 Aaron Powell And I'm Trevor Burrus. Aaron Powell And joining us today is Deirdre McCloskey. She's a Merita Distinguished Professor of Economics and of History and Professor of English and Communications at the University of Illinois at Chicago. She's the author of many books, most recently, Bougiois Equality, How Ideas, Not Capital or Institutions Enriched the World. Welcome to Free Thoughts. Aaron Powell Thank you. I'm thrilled to be here. So with this last book, Bougiois Equality, you've reached the end of your Bougiois era trilogy. And these are three big books. Aaron Powell Praise the Lord. Aaron Powell These three books, big books, I mean, to say they cover a lot of ground would I think be to understate the matter a bit. For our audience who has not waded into all three or even one of them yet, can you give us a thumbnail sketch? Sure. The three are a defense of what is unfortunately called capitalism. And it's a full bore defense. It's not just economic, although I think you can make a very good economic case in favor of capitalism, but it's social and political as well. And the kinds of evidence that I use range from quantitative economic calculations right through Shakespeare and Jane Austen. Aaron Powell That's clearly a gamut. I'm just saying that clearly I know it goes in between those two things. Because in the middle of it is that like the Hitchhiker's Guide to the Galaxy. Is that on that continuum? So what are you trying to explain in these books? Aaron Powell Well, I'm trying to explain modern economic growth. The most important secular event in human history is that in 1800, the average person on the planet earned in modern Washington, D.C. prices $3 a day. Earned and spent $3 a day. And now the average American earns and spends $130 a day in the same prices. Aaron Powell What's the world average? Aaron Powell The world average is $33. It's about the same as Brazil's income per head. So think of Brazil as the average. And it's about $20 a day, India about $10. And this is just an immense improvement. And it's the central question as the blessed Adam Smith said the nature and causes of the wealth of nations. Aaron Powell What does it mean to say that someone lives on $3 a day versus $33 a day? Aaron Powell $130. Aaron Powell $130. Aaron Powell $130. Aaron Powell $130. Aaron Powell $130. Aaron Powell $130. Aaron Powell The world for most of its history lived on $3 a day. That means that on an average day they purchased an amount of stuff equaled what we today could buy for $3. Aaron Powell That's right. And so it allows for inflation and allows for exchange rates. I mean these figures are very rough of course. But the order of magnitude is not in doubt and there's no economic historian who will contradict the rough order of magnitude involved. It's an amazing change. And there is nothing like it in the glory of Greece and grandeur of Rome and Song China and the Italian Renaissance. You might get a doubling. But this isn't a doubling. This is a factor of $30, 2900%. Aaron Powell So that fact has been people have tried to explain this before. I mean you said economists are aware of this fact. It's a hockey stick. Aaron Powell It's a hockey stick. Aaron Powell And that fact is, I mean as you said, even Adam Smith thought that this was an interesting question of why our nation's... Aaron Powell Although I must say the sharp awareness of the hockey stick, the amazing, the blade of the hockey stick shooting up, that's rather recent. That's in the last say half century or so that people have really seen, oh my God, it's that high. Aaron Powell Yes. It's a thing my dad once pointed out to me that if you were to take a time machine from maybe 1000 BC, if you were an average person living in 1000 BC and you took a time machine to 1400 AD in say England, you would not have that much to, I mean maybe some... Aaron Powell The fashions of the game. Adam Smith Fashions would look different, but it's so toil is the name of the game. Aaron Powell Exactly. Adam Smith Most people can't read. Aaron Powell Early death, unable to read, eating a very narrow and unhealthy diet, housing is terrible. It's a hut with a hole in the roof for the smoke worldwide, everywhere. And then there's a tiny group of kings and so on priests who might live better than that. But even Louis XIV, the son king in Versailles in 1700, he was subject to smallpox. He rode around in his carriage, it was bumpy. And people who waited on him in the great hall of mirrors at Versailles, there were no bathrooms. There were no bathrooms in Versailles. So if you had to heed the call of nature, you went out into the stairs and peed. Aaron Powell Now the king didn't do that. Adam Smith The king didn't do that. He had a special place where he would pee with all his dukes around him to help him pee. Aaron Powell So that was his great wealth difference between people. Adam Smith In fact, yes. In fact, there's been a lot of talk about inequality recently and it's, I think, it's deeply foolish because the real inequality was in 1800 and before. Which people in the 18th century in Europe would have orange trees, that is, in their backyard. They had a backyard. They'd have orange trees and lemon trees and so on. And so they didn't get scurvy. Whereas if you were a poor person subsisting on a little black bread, you could get scurvy because you weren't getting enough vitamin C. Aaron Powell So this growth then, you, over the trilogy, you're giving your argument for why and how this happened, which is a, it's a subtle and really interesting argument and cause. But it's this, you're not the first to tackle this question. Adam Smith No. To put it mildly. As I said, back to Adam Smith and Marx and all, all, Schumpeter, all the great economists and historians have faced this question. Aaron Powell So then prior to Deirdre McCluskey coming on the scene. Aaron Powell Yes. The stories that are typically given or most accepted for the cause of others. Adam Smith Well there are two. There's, there's one on the left, which is Marx and others, which is that the great enrichment, as I call it, the 19th century was caused by exploitation. The slave trade, for example, which has become popular again among young historians. Or simply exploitation of the workers, you then take the so-called surplus value and you invest it in machines and that causes the modern world. So that's, that's the left side. On the right, it's about virtuous capital accumulation. You abstain from consumption, as we economists say, and then use that money to invest in ports and carriages and houses and machines. They both, both of these explanations depend in a sense on the word, very word capitalism, which as I said earlier is not a very good word describing what the history of the last two centuries has been. The problem is that sheer piling of bricks on bricks or even university bachelor's degrees on university bachelor's degrees reaches diminishing returns very quickly. You can, you can build a factory and then you can build another one next door and then lay, let's do a third one and a fourth one. You can see that this is not going to work out. Adam Smith Well you don't get the exponential. You can diminish it. What you do is you get declining returns on the next brick and it declines and declines and declines. John Maynard Keynes pointed out that without innovation you could drive the interest rate down to zero in a generation or two. So it can't be just accumulation. In any case, humans have always accumulated. And they accumulated Auschulian hand axes by the hundreds when they were in the caves. The Chinese built the Great Wall and then built the Grand Canal and so on. So investment, whether it comes from exploiting the poor or from virtuous savings, can't be the key. What has to be the key is innovations. I call them market tested betterments. That is an idea like the railway, which is a combination of rails that they used in coal mines to move the carts with coal in them to the head of the mine with high pressure steam engine, not the great big slow things, atmospheric engines, but high pressure. And you combine those two and suddenly you have railways. And there's been this just this amazing burst of innovation since 1800, and my explanation is not this capital accumulation idea or even institutional change, but my idea is that there was an ideological change and that people started admiring market-tested innovation or indeed admiring markets much more than they had before. And that made everyone bold. It made the ordinary person think, gee, I can invent a cherry car. I'm an orchard man in Wisconsin in the 19th century with a lot of time on my hands in the winter. And I can invent still another cherry car taking the pit out of the cherry. And so you get this just amazing screw propellers, the bandsaw, the electric motor, the internal combustion engine, blah, blah, blah, blah, blah, blah. So a merchant, and I mean, I'll choose a time and you can correct me, but let's say 1250 is not respected or and is it, is it they're not, and also an inventor is also not respected unless they're doing maybe inventing a new stirrup for the horse for the chargers for a long though. Exactly. Military innovations were admired. The very word innovation, as you can see if you look at the history of the word in the Oxford English Dictionary, is a bad word until the 1800s in the 1700s and before, oh no, geez, let's not innovate. God, that would change things. It would disturb the great chain of being from king to family dog. No, no, we can't do this. And it only becomes a positive word. We all think that innovation is grand. No one in the last 100 years have thought that innovation is a bad idea, although actually some of our friends on the left are starting to think that. Well, they've actually always thought that mechanization causes unemployment, which it doesn't. Is there a difference between thinking innovation as a general concept or as something that happens in the abstract is good or bad versus how you respond to on the ground individual innovations because something like to mention our friends on the left, in general, if you ask young people on the left, yeah, innovation is great, but then when there's on the ground, well, we're going to replace taxicabs with Uber, well, that's bad. And in Germany, they've outlawed Uber. Yeah, the problem is protectionism, and you can call it lots of names. You can call it mercantilism. You can call it, don't do it in my backyard, maybe as a best. You can call it all kinds of things. And it's the impulse to protect John from the competition of Janus. And in fact, American progressivism 100 years ago did protect John from Janus, made it much harder for women to be employed, and that was on purpose. It was to protect middle-aged white males, Native Americans against the women and the immigrants and the blacks and the young people who might compete against them. So that's been one, as you point out, it's kind of a tension on the left, because the left, I mean, Marx had a great vision of improvement, of innovation. He believed that the bourgeoisie and capitalism, as he called it, were these great improving forces in history, and then that socialism would be plucked as the ripe fruit from this capitalist society. But his followers have gone back to a much earlier version of economic thinking, namely, protect, protect, protect. And the way I explain it to my students is I say, look, okay, you want to be protected against Mexico? Why don't we protect Chicago against the rest of the world? Why don't we protect the South Loop against the rest of the world? Indeed, why don't we protect my house against the rest of the world? And I'll make all my own stuff and I'll be fully employed. Then they can kind of see that this is a crazy vision of the future. So I want to try and connect these two ideas because I'm still trying to figure out, and I think these are connected. So merchants and businessmen, and it's an equality of a certain type, middle class, the bourgeoisie, in middle ages have a different level of esteem, of no esteem at all, and innovation has little esteem. Your contention is that it's not that people started inventing and then got esteem, or becoming merchants and then got esteem by bringing more wealth, it's that they first got esteem and then started doing it, or was it more contemporaneous than that? No, it's they first got esteem and then they did well. But of course there's some feedback. You can see this in the talk in the early 18th century in England, where merchants are rising in prestige, it's perfectly plain. And one of the arguments is precisely that the str- and I see it's a kind of mercantilist argument, it's a kind of protectionist military type argument, that the profits and the prosperity coming from the merchants makes England and then Britain stronger in every way. And so there is feedback. Look, if this what I call bourgeois revaluation hadn't happened, or if it hadn't resulted in economic success in this explosion of income in the 19th century, we would not be talking about how wonderful it is. In fact, then it took quite a while into the 19th century for trade-tested betterment to massively pay off for the working class is the origin of socialism. So the protectionism thing, I wanted to like try and tie this because one thing that I thought when I was reading your first volume years ago was an idea that I had about that one of the most important things that had to happen for markets to thrive was that you had to believe that certain types of harms were not actionable or morally wrong, so competitive harms. I mean this is clearly a harm. You run a butcher, someone comes in and starts a butcher, puts you out of business, maybe puts your family on the street. I publish a book and I hope that Bob Gordon's book does worse. But we think that it's all in the game. It's something like this. That's right. That's a really important idea. John Stuart Mill is very explicit on this. In On Liberty he says in a sentence which I can't exactly reproduce, the state should not take an interest in complaints of people against competitors. Unless the competitors are using force or fraud, then the criminal law and the laws of contract and property should be brought to bear. But aside from that, if someone builds a better mousetrap and you're in the mousetrap industry and you don't get it too bad for you, and it's a massive change to have that ethic. Well, that's why I think there's always this tension. I mean there's a lot, I mean we always have to talk about Trump in this day and age, but most competition is tough and very unforgiving and a lot of government has done a lot of things throughout history to just protect people from competition. But before we even understood, that was the way I could have been in a very broad view. The only thing government was for in the Mercantil is just to protect people from competition. To foster markets, you need to get people to start thinking that competitive harms are not actionable in that way. Indeed, it would be interesting, and I don't know the history of the common law well enough. I believe that the common law has never viewed competition of that character as actionable. Yeah, it had to be unfair. I mean right from the beginning, it had to be violence or fraud of some sort. Was even this change part of this change in the respect we paid to the middle class, to the merchants, because I can see thinking about the way that we talk about competitive harm today, it seems like when the person who you are in competition with and who is harming you is someone that you respect, that you believe in the dignity of, then we seem to think it's okay, whether that's like the merchant down the street or the other sports team and we've got the good sportsmanship. As long as it's not the Jets. Yes, this is Aaron's doing better at hatred for the Yankees, yes, I'm down with that. But when it seems to switch over to that same sort of competitive harm becomes wrong, impermissible and moral when it's done by someone we don't respect like Trump's Mexicans and Chinese. That's exactly what I say in this new book. I speak of the two equalities, the book is called bourgeois equality, which is a somewhat surprising title for a free market person to use. But what I mean by bourgeois equality is equality before the law, that's essential, but it's not sufficient because exactly as you say, you need equality of social dignity or else the equality before the law is eroded. The history of European Judaism is a case in point where in the 18th and 19th centuries in all the countries of western Europe at least, Jews get equality before the law. But they don't in most countries get equality of dignity. This is the point that Hannah Arendt makes and so you see the result. The equality before the law was abandoned in the 1930s in lots of countries. That's super interesting because what comes from that seems to be because Jews created so many institutions of economic cooperation because they had a deficit in dignity even if they were on par in the law. For very good reasons they were nervous about their Christian neighbors. Only as we've come to know their neighbors in the Islamic world were much less hostile to the Jews than were the Christians. But the key is equality and to use another somewhat surprising word, the key idea that is very radical in the 17th century, somewhat radical in the 18th century and becomes less and less so in the 19th and 20th century is liberalism. In the sense of not in the modern American sense but in the root sense and in the sense it's still used in most of the world, namely worthy of a free person, a free person is equal before the law and is equal in dignity. This kind of equality, not equality of result, which I call French equality of Rousseau and to Toma Piketty, not French equality of outcome in state equality as it's been called but equality of opportunity. The structure of this argument though, let me ask about this because it's a trilogy of books and the story that you're trying to tell as you described to us is why this economic growth happened and that it happened as a result of a rhetorical shift and a shift in the way. Yes, a shift in ethics and ideology and rhetoric. But then the first volume of the trilogy is how does it then fit into the argument because in that one you're reviving an ethical tradition and explaining it. So what is that ethical tradition and why is that step necessary to then books two and three? Well, I think it's necessary although when you write a book over 10 years, a series of books and you're thinking about them for 20 years as I have been, your ideas are bound to shift, at least I hope so because you should be learning stuff as you go. And in the first book I was simply trying to establish that there are commercial versions of the traditional virtues that you can attribute to modern, market-tested, betterment as I eventually came to call it, or to capitalism. So I was trying to show that the sneering at the bourgeoisie, which is so common, it's just reflexive in most people in the West and the East for that matter, is his big mistake and that we should honor innovators and merchants and people buying low and selling high. So it was part of the continuing sub-theme of all three books, which is against socialism, against, well, Gandhi, Madhma Gandhi, in many ways a wonderful man, said that to buy low and sell high is the worst possible thing that you could do. And this is crazy because buying ideas low and selling them high is how the economy innovates. If we're not going to make a profit that is then eroded by entry of the sort that John Stuart Mill said you couldn't, it wasn't actionable, then if you don't have that, you don't have any progress at all and you stay at one, two, or three dollars a day, which is essentially what Gandhi wanted. Now, how is this relationship work with political institutions, in the sense of do you see it as a first we have, we have to have relative freedom, I would say, for merchants to even, if it was illegal to be a merchant, it would be very hard to get people to start respecting merchants. That's right. That's right. And if the state is constantly intervening in the economy in various ways, it's not going to work out. Was that, were there certain places where there was a fertile political environment for this to happen? Yes. Well, for example, the first place in Northern Europe where it happened on a big scale was in Holland. And this happens in the 16th and 17th century. By the end of the 17th century, the English are so tired of fighting the Dutch as they do every time and being outsmarted by them in trade many times, they finally become Dutch practically. The English do. They get a Dutch king. They get a Dutch king, yes. The Dutch king, they adopt a Dutch stock market. They adopt a Dutch national debt. My only surprise is that they didn't adopt the Dutch language. But that's when England starts becoming bourgeois. 100 years before in Shakespeare's time, everyone is against the bourgeoisie, against buying low and selling high, against innovation, against trade, against trade is thievery. And it shows in Shakespeare's plays, none of which, even the merchant of Venice, praises commerce. And so the Dutch, is there, would you, do you try to go back further than that in the sense of, and at some point, you know, how well you can bring an explanation back, like why Holland, like what was happening? Was the Hanseatic League had been there in the Middle Ages? Yeah. Trading was a part of there. Certainly. More part of their blood than other places. Well, indeed, there's certainly the Hansa, and then there is Northern Italy with its merchant republics, which except for Venice gradually became non-republics. And there's Barcelona, a town I know and love, which has a long history in the 12th and 13th century of a merchant town, a town that's into this. But the scale of the Low Countries, not just what's now called Holland, but also Belgium, and then the scale of England, taking this over in Scotland then eventually, and then the English-American colonies, taking over this liberal idea that any person should be equal before the law. Now, don't get too excited about this, because these are, in what became the United States, this is a slave-holding society. The man who wrote, all men are created equal, enslaved his own son by Sally Heming. So it's not altogether, it's not complete equality. And indeed, the notion of equality that's born in full political form among, say, the levelers in the English Revolution or Civil War of the 1640s, is one that keeps being expanded in the West. And now we have equality for transgendered people. I mean, I never thought I'd see such a thing. And gay marriage and women's liberation and the liberation of colonial people and on and on and on. Are there historical examples where these things don't go together, where we have the liberalism without the respect for the middle class or the other way around? Well, I wouldn't define a society that doesn't have respect for commoners. It's not just the bourgeoisie, it's all commoners. Because how are you going to refresh the middle class, the merchants class or the inventors class, if not from the working class? So you have to, all people have to be empowered. All people have to, in the English phrase, be allowed to have a go. So I wouldn't call a society that doesn't empower people that way, a liberal society. For example, we think highly of Athens. And I do too. There are lots of people who have this odd affection for Sparta. And I really don't get that. The status of the ultimate state of society. I know. They love Sparta. They think, boy, that's a grand idea when we're everyone's. They haven't had to eat their food. I mean, everyone's a serf. Even the Spartanate. Or kill their babies. Even the free warriors are confined. Anyway, that's not Athens up the coast. Yet, Athens was a slave society. Yet, women were absolutely unfree. Yet, if you were a foreigner, you couldn't vote. Yet, yet, yet. So that wasn't a liberal society. It was a commercial society. There's no question about it. What made Athens strong was its commerce. So you can have commercial success and not get all the way to this modern idea. There's a great statement by Rumbolt, a leveler who was hung by James II, I believe, in the 1680s. As he was facing the hangman, he said, I think there is no man and also no woman, dear, who is born superior to another. For none comes into the world with a saddle on his back and none comes booted and spurred to ride him. And that radical idea that every human is equal, not equal again in the French way, but equal in dignity and before the law took a long time to come on the scene. And that's what made us rich. So to recapitulate, then the flowchart, as you see it, some things are pretty contemporaneous with their feedback loops. So the flowchart begins with, how do you get to the great enrichment? It begins with dignity? Here's what I claim. And this is a little unsatisfactory, but it has the misfortune of being correct. So I have to say it, which is that there were accidents of European politics from the Reformation on that accidentally made people think that they could have a go. Let's take the Reformation itself, 1517, Martin Luther and all that. It's not so much his Reformation as what's known as the radical Reformation, the Anabaptists eventually in England in the next century, the Quakers, or the Congregationalists, the Puritans. Calvinists too. Calvinists, but only if they were the Congregationalists. That is, if they believed that the Congregation should choose the minister, not some hierarchy. Some of these are very eschatological. You're talking about this. The Anabaptists are unbelievable. That's why it's Cromwell who invites the Jews back into England who had been expelled in the 13th century. Because he believes that England is the new Jerusalem. And this resounds down to this day in the affection of radical Protestants for Israel. But in any case, this matter, it's not what Max Weber said, which was the doctrine of salvation changed. That's not my argument. And I think it's his arguments wrong and has been shown to be wrong over and over again since it was written in 1905. But what's really going on is church governance makes people feel empowered. When it becomes more democratized. More democratized. An extreme example again is English Quakers, in which women and men were equal in the meeting. And there was no minister at all. And they just sat around and waited for the Holy Spirit to descend on them. Yeah, as friends. Yeah, the very phrase, the society of friends is crucial here. And that kind of equality is what made the modern world. And no surprise. An astonishingly high percentage of Quakers excluded from Oxford and Cambridge. So there were certain occupations they couldn't go into. But an astonishingly high percentage of English Quakers, an extremely small group, were successful in business. Cadbury's chocolate. Round-free's chocolate. Just to begin with Quaker Enterprises. So we had this increasing respect for merchants and the people who were innovating. Well actually, I want to clarify because actually that's the question. Is that the domino? That's the domino. Is that before the merchant respect? Well before the great enrichment, which is really the 19th century. So would the first domino be like the printing press leading to church reformation, leading to equality? I speak of the four Rs. Reading, reformation, revolt by which I mean specifically the Dutch revolt against Spain, 80 years which ended in 1648. And revolution. The English Civil War Slash Revolution of the 1640s, the American Revolution and the French Revolution. All of those could have gone the other way very easily. If Charles I and Archbishop Laud had been on not such jerks, the English Revolution wouldn't have happened. It added to that 1688, the so-called glorious revolution when, as I said before, England became Dutch. Add all those together and you have accidental contingent events that came out in a way that made people bold. And what the historical job here, the scientific job, is to then compare Europe after 15, 17 with other societies at the time. And it just so happened, for example, that China, which was a very advanced society economically and technologically, was way in advance of Europe in 1600 or even 1700. It just so happened that under the Qing, and even earlier under the Ming, but especially under the Qing after 1644, was very conservative, very hostile to innovation. There's a famous event in the 1790s, the English king, George III, sends scores of boxes of machinery to the Chinese emperor as a gift, telescopes and steam engines and so on. And the emperor, or at least the emperor's man, replies to the king of England, thank you very much, but we're in no need of gadgets. Well, this then brings you back to my question, which is, does it matter who in the society is respectful or if everyone is? Because so there's the date that looms large throughout these books, which is 1848. And that's when you date the beginning of the cultured classes, the intellectuals. The clericy. The clericy disdaining innovation and merchants and capitalism, but we have, I mean between 1848 and now, there's been an awful lot of economic growth. Well, yeah, that's right. So why did I write the books? Because I'm terrified that the clericy's position, Bernie Sanders is a nice example, but so on. And his fans. And the professors and people who are fans of him. And the professors and the intellectuals on the left. But indeed also Donald Trump and that kind of person on the right, if he's really on the right, they're very dangerous. But by now, ordinary people have bought into what I call the bourgeois deal. You let me bourgeois innovate and start a new factory. And in the long run, I'll make you rich. That's the deal. We were, Art Cardin and I are going to write or have written and are going to soon publish a popular version of the three of I Ames, which we're going to call, let me do it and I'll make you rich, the bourgeois deal. And that's what happened. And that's what's protected us since 1848 against these terrible ideas, nationalism, socialism, both ideas in the minds of intellectuals, journalists, think tanks. And then if you like those two, nationalism, socialism, maybe you like national socialism, the Nazism. So that's why I wrote the books is to hold back this tide of left and right utopianism. Do you think that you talk about growth as you said, the great enrichment and the rates of growth. John Cochran, John H. Cochran is Stanford in today's Wall Street Journal actually, wrote about to the GDP growth rate came out for 2016. So he said from 1950 to 2000, this is quoting John H. Cochran, the U.S. economy grew at an average rate of 3.5% annually. Since 2000 it has grown at half that rate, 1.76%. Even in the year since the bottom of the Great Recession in 2009, which should have been a time of fast catch-up growth, the economy has only grown at 2%. Some people will read this and be like, well, I mean growth, what's the big, we're all pretty rich, why is growth so important? What are these differences in numbers scary? And so is this kind of thing scary? Do you think that we're starting to paralyze the growth through some methods? Well, you can kill it. You can paralyze growth. Europe and the common market has done an excellent job of this with absurd regulations. The Treaty of Rome, this is the central question in the vote in Britain in June about whether or not to stay in the common market. The Treaty of Rome created a big trade area, which was a very good idea. But then Brussels has decided to level the playing field as they keep saying. Mercantilize it basically. It's mercantilizing. They're going to protect. It turns out that they end up protecting France and Germany. Surprise, surprise. But okay. No, I think that this sky is falling rhetoric that you hear these days from even Cochrane, I'm very surprised, but from Bob Gordon and even Tyler Cohen, who I wouldn't have expected it from, is premature. I think that we miss-measure growth. We don't include enough of the changes in quality. We can't measure them very well. When was the last time you changed an automobile tire? A very long time ago. Things have improved, and the consumer price index that you use to get real growth doesn't adequately allow for this improved quality. But what's more important is that the rest of the world, China and India in particular, are growing like mad because they're liberalizing. They're not in the Chinese case in politics, but they're moving against mercantilism and towards free trade inside and outside. And that is going to spread through the demonstration effect, if nothing else. It'll become more and more obvious that the way forward is liberalism, and that will make the rest of the world, which as I said is about $33 a day, which by the way was the American income in 1940. The average income in the United States was $33 ahead in 1940. Now it's $130 ahead per day. So if there's been, as Cochrane points out, a big improvement since then. So I think it's way premature to say that the end is near. There was a cartoon in the New Yorker, not too long ago, which showed a bearded man walking away down the street with a sign. He held the end as near. And this couple that had seen him, one says to the other, you know, that was Paul Krugman. So we at the Cato Institute, our mission is to promote the very ideas that you are promoting to spread the notion that this trade and innovation and capitalism and markets are the ways to improve the state of humanity while respecting people's dignity. But I saw a poll just a few days ago that was asking supporters of various political candidates about their views on free trade. And first, the overall numbers of people who thought that free trade was overall good were low. But what was really striking was that every single one of the Republican candidates, supporters pulled lower on this than the Democrat candidates. And so we've been, I mean, we're used to having this, to promoting the ideas to the clericy. We're used to this argument of, no, look, you've misunderstood markets. Socialism doesn't work for these reasons. We can show you the historical stuff. But how do we tell this story, sell this bourgeois deal of let me get rich right now and over time I'll make you rich to the people on the opposite end from the clericy, the ones who are, say, supporting Trump now who are saying, yeah, that sounds like a fine deal except I don't have the time. Like my family, you know, I can't find work. My kids can't find work. I'm hurting right now and what you're saying is, hey, I'm going to get rich, and then I promise in a generation or two it's going to pay off. Well, it in fact pays off much quicker than that. But what people need to understand and they don't is that international trade has very little to do one way or the other with American prosperity, American prosperity. This is a very big country and most of the lost jobs in Pittsburgh or in Detroit were lost to other Americans not to a bunch of Mexicans and Canadians and Japanese and so forth. So foreign trade, foreign free trade, I approve of it. I can take back my economist card if I don't but what is really important is internal free trade and it's internal free trade to go to your point that's being leaned on with excessive regulation and foolish taxation such as the corporate income tax. I am how to persuade them. One way is to get more radical in some ways in the liberal. I want to stop calling myself a libertarian. I'm a Christian libertarian but I'm going to start calling myself a Christian liberal and what we should be saying is, look, the purpose of the Cato Institute is to make poor people rich. That should be its purpose and that is its purpose because its program does make poor people rich and if we were to say things like let's have a negative income tax of a serious sort where the poor are raised up not by the very foolish minimum wage which is orthodoxy in the Democratic Party but by giving people money if we don't like the poverty that they have. If we were to say that, we would be able to sidestep the absurd claim that Cato or the libertarians are in favor of business and the Democrats are in favor of workers. Donald Trump is, of course, not really a conservative or a Republican. He's a populist but that's his claim. He's going to help the workers by closing down trade, all kinds of trade and this is a terrible, terrible mistake. So I think we've got to develop a positive program for a little laissez-faire.