 OK, good evening, ladies and gentlemen. Thank you very much for joining us today, and I apologize for the delay in starting. Great to see so many people here. And unfortunately, some people couldn't make it in here and had to go in the next room, but that's OK. It's live streamed, and the Q&A of people on that side can definitely ask questions after. My name is Cameron. I'm president of the undergraduate journal, and I'm here with my team of 18. We're very excited to be hosting Dr. Brook today in conjunction with SeaTalks. What the journal does is we're an interdisciplinary academic journal at the university. We want to encourage and empower undergraduate intellectual activity, and that's primarily through publishing our biannual print edition, to which all undergraduates are welcome to submit their writing. But today, the focus is on our live talk with Dr. Brook. But before we get started, I'd just like to thank everyone for coming. I'd like to thank the University of Exeter's annual fund for their generous financial support, without which this talk would not be possible. I'd like to thank Alex and the team at XTV, who is making all of the recording and streaming possible, and the University of Exeter. Dr. Brook is going to advance his case for unrestrained, the moral case for unrestrained capitalism. He started his career in Israel in military intelligence, and then he moved to the United States in 1987. He did his MBA and PhD at the University of Texas at Austin, and then was an award-winning lecturer at Santa Clara. He founded the Hedron BH Equity Research and is now both the co-author of this best-selling book, Free Market Revolution, which you're welcome to take a look at at the end of the talk. And he's the executive director of the Iran Institute in California. So without further ado, please join me in welcoming Dr. Yaron Brook. Thank you. I'm going to go in front of the desk. Thank you all. This is, wow, this is terrific to see an audience like this. So the last 250 years, it's kind of weird standing close because I have to look way up. So I'm going to stand a little bit. Last 250 years, if you will, have been an experiment, a social experiment. A social experiment in which economic, political, social systems work and which don't. Which economic, political systems raise the standard of living of people and which don't? Which economic systems create wealth, create a middle class, raise the standard of living of the poor and which don't? And over the last 250 years, we've tried a lot of different things, a lot of different things. In the 19th century, we came as close as we've ever come to what we consider pure capitalism, free markets. And when I mean free markets, I mean free of what? Real question. Free of what? Free markets are free of regulations, government controls, government intervention. That's what I mean when I talk about capitalism and when I talk about free markets. So we came close to that in the 19th century. We tried pure statism in a variety of different forms, whether it's communism, fascism, all kinds of forms. We tried everything in between. Some statism, lots of free markets, little bit of free markets, lots of statism. We've tried every variation possible. And I would argue, I'm sure there'll be many here who disagree. But I would argue that the empirical evidence is unequivocal. If you want to raise the standard of living of people, including the poor, if you want to create wealth, if you want to create a high standard of living, if you want innovation, technology, prosperity, capitalism, free markets work. Indeed, the more free markets you have, the greater the wealth, the greater prosperity, and the greater, the better, the condition of the poor. The more statism you have, the exact opposite happens. And you can actually plot this on a graph. You can take a graph of the, in a sense, percent of freedom that you allow in an economy and the amount of wealth created in that economy, and there is a direct correlation. Indeed, today, there are economic freedom indexes published, and you can do it not just historically, but you can do it cross-sectionally across different countries, across different regions of the world. And those countries that embrace capitalism, that embrace free markets more, because nobody embraces it completely, those countries that embrace it more, richer, more prosperous, and the poor do better than those who embrace it less. There's a direct correlation between these things. I mean, and we've seen great examples of this. We've seen East Berlin versus West Berlin. You know, they built the wall not to prevent people from running away from capitalism towards communism, but the other way around. 25 years ago, the wall came down, and people discovered the difference between West Germany and East Germany. It was dramatic in stock, the prosperity in the West, the poverty and horrific nature, and the dirt, the filth, the pollution in the East. We've seen it in Asia. Hong Kong versus China. Hong Kong is flourished. Hong Kong, 70 years ago. Anybody been to Hong Kong? Well, good number. Everybody should go to Hong Kong at least once in their life. It's an astounding place. 70 years ago, it was a fishing village. Almost nobody lived there. 25,000, 30,000 people there. Today, 7.5 million people live on this tiny little rock, no natural resources, no reason for them to be rich, and yet the GDP per capita, which is a measure of wealth, is equal to that of the United States of America, so that as rich as Americans and richer than most Europeans. On this rock, why? What does this rock have? All that was provided on the rock is almost no safety net, almost no social services. All that was provided on this rock was the respect for property rights and the rule of law. That's it. Millions of people from Asia came to this place, and they thrived. They thrived, and they've done phenomenally well. Today, there just is, maybe you won't consider this a real measure, but just as one measure, there are more skyscrapers in Hong Kong than there are in New York City. Because to fit 7.5 million people into this tiny little space, you have to build skyscrapers. So there's this relationship, and you can see it today in China, to the extent that China adopts free markets and in the places where those free markets are left alone, if you will, where the central government leaves them alone. Wealth is being created. They produce. People are rising up from poverty. More people, more people have moved from poverty to middle-classhood in the last 30 years than in any period in human history. In Asia. Why? Because Asia has adopted free markets. So we've run this experiment. Again, in my view, the data is conclusive. You can challenge me in the Q&A. So this is the question, because it's a question that really troubles people like me who believe in free markets and believe in capitalism. If this data is so conclusive, is it so obvious that free markets work in the way I've described it? I keep moving, and the camera is kind of, everybody's going to get seasick over there. I'll try to stand still. If this is all true, if everything I said is true, then why are we moving away from free markets throughout the West? The West is giving up on free markets. The United States of America is a lot less free today than it was 30 years ago, which was a lot less free than 60 years ago, which was a lot less free than 100 years ago. We are systematically moving away from capitalism. We're systematically moving away from free markets. That's certainly true of Europe. That's certainly true of the UK, although you've gone through dramatic movement away, a little bit movement towards, and now starting to move away again. But suddenly in the last few years, the West is deserting free markets in mass, in mass. Why? What is it about free markets that we find so bad if everything I said up until this point is true? Granted, a fairly big if, but give me that for now. There's something about capitalism. There's something about markets that we find offensive, that we resent, that we don't like, that causes us to blame them for every problem, to blame them for every crisis, and to crush them at every opportunity. Crush them, I mean, regulate them, control them, impose the rule of government on them. So what is it? What is it about markets that's so upsetting, that's so, doesn't feel right? I mean, the latest financial crisis is a good example. 2008 happens. And before there's any data, before any economist has looked at anything, before anybody knows anything about what's actually happened, everybody knows who's to blame. Capitalism failed. Those were the headlines in all the big newspapers. It's capitalism's fault. Free markets failed. Now, we could spend hours and hours and hours talking to a financial crisis. I'll give you my two-minute. I mean, that's a joke, the idea that free markets failed in 2008. Because the funny thing about this financial crisis is that it happened in which industries? Banking and housing. At least in the United States, I'm going to put the UK aside because I know less about the UK or that I think this is true of the UK. Banking and housing are the most regulated industries in the United States, the most controlled. They're more regulatory agencies. They're more people involved in regulating. They're more rules to regulate them than any other industry. And they failed. And we don't blame the regulation. God forbid we blame government for anything. We blame the markets. And we blame a particular segment of the markets. We blame bankers. Now, we blame bankers for every financial and economic crisis for the last 2,000 years, since Jesus threw out the moneylenders from the temple. We used to blame it on Jewish bankers, but that's politically incorrect. So now we only blame it on bankers. But that's what it is. Wall Street. Wall Street's to blame. Now, I will guarantee that 10 years from now, almost no economist looking backwards towards the financial crisis will blame it on markets. But it doesn't matter, because we blamed it on markets and we've completely added on to the massive regulation that used to exist. Now there are even more of them setting up the next crisis, which we again, I can guarantee, blame on markets, on free markets, so-called free markets, where the freedom comes from. I have no idea. So something, again, something is there instinctually almost that leads us to say, it's capitalism. It's those bankers. It's those free markets that are at fault. They're the ones to blame. They did this to us. So what is it? So what are markets about? What is capitalism about? What are markets? Why do people participate in markets? Why does Steve Jobs build one of these? Why does he do it? Real question. Yeah, to make money. This is about making money. These things have profit margins. I wish I could sell a product with these kind of profit margins, 60% plus, right? He, Steve Jobs, wanted to make money. Apple wants to make money. People sell you stuff. They're making money. Is it only about money? I mean, do people go into business? Does Steve Jobs make this only because he wanted to make money? What else? What else? Yeah, he loves this, right? It's a passion for him. He believes that he can produce something better. He's driven by competition. But he's passionate. He loves this stuff. But at the end of the day, this is about whom? Steve Jobs made this for whom? For me? He doesn't care about me. If he cared about me, he would have produced this at much cheaper price. And maybe he would have asked my opinion about how this should look, which would have been a disaster. Never asked me an opinion about something like that. So who did he make this for? For Steve Jobs. This is all about Steve Jobs. Business is about the business that makes it. He's being, it's about him. It's about his self-interest. Now, I bought my first iPhone in 2008, when the US economy was spiraling out of control. And I went to buy my first iPhone because I wanted to stimulate the US economy. Because I know that's why you guys go to the mall. You guys go shopping because you care about your fellow man. And you want to make sure their job's out there. And you want to help the economy kind of spur along. It's why you buy those nice shoes, and those nice clothes, and the iPhones, and your iPads, and right? So why do you go to the mall? Why do you go shopping? For whom? For you. To make your life better, you think. Not always the case. Sometimes you buy a lemon, or a bad product. But you engage in that trade. You go and buy the stuff. Because you want to make your life better. So capitalism is about what? It's about people pursuing what? Their self-interest. It's about producers producing because they want to produce. And they want to earn a living, and they want to make money, and they love producing. And it's about buyers buying stuff because they want to make their life better. And buying the stuff that they believe will make their lives better. And it's the matching of those two. Markets are all about the pursuit of self-interest. And who loses when we pursue, when we do this? When I bought the iPhone, did I lose? I paid 300 bucks for this, let's say. How much is this worth to me if I paid 300 bucks to it? This is the Econ 101. How much was this worth to me if I paid 300 bucks for it? More than 300. Otherwise, I wouldn't have bothered. How much was it worth to Apple? Less than 300, they made a profit. So we both won. I'm pursuing my self-interest. Apple's pursuing their self-interest. And we're both better off at the end of the day. Magic. It's called the Trader Principle, win-win. And indeed, this is not a new observation I'm making here today. This is an observation Adam Smith made in 1776 in the wealth of nations. He said the baker does not bake the bread, the baker being the equivalent of a Steve Jobs, right, does not bake the bread for your sake. He doesn't know you and he doesn't care about you. He bakes the bread for himself because he wants to feed his family. And he wants to make money for himself. And you're not buying the bread so that the baker can feed himself. You're buying the bread so that he can feed yourself. You're both self-interested. That's the motivation. So capitalism is all about self-interest. That's what markets are about. That's perceptually obvious. Everybody knows this. But what do we know about self-interest? What are we being taught by our mothers, our fathers, our professors, our preachers about self-interest? From when were this big? What have they told us? It's bad. Self-interest is bad. I grew up in a good Jewish household. And my mother taught me, think of yourself last. Think of others first. I mean, she didn't mean that. But she taught me that, right? Nobody means it. That's part of the hypocrisy of the whole system. Think of yourself last. What's moral? What's noble? What's virtuous? Selflessness, not thinking of self. Excluding self from the decision. Just read Kant, or read Compte, Augustine Compte. They're philosophers, right? You shouldn't take your concerns into account when making a moral decision. Selflessness is the standard of virtue. Sacrifice. Sacrifice means giving something and expecting one in return. Nothing, or something of lesser value. And yet when I bought the iPhone, was I sacrificing? No. Did Apple sacrifice? No, we both came out ahead. Win-win. Sacrifice is by definition. Lose-win. You're supposed to lose. That's what makes it a sacrifice. That's what makes it virtuous. Goodness comes from loss. This is the morality. This is the moral code that we are taught. You can see this in the world out there, right? Bill Gates. Let's take Bill Gates, a technology entrepreneur. Bill Gates builds Microsoft. He makes $70 billion for himself, building Microsoft. How many people does he help in the world? By building Microsoft. How many people's lives does he change for the better? I would argue pretty much everybody on the planet. We're all better off for Microsoft. I mean, I'm an Apple guy. I've been an Apple consumer since 1989. But I know that without Microsoft, without standardization, we might not have the internet. Our lives are so much easier. Computing would be much more primitive. So much easier because of what Microsoft did. He has literally raised the standard of living of almost every person on the planet. Billions of people have benefited from him making $70 billion. By the way, the only way to make money in a free market is by providing a service or value to somebody else who values it more than what you're selling it for. Otherwise, they wouldn't buy it. So when I buy a Microsoft product for $100, it's worth more than $100 to me. And if you do the calculation, it's worth hundreds of thousands of dollars, if not millions of dollars, over the lifetime. So here's Bill Gates building a business, creating jobs, creating an industry, creating wealth, changing everybody's lives, making everybody's lives better, and how much moral credit does he get for that activity? Zero. I mean, we think of him as a good businessman. But how many people think, oh, Bill Gates, yeah. He was a, wow, that was a moral thing he did by starting Microsoft and making lots of money. I mean, we laugh because that's not even in the framework of morality the way we think about it. So at best, he's kind of morally neutral. But mostly, we kind of say, particularly in the world in which today where inequality has deemed this evil thing, we say, oh no, he must be a bad guy because he's so rich. So he gets negative moral credit. For all this good he's done in the world, he gets negative moral credit. Now when does Bill Gates become a good guy? That's slightly good guy. He's not a saint yet, but a good guy, kind of more positive. He leaves Microsoft. God forbid he should continue to create wealth and create products and sell them to us. Now he goes and starts a philanthropy. And now he starts giving his money away. That's good. Now he's a good guy. Now we like him. We like philanthropists. We love charity. Those are good things. Now how many people is he gonna help in his charity? Quite a few, hundreds of thousands maybe. Not billions. It doesn't matter. It's not how many people you help. It's what you get out of it. Why do we view Bill Gates as a good guy now that he's a philanthropist? Because he's not making any money. Because he's not benefiting it. Because he's not being self-interested. He's being perceived as caring about others. That's good, caring about others. That's a positive. Caring about yourself? Negative. How would Bill Gates attain sainthood? How would we make him a great historical figure that people talk about for generations? What would he have to do? Yeah, we'd have to give it all away, move into a tent. And if he could bleed a little bit, that would make him heroic. I mean, then we'd really, you know, sainthood. I haven't talked to Pope. But I think sainthood would be forthcoming. I consider that a perversion, a perversion of morality, a perversion of justice, a perversion to build something, to create wealth, jobs, flourishing for your own life, improve the people's well-being all over the world, that we consider insignificant. But to give it, to give the wealth that you had to create, by the way, it didn't just appear out of nowhere. You had to build it. You had to create it. To give it now, oh, that's virtuous and noble and wonderful and heroic. But that's the moral system we have. And this idea of giving, this idea of selflessness as being virtuous, is completely inconsistent with capitalism. Because capitalism is not about giving. It's about trading. It's about selling. It's about buying. It's not about sacrifice. Capitalism is not about sacrifice. So capitalism, by definition, in the moral system that we live in today, is not virtuous. It can't be virtuous. Because the people in it are motivated by self-interest, and they are. There's no doubt about that. And there are two things that happen politically because of this conflict, this conflict between the ethical system that we have and between the way markets work. What happens to these businessmen and generally to people in the world when they, in generally on day-to-day basis, they are pursuing your own self-interest? So imagine, put yourself in their place. You're pursuing your self-interest. But you've been taught that self-interest is bad. And you've been taught that you should be selfless. You should be suck. You should be Mother Teresa. That's what you should be. But nobody wants to be Mother Teresa. So we all live a different life. What do you think that happens inside of you when you live one life and your moral ideal is a different life? What emotion does that generate? Shame or guilt, I would say guilt. Guilt, I feel guilty. And most wealthy people today feel guilty for the wealth they've made. Bill Gates certainly is an example of that. They feel guilty about it. And much of their charity is not motivated by benevolence and love of their fellow man. Most of their charity is motivated by trying to buy themselves into heaven, whether they're religious or not, the equivalent of heaven, the equivalent of virtue. They're trying to buy themselves into virtue by giving them money away. Because that's what they've taught is virtuous. Making it, again, is not giving it is. So guilt. Now, how do we use guilt? Now, if you grew up in a Jewish or Catholic household, you know that guilt is a powerful weapon. You can control people with guilt. You can get them to do stuff. So for example, we can easily get people to vote to increase their own taxes using guilt, because they don't give enough of it away. Charity is small in the world we live in. And yet there are people over here that need stuff. They might not have nice houses. They're poor. And I'm rich. And it's my moral obligation, my mother taught me, to take care of them. But I don't, because I'm too busy living my life. And I don't look over there. So my politician, local politician, comes to me and says, I've got a solution for you. You don't have to look over there. You don't have to worry about those people anymore. I'll worry about them. I just need to raise your taxes quite a bit in order to give it to them. And I go, yes, all right. I can reduce my guilt by raising my own taxes. And this is what happens. People think, in America at least, they think that people vote their pocketbook. I.e. they vote to maximize their economic well-being. People never do that. People vote what they think is right, what they think is just, what they think is fair. So when Obama runs for president, he promises to raise, in his last election, he promised to raise taxes on the rich quite a bit in America, right? He promised to raise to how do you think the rich voted? Well, most people say voted against it, right? No, most rich people voted for Obama. Eight out of the 10 wealthiest counties in the United States went for Obama, not for the Republicans, knowing that their taxes would go up. But that's cool that their taxes go up because they get to have less guilt. They get to help the people they were supposed to help anyway, but forgot, right? So redistribution of wealth, the whole idea of the welfare state is an idea driven by this morality. It's driven by the idea that a Bill Gates owes it to everybody else, to take care of everybody else. And if he's not doing it voluntarily, then so what, let's force him to do it. Let's use taxes in order to do it for him. So that's one way in which this moral code kind of gives us a welfare state, a redistribution state, a state that takes from some and gives to others. There's no economic argument to justify that. It's a completely moral argument to justify the welfare state. What about regulation? The regulatory state, regulations are growing and growing and growing. Why are they growing so much? Well, what were we taught about self-interest beyond the fact that it's not good? What are self-interested people do in their lives? What do they do? How do they behave? They just go into the marketplace and trade? When we look at a kid in the back, and I'm not pointing at anybody specifically, so don't take this personally, and say, you're selfish. What do we mean by that? You're just taking care of yourself? No, we mean something more negative. What do we mean? You don't care about anybody else. It's even worse than that. What is likely that person's doing? They're willing to hurt other people in order to advance their own interest. They're people who are willing to exploit people. They're willing to lie, cheat, steal, do whatever it takes to get away. Right, to get away with what they wanna get away with. Supposedly make their lives better. So they are scoundrels. They're scoundrels. Now what a businessman. We've already decided, a businessman is self-interested. But self-interest equals scoundrel. Now maybe if we think about it, it's not so much, but deep down, yeah, self-interest. We've been taught from the beginning, equals scoundrel. So what do we need to do with scoundrels? Do we want scoundrels cooking our food? Do we want scoundrels building our buildings? Do we want scoundrels building elevators? Well we have to, because that's what business does, right? It creates all the products that we use. But we don't trust them. So what do we need to do? We need a point, good-hearted, public servants to go and watch everything that they do to make sure they don't kill us. Because you know, in America, every elevator, you walk into an elevator in a high-rise building, there's a little diploma on the wall, and it says that a government bureaucrat inspected the elevator and approved it for functioning, it won't fall and kill you. Because if you didn't do it, we know, we know, deep down we know, that if we just left it to the marketplace, those elevator manufacturers would build elevators that killed people. So we need a public servant to make sure that they don't. Because that's how you make money in capitalism by killing your customers. If we didn't have food inspectors, McDonald's would poison us. Thank God to the government. And why do we trust the inspectors? Because they're not self-interested. They are public servants. They're there for the common good. We hate self-interest. They're there to take care of us. Yeah, you should talk to them sometime, find out if that's true. But anyway, that's the perception. We don't trust private bankers. We love central bankers. Central bankers are fine. We give them promotions. Bernanke, who oversaw the financial crisis in a disastrous way, gets reappointed and considered God today. Gets hundreds of thousands of dollars for a lecture like this. Why? Because the central banker didn't make any money. They just get a salary. They're not in it for themselves. They're public servants. They're there for the common good. Yes, they might make mistakes, but they have all of our interests. They're not self-interested. We don't trust self-interest. So you get a regulatory state because every time something bad happens, you're gonna blame the guys who are self-interested. You're not gonna blame the public servants. You're gonna blame them and you're gonna hire a bunch of new public servants to look over their shoulder some more. And if you had a thousand public servants looking over the bankers before, well, that wasn't enough because they obviously got away with it. Let's hire 5,000 to look over their shoulder. Now, in my view, this whole scheme is wrong. It's evil. It's distorting the whole reality of the world in which we live. And it starts, I think, with a fundamental question. Why is it good, noble, virtuous to think of others first? Why is that the standard of morality somebody else's well-being? Why is the purpose of my life, other people's happiness? What about me? Are the people more important than you? And to me, there's no answer to that other than because somebody said so. To me, the most important person for you is you. And morality, ethics should be the science that tells you how to live a good life, that teaches you what values and virtues to pursue to achieve happiness, to achieve success, to achieve flourishing. I mean, this Hawkins back to Aristotle. For Aristotle, the purpose of life is what? Serving others? No, the purpose of life is flourishing. It's you demineur, happiness, your own happiness, your own flourishing. It's to make your life the best life that it can be. Which is not easy. It's hard to figure that out. What will make you happy? What will give you the best life that it can be? Because it turns out that instant gratification is not what works in the long run. Lying, stealing, cheating are awful strategies for success in life. And if you don't believe me, try it. Well, I prefer you don't. But I mean, everybody's lied, right? Lying sucks. I mean, it's awful strategy. You might get what you want that instant, but long-term, it ruins relationships. It ruins your ability to communicate with people. And you lose what you deceptively got. It doesn't work. So the real purpose of ethics, in my view, is not to dismiss self-interest, but to figure it out. To figure out what is really in our self-interest. What leads to a happy, flourishing, successful, prosperous, good life? Aristotle writes a lot about this. So what is it? What is it for human beings to live a successful life? Where do our values come from? Where the stuff that help us live, where does it all come from? Because it all has one source. Because if you look at your neighbor here, if you look around the room, you'll see that as a biological specimen, we're pretty pathetic. Let me just look around. We're slow. We're weak. We have no fangs. We have no claws. You put any one of you opposite of Sabertooth Tiger, forget about it. Except that what's interesting is, the Sabertooth Tiger's not here. And you are. And you're sitting in an auditorium with, you know, live streaming, which just a few years ago didn't exist, with sophisticated cameras and sophisticated seats and you wearing clothes. Anybody have the clothes making gene in them? I don't. How do we get all this stuff? And where, how do we get rid of the Sabertooth Tiger? Why are we here and he's not here? What is it uniquely human? What allows us to prosper? What allows us to be successful? Destroying things. Like what? Yes. Yes, but what makes it possible? It is convenient. What makes it possible for us to destroy things? Because he's right. In a sense he's right. I mean, he's being obviously cynical, but in a sense he's right. The difference between the Sabertooth Tiger and us is this, the Sabertooth Tiger either adapts to his environment or dies. Either genetically, evolutionarily, adapts to his environment or dies. Human beings do what? Adapt their environment to them. So it gets cold, we build buildings and we, yes, we destroy mountains, we carve out rocks from the mountains to build a building or we chop down trees to build a hut or we kill animals to make our clothes. Yes, human beings are unique. We change our environment to fit ourselves. By the way, nature made that, not us, that's the way we are. That's the way, we're programmed, if you will. We change our environment to fit our needs. How do we do it, though? That's the question. How do we change the environment? What tool do we have to allow us to change our environment to fit our needs? What's that? We learn, we experience, but just, you know, animals have experiences. What capacity do we have that allows us to learn? Yeah, intelligence, reason. It is our reason, it is our minds, which are unique. We can think, we can communicate, we can strategize, we can learn, we can develop. We build one on top of the other from other people's learning experiences. We can reason. Reason is the most important value for human beings. It is what allows us to survive. Without it, we are dead. And it, what allows us to thrive, to be as successful as we are and as successful as we could be. Reason, so to be self-interested isn't about instant gratification. It isn't about lying, stealing, and cheating. It isn't about, I don't know, the line of cocaine here and just taking it and getting it high. That's not happiness, that's not flourishing, that's not success. It's about reasoning, it's about thinking, it's about using your mind to figure out what's good for you. Self-interest, to achieve your self-interest, to be self-interested is unbelievably hard. It's hard work. It requires real thinking, calculating, figuring stuff out. What's good for me, what's not? What career should I pursue, what shouldn't I? What relationship should I pursue? What shouldn't I? What tree should I chop down? What tree shouldn't I chop down? These are not easy. Every step in human progress has required genius. You think making clothes is easy? Some genius had to figure out that once you carve up an animal, you can use that skin and the whole process has to be invented by an entrepreneur to figure out how to make the clothes or agriculture, any one of these. A massive achievement of the human mind. Self-interest is about the human mind. It's not about instant gratification. It's not about emotion. It's not about satisfying your emotions. And what is the enemy of the human mind? What makes it impossible for us to think or to do anything with our thoughts if we can't think? It's force. It's coercion. Somebody sticks a gun at your back and says from now on, two plus two equals five. Which government bureaucrats do the entrepreneurs all the time? All the time. You try programming a computer if you have to add two plus two is equal five or try building a bridge or an elevator or a building. You can't. You can't function. But if you don't, they'll shoot you. Coercion is the anti-thinking, the anti-reasoning, the anti-mind. So in my view, the enemy of man is force. It's other people who try to force upon them their values, their ideas, their conceptions, what they think is right. Your life is yours. It's not the groups. It's not people who need stuff. It's not somebody else. It's you. It's about your happiness, your success, your prosperity. And in my view, the only economic system that leaves you to pursue your happiness, to pursue your flourishing, to pursue your life is a system that extracts force from society. That says you cannot force people to do stuff. That the only use of force is to defend yourself against bad guys, against crooks, against the lying, cheating, thieving types. And therefore extracts governments from marketplaces because all government regulations are and redistribution of wealth is force. So if you take that force out, what you're left with is capitalism. And capitalism is moral because it's the only system that allows for the pursuit of happiness, that allows for human flourishing, for individual human flourishing. It's moral because it's consistent with a morality of self-interest. It's not consistent with a morality of selflessness. And that's why we don't consider it moral and that's why we move away from it constantly. So the battle for those who believe in free markets, the battle in my view is not economic. I think those of us who believe in free markets won the economics battle decades ago. The battle's not political because politics is just a reflection of people's views and morality. Politicians will never change unless the people change. The battle is ultimately a moral battle. It's a battle about whether your life is yours, whether the standard of goodness is your happiness or other people's happiness. If the standard is other people's happiness, capitalism loses and capitalism dies. Freedom generally dies. If the standard of what is good is your own happiness, then capitalism flourishes. Then we recognize its inherent morality, its inherent virtue and we all benefit from its existence. So while the talk is primarily about capitalism, what I really am asking you to think about or rethink is your moral beliefs and challenging the moral beliefs of the last 2,000 years and maybe resurrecting an old moral belief of Aristotle's, reinterpreted by Ayn Rand. Your life is yours. Your happiness should be the standard of your morality. Thank you all. Thank you so much for coming to speak to us tonight. You've certainly left us with some very thought-provoking ideas. My name is Cherry and I'm editor-in-chief of the undergraduate Exeter, which is the academic journal that is hosting this event together with SeaTalks and I'll be leading the Q&A now. So what we're gonna do is we're gonna take a question, we're gonna alternate between a question from the audience member and then one of the pre-submitted questions that we collected from other audience members early on in the day. So does anyone have a pressing question? Okay, that's great. We'll start with the young man in the blue. Hello. Hi. Talk about killing your customers being bad and that's pretty self-evident. But it seems killing your workers is fine. I mean, you look at Rana Plaza in Bangladesh, for example, that was a failure of capitalism. It was cheap labor and yeah. I get it. What did you have to say about that? I would have expected that. First of all, it's ludicrous to consider Bangalore dish capitalist. There's no rule of law there. There's no, let me finish. There's no capitalism in Bangalore dish. There's no rule of law. There's no respect for property rights and there's no respect for the lives of people. But let me, it's a broader question going over not particularly in Bangalore dish because so there's this wonderful statistic about OSHA in the United States. OSHA, I can't remember what OSHA stands for but it's basically the safety and protection of workers act that passed in the United States at some point. And everybody shows this graph that OSHA passes and then safety in workplaces or put it the other way deaths and accident in workplaces went down quite a bit. Anybody says, see, when government regulates things get safer. And what they don't show you ever, I wish I had a whiteboard anyway. What they don't show you ever is what happened before OSHA was passed which is a systematic pattern since the 19th century of declining deaths and injuries in the workplace. Why? It's quite simple, but beyond the fact that even greedy capitalists care about human beings. Nobody likes to see their workers die or suffer just like you wouldn't like to see your neighbor dying or suffering. You think you're different than the guys who run Steve Jobs or Bill Gates or guns who are corporations. They're just human like you. Nobody wants to see other people main because of a work condition that they created. So that's one reason, but the second reason to put it in dollar terms, right? It's not efficient. At work time, lawsuits, a whole variety of reasons. Increase productivity, to increase productivity one has to create a safe, healthy work environment. Healthy work environments were not created by regulation. They were created by greedy capitalists because it's the way to make money. The way to make money is to treat your workers well. And if you have two plants, one plant in which we beat our workers and chain them to the fences, slavery, call it, in the south of the United States. And you had another plant where people were free and where you paid them a fair wage based on their productivity. Who do you think did better economically? It's not an accident, by the way, that the North beat the South in the Civil War. The North was a lot richer, a lot more productive, a lot more effective, a lot more capitalist. It didn't have slaves. Slavery is the worst economic idea ever, counter to Marx. Slavery is not economically efficient. It's economically horrific. So if you want to make money, if you want to be rich, if you want to be wealthy, treat your workers well. McDonald's is one of the most wonderful places to work ever. I've worked in the equivalent of McDonald's and a lot worse, but why are you personalizing it? It's not how you should personalize it. Let me finish. Oh, okay, one moment, one moment. Okay, how this is going to work is that you will have to put your hand up and we're not allowed to interrupt each other because that's what we learned when we were in kindergarten, right? Okay, it's only polite to put your hand up. But I'm making them upset. Therefore, they have a right. Let me just deal with the minimum wage because it's part of this and that covers all of this stuff. What do you do when you, there's no point because there's so many questions and I'm gonna get to you twice. What is the issue of the minimum wage? What happens when you raise the minimum wage? Now this is ECON 101. This is ECON 101. If you raise the minimum wage, all you're doing is creating a class of unemployed people. You raise the unemployment rate. And who are the people who aren't employed? They are the poorest of the poor. They're young, poor people. And they'll never get their first job. They'll never get their first job because they'll never learn the skills. Now if you look at people working in McDonald's, actually look at data, which I know is unusual these days. If you look at people who work in McDonald's, they don't work there very long because they're learning a skill. They're learning to be on time. They're learning customer service. They gain productivity, they find a better job and they're very soon earning much more than they make at McDonald's. But if you deny them the job in McDonald's, if you never give them the job at seven bucks an hour or five bucks an hour, they'll never learn those skills. And they'll be stuck in poverty, recipients of welfare for the rest of their lives. And it's not just that you're making them poor for the rest of their lives. You're making them miserable for the rest of their lives. Because where do we get? Where do we get our happiness from? We get happiness from self-esteem. You get self-esteem from work. We all say the most important thing in life is family. But how many people spend most of their time with their family? Most of us spend most of our time at work because that's where we get fulfillment, that's where we get self-esteem, that's where we get happiness. When you deny people work, you deny them life, you deny them happiness, you deny them success, you're destroying those people. And the worst thing you can do is pass minimum wage laws that institutionalize people into poverty and unhappiness, which is exactly what they do. Okay, wow, great. Okay, so we're gonna move... Oh, all right. Oh, there are a few of you. So we're gonna move on now to a pre-submitted question. And the first one I have here is quite interesting. It goes, America has 5% of the world's population. Yeah, and it has 25% of the world's prison population. As a result, private prisons are a $3 billion business. Is it moral to make money off of people being in prison? I think the real question is why 25% of people in prison? That, to me, is both more interesting. I'll deal with the private prisons in a minute, but I have to say this. Why is 25... Who are these people in prison? They're drug offenders. They've hurt nobody, in my view. Why are they in prison? If you legalize drugs, if you legalize drugs, not only would murder rates go down, not just in America, but in the Latin America, prisons' population would shrink dramatically. The cost to law enforcement would shrink dramatically. Police could actually protect us from real criminals rather than chasing people who want to shoot up heroin. I'm not for shooting up heroin, by the way. But you have a right. If you want to commit suicide, go ahead and commit suicide. I shouldn't spend a lot of money trying to prevent you from committing suicide. And that's what drug laws do. So I would legalize drugs and get rid of the 25% of people in prison. Beyond that, no, I don't think prisons should necessarily be private. I think prison is a function of government and I'm not for privatizing prisons. Okay, great. So now we're gonna move on to an audience question and I'm gonna move on to people who have come from the other room watching the live streaming and would go with the young man and the white over there. You've always talked about how force, stop freedom, whatever. But is it not kind of true that when countries like Mozambique accept to structure adjustment programs from IMF? Who? So when countries like Mozambique accept to the structure adjustment programs from IMF and World Bank, they're kind of forced privatization. Privatization, you know what I mean? Privatization. That's the one. Yes. Upon industries that weren't quite ready for it yet and results in high unemployment and an increase in poverty. Okay, so there's two issues there. One is, I'm not a fan of the IMF and the World Bank. I think they should be eliminated. They've, they never had a purpose. They certainly don't have a purpose anymore. They served some purpose after World War II. They certainly shouldn't exist today and they shouldn't be imposing, you know, their imperial will on anybody. So I am no fan of the IMF and the World Bank. However, I don't believe that any country is unready for privatization and private property. Indeed, quite the opposite. I think the sooner you establish private property, the sooner you establish privatization, the sooner you will get out of poverty and start creating wealth. And again, I would refer you to Asian countries where they've done this, starting with Hong Kong, even Singapore, and see their progression out of this. There's a wonderful book. Of course, I wouldn't remember the name. There's a wonderful book that says, how do you solve poverty in many of these countries? It's by a South American economist. And he says, one way in which you could almost instantly help people who are poor is give them private property over the land that they are cultivating anyway. I was in Rio de Janeiro. I don't know if you've ever been to Rio de Janeiro, but geographic is the most beautiful city in the world by far, but it's an interesting place because the middle class all live at the bottom of these hills, right, in these condos and close to the beach. And the favelas, which are squatters, the poorest of the poor, live up on the hills with the most beautiful views in the world, right? You would solve their poverty problem like that if you gave them private property rights over the land that they already occupied. Because what would they do? They would sell it to rich people who would build resorts and beautiful homes and benefit from the view. And they would move somewhere else with the loads of cash that they would get from it. And if you did that universally across South America and Africa, you would increase production, increase wealth dramatically. The problem is that the powers to be don't want to do that, right? The government owns all the land and government never gives stuff up if it can hold on to it. Okay, great. Well, let's go for- Or the written questions. I'm sorry? No, the written one. Well, I feel like the audience has a number of questions that like to get through. So, who has a question? All right, let's go to the back there in the middle. Oh, that's hard. Well, do you want to shout out your question? Great. So, Scandinavia, I'm going to cut you short just because we're limited in time. So, it's a Sweden question. I get this every time. Why are people in Sweden so happy? Because they're pretty socialist. So, I have two answers. You can accept them or not, but two answers. One is they're not that socialist. The difference between the United States and Sweden is not that big in terms of the size of government. Sweden went through this pattern. It was one of the most capitalist countries in the world up until the 1950s. And indeed, massive amounts of wealth were created in Sweden by families and by corporations, by businesses. And they were incredibly industrialized. They made a lot of money. In 1950s, they switched towards socialism and they started redistributing all that wealth that was made. Very little wealth was made during that period, by the way. They were just redistributing all the wealth that was made in the previous century. It took them until 1994 when Sweden was basically Greece. It was bankrupt. And since 1994 to today, Sweden has been deregulating reducing welfare, reducing state involvement systematically across its economy. And indeed, today, on the World Economic Freedom Index, which measures economic freedom, Sweden is ranked higher than the United States in a bizarre twist. So that's explanation one, is it's not as socialist as you think. Two, why did the Swedes say they're so happy? Because the only way to measure happiness is to ask you, are you happy? Swedes say they're happy. But it's funny. Because if you ask Swedes in America, if they're happy, they're as happy if not more happy than Sweden-Sweden. So if you run the same tests in Minnesota, which is dominated by Swedes, they're happier than Sweden. I'm gonna make a flipping answer to the other side of this. I'm Jewish. If you ask Jews if they're happy, they're never gonna say yes. We just live in a culture of complaining. We like to complain. To say happy means you're being selfish and it's not good. Swedes, it's socially acceptable to say yes, I'm happy even if you're not. Jews, it's the opposite. So my point is that the studies are way, all the wellbeing studies and the happiness studies are way skewed culturally. Life expectancy in Sweden's higher than the United States, by the way, right? Life expectancy in Sweden's higher than the United States. Life expectancy of Swedes in America is higher than life expectancy of Swedes in Sweden. Same true of Japanese. Japanese Americans live as long, if not longer than Japanese and Japan, but it's much higher than the average. So I've done statistics in my life. You gotta be careful. Okay, do we have any further questions? Wow, oh my goodness. Can we go with the man in the blue over there? First of all, thank you for the interesting talk. I cannot really agree with all that you say, but that's not what it's about. I'm very interested in how you see the relationship between capitalism and government in general, because it seems to me that you describe the two as not coexisting really, and not influencing each other. So let me say, I'm not an anarchist. I believe in government. I believe in government as a necessary good. What is the role of government? It has no role in economics. It's other than the definition of protection of property rights. Government is force. The nature of government is a gun. Everything the government does is about coercion. It's about using a gun. So my question is, if somebody has a gun, government, and all governments are like this, whether they're good governments or bad governments, they are the monopoly over the use of force. That's a definition of government. That power that has the monopoly in a society over the use of force. That's true of totalitarian government and it's true of free government. The question is, if you have an entity whose responsibility is force, how do you want it to use that force? My view is I wanted to use that force to protect us, protect us from crooks and criminals, from people who would violate our freedom, protect us from terrorists and foreign invaders, so a military, a police, a military, and then to serve as an arbitrator of disputes, final resolution, so a judicial system. And that's it. And other than that, I believe that we, as individuals, are far better off dealing with one another directly than having this entity impose its will on us. I think all it does is corrupt, distort, pervert. And if it just stepped out of it, we can handle our fears quite well. No, so my point is that to the extent that we lie, steal, or cheat, the government has a role in taking us and putting us in prison because we're committed fraud, we're stealing from people, that's the protection of rights. To the extent that you're just not very good at what you do in capitalism, then you lose and that's okay. They're gonna be winners and losers in capitalism. We're not gonna be equal. What's that? You don't always lose, you get away with murder. You don't. You don't. Yeah, quite the contrary, today we get away with murder because today I can murder you, the equivalent of murder you, and I can pay the politician off over here and he's gonna leave me alone. This is called lobbying or it's called cronyism or whatever you wanna call it. This is what corporations do today because we've mixed the two. I wanna take that element that's forced that actually murders people. Governments, by the way, murder a lot more people than we do in capitalism, right? Puts it over here, no entity in human existence has murdered more people than governments have. But I wanna put force over here and put it under very tight controls and very tight binds so they can only use it in retaliation, in self-protection. And I wanna leave all of us free to trade and we'll make mistakes, but they're mistakes and they're not mistakes on a grand scale that causes all of us to suffer. This is when the Federal Reserve makes a mistake, when you have one centralized entity that prints all the money and determines what interest rates are gonna be. When they make a mistake, which they do every day, everybody suffers because we all are using the money that they print it. If you take away a Federal Reserve, you take away a central bank, like Scotland had in the 19th century or like the United States had before 1914, a bank might make a mistake and some people might lose. But a bank doesn't have the systemic risk to use a modern term that a central bank does. Government is centralized power. There's nothing that can distort and provoke more than that centralized power because it touches everybody and it has big, big guns. Okay, thank you, Iran. I'd just like to remind everyone that we do have to put our hands up just to maintain control. So I'm gonna go to the woman at the back there. Bad behavior, sorry. That's okay. Do we have a mic that we could? I have a little left one. Go for it. Okay, you know what? Why don't you say a question and I'll repeat it because people in the other room, live streaming will not be able to hear you. So why don't you, yeah, go for it. Oh, so you mean by rates, you mean the price? Okay. Yeah, okay. I didn't understand, okay. Sorry. She has to repeat. Continue. So repeat the question. Can I repeat the question? Why are prices going up and isn't that a bad thing and as an example of capitalism run amok? For education, in education. Yeah, prices are going through the roof in education in American, higher education, right? In colleges, they're going through the roof. Guess who's paying that price? Yeah, but who's subsidizing it? Who's making it possible? Government loans. All of American education, all of American education is dominated by government funds. Government pays all the bills. You know, through these loan programs, but that'll lend you money to go to any university as long as the university will accept you. There's no price control. There's no market. There's no market. Tuition in no market in the world, no capitalist market, no free market in the world. Would prices go like this and quality go like that, which is what's happening in America? It wouldn't happen. The only reason it can happen is that government is buying it. When government buys anything, what happens to price? It goes way up. Government is buying your education. Yes, it's through loans and it's through this convoluted, complicated thing in America, but it's basically the government buying it and prices are going up. And by the way, where's the money going? It's really interesting. All this tuition goes up. Where is the money going? Because there are no more professors. The student professor ratio in the United States is not changing, right? The same number of professors. It goes to three things. Professor salaries. They're getting more and more money and teaching less and less and less. Yeah, but in the big scheme of things, it's small and it subsidizes itself because attendance at football games subsidizes the coach's salary. But I don't care. If you want to blame coaches, that's fine. Professors get higher and higher salaries. Administrators, they are three to four times more administrators at American universities today than they were 20 or 30 years ago. And buildings, today the universities are building magnificent dormitories and all kinds of stuff. Not improving education when I order. Education is actually declining. And that's because the government's buying it. If the government bought a hammer, and you can see this in the Defense Department in America, when the government goes out and buys hammers, what do you think happens to the price of hammers? It goes up because the government's using money that it didn't earn, right, it's your money. So they don't care about how much it costs. They just pay whatever they want. Government is a distorter of markets. And if education was truly private in America, I would bet anything. Prices would be declining and quality would be rising. Private colleges get as much money from the government as state-owned colleges because they're getting the money from student loans which are all, today under Obama, all student loans come from the government. And the greater the percentage of student loans, you can do a correlation, right? You can do a statistical. The more student loans are funded by government, the higher the prices of education. Okay, we're gonna move on now. Question, young lady at the front? One second if we could just get the mic there. Hi. Where does the NHS sit within a capitalist idea? Would you abolish it or would you keep it? So this is great because I can say pretty much anything to a British audience. And they'll go, okay, yeah, we disagree, we agree. But if I say anything about the NHS, oh my God. It'd be dangerous for me to leave. Because you guys, I mean, for you, the NHS is like religion. It's like, it's unbelievable. And that's just true. I mean, of course I'd abolish the NHS. The NHS is killing you guys. It is killing you guys. This is, well, let me finish. Let me finish, I just, I just said sentence. I'm going to explain. If you are cancer, if you're healthy, by the way, if you're young and healthy, the NHS is wonderful. Because you don't need it. You have a little bit of sniffles, you go into the doctor, they give you aspirin and they don't charge you and you think that's wonderful, except. But if you have cancer, if you have heart disease, you do not want to be in the UK. Because you all, well, let me finish. I get it, I get it. Because you're going to wait in long lines for your MRI. You're going to wait in long lines for your CAT scan. You're going to wait in long lines for your surgery. The best doctors who are not making any money here going to go overseas are going to go into the private sector. You are getting, and the older you get, the more this will affect you, you are getting mediocre, at best, mediocre treatment when you get really sick. Okay, no, I'm afraid. Let me finish. No. Doctors earn, as compared to the States, less. And in the States, doctors are earning less now because we're socializing healthcare in the United States. So doctors are leaving the profession and we're getting fewer and fewer doctors in the United States. And there's a shortage of doctors. More patients, shortage of doctors, as the population's aging, fewer doctors. If you want high quality healthcare, if you want high quality education, it's education and healthcare are some of the most important values we have in the world. The last people you want running it is the government. They have no incentive to make it work well. They don't, you don't have a customer relationship. There's no competition. There's no innovation. 75% of all innovation in the world in healthcare happens in the one country that has a little bit of freedom left in healthcare, which is the United States. I want every entrepreneur that goes in and makes a stupid little app for this thing because this is the only place where we still have a little bit of freedom in the world. I wanted to think about how to build the best school in the world possible, to build a great educational product because our mind is much more important than an app. I wanted to figure out the next best way to cure cancer or heart disease. But if you take the profit motive out of those treatments, the incentive goes away, the motivation goes away. Not only that, going back to cost. What happens in freedom, in a free market, in every single product and service, every single one, is that as competition and innovation happen, prices go down and quality goes up. Just look at the world you live in. The stuff you take for granted is this stuff because that's the stuff being produced and what happens, prices here. They go down and quality goes up. In everything that's true, except in two areas, healthcare and education. Why? Because those are dominated, even in the United States, by government. Government perverts the incentives. It perverts the incentive to innovate. It perverts the incentive to compete. It perverts the incentive to keep prices down. It perverts the incentive to increase quality. Now, poor people in a real market economy could buy insurance, you know how much insurance, health insurance in the United States, in places that have very few regulations costs? Less than your monthly cell phone bill. That's how much it costs to get insurance in places and that's why people who believe in socialized medicine don't want insurance companies in the United States to compete across state lines because they don't want the truth to be discovered that in some places in the US you can buy health insurance for less than a cell phone bill. Now, every poor person in America, almost 95%, I think, have cell phones. Healthcare is more important than a cell phone. You can give up a cell phone. Go buy insurance, right? Now, that's in a world where we've got massive regulations. Imagine if there were no regulations, all those costs, all that insanity that the government brings to the insurance market. I'm 53 years old, I've got two sons a little older than you guys. I'm not gonna have any more kids. My wife's done. We were done 20 years ago, we were done, right? I mean, even if we wanted to, we couldn't at this point, it was the reality. I have to buy maternity coverage because the state of California has decided that you cannot sell an insurance policy in California without maternity coverage. So guess what? I pay more money than I should. Much more money than. You know, I'm never gonna do acupuncture. I tried it a long time ago. I'm not gonna do acupuncture. It doesn't work for me. I don't know if it works for you, it doesn't work for me. In the state of California, I buy coverage that covers acupuncture, but I'm never gonna use it. You still have to pay for it. So the insanity of the government telling me what's good for me, of the government determined to me for what kind of insurance raises the cost and reduces the quality. The best thing you can do for healthcare. By the way, I come from a country with socialized medicine as socialized in the NHS, which is Israel. And Israel has a pretty good healthcare system because it has lots of doctors. Why does Israel have a lot of doctors? Because it's the Jewish state, right? There's a lot of doctors and they're good doctors. But if you're really, really sick in Israel and you have the money, you fly to the United States of America. When Bolasconi in Italy gets sick, he doesn't come to the UK to benefit from the NHS. He goes to the Mayo Clinic in Minnesota. That's the standard. The standard is the Mayo Clinic. And figuring out how to provide the Mayo Clinic to poor people is an interesting issue. But you don't do it by socializing it. You don't do it by destroying the Mayo Clinic, which is what the NHS has done. Okay. We have a couple of minutes left. So we have time for two more questions. Guy in the gray over there and the woman over there in the sweater. And just to note, if you have any more pressing questions, which I'm sure you do, we will be taking Iran to the ram for a meal. You can come and harass me there. Yeah. But Bill goes in a drink. Yes. Much more fun. Good to hear your question. Go ahead. Would you not accept that there are some situations where the government would need to intervene? For example, in this room, all the people that want to ask questions, it's in our self-interest to shout them out. It's not in everyone's interest overall if we'll shout them out at the same time. Yes. Even Milton Friedman, you seem to have a lot of your views in common with, would accept problems like monopoly power, or common land, or externalities, which he called neighborhood effects. All these things he would have as reasons for government intervention. Would you not agree with this? All you've said is property rights, and that's it. Yes. So the property rights is the equivalent of a rule that determines how we're going to ask questions. And indeed, if you were really rude, we could, in a property rights system, we could have scored you out of the room. Not every university enforces that, but at least the civilized ones do. So government has a role, as I said, in defining property rights. And this indeed solves most of your problems. Now, monopolies, do we have time to get into monopolies? Go ahead. In my view, monopolies do not exist in a free market. I know. So let's take a monopolist. Let's take a great historical example. What's your favorite monopolist example? Well, in the United States, it's standard oil, Rockefeller. Because Rockefeller in the 1870s had 93% of all oil refining capacity in the United States. 93% sounds like a monopoly, right? What do we expect? What are our econ professors? They're really, really good econ professors. What are they? Oh, there might be some in the room. But what do they teach us the monopolists do? Why do we hate monopolies? Because what happens to prices under monopolies? Prices go up, and quality goes down. I mean, that's obvious, you just look at the charts. But it doesn't work that way, it turns out. Look at the data. When Rockefeller had 93% of oil refining capacity in the United States, prices went down every single year. Quality went up every single year. Why? Because Rockefeller understood what all businessmen understand, that if he didn't do that, there would be competition. Because the government wasn't prohibiting competition. It wasn't like a British monopoly in the 1700s or the 1800s, where a government granted monopoly, which meant the government prohibited people from competing with you. In a free market, anybody could compete with you. If he raised prices, people would compete with him. And indeed, so he kept prices down. And you can see this. You go to Alcoa in the 50s and aluminum prices. You look at IBM in the 80s, in the 70s, when the Justice Mall went after them. There is no example in a free market, semi-free, of where a monopolist raises prices in lowest quality. You can challenge your econ professors to find the example. Now, why? Who ultimately competed Rockefeller out of the business? Because Rockefeller was producing a product in the 1870s, of which he had 93%, which two, three decades later, he had zero market share in. Zero. Because what was the product he was producing in the 1870s? What was he refining oil for? Anybody know? Kerosene. Kerosene, which was used for jet fuels in the 1870s? My god. What were we using kerosene in the 1870s for? For lighting. For lighting, by the way, Rockefeller saved the whales. Because the primary reason we were killing whales in the early 19th century was for whale oil, which we were using to light our homes. By making kerosene so cheap, whaling industry went out of business, and we saved the whales. But put that aside, who drove him out of business? Who drove Rockefeller out of the business of lighting? Thomas Edison, electricity, who would have expected that? What government bureaucrat could have seen that coming? None. So no central committee, no authority, is going to arbitrate competition. Because you can't. Competition is always unpredictable. If it was predictable, somebody would win all the time. And nobody wins all the time. So monopolists don't behave the way your professors tell you they do. It's nice on the board. It doesn't work in reality. And there's always substitutability. Products can be substituted. When we look at monopolies, we look at it very narrow. IBM was accused of dominating the mainframe business. But there was digital that was creating computers that were smaller than mainframe. Yes, they had 190% of the mainframe business, but that 0% of the slightly smaller business, which was taking over their business. And ultimately, what took over IBM's and digital's business? The PC. The beauty of markets is the dynamic. They change constantly. It's an amazing feature. Now, let me quickly address your other question, because that's a whole other can of worms. The problem of the commons. My solution to the problem of the commons is not to have any. Privatize them. If you apply property rights over everything, it gets cleaned up very quickly. My land is clean. But our land is probably pretty dirty, because when it's public, it's owned by nobody. And nobody takes care of it. When it's yours, this is why the eastern block of Europe was filthy, far more polluted than capitalist Western Europe, because nobody owned anything. So nobody cared about anything. So they left it to rot. When it's yours, you care about it. And if you apply property rights over water and over other goods, they would be clean, because you don't drop your garbage in my backyard. And there's a whole legal history about how to do that and how it could be done. Government intervenes. If I'm spewing something out of my factory that's killing you, then government intervenes, because I'm violating your rights. I'm using force against you. But other than that, government has no law. OK, great. We're going to go to our last question now to the young woman in the sweater. Do we have a mic? Oh, yeah, could you pass that on to her? Thank you. So taking it down from a large scale, it's like a consumption site. How do you explain the crippling over consumption and drive to spend to buy these supposed win-win products you spoke about earlier that forces people, manipulates them, and coerces them, as you say these evil governments do, as you said yourself, to buy a mobile phone contract over health insurance? How do you explain that satire behavior caused by a market that is so moral and free? Well, A, I've already explained that the market is not free. The market is horrifically regulated. So we don't know what would happen in the actual free market and how people would actually behave in a free market. It's not the way they behave today, because we're not free. But second is, nobody's actually cursing you to buy a cell phone. Nobody is. I, for a long time, didn't want a cell phone. I thought it was ridiculous. It was a stupid product. I have a phone at home. I have a phone at work. I don't need a cell phone. This is in the 90s, when nobody had a cell phone. And they were first coming out. They were, yeah. But my wife used to travel quite a bit to school. She was getting a master's degree. And she would come home at night. She would come home after dark. And I figured, OK, I'll buy it. I'll get a cell phone, just for emergencies. And then, you know what I discovered? It was pretty cool to have a cell phone. Nobody cursed me. I just thought it was cool. So I bought one. And then we all got one. And you know why I buy? Well, I'm going to get an iPhone 6 as soon as I get home. This is a five. Nobody's cursing me. Nobody put a gun against my head. I see all the advertising. I see, what's his name? Samsung's advertising. And that doesn't faze me one bit. I'm still going to buy an Apple. Because I want, this bothers me that it's a little slow. It's a little inefficient. The screen's a little small. I want something better. But that's a coercion. That's my choice. And could you give this up? Of course you could. It's your choice. It's your choice. The whole idea that advertising curses you. I mean, there are a million, actually probably more than a million products that I don't buy. Because I have no interest in them. I mean, people try to sell me all kinds of crap that I don't want. But I buy the stuff I want because I choose. Now, I might make mistakes. It might not be good for me. Like, some people might choose this. They don't choose this over health insurance because health insurance for many people is just not available because they live in regulated states where their health insurance is too expensive. But people do choose this over stuff that's better for them. Why is that my problem? People make stupid mistakes in their lives all the time. And you think that a government regulator knows what's good for you? So if the government controlled marketing and advertising and said, oh, these products are healthy and good, let's take a product. Let's take a product we all know is important, food. Does anybody here know what's good for you in terms of food? Fat, fat, saturated fat. Is it good for you? Yes, how many people think it's bad for you? What does the government tell us is good for us? And what does the government say is bad for us? The government overwhelmingly in the world today says that saturated fat is killing you. It's bad for you. Don't eat saturated fat. This is the bureaucrat who got a common interest in mind. Telling us they've got a whole food pyramid. And at the bottom of the food pyramid are grains. Grains are good for you. Fat is bad for you. Now it turns around that the latest research, and I'm not an expert on this, so I might be wrong, but the latest research is showing that saturated fat is actually really, really good for you. And it might turn out, might, I don't know if this is the case, that grains are bad for you. But the government in its wisdom has been teaching us, telling us what to eat and what not to eat. So we all are eating this diet in America. Everybody's fat. You know why everybody's fat in America? Because yes. And you know what about McDonald's is bad for them? The bun. The bun is bad for them. Now, the bun is bad for them. The bread is bad for them. I mean, I didn't make the saturated fat up. He did, right? I'm glad you think so. And that's fine. You know so. It turns out a significant number of scientists today, based on the New York Times, the Wall Street Journal, and medical publications all over the world today, are discovering that that's not true. It's just not true. Now, as I said, I might be wrong. My point is this. Fine, I'm wrong. I'm wrong. He's saying I'm not wrong, and he looks older than you, and maybe has something. I don't know. My point is this. When a centralized authority makes a mistake, we all suffer. When a central authority tells us what's good or bad for us, we all follow their lead. He might be right. I might be right. He's going to eat a diet, low in saturated fight. I actually eat a diet, high in saturated fat. I might be wrong. Maybe, and I'll suffer the consequences. You won't. You can follow his advice, and that's fine. I'm OK with that. I'm not going to try to force you to eat saturated fat. I'm going to eat the saturated fat. I'm going to die of heart disease. And it's not going to cost you a thing, and I know you hope I do. But my point is this. I get to make the choice. You get to make the choice. And if there wasn't an NHS, we wouldn't be cross-subsidizing each other about this. We'd each be bearing the cost of our own decisions. So if I'm really sick because I'm eating a bad diet, whatever that diet is, my insurance rates will go up. I will bear the cost of my own bad decisions. So if I'm not following, you see, in my view, the government shouldn't have health recommendations because they don't know what they're talking about most of the time. The best thing is for you and your doctor to figure out what the diet is right for you and to you make the best educated decisions about your life. And so this will be my parting word. My point is this. I believe in self-interest. I believe you should pursue your life, figure out what's right for you, and don't abide by authority. Now, my authority, not his authority, but don't grant authority for a government or anybody, the pope. I don't care which authority. Don't grant them the authority to rule your life, to tell you what product to make or not to make, what profession to go into or not to go into, what food to eat or not to eat, for that matter what drug to take or not to take. It's your life. You make a decision about your life. If I am for freedom, I'm for liberty, I'm for your liberty and freedom to do what you want, including commit suicide, including make mistakes, including the bad stuff, but that freedom will mostly allow you to achieve more prosperity, more happiness, more success, more flourishing than any system that exists today on the planet because it's about individual liberty, it's about individual freedom. And you are the standard, it's your autonomy. That's what I'm fighting for. I'm not fighting for saturated fat or against saturated fat, who cares? I mean, I do care, but that's not the issue. The issue is who gets to decide. I want you to decide, not some government bureaucrat. Thank you all. Thank you, thank you all. And let me just say, these guys did a phenomenal job organizing this and this kind of audience, so thank you. Yeah, as Euron said, the audience turnout is amazing. So whether you agree or disagree with Euron, thank you so much for coming and keeping an open mind about this sort of thing. We will, first of all, I'd like to thank University of Exeter's annual fund again, without their support, this would not be possible. And I'd like to thank XTV again and of course my wonderful committee who have worked very, very hard. Thank you so much. We will now be taking Euron to the RAM. So those of you who have questions or comments that you would like to... We're gonna eat saturated fat, so... Yeah, we will be consuming some of that. If you have any pressing comments or questions, please do go to the RAM. Otherwise, we'll probably put a post up on our Facebook page and on our Twitter and you can post your reply or comment there and continue the debate online. So look out for us on Facebook and on Twitter. And again, thank you all for coming. Oh, thank you. Let's turn this off so I can actually talk. Thank you.