my pie for your pie? Fine, as long as it's voluntary. As long as I don't steal your pie, as long as I don't take your pie by force, you can do with your pie anything you want to do, as long as it doesn't violate the rights of other people. As long as it's not using force against others, you have a right to do with your pie what you wanna do. Pies are not social, and they're not static. That's the other thing, right? From 300,000 years ago, the beginning of Homo sapiens, I'm willing to accept that that might be the wrong date, but some way, a long, long time ago, when Homo sapiens begun, until about 250 years ago, everybody on this planet was dirt poor. Was under $3 a deal, less everybody on the planet was like, that few aristocrats over here who by our standards were still dirt poor, they didn't have electricity, they didn't have running water. And then something miraculous happened. We got a little bit of freedom. Not the full freedom I would like, but just a little bit, about as much as we've had. And what happened? Wealth creation took off, took off. So now we can say, there were only three and a half billion people who were poor. Actually, the number's a lot less according to the UN, extreme poverty is at the lowest it's ever been in human history. It's down to 8% of the population. Why? Because a few countries in Asia have adopted a little bit of capitalism. Imagine if they've adopted a lot of capitalism. There'd be no extremely poor people on planet earth. So the only system that has ever brought people out of poverty, the only system that has ever brought people out of poverty is capitalism. And it's done such a spectacular job of doing it that it is striking that every place on the planet that has adopted a little bit of capitalism has shrinking extreme poverty and every place on the planet that has not adopted capitalism is still extremely poor. Africa is the last continent to struggle with adopting capitalism. Rwanda, Botswana, Namibia are starting to do that. Their GDP is going like this. They've adopted property rights, they've adopted some of the elements of what capitalism looks like and suddenly they're getting less poor. So if you care about poverty, which I think any human being cares about seeing able people who are poor, stay poor, then capitalism is the only solution to solving the problem of poverty that still exists in the world. Thank you. What if there's a fundamental flaw in your premise? Many people here will be familiar with Jordan Peterson and he's talked about the dominance hierarchy and that it's flat out wrong to blame that on capitalism. That the structure of the way we're made, the biology of the way we're made, it's dependent. Like there's a dominance hierarchy in all social animals. All social species have that. Thanks for the question. So I think there's a misunderstanding. So I'm not blaming all hierarchy on capitalism. For sure, there will be hierarchy, there's hierarchy in Norway. There will be hierarchy in Norway even if it moved further left. So there's gonna be hierarchy in human relations. Not all hierarchy is problematic. There can be some hierarchies that are great. I mean, I'm the coach of my son's soccer team. That's not problematic, right? They need a hierarchy. So the rich. So here are problematic hierarchies when we live in a democracy. That's a fundamental premise. Maybe you guys don't wanna live in a democracy, but I do. And that means political equality. And that is fundamentally incompatible with the Koch brothers, for instance, not to pick on them too much, but they make such easy targets. Spending per the New York Times over $800 million in the 2016 electoral cycle. That's some problematic dominance right there. And that is due to capitalism because in Norway shifted to the left, nobody has $800 million laying around to spend on an election because you don't have these grotesque excesses of wealth. So yeah, I don't wanna oversell socialism. It's not gonna be rainbows and unicorns and no hierarchy. There will be all sorts of problems, but we won't have this problem of the rich per se dominating everybody else. But the rich are part of that dominant hierarchy. So the reason why people work really hard, the reason why they come to school, the reason why they're trying to improve themselves, it's to make a contribution to society. But it's also, so it's part of this whole biological premise, like they're peacocking. You know, part of the intellect is peacocking. So when you criticize somebody like, say, what's wrong with taxing Bill Gates? Well, it turns out that Bill Gates employs just tens of millions of people. It's impossible to conceive of how many people, Bill Gates, a single person has affected. It's arguably that he's affected the entire world for the better. That's hard to say. Well, why don't we just take away all of his profit? Because some of these people, some people are corrupt, which I'll get to you. But I mean, you know. Can I answer this question, too? Sure, sure. Because I disagree with you, too. OK, you know, well, well. I want to critique Jordan Peterson. All right, so I won't go on. What happens if you destroy the very class of people that are producing the means of production? Like he said, they don't just come out of nowhere. It's not just there. It's not a pie that exists. And you just seize it, and now it's yours. Like, people are producing this. Yeah, so OK. So I take this broadly as an opportunity to talk about incentives to produce under a more egalitarian system. Why would people work if they faced steeper levels of income tax or wealth tax? Well, because they want to be richer than other people. And under socialism, you could still be richer. You just wouldn't have the 300 to one split between CEO pay and average worker pay. Instead, in a lot of cooperatives like in the Basque region of Spain, Moundrego and cooperatives that are a kind of model for a kind of socialist institution, their highest paid employees make, say, four times what the lowest paid employees make. And they're perfectly competitive. But put Moundrego aside, just talk about our own country. As I'm sure you both have heard this statistic. But I mean, the highest level of the top marginal tax rates used to be much, much higher in the 50s and 60s, indeed up to 90%. Was there an economic calamity? Did the dominant peacocks say, I'm not going to show my peacock feathers off anymore? No, because it turns out that what human beings really want is to be better than the next guy. It doesn't matter necessarily how much better in an absolute terms, or it doesn't matter how much in absolute terms they have. It doesn't matter to Bill Gates whether he has $15 trillion in his bank account or a billion. He just wants to have more than Mark Zuckerberg. And you could have relative inequality under socialism. We're just not going to have this ridiculous, absolute inequality where you've got people with billions of dollars and people starving in the streets. So the big picture point then is, socialism is perfectly compatible with allowing some inequality for the sake of incentives. So I hate this dominance theory. I think it's awful and terrible and it justifies the worst kind of elements that would be critiqued against, that exist within society. Because it says that we're basically just regular animals. Some of us have this dominance thing and we're willing to step on other lobsters to get to the top and to hell with those other lobsters. And it's a zero sum world and we're going to destroy the competition in order to get to the top. And it's all about relative. I want to be better than the other guy. I think all of that is bullshit. I don't think any of that is true. We're not lobsters. We're human beings. And as human beings, we have the capacity to reason. We have the capacity to create stuff that doesn't exist before. We don't become wealthy at other people's expense like lobsters do. We actually create wealth that benefits everybody else around us because they all get to trade with us. So we don't rise to the top by stepping on other people like the lobster example. And we're not programmed to step on other lobsters and other human beings to advance. And we're not motivated. I don't believe for one Iyoda, Bill Gates looks at the top with 400 wealthy and figures out where he is relative and motivated by getting higher up on the top of the list. None of these guys are motivated by that. If you know billionaires, what they're motivated by is the love of producing, the love of creating something, the love of making something beautiful. He didn't create the iPhone, which is somewhere over there, because he wanted to be richer than somebody else. He created the iPhone because he was inspired by something beautiful that could change his life and our life. And trade for that. And yes, he wanted to make a lot of money, but the measure of money is not relative to other people. The measure of money is how much did I impact the world? Money is a symbol for how much value I've created. Because how do you become a billionaire? How do you become a billionaire? We talk about this abstraction of people having billions. But how did Bill Gates, Steve Jobs, Bezos, these guys become billionaires? By trading with us. Did we win or lose from that trade? Well, why did we enter it? Why did we buy the iPhone? Why do we use Amazon? Because we believe that it makes our lives better. So we enter the trade because we believe we're gonna make our lives better. So the only way for them to become billionaires is for millions, no, not millions, billions of us to trade with them in a way that we believe will make our lives better. So the only way for Bill Gates, Steve Jobs, and these guys to become billionaires in a free market, we'll talk about the corrupt ones in a minute, I guess, is by making the world a better place for everybody else, by applying their own mind to a problem that exists out there, a problem of human survival, a problem of human production, and coming up with a best idea and then trading with other people, making their lives better in win-win relationships, trader relationships, voluntary relationships, not relationships that are imposed, not relationships that are zero-sum relationships, not lobster-like relationships. Human beings are different. We're not predetermined by genetics to invent iPhones. Doesn't work that way. There's no way that we're predetermined to invent iPhones. You have to make choices. You have to use your reason. You actually have to think to come up with an iPhone or any product that's out there. We don't, even this building, animals don't do this. They can't. So billionaires become billionaires by making the world a better place. They do it by creating wealth, not by taking wealth. And the fact that 26 people are richer than three and a half billion is because 26 people have created, objectively created, more wealth than three and a half because the fact is the three and a half billion are barely surviving. All they're doing is they're farming and they're eating what they produce. And I bet you the net worth, by the way, in this room, I'm probably richer than all of you combined or at least the students combined. I'll take out their delts because your net worth is negative because you got student loans. It doesn't mean I'm rich. It just means I have a positive net worth. So 26 people actually created a lot of wealth. Three and a half billion, sadly, sadly, haven't created the wealth yet. If they lived under capitalism, they wouldn't be that poor. We all know there are people, say, for example, the Wells Fargo crisis. It's just absolutely appalling. And when you look it up, they knew exactly what they were doing. And so they were targeting people. They couldn't speak the language. They were targeting people that were the elderly. These are the people, what is Wells Fargo? Number four, number three of the biggest banks. And they, in order to drive like, so we have the system of capitalism that incentivizes like growth. So in order to fake their profits, because they have to show the people that want security for their stocks to rise up, they are faking sales. Let me just, because you've been to Coke twice, let me just say that nine minutes, it does get a little bit of money for the Koch brothers. So just for, you know, they pretty much give everybody who's in the free market world some money. So just for full disclosure. How do you protect against corruption? That's the only reason to have a government. It's to catch the crooks, right? That's the one thing the governments should do. So if there's real fraud, then catch the real fraudsters. But the problem is today that that's not what the primary job of government is. So everybody remember Bernie Madoff? I know you guys are too young maybe, but Bernie made a big pyramid scheme. He basically stole $63 billion from his friends and family members. Did the SEC catch him? SEC, responsible for protecting us from fraud in the securities market. Did they catch him? No. They got a report twice from a hedge fund. This guy's a crook. Here's what he's doing. And they couldn't catch him. They couldn't get him. Why? Why couldn't the SEC get him? Because the fact is the SEC's not about catching crooks. The SEC's about monitoring my behavior. I'm not a crook just for full disclosure. I happen to be in the financial business as a business on the side and I do some buying and selling. But the SEC monitors everything I do. I have to follow a 13D and a 13G and a 13Listener. And then they send in their inspectors to... I have a whole compliance office. I have a whole thing of compliance where they come in and look at my books. They're so busy monitoring what I'm doing that who has time to catch crooks? Indeed, they almost never catch crooks. It's rare that they actually file. Usually, who catches the crooks? The market does. In the case of Bernie Madoff, who caught him? Well, the hedge fund guy who wrote the memos twice and who landed up at the end catching him. His son. His son called in the police. So if the government actually did its job, it's one job, which is to protect us from crooks and criminals and fraudsters, the world will be different. And just to relate to the Wells Fargo example, in capitalism, there are no bailouts. By definition, capitalism is anti-bailouts. There's no too big to fail in capitalism. I'd go further. There's no deposit insurance in capitalism. Yet why do people keep their deposits in Wells Fargo in spite of the fact that they've committed fraud? Because who cares? If something really bad happens to Wells Fargo, the government's going to step in and pay me back, right? Unless you've got more than $250,000. Who's got more than $250,000 in the bank account? Like, okay, one guy, right? That's pretty amazing, right? They're trying to protect a little guy with deposit insurance. Really, how many little guys have $250,000 in their bank account? So the whole system is corrupt. The whole mechanism of the world in which we live in today is corrupt, not corrupted by capitalism, corrupted by statism. As soon as you have deposit insurance, now you have to have the regulations to monitor the banks. And then if the bank is very big, it has systemic risks, so we have to bail you out. So by the way, if you have more than $250,000 in your bank account, here's a tip for those wealthy students among you. If you have more than $250,000 in a bank, always put it in a too big to fail bank. So Wells Fargo is a good place for $250,000. Bank of America is a good place. Don't put it in your local community bank, because when it fails, you won't get your money. You'll get everything up to $250,000, but not above. But if Wells Fargo fails, they'll bail them out. They've told us they'll bail them out. It's in the, so talk about incentives. When you tell somebody, when you make money, you get to keep it all. But when you lose it, we'll bail you out. What kind of behavior do you expect to get? Pretty nutty behavior, right? And that's what we get. So that's our capitalism. There's no bailouts in capitalism. There's none of this stuff in capitalism. Capitalism is a system where the government does one thing. It protects us from the crooks. And if only we had a little bit of that. One of these days we'll have to debate Jordan Peterson, because... So in the pocket of America where there's extreme inequality and poverty, many of the victims of the lifestyle live on the government's welfare policy. And in a purely capitalist society, what's safety net exists where people are able to improve their own quality of life, where there's other inequalities such as education, access to jobs, things like that? So first, I don't buy that inequality is a problem in capitalism, right? So there's inequality, but I don't think it's a problem. As Sam said, I'm gonna say I don't care about inequality. And I don't. So I care about poverty. I don't care about inequality. So what happens to poor people under capitalism? One of the amazing things, if you look at free economies, again, to the extent that they're free, relative to what we have today, which I think is a lack of freedom, to the extent that they're free, is that two things happen. One, capitalism tends to produce more jobs than there are people. So you get massive immigrations into capitalist countries because there's so many jobs being created. So poor people can get jobs. The unemployment rates under capitalism, again, the closer you get to two free markets, the more this happens, that unemployment rates are basically approach zero. Second, because of the investment in capital, the productivity of labor goes up dramatically. So wages go up. So people become less poor, not because of a handout. People become less poor because they're becoming more productive and therefore they're rising up. You can see this in 19th century America. You can see this in 19th century England. You can see this in Hong Kong. Hong Kong's a brilliant example because 75 years ago there was nothing there. There was a fishing village. Seven and a half million people lived there. Why? Because people went on rafts to get there. No safety net. Nothing guaranteed except their freedom. Freedom of contract, not even voting. So not even democracy, as we understand it. Property rights and contract law respected. People went there, created their businesses, built wealth and built a life for themselves. So that is the way poverty gets eliminated. Now, you might ask what about the people who can't? There's a certain percentage of the population. I think it's well less than 1%. But there's a certain percentage of the population they got into an accident, something happened and they can't take care of themselves. What happens to them in my ideal capitalist economy? People help them voluntarily. So those people are dependent on other people one way or the other. And the question is, is that dependency gonna translate into a legal claim against me? Is that dependency a moral claim against me? If you're suffering, if you got into an accident and you're suffering, does that mean I am obliged morally or politically to help you? And my answer is no. Not morally, I don't owe my life to you just because you're suffering and certainly not politically. So the question is how you convince me voluntarily to help you? And of course the people closest to you are most likely to help you. And the people's further away are less likely to help you. But one of the things that happens in a free capitalist society is you get civil institutions, voluntary institutions, not corrosive institutions that help out people who cannot help themselves. So charity is the main form that takes. But there are all kinds of other mechanisms, mutual aid societies, unemployment, private unemployment insurance. There's even insurance against poverty in some capitalist countries in the past or semi-capitalist countries. Insurance against poverty that you could buy to protect you from those kinds of accidents and things like that. In other words, you're still dependent on other people but now you have to ask for the help instead of demand the help which is the system we live under today. Today, if you have a need, you can use the force of government, guns, in order to take my money and get help. I think, again, I'm against force. I'm against coercion, I'm against authority. Maybe I'll say something about the same too. That's a great question, I think. Let me just say something about poverty again. So it's striking that the only countries that have really eliminated poverty are probably some of the countries you like least. So again, the Nordic model, Scandinavia, there basically is no poverty in those countries. They're not very capitalist. I think of these things on a spectrum. So you might as well. Well, I actually know you don't because you only define capitalism as that one extreme end but really there's a spectrum. And the question is to what degree is society in control of the economy? The more the answer is yes, the more socialist it is. Norway is quite socialist in that sense. Society exerts a lot of control through its very democratic state over the economy. And one of the things it does with that control is it taxes a lot and then it redistributes that wealth to do a lot of useful things among them. Basically eliminating poverty. So the answer to your question in the American context is we need to have more social spending. We need to have more taxation. We need to do more to help people. For instance, I'll just end with this. Here's one thing we could do. We could have a universal basic income that would literally eliminate poverty overnight. We could literally just give every American $15,000 a year divided up monthly if you want and bam, poverty's gone. I have a question for Yaran. I am talking about pie. So we're going back to the pie. But you say there is no social pie. Like there's no pre-existing pie. There is only the pie that we create. And I'm running away with this pie thing. But I mean, I think at least from my perspective, this is the one argument I would have against like a libertarian capitalist system is that I mean, that's just not factually true. I mean, I was born, my family is not wealthy. I was still born into a family that could provide for me and I was born with a pie. I mean, and so at what point in my life, if I grow up and I get a good job like I've always been expected to by everyone in my life and I say this is my pie, nobody else can have it, like that's just not true. I was gifted some percentage of this pie through the arbitrary luck of being born into a middle-class family. So how do you justify saying that all wealth has been created by the people who currently Yeah, that's good. Good question. So it's true that you're gonna benefit from the fact that your parents created a pie and their parents, they might have benefited or might not have benefited, I don't know what their situation is from their parents having created a pie. So you're gonna benefit from intergenerational pie baking, right? But okay, so what? It's still somebody baked a pie. It's still not our pie. It's your parents pie. And they choose to give you a piece of it, right? But they choose voluntarily to share that piece. And it's sad that some people don't have parents who have baked a pie for themselves and these new people, these people, these young people have to start from scratch and they're in some sense at a disadvantage, right? Because you've got a little bit of pie that you can leverage for your future and they don't have that pie to leverage for the future. But remember, somebody always baked pie. There's no pies that just proof come into existence. Pies get baked by individuals, by people. So there are these disadvantages. I'm not gonna pretend that we all have equal advantages or we're all born equal, on the contrary. I admit completely, we're all completely different. Again, look around the room. We're all completely different. We have different abilities, different qualities, different characters that some of them we shape ourselves. Some of them are just issues of luck. That's life, that's life. Now the question is, given that, how do we create the most opportunities for those people who weren't born with a piece of their parents pie, or whoever you wanna see it, right? How do you create a system that provides them with maximum opportunities to bake a pie, their own pie? And I think freedom is the way to do that. I think leaving them free, and we can get into the economics of why you don't wanna tax Bill Gates, why taxing Bill Gates is like the least efficient thing you could imagine using his capital for, that the capital left in the hands of Bill Gates is far more productive and far more creative in terms of helping people create little pies if he actually invests it rather than if you take it away from him and start distributing it. So freedom is the best mechanism to create the most, not equal, the most opportunities for everybody, including those who are most disadvantaged by the fact that they weren't born to the right parents, or weren't born with the right genes, right? It's what you do with what you have and the environment in which you live, a capitalist or socialist, I believe capitalism provides you with the most opportunities to actually succeed in life. And I'm gonna stop there, but at some point I'll come in and Scandinavia, we'll find an opportunity to do that. May I just say something about this as well, this is a really good question. Just on the issue of opportunities for the least, for the worst off, it just doesn't seem plausible to me that a kid born to homeless parents in libertarian utopia who have to rely on charity and oops, they're not likable, so nobody gives them charity, it just does not compute with me that that kid has the most opportunity any human society imaginable could give anybody. That just isn't true. Look again at, in our country, bad though it is in many ways from the standpoint of justice, at least kids have access to public school food stamps of their poor, et cetera. And we could do much better. We could do much better on the score. But again, if you're really serious, that you want a society that extends the most opportunity even to the worst off, there's just no way you would pick a libertarian society. There's just no way. Okay, so a movement towards a socialist society and you think about why America was created because we were leaving a government that was, it was suppressive. People thought they had more rights than they were being given. A move into a socialist society, isn't that just kind of going backwards and neglecting American values and tradition? Good, okay, so I'm no scholar of the American Revolution so I won't speak to the motives there. But on the issue of whether socialism would represent an abrogation or a break with fundamental American values, no, because there could be a completely liberal, egalitarian, freedom-loving, bald, eagle-flying version of socialism. Call it, so here I'll explain maybe a little bit of this proposal I didn't get to before, and I'll be quick. Matt Brunig, a socialist wonk, there's like one of them and he's the only one. He has a think tank called the People's Policy Project. He proposes something called the American Solidarity Fund. It works like this. The government sets up a fund, an index fund, like Vanguard or whatever, and every citizen gets one share. Now, you cannot sell your share. Instead, you get the dividends that come from owning that share, just like rich people get to do now with their Vanguard funds. Over time, the government fills this fund with more and more assets, until eventually, this fund, which we control, because it's for us, it controls over half the economy. Voila, just like that, without any scary production, violently, which I don't remember writing about, but apparently I did, no violence, no force. It's just using the instruments that financialized capitalism has given us. Thank you, capitalism. We're gonna use financial funds to socialize the means of production. And now every American gets every year a basic income from this fund. And I don't see any incompatibility with American values there. Instead, I see opportunity and freedom. So let me comment quickly on that. I mean, really, there's no force there. First of all, how do you fund the fund? You fund the fund by forcing people to contribute to it. Contribute in quotes, because you're forcing it, which is what taxes are, force, which is coercion, which is force. And then how do the investment decisions get made? They don't get made by means of who is the most productive, by means that Vanguard or any of these mutual funds do today. But they would get determined by political means, the same as culpers and culsters make their decisions for pension plans in California. You'd have this pressure group and that pressure group and that pressure group over there that each would lobby for investment in their particular industries, in their particular areas in life. And it would be an unmitigated disaster to the extent that they don't have the economy. Yes, half the economy would be crippled by the fact that now government, democracy, the people own them in a democratic way. Today, if you don't want to own certain shares, if you are in Vanguard, you can sell your shares. But here, you can't even sell the shares. So you're contingent on this ability of people to manipulate the system politically by yelling or by shouting or by demanding or by using other means, by coming together. And the allocation of capital and the socialism, I mean, everywhere it's tried, it is unbelievable, unmitigated disaster. I mean, any experiment with the exception of, I hear the same stories about these communal firms in Spain. They're the only ones that anybody ever uses because the fact is that when you actually collectivize the means of production, even if you do it by the workers owning it, not the state, which is, you know, I lived in a country like that. The labor union was the number one employer in the entire country. This is Israel in the 50s, 60s, 70s. The labor union, and it was unbelievable disaster. Israel was poor. It's become a first world country because it got ridden of the collectivization. Venezuela, and I know a lot of bring up Venezuela, but Venezuela collectivized its farm system. That's why they're starving because every time you collectivize farming, you starve. Again, Israel used to have a kibbutz, which is like the most softest form of socialism possible. And without government subsidies, without subsidies from rich Jews overseas, the kibbutz was a complete and utter financial disaster. And socially, social interaction within the kibbutz was like the ugliest, the ugliest human relationships I've ever seen. In capitalism, people are benevolent because the way in which we deal with one another is through trade, not through your benefit is at my loss, not through taking from some, I was gonna say stealing, because I believe it's stealing, stealing from some and giving to others. So I think at every level, spiritual and material, that what socialism produces and what capitalism produces are night and day in terms of their values. So I have a question regarding the whole pure capitalism concept, right? So in terms of like what's happened in the past with Lehman Brothers, 2008 financial crisis, like all of these things happened because of the frauds and the crooks, right? And well, kind of. Well, I'll tell you what happened. Well, yes, but without the government to self, like just regarding basic economic principle, you think that the invisible hand will work very well, but without the government self-correcting or like government correcting a non-self-correcting economy, it ruins a lot of people's livelihoods. And even if the market always self-corrects, the government itself is part of the economy in the sense that basic economic theory, like you have like the government sets a policy rate, they have their yield rates for their government bonds, and they have their charge of the currency in which every economy works on. So how is it that capitalism can be so pure and distinct from the government that it's possible to... So let me be very clear what I believe pure capitalism is, right, the ideal capitalism. So there's no coercion. So the government does not control the currency. You compete on currencies, banks issue currencies, just like they did before 1914, when the Federal Reserve came into existence. They did it in Canada until the 1940s, when they only adopted a central bank in the 1940s. And Canada has had zero banking crises. We've had 12. So the question is, why do we have 12? And they have zero... To a large extent, it's because we have over... We have regulated our banking system far more than they have since the founding of America because Hamilton and Jefferson fought and in a sense Jefferson won the argument. So our banking system is being unbelievably fragmented in a destructive way. But let me quickly, because it's impossible to do this quickly, quickly just tell you what I think caused the financial crisis, because this mythology that financial crisis was caused by capitalism is... Because there was no capitalism in 2007 and the crisis happened in eight, right? And where did the crisis happen? In two primary industries, mortgage industry and banking, very related, two of the heaviest, most regulated industries where there's more government intervention than all these industries than any other. Banks today are basically public utilities where everything they do, they have to get permission from the bureaucrats. You want to nationalize the banks? They're already nationalized, right? At least they're socialized, they cost the socialized and they were bailed out and they had too big to fail. Too big to fail is a strategy of the Federal Reserve since 1984. It's not new. It didn't come about during the financial crisis. It existed when Continental Illinois was about to go bankrupt in Chicago and the feds bailed them out. So if you're the CEO of a bank, you don't have to be corrupt. All you have to do is follow incentives created by government. And you're winning on the upside and on the downside you have no risk. So you take on a lot of risk, which is what they did. But think about housing, think about mortgages, think about Freddie and Fenney, not institutions of capitalism, these institutions created by government to increase home ownership. Why is government interested in how many people own homes, right? So, if you look at the financial crisis and if you go to my YouTube channel, which you should have subscribed to, I have an eight hour, eight session course where I analyze the financial crisis in great detail. And let me tell you, it's caused from beginning to end and I think almost every economist will agree to this in about 10 years. From beginning to end, it was caused by government programs, government interventions, government incentives, government controls. It would, those kind of crisis, that kind of systemic risk, does not exist in pure capitalism and you don't find it, those kind of crisis happening, the closer you get to capitalism. It's when you, the central bank is the primary evil here. I'll just quickly say, maybe those crises don't exist in pure capitalism, but they sure as hell exist in our capitalism. And the only people who are gonna try to stop that are Elizabeth Warren and Bernie Sanders. That'll make it much worse. My question's mainly for Sam, but you both can obviously chime in. So in your critique of capitalism, you said that wealth falls into the hands of a few people and those people get really rich, obviously. And then you also said that wealth equals power in our government and that normal people have no effect on politics because of this, which I think is a very fair critique. And then you also say that rich people's interests are not aligned with the interests of the people. So I just wanna know what you define as the interest of the people because that's collectivizing a group. I mean, if we're speaking in the US of 300 million people, so how do you create one broad set of interests of the people for farmers in Montana, for bankers in New York City, et cetera? Right, that's a great question. And you're right, it's too simple to think that the people have some interests. There are lots of different coalitions amongst the people. I guess from the socialist perspective, the key cleavage is between the capitalist class that owns the stuff and the working class that then is driven through not owning the stuff to go work for the people who do own the stuff. And while you're absolutely right, there are going to be interesting differences of interests within each of those groups. So even within the capitalist class, what's good for solar panel manufacturers is not good for what's good for ExxonMobil, for instance. So there are interesting conflicts there. Within the working class, boy, that's a big class, right? I mean, the way that I just defined it, it's like anybody who relies on a wage rather than capital income. That's like 90% of the people. And there may be some interests that are shared amongst all 90%, but they're gonna be important divergences. So absolutely right. There are those some things we can say in general about the way that the capitalist class as such, their interests conflict with the interests of working people. For instance, capitalists want lower taxes on their stuff. Working people, it's in their interest to generally speaking, not always, but often to raise taxes on rich people so that more of society's funds are available to put to socially beneficial uses. I like the market. I like the profit motive. I like Norway. Norway has a market. Norway has the profit motive. It just doesn't have the sort of rapacious capitalism that we have here. And there would be profits. There would be inequality. It's just that more of the social pie is available for public uses in a country like Norway. So just quickly, I think one of the differences is that I don't care about groups. I don't care about the rich. I don't care about the poor. I don't care about the middle class. I don't care about any of them. I care about individuals. And I care about which type of social system creates the opportunity for an individual who is willing to work hard, who is willing to apply themselves who are willing to exercise their mind, who is willing to strive towards bettering their life. Where is that individual better off? Where is that individual free? And I don't believe that free in Norway. And somebody should ask me about Scandinavia because I have a lot to say about it and I don't want to take up this question to do it. I don't believe that free in Norway to do that. And indeed, I think those who are actually ambitious actually want to produce something, actually want to be entrepreneurial. If it was easier to get to the United States, we'll probably be in Silicon Valley, not in Norway because that's where they would get excited about actually producing and making stuff. So I'm interested in the individual. Am I interested in freedom? I'm interested in getting rid of coercion, in getting rid of force, in getting rid of people telling me how I should live my life. And any system that is based on the group as the standard, there's always going to be a minority that is going to be oppressed by the majority. There's always going to be a minority that's oppressed by a majority. That is the nature of pure democracy. This is what the founders of this country warned us against is that pure democracy where the majority oppresses the minority. And the smallest minority is what? What's the smallest minority? The individual. And the individual always gets screwed when there's so-called group interests are involved because there are no such thing as group, you point it, there is no such thing as a group interest. Groups don't have interests. The only people who have interests, the only unit that has interests are individuals. And I want to make it free for them, as free as possible for them to engage in those interests. Oh, you want to do Scandinavian? So I actually spoke at the University of Bougain a few years ago and gave a talk on the evils of the Scandinavian welfare state. It didn't go too well in Bougainoy, but it was a lot of fun and there was a lot of engagement and a lot of interaction. I mean, I'm not gonna use Norway as an example because Norway is slightly cheating because they have oil and give them credit. They've managed that oil reserve in ways that other countries have not. They've done a very good job of managing that oil and the money that's coming in and that's a big product of why Norway is significantly richer, for example, than Sweden and Denmark. But I spent a lot of time in Sweden and Denmark. I give a lot of lectures there and I don't see the, what do you call it, the utopia that is Sweden. So let me give you a quick history of Sweden and I'm sure people will challenge this, but my version of a quick history of Sweden that I think aligns with reality. Before 1870, Sweden was the poorest country in Europe. Many of the Swedish immigrants that came to populate the United States left Sweden during that late part of the 19th century because it was so poor and it was poor because there were no property rights. It was still, it was still basically still remnants of feudalism in Sweden. In 1870, Sweden did what many other countries have done which is adopted the basic elements that move you towards capitalism. Again, not the pure capitalism but as close as people have come. From 1870 to about 1950, Sweden was the freest economy in Europe, the most capitalist economy in Europe. Actually one of the most capitalist economies in the entire world and indeed rose and became on a per capita GDP basis the richest country in Europe. Sweden had many of the large industries, it was an incredible successful prosperous country. From about 1960 to 1994, Sweden decided that they were gonna redistribute that wealth, they were gonna adopt socialism, they were gonna nationalize certain parts of the industries and they did all that and they became poor. They became poor. By 1994 they were bankrupt. By 1994 nobody would buy their bonds, they were basically grease of today. In 1979, the most money making industry in Sweden was ABBA, remember ABBA? Most money making industry in Sweden because they'd lost all their industries. They'd lost their edge, they'd lost their success. A lot of the successful Swedes like Johan Borg, the tennis player, the second biggest income producer in 1979 in Sweden left so that they wouldn't have to pay the high taxes in Sweden, he moved to Monaco for a while. In 1994 they were bankrupt. And since 1994 to today, most of the governments in Sweden have been right of center government. Most, all of the governments in Sweden have actually done something that is unthinkable in the United States. Unthinkable by Republicans, never mind Democrats. They cut government spending. They actually reduced government spending. There is no deficit in Sweden anymore. They run a balanced budget. But by the way they do that, while having a significant less progressive income tax than we do. The rich pay a lot less in comparison. So in Sweden, everybody pays taxes. Not just the very rich. In the United States, we have a very progressive tax system. So they've cut spending, they've shrunk the welfare state, and most importantly is they've reduced regulation on business. Indeed, in many respects, in spite of the large unions in Scandinavia, it's easier to fire an employee in Denmark than it is in the United States, or in Sweden than it is in the United States. Mobility of labor laws are far more rigid in California than they are in Scandinavia. It's easier to start a bank in Scandinavia than it is to start a bank in the United States. In many respects, if you look at the economic freedom indexes, Sweden and Denmark are right up there with the United States. They're not that different than the United States. Indeed, when Bernie Sanders said that his ideal of socialism was Denmark, the Danish prime minister came out and said, wait a minute, we're not socialists. We're not a socialist country. And if you go to Denmark, you don't see socialism. You see, yes, more redistribution of wealth in the United States, but less business regulation. So they've come up with a different mixture in the mixed economy, right? We have a mixture, we distribute relatively little, but we regulate a lot. They redistribute a lot and regulate less. Both are way below what they could be. And let me just end with this. I recently read a study that shows that Danes in America, immigrants that came to America, now there's a selection bias here, but Danes that came to America are significantly wealthier than Danes that stayed in Denmark. They're just as happy, because you know the Danes are supposed to be the happiest people in the world. Danes in America, just as happy in Denmark, and Danes and Swedes and Norwegians in America live just as long in terms of life expectancy as they do in Scandinavia. So once you control for those genetic aspects of health, they're not any better over there than they are here. And happiness is probably more of a cultural thing than it is something that we know how to measure in any kind of truthful. So this is a question for, I guess, either of you, but you both seem to be advocating pretty radical views that are well outside the mainstream. And you also both seem to acknowledge that some set of countries in the developed world from Sweden or the United States, whatever your model is, has done pretty well. In fact, it's made huge increases in quality of life, whether eliminating poverty in Sweden or creating more wealth. So why is it that you're both so certain in different directions that these mixed economy models that have done so well are no longer viable or can be improved upon? Good question. So yeah, I'm not certain. I mean, in the spirit of John Stuart Mill, I think it's important to be open to ideas. And one learns what to think precisely through exchanges like this. I think that the balance of evidence suggests that humans flourish best in countries like the Nordic model where the states takes a very active role in redistributing wealth. And I think that the fundamental argument that I outlined earlier against capitalism that under capitalism it turns into plutocracy because wealth equals power. I think that's a sound argument. And so I think that you take a model like Norway where the state owns 60% of national assets. And if you were to bump that up even further, move it in an even further socialist direction, it would be more democratic and more responsive to the will of the people. So yeah, social democracy, you know, one and a half thumbs up, socialism too thumbs up. So I'd say thumbs down on both of those and three thumbs up for capitalism. But look, yeah, the mixed economy works okay, right? And it's part of the challenge of being radical because real life's pretty good. There's a new model of iPhone coming out next year. Everything's fine, right? But I know what, oh, I think I know. What's possible for human beings? What the real potential is? So two things. One, I think a mixture never stays a mixture. It drifts in one direction or another. I think in the United States, we've drifted towards the statist model. I won't call it socialist because statism can come in a variety of different forms where the state intervenes, but it might be on behalf of, you know, you might plutocracy or fascism or, there are lots of different models of statism. We've drifted towards statism dramatically in this country over the last 100 years. And I think it's, I'll detriment, I think life is less prosperous. I think life is less good from a material and a spiritual perspective. I actually think one of the reasons that we still have poverty in the United States is because of the welfare state. I think the war on poverty generates poverty. That is the war on poverty guarantees that there will always be poor people. Generally, if you create a bureaucracy to serve somebody, they have an incentive to keep having people to serve. But also because I think it's taxing the people who actually create the jobs and create the wealth that would help raise people out of poverty. You don't raise people out of poverty but just by handing them a check. So, and I don't think, I don't think you spiritually benefit people by giving them a check. So I think there's a spiritual aspect to the evil of the mixed economy that by handing them a check, you deny them the self-esteem and the pride that comes from actually working for a living and you tell them, you're too incompetent to get a job. Here's a check. Don't worry, you don't have to work. But yeah, you do have to work. Not because of the money you get from work, but because of the spiritual value work actually provides for you. So, disincentivizing work is bad spiritually for human beings. It's bad for the ability to be happy. So, and then why do I think, why do I need to be radical? Because look, I believe force is bad. I believe coercion is bad. Even a little bit of coercion I think is bad. I don't want to be told what to do. Especially if you've got a gun in your hand. So I don't care if the gun is held by a majority or the gun is held by a criminal in the street corner. It turns out that the majority usually has a more damaging gun than the crook in the corner. The crook in the corner can get my wallet, that's it. The majority can get all of my assets. They can take 55% of my income in California. They can tell me how much to pay my employees. They can tell me how much profit I can make. They can tell me what kind of wages I can take if I'm the CEO. They can control almost every aspect of my life. I don't want other people. I think it's immoral. I think it's immoral. So going back to the moral aspect. I think it is immoral for people to use force against one another. I think it's immoral to constrain human beings by use of authority and coercion. You know, freedom, the freedom of the individual to pursue his life as he sees fit using his mind. That to me is everything. And to the extent that you use force, even a little bit, I'm against it. Even by the way, if you could say economically, we'd be better off. I don't care. I value freedom more. And I don't think you can make that case, but if you could. Value is not what you produce. It's not determined by just you producing. There has to be somebody who values the thing you produce. So I can produce, I don't know, I can produce lectures. But if nobody comes to listen to them, they have no value. Nobody is valuing my lectures. So I'm not gonna make any money. So for a farmer who produces plants that people don't value, that people are not willing to pay for to exchange for those plants, then the plants actually have no value from an economic perspective, right? If you're growing marijuana right now, you're doing pretty well because there's a large value and the supply hasn't really caught up yet with the demand, right? It depends on the plant. It depends on the industry. There are lots of small businesses out there, including service industries, restaurants, for example, who don't make any money. And that's why you see restaurants changing all the time because entrepreneurs are losing money constantly. But the idea that the service industry just moves money around is just completely untrue and bogus. There's nobody, again, in a free market and put aside the cronyism. There's nobody who works in a service industry who makes a lot of money, who is not creating value. You might not be able to see the value. Most people don't understand finance. Most people think finance is paper shuffling. But there is no industry. There is no workers. There is no proletarian. There is no workers class without a financial industry. It is the financial industry that makes possible the existence of jobs. It is the financial industry, the paper shufflers, supposedly, who decide on what projects are profitable, what projects are going to produce value to other people and what projects are not, that create industry, that create, and this is a part of my problem with the state owning all this, is because there's such a lousy, central planning is such a lousy methodology of deciding which industries to invest in and which not. The beauty of the financial markets is they are phenomenally good at investing in Apple and not investing in some other schmuck that couldn't produce anything close to what Apple did. They're really good at making those decisions. The service industry produces more value in many respects than any farmer who creates a plant. Apple, like everything else we have in the world today is a product of a mixed economy. There's no question about that and it's absolutely true that when the government goes in and funds all the basic research, then all the products that are based on basic research are gonna be, you're gonna argue, were funded by the government. But that's because the government has crowded out all private funding and that's the only source of funding you can get for basic research. But the idea that if the government stopped funding those things and actually cut our taxes and gave us our money back, that basic research would not be funded by the private enterprise is just historically not true. It's happened. I'll say this again. To the extent that a market is free, to the extent that a country is free, wealth is created. To the extent that a market is unfree, to the extent that a country is unfree, wealth is not created. So if you look at the technology industry, it's relatively free. A lot of wealth is being created. You look at other industries that are heavily regulated, heavily controlled, not free. You see a lot less innovation. You see stagnation. You see complete regression in everything. You know that every generation of airplane over the last 40 years has been slower than the previous generation of airplanes? They don't get faster, they get slower. And airplanes are unbelievably, unbelievably regulated. The last innovation in airplanes was the Concorde. And that got wiped off because of regulation. There's no supersonic jets anymore. So regulation cripples, statism cripples, socialism cripples, capitalism, the elements of capitalism that exist in a society are what allow for any economic growth. OSHA is the safety, work safety place regulation that came in. And you always see the graph. They show you this point where OSHA comes in and since OSHA, the number of bad stuff that happens in workplaces, the number of bad stuff that happens in workplaces is declined significantly, right? So everybody says, look, OSHA worked. It's declined significantly, unless and unless people are getting hurt in the workplace. But what they don't show you is the graph before OSHA. And the graph before OSHA shows exactly the same decline. So the workplace is becoming safer and safer and safer and safer without OSHA and then continue to become safer and safer and safer with OSHA. The idea that manufacturers wanna build product that kill their customers. The idea that McDonald's without bureaucratic government employed food safety inspectors would poison you is bizarre. I don't know a single businessman who believes that the way to make money is to kill your customer. But that's what you assume. It just doesn't exist. Boeing isn't safe because of their FAA. Boeing's safe because that's how they make a business. And when they're not safe, right now, you can see what's happening to their stock price right now when you've had two plane crashes. We'll just say something about a philosophical issue that has come up a number of times that gets a part of what you were asking. To what extent are we responsible for what we produce? And right, and of course, we're gonna take very different views on this. So you've outlined an interesting view according to which it sounds like on your view, Steve Jobs is sort of completely responsible for the iPhone. This is part of the libertarian, I think sort of fetishization of entrepreneurs, the valorization of the Silicon Valley, VC, venture capitalist, entrepreneur types. They're the titans of industry, the heroes in the Iran novels, who they're the ones who do all the stuff. And so without them, we would all be screwed. And they deserve, therefore, everything that's coming to them and the torrents of wealth and income that they can capture, well, it's all deserved. This is kind of laughable. I mean, even take Steve Jobs, who was no doubt quite skilled. In what sense did he make the iPhone? There are millions, I don't know about millions, there are tens of thousands of people, probably hundreds of thousands of people involved in all the supply chains involved in making an iPhone all the way down to probably slave labor in Africa digging in rare earth mineral mines. And without them, there wouldn't be an iPhone. It's true, without Steve Jobs' input, there might not have been an iPhone, although maybe you could find some other tech bro who could figure it out. But you know, a lot of people contributed. And this is just to illustrate a larger point that's really important here. All production is social. Nobody makes anything by themselves. We live in a society, whether we want to deny it or not. We depend on each other. This is a system of cooperation. Libertarians deny this and they fetishize property rights. And they're like, this is my stuff, I made it. How dare you point a gun at me and take it away from me? To me, that's just hyperbolic. That's not what we're talking about doing. We're talking about acknowledging mature adults that we live in a society and we have to cooperate. And we ought to care for one another to some minimal extent. Even if that means you can't buy your seventh yacht or for somebody like me who's certainly not buying yachts but I can't take a fancy vacation because my taxes go up. Well, if that's the price we have to pay to have a minimally just and decent society where everybody, even the children of the poor have a fair chance in life, I'm willing to do that. So I guess this is almost like a closing I suppose but I don't know how much more time we have. I personally think that justice requires an economy that's justifiable even to the worst off. This is the core John Rawls commitment. You justify a society by looking at its worst off members and you ask, could we justify the way we're organizing things to the worst among us? And the sort of radical libertarianism would be an absolute nightmare for the worst off. Whereas social democracy, socialism would be quite good. Okay, I have a question for you, your own. So you've said that the role of government is to protect people. That should be the only role of the government, right? Yeah. Okay, so do you believe that there should be governmental limits on what people can own? No. So can people- Well, weapons, weapons I think there should be limitations on what people can own when it comes to weapons, yeah. So do you think people should be able to own people? No, absolutely not. Okay, so then can you please explain to me and justify under the capitalist or- Can't own people. quasi capitalist system that you'd argue is in America that you keep saying you want people freedom, freedom, freedom, you're obsessed with freedom. And you even gestured about coercion that you don't want force and coercion. Can you please explain how mass incarceration in the United States has prospered under capitalism? Because of the profit motive and the prosperity that private ties to prisons have generated? Well, look, you're not gonna find anybody who's gonna, you're not gonna find me defending mass incarceration in the United States. It's a phenomena of the majority deciding to prosecute a minority. It's a phenomena of a majority deciding that the drugs that you should not be allowed to use drugs. I'm not gonna defend that. I'm against that. I'm for drug legalization and by drug legalization everybody who's in prison today for drug offenses, nonviolent crimes, should be let loose, should be let free. I don't think that's a phenomena of capitalism. I think that's a phenomena of statism. It's the phenomena of the majority dictating to the minority what's good for them or what's bad for them. Now I happen to think drugs are bad for you. Don't do them. But the only mechanism by which I should be able to enforce that is through argument. I should be able to convince you that drugs are bad for you, don't use it. I shouldn't be able to curse you not to use drugs. But that's what the state is trying to do. So the one drugs to me is a microcosm of the entire, you know, status socialist system. It's an attempt to regulate individual human behavior. And I think it's wrong. It's corrupting in every dimension of it. And it's not only that. There are so many other reasons people go to jail that do not have to do with what I consider real crime, coercion, violence, force that should not be jailable. They should not be crimes. For example, maybe this will be controversial to the people on the right, crossing the border of the country, exercising your freedom as an individual to move, to travel, should not be a crime that puts you in jail, should not be a crime that separates families, should not be a crime that is the way we treat it today. So no, I'm with you on mass incarceration, but I don't think it's a phenomena of capitalism. I mean, let's have free markets and drugs. Again, I hate drugs. I'm not preaching use of it. But you have a right to shoot yourself up with anything you want to. You have a right to commit suicide. Why? Because you have a right to your own life. And the right to your own life gives you a right to do with your life as you see fit, as long as you're not imposing, not cost, because you always impose cost. And let's say you're imposing violence on somebody else. Wow, got a lot of questions for this late. So I'm 35 years old. And when I went to high school, college, there was socialism. There wasn't democratic socialism. I think this is a new phenomenon that suddenly become commonplace in the last 10 years or so. What I was always taught socialism was the basic definition, government owning the means of production. And I appreciate, and by the way, this question is gonna be mainly for you, Dr. Arnold, but, and Yaron, I appreciate you giving you your definition of pure capitalism, which I agree with, okay? And I've always understood the definition of socialism just to be that, government owning of the means of production. Now, I don't think that I'm not clear on exactly what you're advocating for. And I'd like you to define democratic. So I knew that you said earlier that you're for the Nordic model. I would argue that the Nordic model isn't socialist. They have socialist redistributionist programs, but because there's private owned property and private business, they are inherently capitalist. So I would like to hear your definition of democratic socialism and what you are specifically advocating for here in the United States. Thank you, yeah, no, that's a great question. So I think there are three players to talk about here. There's capitalism, which is private ownership of the means of production. There's statism, state ownership, and then there's socialism, which is social ownership. Now, social ownership means democratic control. State ownership can be a way of realizing that, can be part of the toolkit we use to implement social control. But not always, statism can go really, really wrong. Soviet Union, moral disaster, state ownership, no social ownership. There's no sense in which the 500 members of the 10 members of the Politburo running the country, they did not represent the people. That was not social ownership. So democratic socialism unequivocally rejects statism as such, it does not want the Soviet Union. It does not want unaccountable bureaucrats running the economy, it doesn't want central planning. Instead, democratic socialism says, let's reduce the influence of private economic power and increase the influence of democratic power over the economy. There are going to be a lot of ways to do that. One, the Nordic model, as I said earlier, I think it's sort of a spectrum, right? So it's like, there's not like one threshold where it's like, ah, we've reached socialism. Like we now can all, you know, start drinking, you know, lemonade and riding unicorns. There's nothing like that. Instead it's a spectrum, it's a matter of degree. To what extent is the economy subordinated to democratic will? The more the answer is yes, the more socialist the country is. Now I think a lot of countries are fairly far on that spectrum. I think they could go further. One way to do it that I haven't talked about yet is a model called market socialism or economic democracy by this philosopher, David Schweikert. And there's a lot of parts to his model. I won't go into all of them. The key part for right now is he proposes social ownership of social control over investment. So here's how that would work. Right now in our system, if you want money to expand business, you go to a private bank and you get a loan or not, you get finance or not, on the basis of profitability. The bank looks at your proposal and says, how profitable is it likely to be? Can you pay us back? That's the only consideration. Under his model, there are no private banks. Instead, there are democratically accountable, socialized banks that are responsive to we the people. And these banks, we give these banks marching orders and we say banks, we want an economy that works for everybody, not just for elites. So when businesses come to you and say, hey, we want to expand production, we want to do blah, blah, blah, we need money, don't just look at profit. Look at profit, but look at other things too so that profitability does not crowd out everything else we care about. So for instance, look at sustainability, look at job creation, look at whatever other criteria we democratically choose. Now, as a complicated model, I've only explained part of it, but hopefully you can see how if we did this, right, this would nudge the economy further in a socialist direction, precisely because it would, again, help us, the people, start to control the economy to a greater degree. So good question, what is socialism? It's social control over the means of production. How to get there, there are a lot of different proposals. So let me, let me quit just one thing to add to that. One of the beauties of capitalism is because it's a system that basically leaves you free, you can experiment with models like this. Nobody's gonna stop you, right? So under capitalism, if you want to go start a commune, you get a plot of land or start a bank that is run by voting in the community or any way you want. You can experiment with all these things and as long as you're not violating other people's property rights, as long as you're not using force, as long as you're not using a gun, you can do these things. And I think that all fail. I don't think there's any question that they would dramatically fail in comparison to the incredible efficiency of the actual banking system, which is amazing. Again, not in the United States because it's heavily regulated, but that's a beauty of capitalism. It's about freedom. So if you want to start a commune from each according to his ability to each according to his needs, go for it, live a miserable life in your commune. But as long as you're not using force, as long as it's all voluntary, it's fine. But try to be a capitalist, somebody who believes in freedom, no coercion in a socialist world. You can't, you're gonna be dictated to, you're gonna be told what to do and how to do. And this is why this is the fundamental model question. Is it right for the group to rule the individual's life or should the individual be left free to live his life as he sees fit? That to me is the fundamental model issue. And I don't believe the group has any business in my life, any group. And this is why rights in a declaration as inconsistent as it was applied and has been applied are inalienable. You have a right to live to be inalienable, means nobody can take it away, even a majority, even 99%, they can't vote your way to life away. Well, if you take that really seriously, then that means your choices that you make in life cannot be voted away and shouldn't be voted away. I have a response to that from Don Corleone. He always said that he's been in the world of guns and in the world of finance and he always considered the world of finance to be much more dangerous. And so I think that one of the things that I've been struggling with about considering capitalism for my entire life is, if we were to go to a more deregulated style of capitalism, it seems to me inevitable that it would have a destabilizing effect on society as a whole. You have these experiments and that's great, you're free in a free market to have these experiments and a lot of them are gonna fail. But isn't that going to necessarily lead to a society that is largely destabilized? And the other thing that I've noticed, especially now, I mean, it's probably easy to say to any critical question of capitalism, well, it's because it hasn't really tried yet. I think that a lot of these are philosophical ideas that are hard to get to a real understanding of. So I just wanna caution anyone listening that you gotta really think about this. I've got really in depth and really listened to. So I'm really proud of everybody here. The last thing I would ask is, if I were gonna make my own pie, right, I would start off with wanting access, not necessarily ownership, right? I think we conflate those things a lot and I think what's important is access to a kitchen and to an oven and to flour and to sugar. Now I have to ask, is my sugar contaminated, right? These are the sorts of things that we have to actually ask the question. We have resources in common. I don't have own five gallons of the ocean that may or may not be polluted by plastics that are profitable for people to not care about. So my question would be to anybody. How do we actually deal with these things that cannot be specifically allocated? Thank you. Oh, okay. You ended on a different question than I thought you were asking. I thought most of that was targeted to me. So I'll start. I mean, let me just comment on this issue of cooperation because of course Steve Jobs didn't build it himself. Nobody would argue that he built the iPhone himself. But everybody along that supply chain with the possible exclusion of the slave labor in Africa which I'm certainly not gonna justify was paid and was paid enough so that they did the work. That is everybody in a capitalist society exchanges values for value and win-win relationships otherwise they don't enter those relationships. And yes, 10,000 people to one Steve Jobs which you know what? There's only one Steve Jobs. The 10,000, not all of them are replaceable but a certain percentage of them are more replaceable than a Steve Jobs. It's supply and demand, right? So the people who actually assemble the iPhone in China are probably easily replaceable. The engineers who help them in China are probably not very replaceable so they own a higher wage. And they add less value, right? The guy who actually assembles the iPhone anybody can do that to you doing it as an individual you're adding the least amount of value. The guy who added the most value to the entire supply chain including all the people at Apple who worked on the design and Ives and all these guys the guy who added the most value was Steve Jobs and that's why he gets the most, right? And again, it was all voluntary. Again, and I'm putting aside the slave labor because slave labor is evil and clearly I would be against that. In terms of plastic in the ocean and I'm gonna have a response that you're gonna laugh at but it's my response and I believe in it. I mean privatizing, right? The ocean or the use of the ocean in some way or another. In Iceland, they have found ways to privatize in a sense the fishing stock. And again, I'm not an expert on this so I don't have solutions to every problem the world has ever presented. But I do know, surprisingly but I do know that privatization works. You don't dump your garbage in my backyard. The more backyard you create the cleaner the environment becomes. So the fact is when the building wall came down the thing that really shocked people was not so much the poverty but the filth. The filth when stuff is socially owned owned in quotes, it's filthy. Nobody takes care of it. The fact is, and this is true everywhere you go everywhere in the world the fact is the private property is generally clean and taken care of because it's mine because I care about it and the legal incentives to do it. If you dump your garbage in my backyard, I sue you. There's a well-known mechanism for dealing with polluting somebody's private property. The more stuff we can privatize and I don't know exactly how you do it but the more stuff you can privatize the more stuff that we care about we will have. I'll give you one quick example. I think it's elephants but I think it also applies to lions in Africa. The way the elephant stock has been declining for years in Africa because of poachers who go in and kill them. The way they have saved the elephant in Africa is basically by privatizing the elephants. They've created private reserves where they're allowing hunting but now the private entity has an interest and a motivation and an incentive to stop the poaching because the poaching cuts into their profit. They hire, so people can buy licenses to shoot the elephants from the private owner and now the private owner has an interest in reviving the elephant stock because you need more elephants to shoot. Now I don't like that in a sense that I find shooting an elephant to be pretty despicable but the fact is that the more elephants because of this mechanism than they were before and the same thing happened with fishing in Iceland and I think actually Norway. I think Norway has a very creative privatization kind of model of fishing and fish stock and how to do that which I can't elaborate because I don't know it but imagine if we could do that on a larger scale. Imagine if you could do that over the ocean because people have uses for the ocean. It would clean it up. It wouldn't make a duty. It's an interesting, yeah, interesting idea. Could you speak to the other issues of the idea that perhaps the economics is just as coercive in certain circumstances as a gun and the other concern being, well I'm sorry, I'll just let you finish. I'm not sure what that means exactly because I know that there is this idea that economic power is the same as political power. If I'm the only job provider here that's a specific job. Yeah, so move. I mean, move, I'm serious, right? So if you're in Southern Ohio, I mean one of the things I wanna complain to I have about a modern America today is if you're in Southern Ohio and you don't have a steel job instead of voting for Donald Trump so he can impose tariffs so he can save your job while killing 40 other jobs, how about just get in a car and drive to Northwest Arkansas where there are plenty of jobs. Where there are wanted listings. That's what we used to do in America. We used to go to where the jobs are. We didn't believe that we were born and gonna die with the same job. We didn't believe that our generations were gonna, so you move. And again, if you look, now I said that pure capitalism has never existed and I in Rand wrote a book called Capitalism, The Unknown Ideal because it's never been actually practiced, but again, the closer you get to that ideal, the more jobs are actually created. People got on rafts and were willing to swim to make it to Hong Kong in order to get a job, in order to start a business, in order to provide for their family something and GDP per capita in Hong Kong today is higher than in the United States. So you can, and there was no safety net or there's very minimal safety net and very minimal social services, what we consider as the basics. So all of it very minimal. And yet people went there because they had opportunity and they had that desire. So they wanted to be free. They wanted to be free from coercion and they wanted those opportunities that freedom actually creates. So economic power and political power are not the same thing. With economic power, there are always options, always options. With political power, there's no option. There's no option. I don't pay my taxes, I go to jail. I don't follow the regulations, I go to jail. There's a gun. With economic power, there's no gun. And there's a fundamental difference between those two types of economic. You don't like your employer, you're not getting the right wage, leave. There are plenty of other employers in the world today. You don't like McDonald's, go to some health store and buy vegan burgers. I don't know. The beauty is you've got options and you get to choose. In that sense, it's the most democratic system ever because individuals, democratic in the sense of individual choice, individuals choose with their feet, individuals choose with their wallets. Individuals have options and they make their wishes expressed in their market activity without coercion. I think this reply is emblematic of a mistake common to the libertarian right, massively overestimating the power of exit to check private power. Most people can't pick up and move to Northwest Arkansas. Moreover, we see here a flaw in neoliberal capitalism. Get rid of borders, get rid of communities, commodify everything, move to where the jobs are, abandon your family, abandon your friends, abandon your church, abandon everything. Everything must be subordinated to profit. That's where this ends. But maybe that sounded pretty good to me, actually. I'm kind of into this private property thing. So maybe what we should do is this. As you were talking about oceans, privatizing oceans, I kind of got interested in that. I'm genuinely curious what you would say to this. Suppose we privatized the entire surface of the earth and then I'm big shot, awesome entrepreneur, I become fantastically wealthy and through a series of perfectly voluntary transactions, I acquire the whole damn earth. Well, among the rights of private property are the rights to exclude. And I notice there's seven billion other people on my stuff. So I say, this is infringement of my rights, maybe out of charity, I will allow you to continue to exist on the surface of the earth, which I own, but you better, I hope I like you. And it turns out I don't like you, so get off. And then among the rights of private property are the rights to enlist the state to enforce your property rights with force. So it looks to me like a reductio of the whole position. If his position is true, if I were to voluntarily, through voluntary transactions, acquire the surface of the earth, it follows that justice would enable me to kick all you off into space and die. That to me looks like a reductio at absurdum of the whole position. Sure, I mean, yeah, you can create science fiction nonsensical examples. It's a counter example. It's a counter example. There's no counter example here, because there is no possibility, and we can walk it through the example of anything like that ever happening. And indeed, you've had basically private property in the United States, so most of the United States, at least most of the East Coast of the United States is privately owned. Has anybody ever approached even close to owning the entire East Coast of the United States? But if they did. Has anybody even approached owning the entire island of Manhattan as anybody even approached? But if they did, if they did. But they did, but they can't. But if they did. No, but metaphysically, but metaphysically, they can't. You can't go against nature. But will you admit that if they did, and if I decided. But they wouldn't. You can't. Oh, I don't know. That's not how philosophy works here. But you can't hypothesize a metaphorically impossible. It is how philosophy works. It's how good philosophy works, so it's a bad philosophy. You don't hypothesize something that's metaphysically impossible, because yes, the metaphysically impossible is impossible. Yes, if that happened, it would be wrong. But it is metaphysically impossible for such a situation to occur. I mean, it's just not an example that actually has any reality to it. So I don't believe philosophy is about trams or metaphysically impossible situations about what would happen in a different universe. So I don't think it's a legitimate. I don't think it's a legitimate question. My question is like, if one property owner is surrounded by another property owner and how do you access your property, that are somewhat realistic that you can come and you can see situations like that. And they've always been in common law in the theory of property rights. They've always been ideas about access and how you should be able to access your property and exit your property. So the law is always provided within capitalism for the ability to deal with real situations like that, like the absurd one, but ones that are more realistic. Well, I would just really draw a distinction between things that aren't going to happen and things that could happen, although they're extremely unlikely. And the scenario I sketch is not going to happen, but I don't see the metaphysical impossibility. And I think it's a really telling example because what it forces you to say but you won't say is this. You are willing to protect the rights of private property left to heaven's fall. And that's what libertarianism is about. It's not about freedom. It's about protecting private property, guys. That's what it's about. They dress it up in freedom, and I respect what you've said, but I think this is really the core issue. Sorry. Go ahead, sorry. I know I interrupted you, so. That's okay. Libertarianism is an ugly selfish philosophy. So you can't just present it as such. You gotta dress it up by talk of freedom because talk of the rights of private property doesn't really inspire people because that's just protecting rich people and most people aren't rich. What, so what libertarians do is they don't talk about private property, they talk about freedom. What the counter example forces libertarians to do is acknowledge that in a scenario where protecting private property legitimately acquired entails literally booting all of humanity except for the private property owner off in the space, they're kind of inclined to protect private property. But he won't quite say that. But that's what follows from the theory. This to me is a reductio ad absurdum, not just to Vine Rand, but if Robert Nozick and all libertarians who put property rights at the center of the theory. I think property rights are important. I just don't think they're the only thing that's important. So let me just respond to that, because it's important. One, yeah, we're selfish, so I'm not gonna walk away from that. I believe individuals, primary moral responsibility, the only moral responsibility in life is to their own prosperity and their own well-being and their own survival, fundamentally. And that does not mean you live in a desert island, it does not mean you treat other people like shit, it means you respect their rights as well. But I am full rational egoism and I'm an advocate for that. I don't think it's ugly, I think it's beautiful. And I don't put property rights at the center. I don't think property rights are at the center. And this is why I think this is a ridiculous example. At the center is the right to life. There's only one right. Property rights don't exist in a sense. There's only one right. And that is your right to your life, that's it. Your right to your life means you have the freedom to act in this world in any way you please, accumulate whatever property you happen to accumulate. And I think you have to accumulate property in order to survive. But again, property is a derivative of your right to your own life. Your right to this, to you, to being you, to making decisions for yourself, to using your mind as you see fit. Property is a derivative of that right. And let me just clarify because it's important for the video because everybody's left. I'm not a libertarian for whatever the distinction matters. I think libertarianism is too big of a tent. I don't consider myself belonging to this tent because there are people there that I consider. I know many consider me crazy, but I consider it crazy. I think anarchism is not, is a bad idea. It's an evil idea. It's really wrong. And I don't want to be in the same tent as anarchists. So I don't consider myself a libertarian. I consider myself an objectivist for whatever it's worth. But an objectivist places the right to life as the center, right to liberty, the right to pursuit of happiness, the right to property, all derivatives of the fundamental right to your life, which means the decisions you make, which means the actions you take in order to achieve your life. And in that sense, I'm an egoist. You have a right to pursue the values you believe, rightly or wrongly, it turns out, that you think will promote your life. I don't believe I have a right. I should be able to interfere in your ability to do that as long as you're not interfering in my ability to live my life. So property is an outcome of that, not the foundation, not the beginning. And here I'm different than a lot of the libertarians who start with property and go from there. I start with life. I just want to know what your opinions are on Alexandria Ocasio-Cortez and her Green New Deal. Just whoever wants to answer the question. Yeah, I haven't looked at the Green New Deal in great detail, so I don't know the ins and outs of it. But certainly, the idea that we need to have a really important, massive, urgent response to climate change, I don't say how anybody could deny that. I mean, climate change, guys, is an existential risk. This is your generation, I'm not that old, my generation too, we're going to be dealing with this. This is an existential threat. And I think we need government to do something major. And if the Green New Deal is part of that, then great. We certainly, we need collective action. And the only way to get that right now is through government. And so I, to that extent, support the Green New Deal for sure. I'll just say I'll be the one person who disagrees. You know, I don't think climate change is an existential threat. I don't think there are many, or any, I think the only existential threat to humanity is humanity. That is nuclear bombs and war, I think of the real existential threat. I don't believe climate change is. We have the ability to deal with anything nature throws at us. We are amazing at figuring out solutions to these problems. You don't need a massive, complete remaking of the US economy. I mean, the new deal that she published, I think she withdrew it from their website, but the one she published on her website was nuts. I mean, it was every single building in the United States within 10 years where we had to have fitted. There would be no positive carbon footprint. I mean, I guess we stopped breathing. Within 12 years, I mean, I guess we kill all the cows. We have to, she talks about killing all the cows. So we stopped eating beef. I mean, it truly is nuts. Climate change happening, not happening. Whatever's happening to the climate, it's changing. It always changes. If it gets significantly warmer, there are kinds of things that we can do. For example, Canada will become habitable. Maybe some of us will move to Canada. I'm serious about this stuff. People have moved throughout human history because of weather. This is not new. There were ice ages, and humanity moved around because of the ice age. They're gonna be costs, but the amazing thing is if we allow the economy to grow, if we allow wealth to actually be created during this period, then we'll be rich enough to be able to deal with whatever climate throws at us in the decades to come. And let me just say this about this generational thing because this depresses me. I mean, I've never seen a generation so depressed than young people today. I mean, you're convinced that the world's gonna end. It's not. It's not going to end. It is. Millennials, millennial cults have always existed. And we're just replacing one millennial cult with a new millennial cult. 1989, the IPCC or whatever it was said, we had 10 years to fix climate change, or we were all gonna die equivalent. That was 1989. It's 2000, whatever, 19 already. And life's pretty good out there. Life's pretty good for pretty much everybody. It's not like the climate is destroying human life anywhere on the planet right now. Right now, it's 12 years. Let's meet up in 12 years and we'll figure out whether human life has been demar... Because we're not gonna do anything about climate change. Let's be real. Nobody's gonna actually implement the Green New Deal and the Chinese are not gonna do it. And if the Chinese don't do it, then carbon emissions are gonna still accelerate through the roof. Let's meet in 12 years and see how many people have died because of climate... I still remember The Population Bomb in 1968 by Oleg, who is a big climate change guy. I still remember the global freezing. I still remember Carson's book, we're all gonna buy of cancer at a young age because of chemicals. Life's pretty good on planet Earth. Start enjoying it. Stop being so depressed about the state of the world. I would just urge you not to take my word for it or his word for it. But look at the science and read, if you wanted to Google one thing, Google life after warming, the uninhabitable Earth. This is a book that summarizes the state of the art science. The overwhelming consensus on this is that he's dead wrong about this and we better get our shit together ASAP. Well, let's say the overwhelming consensus is, there's overwhelming consensus about warming. There's no overwhelming consensus about catastrophic warming. It talks the UN IPCC about that. UN has incentives. This is backtracking a little bit off of the whole like, good entire world thing. But in the previously mentioned capitalist utopia, what stops companies from paying unlivable wages to their workers? Like for example, most clothing companies pay like 12 cents an hour to the people who make their clothes. What would stop people from being given these unlivable wages while companies are only incentivized to pay the top-ranking person, the person who gives out the wages themselves the most and they don't owe anything to that bottom worker? Well, none of that is true. There's no incentive to pay the guy at the top a lot because a shareholder's, you want to pay him as little as possible too because any money he's getting, you're not getting as a shareholder. So the incentive is to pay everybody the least you can get away with, theoretically. What stops it is what's stopping it right now. It's not the minimum wage is not dictating wages right now. What dictates wages is productivity. If I pay you less than you are worth, worth in a sense of how much you can produce, you leave and you go somewhere else. What stops it is competition. What stops, I mean, not to mention just the fact that in an advanced society, in a society like in a rich society, nobody's incentivized to encourage poverty. But the fact is that competition solves this problem and it's always solved the problem. So the fact is that the 12 cents an hour that people are getting in Bangladesh or wherever, if you actually track wages in Bangladesh, and encourage everybody to go and actually look at the data because the data's amazing, right? Every year those wages are going up. Every year they're getting paid more. Every year it's getting higher and higher for two reasons. One, they're actually learning a skill so the individual is actually making more money because they're actually becoming more productive. But the second reason why overall wages are rising is because the productivity of labor generally in the economy is rising and therefore their wages are rising and they're demanding the wages because they can go across the street to a competitor. So markets actually work and the only thing that raises wages, the only thing that raises wages is increased productivity. Nobody is gonna pay somebody $15 an hour who's not producing $15 an hour or more. It has to be more than $15. So if I'm forced to pay somebody $15 an hour who's not producing $15 an hour, there are only two possibilities. One, I go out of business because I can't make a profit, right? I'm paying them more than what they're producing. Second, I replace them with an iPad in the case of McDonald's or I replace them with some kind of mechanization. So a business cannot survive if it's losing on its employees. So what determines wages is productivity and what makes sure that wages go up is competition. Here's something that might drive down wages, automation. So a lot of you have probably heard about AI and all the advances and I'm curious too what you might think about this, Yarn. Suppose that the most sci-fi scenarios come to pass and robots, like Westworld or whatever you've seen is, we've got like awesome robots and we've got awesome AI. And it just turns out that it's way more cost-efficient for companies to get rid of humans and replace them with AI and robots. I mean, we've seen this in a lot of industries already like CVS, you go to CVS, you have kiosks now instead of cashiers. Self-driving cars are just a couple of years down the pike. Fast forward this 10, 20 years and it just turns out companies don't particularly want to employ very many people and we've got an unemployment rate of 50, 60%. I'm curious, I know what I would do about that. I would have a universal basic income and I would think this could be the pathway to utopia because work kind of sucks. And if we could just have people work 10 hours a week and spend their time doing what actually matters, which is spending time with family, friends, developing hobbies, self-realizing activity, that sounds pretty good to me. I'm curious though, you know, what you might handle that. I mean, first I don't think work sucks. I think for every worker, work is essential for their own self-esteem and their own pride, so I think work is part of human life. Now maybe you can replace it with hobbies and stuff like that that serve the equivalent purpose, maybe in some utopian future that happens. I, you know, I have socialist relatives, uncles who are socialists, quite, quite adamant ones and I remember meeting up with my uncle in 1980, it must have been 87 because I was on the way to the US and I spent a little time with them and we'd yell at each other and argue. But one of the claims he was making in 1987 is it's the same with the environmental stuff. Like any day now there are gonna be no jobs because then it was PCs and computers and stuff. And it never happens. This is the same argument made at sewing machines, same argument every single, people say, yeah but this time is different, no it's not. And this is the reason, the reason is that human needs are infinite. We can't imagine the stuff we will want 20 years from now and it's still true that robots can't replace and will not replace in any kind of foreseeable future everything that we do. And indeed I think this whole distinction between robot and human long-term is really not gonna exist because we're gonna embed the robot in us or whatever. You know, we're gonna have the chips in our brain. I'm not sure that's a good idea because somebody might be able to control that but you know, we don't know what the future is gonna hold in terms of how robots develop just like we didn't know how computers but this I can guarantee they're gonna be plenty of jobs. I mean, one of the things that I notice and maybe you guys notice about other things is when I drive in California I look around the strip mall and strip mall after strip mall after strip mall, they're nail salons in the strip mall. I know if you have them here on the East Coast there's many nail salons. Like 20 years ago there were no nail salons. Like only the rich got in pedicures and manicures. And yet there's thousands of people today working in pedicures and manicures. Now I don't know if it's a good job or a bad job, I would hate that job but some people are doing it and they're making a living off of it and that's a whole industry that didn't exist 20 years ago. There are lots of industries like that that we can't even imagine would exist 20 years from now. I can think of a few that I'd like, you know, travel with me, you know, to help me out in all kinds of ways personal assistance might become. I mean all kinds of things that we can't imagine that will be so wealthy that we'll be able to afford. So I don't worry about jobs because I think that, again, capitalism, freedom produces, the needs of human beings under freedom are infinite. We can imagine things and people will be there to supply unimaginable things. And robots will just make it all easier. So yes, maybe we'll only have to work 20 hours a week. Or maybe only 10 hours a week and we'll be able to do other stuff during that period. That's not a bad thing. That's generally a good thing. And generally today, overall we work a lot less than we worked 50 years ago. We work a lot less than we worked 100 years ago. And certainly that we worked 250 years ago. We actually, the time worked, right, is shrinking for most professions in the United States and in Europe in most Western countries. And I think that's gonna be a trend that continues into the future. We'll be able to control more of our lives because we become wealthier. Robots are gonna allow us to be rich. And we can talk about UBI. You stated that with wealth comes power and political influence and all that stuff. And people like Bill Gates have unfair amounts of money. And I'm wondering at what level, kind of in the dollar amount you think is too much money and too much power and too much influence? Right, so I don't have a dollar number. So my answer's gonna be kind of a non-answer, I'm afraid. I think some inequality is functional for an economy. I think allowing people, rewarding people who work harder or produce more value with higher incomes is, within limits, fair and essential. I just think that there comes a point and it's up to economists to figure out what the point is. Where inequality becomes dysfunctional for an economy and for a democracy. One possibility here that we haven't talked about is you could partly block the transmission of wealth into political power through sensible campaign finance regulations. Or even, I mean, there's some pretty interesting ideas out there. You could get rid of elections entirely. Get rid of elections and pick people for Congress at random from the population. It's called Lottocracy. Interesting idea by a guy named Alex Guerrero at Penn. And that's a pretty awesome idea. I'll explain that just really briefly. So rather than, it's kind of nuts if you think about it. We've got these people we elect. They're beholden to a donor class. They show up on Capitol Hill. They're in a million committees. They're supposed to be experts on everything facing Congress. This is not humanly possible. They spend most of their day fundraising for one thing. They're not reading committee reports. And two, they don't often, they often aren't experts in the issues they're faced that they're actually legislating on. So here's a radically different way of doing this. Instead of electing people, let's just break Congress up into like a bunch of different institutions each focused on one topic. So you've got like an energy legislature. You've got like an education legislature, et cetera. And then you fill those legislatures by picking people at random from the population. Now they're gonna know nothing, right? More or less. So what you do is you have like a six month Lafayette college style seminar where you bring in experts, competing experts. You bring in me, you bring in him. You bring in competing experts and you train them up. And then they serve like three year terms. And this would be, I think worth, who knows what, again, this is like back in the experiment. Who knows what would happen? I'm pretty sure that this system would be less beholden to a donor class since there are no more donors since there are no more elections. So it could be resistant to capture by the elites in that sense. There's a worry about capturing the experts who come to give the presentations. I won't mention Koch Brothers money here. But I'm not, that was a little, I'm not suggesting you are, sorry. It's been a long evening. I'm getting a little punchy here. So there's worry about capturing the experts but there are ways, there are things it's worth exploring. I mean, would that New Hampshire tries this out or something? You know, we need to just try some stuff out. So just a quick comment. I think anything would be better than what we have right now. So I'm, but I think the best way to do this is to make politicians impotent in a sense to make them have little power. And I'll give you a quick example, you know, Microsoft in 1994 was the largest company in the world and it actually spent on lobbying exactly zero dollars. It had no lobbying firm. It had no offices in Washington. It did no lobbying, zero, nothing nada. And it was invited in front of the Senate and are in hatch of a public stood up and yelled at them. You have got to get an office here. You've got to get a lobbying firm. You've got to participate in what happens in Washington. In other words, you got to bribe me. And Microsoft literally, you can find the story, you know, that was written about this in Slate Magazine. Microsoft basically said, you leave us alone. We'll leave you alone. We're not interested. We don't want to lobby. We're doing our thing. We're creating value. We don't need you guys. And they went away six months later, just this bottom of an ox in the door. And what was the accusation against Microsoft? They were giving away something for free. Internet Explorer. That was the accusation. And what did Microsoft learn from the experiment? They learned that if they didn't lobby, the politicians were going to come after them. Google has never had antitrust problems. Why? Because they started spending the money early, very early, right in the beginning when they got venture capital, they started spending the money to the politicians. So the system today is geared towards the politicians' sucking influence. The only way in my view to stop that is to not give the politicians any power to make the economy truly free, free of politics. And again, you can then run your experiments within that freedom, within voluntary exchange, you can run whatever experiment you want. But then there's no power of the gun imposed on our lives. I just wanted to counter your point, and then I have an actual question, sorry. No, go for it. Get debating more than one person. You've been here long enough. You've earned it. Well, thank you. Your example was that you would have random people selected to be in government, essentially. What limits that, though? Because it could go to the extreme of everyone getting told what their job is. So that's the extreme side of it. Are we forcing them to come? Yes, it is. They may not want to do that. I see. Let me answer that first. So to be clear, I don't want to take credit for this, or take the blame, depending on your point of view. This is a proposal by Alexander Guerrero at Penn. His response would be, we're not going to force people to come, so it's not going to be like jury duty where it's like a legally enforceable obligation. Instead, we're just going to really encourage you to come by making it worth your while. We're going to pay you as much as it takes to get high-quality people to agree to do this. So if it takes $1 million a year, go for it. It takes $1 million a year. But you're free to say no. Okay. There's lots to say about that idea, yeah. So my other question was, I wanted to go back to your opening statement, how you talked about your ideal system, when it was revolving around the government basically coming in and taking over a lot of the factories, et cetera. And you mentioned briefly unions. But then, in today's world, unions have quite a bit of political play. So how does that really change what we have now to do that, because there's still a huge bias on that. So here's my reading of economic history that's going to differ a lot from the reading you just got, about an hour ago. Not just got, but maybe an hour ago. I think the collapse of unions in our country has been a disaster for the working class. So only about, I think it's around 10%, 14%, seven to 14%, something like that, of American workers are unionized. Unionization rates used to be much higher in our country. I can't remember off the top of my head what they were, but they were north of 30%, 40%. And this is essential to sandpaper off the sharp edges of capitalism. You just need, for working people, to have some counterweight to the power of owners. Owners are rich people who have a lot of influence and power, and they've got great bargaining power. And if you're just facing Walmart as an individual worker, lot of luck, you have no bargaining power. Walmart doesn't give a fig whether you quit or not. If you have a unionized, you come together, well, now you're talking. Now maybe workers can actually get a fair deal. So I think the collapse of unions in the 70s, starting the 70s was a disaster for working people. And we would have a much more humane and just economy where the pie was much more fairly shared, had that not occurred. Now you can see, this is not just, again, this is not just my unwarranted speculation, because we can look at other countries that do have more egalitarian distributions of wealth and income, like Canada and the Nordic countries, and they have much higher rates of unionization. You know, I'll just say, I obviously, you know, I'm not opposed to unions. What I'm opposed to is the special power union has in the sense of, and I forget the name of the bill that was passed in the 30s, it gives them a huge amount of power vis-a-vis employers. I mean, unions should be able to negotiate, but employers should be able to fire anybody who strikes, for example. There should be no special government privilege as one way or the other. As to, you know, look, there's no question Europe is more egalitarian, more flat in terms of income inequality than the United States is. The United States has more income inequality, but the fact is also that we're much richer than Europe. If you take some of the richest countries in Europe and you place them on a scale, adjusting for cost of living, you place them on the scale of the United States, they turn out to be slightly richer than Mississippi, but not much richer, nowhere near even the average. You know, with the exception, I think, of Ireland, which is actually the freest country today in Europe, and in Switzerland, which happened to be the two countries that are wealthier on a per capita GDP than the United States, and where union rates are very low. Union rates are not high in Switzerland and are not high in Ireland, but if I had a model and I wanted to say, I want to be like that country in Europe, I wouldn't use Sweden and Denmark and I would use Ireland. Ireland has, is significantly richer than Scandinavia. Ireland has a dynamic economy, a growing economy, and is doing, and they've even, you know, they've even gone to what, I guess, people consider the left on social issues, which I think is great, so they've legalized abortion and they've legalized gay marriage for a Catholic country, that's pretty cool. So, you know, I consider Ireland much more of a model within Europe and in Ireland, the unionization rates are not that much higher, if at all, than the United States. One of the reasons union rates have gone down is because they're not needed as much in a tech-oriented economy, they're not needed as much when individual productivity can be measured at a much better rate than it used to be. It's true that when everybody was doing the same job and you couldn't actually tell who was a better worker and who was not, then there was power in grouping together and negotiating as a group, but when you're actually the more productive person on the line and you can show it because now everything is measured and everything is monitored, then you don't want to be in the union, you actually want to negotiate a better salary because you're being more productive, you don't want to be driven down. At the end of the day, where it drives wages up as productivity, unions could drive wages up artificially, but that does not help anybody in the long run. In the long run, you cannot make more money than you actually produce. Thanks guys. Thank you guys. And you guys, I will second what Sam said initially. I mean, any way you can support this mill series, do it because exchange of ideas, I mean, when we stop talking, then the fists come out. I mean, that's the reality. It's either talk or guns. Either we give up on reason, either we embrace reason or we move to violence. Those are the only two options.