 There are problems in America. None of them have to do with gaps. None of them have to do with a phenomena. And I'll make one last point, and that is that Americans historically have never resented wealth. They've actually admired it and wanted to be the neighbor across the street with a bigger house or the bigger car. We've always aspired to be successful. And I think that this whole attack on inequality is meant to destroy that. To destroy that American spirit of ambition, of wanting to be successful. Instead, we're teaching people to be resentful, to be envious, and to resent the success of their neighbor instead of to strive to be as successful as one's neighbor. Well, thank you. You've raised some very interesting points that we'll want to get into in more detail. But let me turn to Dr. Auerbach first and say and ask you to kind of lay out your perspective. You have said that you do believe that some regulation is excessive, but you find the position against intervention to address income inequality unconvincing. So from your perspective, why is government intervention necessary and what happens without it? Well, first of all, I'd like to just point out that inequality has been growing in the United States by any number of measures, whether one is looking at wealth concentrations, distribution of income. In fact, if one looks at life expectancy, there's been an increasing inequality in outcomes in the United States. Now, I don't think it's due primarily to government. I think government is neither made it worse nor made it better in the last several decades during which this has happened, but it is a concern for us as citizens and it should be a concern of the government. Because the idea that inequality per se is not bad if everybody has a shot and the rising tide lifts all boats, works only if people really believe that's true and it helps for it to be true if we want people to believe it's true. And one of the things that's happened as inequality has risen, I agree it's not so much the problem of inequality, but as inequality has risen, there's been very little growth in incomes for people below the top of the income distribution. And this along with various social problems that have accompanied the slow growth of income have made people very unhappy. And if we just think about it in terms of the political outcomes, leaving moral issues aside, whether it's fair or appropriate for this kind of inequality to exist, just think about it in terms of political outcomes. If we want to adopt policies that are good for the country as a whole, we have to have people buy into those approaches. For example, economists are fond of favoring free trade over trade protection and we're currently having a debate in this country where there's a lot of sentiment against free trade. Well, why is that? Because trade may help the country as a whole but it generates winners and losers. And if people look at the possibility of free trade and see themselves as losing from the outcome, they're not going to support it. So if we want to adopt policies that may be in the national interest but may also make inequality worse, we have to accompany these policies with measures to address inequality. Dr. Albert, your view is on that? Well, I think this kind of boils down to the essential way of looking at the world. There's a certain implicit assumption, certain collectivist view, the national interest. I don't know what the national interest is. I know what my interest is. I know what individual's interest is. There is a sense in which there's a national pie out there and we need to figure out the best way to divvy up this national pie. There is no national pie. There's my pie, there's your pie, there's your pie. And what, as economists, we can do is we can aggregate those pies on a spreadsheet but that doesn't make it our pie. It doesn't make it our problem. And once we accept the idea of a collective pie, then now we've got trade-offs, right? Trade is good for these people. Trade is bad for these people. So we need to figure out, and at the end of the day, the people with the most political voice, the most political power, the people who pound on a table loudest are going to get their way. You're seeing this right now with the discussion in California, the discussion has ended really in California about the minimum wage, right? Clearly there are victims as a consequence of raising the minimum wage. Even Governor Brown has admitted that it will increase unemployment among teenagers. But there are victors as well. There are people who are going to earn more money, right? And there's certainly political victors. And now we're trading these things off. So I'm against this whole notion of viewing the world as a group pie that we are now going to trade off in the interest against one another versus a much more limited role for government which is to protect our lives and leave us free to choose the trade-offs, to choose what to engage in, what job to take, what job not to take, what business to start, what business not to start, who to buy from, who not to buy from, who to trade from, who not to trade from. Even the issue of trade, America doesn't trade with China. I trade with China. Walmart trades with China. I trade with a Chinese person. Walmart trades with a Chinese company. Who cares, right? If it's America, China, individuals are trading. Let individual choose. You don't want to trade with China. Stop buying at Walmart. Stop buying things that are made in China. So these are individual choices rather than collective choices rather than collectivizing these decisions which make them political. I'd like to see these decisions excluded from the realm of politics. You know, one of the things that you share, absolutely go ahead. You've made my point for me. My point was that if we want to have policies where government does not interfere in markets, for example, by not having very large protective tariffs, we have to have a political environment that lets that happen. And the only way we can do that is if we have a consensus. You talk about the lack of, there's no collective entity. Well, there is. It's called the voting population. And we have to have a majority of the voting population approve of these policies. I personally favored these policies, but I also understand that if people do not benefit from it directly, they're not going to favor it. There are a lot of people out there on both sides of the political spectrum right now who are very much against free trade because they see themselves as losers from it. They want more government intervention. They favor policies which you're against. And the only way that we can avoid having such policies is to have some sort of a safety net so that people who are adversely affected by these policies understand that they will nevertheless have an opportunity to succeed in society. You know, Dr. Brook, one thing that your book has made, a point you've made over and over is that success is, in your view, based on effort much more than luck. And that's the appropriate perspective to have in a political system and in a government system. But what would you say about systemic biases that are just intrinsic in human beings? And a lot of them have been documented. Now there's gender bias. There's racial bias. Things that make the playing field so inherently unequal if you're just relying on individual effort. And is there a role for government in those kinds of inequalities? No. And I think the role is of education just like I think the same issue is with regard to, let's say, trade. The solution is not to choose different winners and losers and to reshuffle the deck. The solution is to educate people about the benefits of trade, the benefits of freedom, which is really what we're about, about individual freedom, and the benefits of having the government not intervene because people are going to be losers when they do. And this relates to the bias question too. Yes, people are biased. It's a reality. There are racists out there. There are people who are biased, people against gender and so on. The solution to that is not reverse bias, which just institutionalizes the bias and makes the bias legally acceptable and therefore makes racism or whatever the bias happens to be legally acceptable. The solution is to educate, to make it unacceptable, to boycott, to provide social pressure and to teach. So this is the wall of the intellectual, the wall of the educator in my world is a key function. People ask me, what about these cognitive biases? We're not rational actors in economics. Yeah, it's good to learn about these cognitive biases so we can fix them so we can become more rational, so we can make better decisions. That's the role of unveiling these biases so that we can become better at not being biased. Dr. Aback, what would be your perspective on these kinds of issues and the fairness of the system? I think that I would concur that one shouldn't always look to government for solutions and that markets, I mean this goes back to Milton Friedman's classic book, Capitalism and Democracy, arguing that markets can help overcome these kinds of problems in writings of Gary Becker and others talking about discrimination. Sometimes markets help. If somebody who's being discriminated against is eager for customers and willing to sell for a lower price then a lot of people will overcome their biases and buy from that vendor and that's sort of the way the argument goes. Sometimes that helps and sometimes that's not enough. Again, getting back to the issues of both fairness and what's moral as well as simple need for political consensus. Sometimes government needs to get involved. I concur that government involvement is a dangerous medicine and sometimes there can be excessive government involvement. It can lead to lobbying and special interest groups getting payoffs. All true. That means that we should be careful how we use the instrument, not that we shouldn't use it at all. But it's very dangerous when we have government starting to decide, or majorities in a sense, starting to decide what's fair and not what and then legislating it. And this is what I mean by unlimited government when government can now interfere in more and more of our lives based on, yeah, democratic process but based on what the majority inflicts on the minority. Thankfully, we have a bill of rights because I wonder right now what would happen to free speech in America if people actually voted on free speech. I have a feeling it would disappear and we couldn't even have the debate. So I'd like to see government shrink and eliminate and us to educate people about their own rational self-interest in their own freedom and liberty rather than have votes on what's fair and what's equitable and what's biased and what's not biased and what's a religious freedom and what's a secular freedom and all these issues, which, you know, at the end of the day are destructive to the American dream and the American spirit and what this country's really about. But sometimes government's needed to foster the American dream. I mean, think of antitrust laws and regulations. We have those to make markets work better not to interfere with markets. Now, they don't always work. It's a very hard instrument to apply. But I don't think going back to the period before 1900 with the trusts and having individual industries controlled by single companies is going to improve market outcomes. It'll stifle opportunity and I think it's generally been very helpful to have this sort of thing, which is not to say that we should have excessive regulation and we've had periods of deregulation, which were good. But having government not involved at all in some of these cases is not necessarily going to foster to promote the cause of freedom. And to follow up on that, there's a question here to Dr. Brooke about how you started out by saying we do have problems in America and there are entrenched cronyism and government regulation that are causing a lot of problems. How do you get to your pure position and can you get there without the political compromises that seem inherent in our system and government intervention to take care of some of the more obvious cronyism problems? So, luckily, I'm not a politician. So, I don't have to compromise and I'm not going to. Look, you can't... This is going to take time. I'm not under the illusion that tomorrow or in the next decade or two decades everybody's going to embrace my ideas. The way to change politics is ultimately you have to change the people. People have to change their minds. I agree that this is the political process. But they have to have... they have to have something they believe in, something as an alternative to we'll use government and maybe we overreach sometimes, maybe we're underreach sometimes. I just would like to see government out of the economy for good. And I disagree about antitrust. I actually don't view, looking back at the 19th century, the trusts were as damaging as the writers at the time made them out to be. There was clearly a political agenda around that. One wonders what the world would be like if Rockefeller hadn't had the economies of scale to make kerosene and then gasoline as cheap as it did. The world might be a completely different place if that particular so-called monopoly had not existed. So a question... I would even question the existence of antitrust. I think it's a bad law. I think it inhibits innovation. I think it's been shown in the case of IBM and Microsoft to destroy good companies and to move them in a very negative direction. So politically, what I'm suggesting feasible, of course not. There's not a political candidate on the map that comes anywhere close to this. But unless we define a goal, unless we define an ideal, the right always drifts leftward because the left has no problem defining an ideal and never has had. Look at Bernie Sanders. Bernie Sanders is maybe the most leftist candidate ever in America and he's doing very, very well because for years, they've been leftist candidates who've been willing to push the envelope on the left. So they've said, okay, we'll compromise on Obama. Okay, but what we really want, what we really want is 100% socialized medicine. Nobody on the right, nobody, not a single candidate on the right, said what we really want is 100% private medicine and that, by the way, includes no Medicare because Medicare is huge, right? If you really consistent on private healthcare. Nobody on the right said that. So of course you drift leftwards because that's where the goalpost is. There's no goalpost on the right. The right starts out the conversation by saying we'll compromise. We just want to compromise a little to the right and not to the left. I want to set the goalpost. Complete 100% private healthcare for America. Now let's negotiate if I was a politician, right? Okay.