 Good one. This is Patrick Dono. Welcome to the Well Standard podcast. Hope you guys are enjoying the first couple of episodes revolving around the topic of capitalism. And I have, I would say the maybe the foremost expert, the foremost living expert on capitalism, Yaron Brooke. And Yaron is an Israeli-American entrepreneur, writer, activist. He is an objectivist, which we're going to most likely talk about today and what that means. And also is the current chairman of the board of the Ein Rand Institute. And he also is the co-founder of BH Equity Research and is the author of several books. The most recent one that has come out is called The Equal is Unfair, America's Misguided Fight Against Income Inequality. So Yaron, thank you for joining us today. It's awesome to have you on camera too. But welcome to the show. Yeah, it's great to be here looking forward to this. So Yaron, I find your background fascinating in how you came to understand what you do and why you have such a strong belief in your philosophy and in your principles. Would you mind just taking a moment and informing the listeners of, you know, what is your background? How did you come to understand objectivism as well as capitalism? And because, which is, you know, I would say a very, very strong opinion if those that are listening have listened to you or watched you before. Yeah, and if they haven't, you know, there's tons of videos for just Google my name and you'll find a ton of content. You know, I was born and raised in Israel and I was born and raised in Israel in a period of time when pretty much everybody was a socialist. I mean, it was just, it was just a thing to be. The labor party in Israel had won every single election until 1977 and it was, you just would never expose any ideas other than the ideas of socialism. And in 1977, as it happens, I was 16 years old and a friend of mine, I was getting together with a friend of mine, we were talking and he was spouting these kind of free market capitalist ideas and I looked at him and I said, you know, where are you getting this nonsense from? Where, you know, what happened to you? And he said, you got to read this book and he handed me a copy of Atlas Shrugged and Atlas Shrugged, for those of you who haven't read it, big, fake book. But I, you know, I read a lot in those days and I delved right into it and it really blew, blew my mind. It completely shook my world. It challenged everything I believed in everything from the very fundamental beliefs I had about ethics and about the purpose of life and about happiness and about morality and then of course about politics and about economics, about everything. And I, I argued with the book. I didn't want to believe it. I threw it against the wall. I yelled that I ran. She wasn't there. But by the end of the book, I was convinced and it completely made sense to me. It was completely logical. I thought I completely understood it. Of course, I was still quite ignorant and I didn't know it, but, but I got into basics and it was the beginning of a, if you will, a life-long journey of discovering Hein-Renz philosophy, the philosophy of objectivism and, you know, her view of capitalism, how capitalism fits in to that. I, I ultimately became a finance professor. My interest is more on the politics and economics. But, but it's all grounded in this view of morality, which I think is key to understanding her philosophy and understanding capitalism. And, you know, I've, I've, I've now studied her philosophy. I've studied economics. I've studied the great capitalist economists and the more I study, the more I'm convinced that, you know, the revolution that went through my mind at age 16 was a true one. And the rest of the world needs to catch up. What are they waiting for? And it's, it's interesting that your, your perspective continues to be reinforced, it sounds, by doing debates, by, by arguing, debating, maybe not arguing the best word, but debating the opposite principles. I mean, obviously you experienced it in your childhood growing up, but also, you know, you continually challenge both sides of the, of the argument, which I think is profound and just continues to reinforce it. So I guess the, the question I'd have for you is, you know, how, how would you come to understand capitalism, you know, to, right now, like when you, when you acknowledge that word and when you look at its, its relevance in society and in life, like what, what is, what is it that is, that's most compelling and, and most profound? To me, capitalism is freedom. Capitalism is about freedom. It's about the, the freedom of the individual to pursue his values as he sees fit without anybody intervening where the role of the government is to protect that freedom. You know, the founders called it individual rights. John Locke, you talked about John Locke last season doing a session on John Locke. John Locke called it individual rights and, and they were right. These are the individual rights are the freedoms of action, freedom of actions to pursue the values necessary for your survival, the rational values that you need. And capitalism at the end of the day is a social economic system, political system in which the government does nothing but protect individual rights, primarily property rights, and where all property is privately owned. So the government has, think about it another way, complete separation of state from economics. Pure capitalism is where the government has no economic role. There's no treasury secretary. There's no regular agencies. There's no federal reserve. There's no role for government in the, in, in when we get together, what we decide, how we decide to exchange, what we decide to exchange, how we decide to produce, how we deploy our resources is completely left to individuals. And as long as I am not committing fraud, as long as I am not punching you in the face, as long as I'm not committing a, a crime, as long as I'm not violating your rights, government has no business intervening in the transaction between us. Now, the primary argument I want you to address this now is, is that, you know, humans, and this is the primary argument that I think we all see in society is that, you know, mankind isn't going to do the right thing. They're going to exploit people. They're going to cheat. They're going to steal. They're, you know, inherently evil, right? And so looking at capitalism, doesn't that just accentuate or magnify those, you know, those flaws of, of, of humankind? Well, even on its own terms, right? So let's assume all men are evil and they're scheming and they're going to screw each other. Okay, so let's take a small group of men, call them saints and have them control everything, right? The bureaucrats, the politicians, we know that they're saints, right? We know our politicians are complete saints. Now that is insane. So even on its own terms, it's insane. But the fact is that there's nothing to suggest in history that this is indeed the case. Look at us today. Since the, since the invention of capitalism about 250 years ago, since the founding of this country, which is about at the same time as capitalism comes together, not an accident that the two happened at about the same time. Since then, life expectancy is more than doubled. We're wealthier beyond the most fantastic dreams of anybody living 250, 300 years ago. Nobody could have imagined an iPhone, the fact that we'd be video conferencing right now. You know, all the tools that are available to us, they barely could imagine. I don't think they imagine automobiles, maybe flying machines that turned out to be nothing like, you know, the jets that we have today. So, so if you look at what human beings are capable of doing, of what when they're left free, they produce of how much benevolence and, and help and, and cooperation, think about capitalism. People think about capitalism, think about competition and cutthroat competition. But the fact is that 99% of capitalism is about cooperation. It's about me hiring you, and that's a cooperative effort. It's about even competitors, you know, that Apple uses Samsung products in its iPhone, even though it competes with Samsung, you know, some of the components in the iPhone are made by Samsung. So even as they're competing, they're cooperating. They're collaborating. Yeah. So collaboration, cooperation is the essential characteristic of capitalism. And you see that on a massive scale and, and versus every other regime, like look at Venezuela, socialism, right? Theft, cheating, backstabbing, manipulating. And of course, people say, no, no, no, this isn't socialism because they're doing, it's really just a kleptocracy. But that's exactly what socialism is. We can get to that if you want. It is a kleptocracy. But every single regime that's not capitalist, even today in America, I would argue that our politicians are more corrupt today than they were 150 years ago when we were freer. I would argue that people generally in the culture are less honest. People generally in the culture will cut more corners because government is intervening more. I think it's exactly the opposite. The freer you allow people to be. People are essentially, people are neither good or bad, but people have it within them to be good. And when the, when the right incentives are provided, when they're left free, when they can benefit, when they can reap the rewards of their own action, they tend to be good. When you try to control them, when you put mother government on their shoulder to try to tell them what they can and cannot do, they work at corners, they will cheat, they will, so I mean, I truly believe people are neither born, neither good or bad, but goodness is a potential in all of us. And the capitalism brings out the best in people. The most, the innovation, the hard work, the striving to improve their lives and the value creation that of course benefits all of our neighbors and everybody, everybody around us. Hey listeners, thanks for tuning in. My book, The Amazon Best Seller, Heads I Win, Tales You Lose, a financial strategy to reignite the American dream, is completely changing the way people look at saving, wealth and retirement. Want a sneak peek? Head on over to www.headsortalesiwin.com forward slash podcast for a free audio and text download of my favorite chapter. Again, that's headsortalesiwin.com forward slash podcast. As you, as you debate the opposite opinion, right? Because I, I, I believe there's a clear distinction of how humans behave within an environment that's free, an environment that has laissez-faire hands off, and one that is centrally planned and influenced to take care of the, the, the well-being of all. Like, what is it, what is it about the idea of freedom that really drives so much disdain amongst people, especially in our very, you know, quickly changing liberal perspective on, on things? Well, I hate to give them the compliment of calling them liberals. Liberals used to be a good word. Because words, you know, face free. But yes, I think what really drives it is that capitalism demands something of all of us. It demands the best of us. It demands personal responsibility, but not just personal responsibility in the way a lot of conservatives deem it in a kind of shallow sense. No, personal responsibility goes deep down on all of our choices. It demands that we actually pursue a life worth living. Capitalism implies a particular moral code. It implies a moral code of self-interest. Capitalism basically says, you're on your own. Go make the best of your life. Nobody's going to be responsible for you. Nobody's going to take care of you. You need to take care of yourself. And it basically encourages that. So we reward success. We penalize failure. We, we reward accomplishment. So we encourage and promote and allow for self-interest. Now we all know what our mothers taught us about self-interest, about egoism, or about even selfishness, right? Bad things. Bad people are selfish. Bad people are self-interested. But is that really the case? Is when Steve Jobs pursues his self-interest in making the iPhone, and he's clearly pursuing his self-interest, trying to make a lot of money and building a product he loves, is that a bad thing? Is that hurtful to anybody else? No. When great scientists, they, they pursue with passion the discoveries that they make. That's not about sacrificing for the world. They're doing it because they love doing it. They do it to satisfy themselves. Capitalism is about satisfying our own rational values, our own, our own rational needs. And as such, it goes against the moral code that almost everybody teaches. And this is why I think on the right, among conservatives and among, among people on the right, they have such a hard time defending capitalism, particularly as an absolute, we need a little bit of capitalism. They'll tell us, right? No, no, no. We need capitalism, period. We need a complete absolute capitalism because they're uncomfortable with the idea of self-interest, then comfortable with the idea of defending and promoting egoism. We have been taught since we were this big that what's good is to be self-less. What's good is to sacrifice. What's noble is to think of others first. And Ayn Rand, this is what blew me away in Atlas Shrug. She asks a very simple question. She asks, why? Why is your happiness less important than other people's happiness? Why isn't your happiness the most important thing to you? And if you understand how you get happiness, it doesn't, it doesn't come by exploiting other people. It comes by creating values. But why is your life less important than other people's life? Why should you live for the other rather than live for yourself? So to me, the real essence of capitalism is a morality of self-interest. And that's what the left, but also the right, finds so disdainful. And why the left condemns capitalism, why the right for the most part cannot defend it or defend it so poorly. So if you look at, because these are, these ideas are very old ideas. And I look back to, you know, and I haven't revisited this in a while in detail, but, you know, Adam Smith, before he, you know, wrote the wealth of nations, wrote the theory of moral sentiments. And this was a very, you know, and I know, so what's your, as he talked about, you know, how we're driven as a human being, where we do have this, we do have this self-interest, right? To, you know, to, I would say it starts with like making sure that we stay alive, like we feed ourselves and we clothe ourselves and we, you know, fit into society. But then it gets to the point where, you know, we're driven to make, you know, contribution and do things. And ultimately, by pursuing that, you provide for the well-being of others as a result. So the intention of the left, I would say by, you know, forcing people, right, to give up money or to do this so that they can, you know, distribute to, to, to everyone, you know, ultimately the best thing for everyone comes about by a person pursuing that, that self-interest. What are your thoughts around that? Absolutely. But this is the revolution. This is why I ran to such a revolutionary, because she fundamentally disagrees with Adam Smith in this sense. Adam Smith correctly observed in, in, in the author nations and in, in theory of moral sentiment, he correctly observes that the baker doesn't bake the bread for you. He baked the bread for himself. He, hopefully he likes baking bread. More importantly, in the context of the baker, he's trying to make a living, he's trying to feed his family, he's trying to feed himself. He's motivated by self-interest. Adam Smith says, self-interest is not very good. It's not a moral trait. It's not a virtue. But we tolerate it because if you add up the self-interest of all these people, you get a better social outcome. I ran and it says, says, I don't care about the social outcome. What I care about is your right as an individual to pursue your happiness, your self-interest. What I care about the baker, I care about the baker is the baker. Not what he does to other people, but the baker. I want the baker to be able to be happy. And for the baker to be able to be happy, he must be free, free to make his own choices, free to have his own ideas, free to bake whatever bread he wants to make, whether it fits into the regulatory regime or not, free to, as long as his customers want it, and as long as it doesn't, you know, hurt them in a, you know, the commit fraud or he's putting poison in the bread, he should be able to be free to make his bread as he sees fit and plays employees as much as he wants because I care about the baker. Now, yes, it turns out that if you leave people free, if you leave people free to pursue their self-interest, society, if you can even define that term, is better off. Everybody who is willing to work, everybody who's willing to produce is better off. But that is not the reason to defend capitalism. The reason to defend capitalism is in a sense what the founders wrote in the Declaration of Independence, you have an inalienable right to pursue your own happiness, your happiness, not society's, your own. And the only political, economic, social system that leaves individuals free to pursue their own happiness is capitalism. So to me, that's the moral foundation. It's about the individual. And yes, it works because when you leave people free, they take care of their own property. That's why capitalism also produces the cleanest environment. If you leave because private property is clean, it's public property that's polluted. When the war came down in Berlin, what we discovered was that the most filthy place on the planet was communist East Europe because everything was public property and nobody cared. Everything dumped garbage in the public space. When you have your own private property, we take care of it. You take care of yourself. You then in order to make a living, you have to produce values that other people want. And therefore you are helping them. So when I, when I buy an iPhone, right, for a thousand bucks, it's hard to believe it's that much. My life is better for that. My iPhone is actually worth it. Don't tell Apple. Much more than a thousand bucks, tens of thousands of dollars. This enhances my life. I'm willing to give up a thousand dollars because my life is better off by doing so. So if you think about that, every transaction we go through every day, when we buy groceries, when we go to a restaurant, when we buy iPhones, when we consume electricity, whatever it is that we do, we are benefiting more than what we're paying. Otherwise we wouldn't do it. So capitalism is a system through trade, through the win-win relationships that trade creates. Capitalism is a system that everybody is constantly better off through it as long as you're working and producing something and earning something. So it's a win-win relationships. It's a win-win relationship. So because I'm selfish, because I want to produce, because I want to have a better life, I'm making everybody else's life better as well because I have to trade with them. That's the beauty of capitalism and that's the beauty of this morality or this small defense of capitalism. So I had a question and I think I knocked you off course with the Adam Smith thing, but you had gone down and talked about this notion of happiness and achievement. And I think it may be in a video that you've done, but you talked about how people pursue achievement and achievement gives them a notion of self-worth or confidence and that happiness. Would you define happiness another way or is it in line with that sequence? No, I think happiness is the sense you get about life that comes from achieving your goals, achieving your values. As long as those values are rational, I don't think somebody who has irrational values can be happy. So if your value is to bring about socialism, you're not going to be happy. You're going to be miserable because the existential reality of those values is going to be detrimental to your life. So the values have to be rational pro-life values. Happiness comes from achieving those values. I ran to find happiness as a state of non-contradictory joy. It's when you just have this positive sense about the world, nothing is contradicting it, nothing is fighting it. The world is good. It doesn't mean you don't have problems. It doesn't mean you can't be sad. It doesn't mean tragedies don't happen to you and you could be depressed for a while, but overall your attitude towards your life, your standing order in terms of life is, life is good. Hey, I achieve stuff. I can make my goals. I can get to the, you know, achieve my values and that's what happiness. So I think people sitting at home, for example, I think one of the great tragedies of the welfare state is that it basically prevents people who receive welfare from ever being happy. It robs them, it robs them of the opportunity. Robs them of opportunity to be happy because without work, at whatever level you are capable of, without the challenge, without building, creating, making something, at whatever level you can do it, I don't think you can be happy. You have to be able to achieve values and if you're sitting home playing video games and collecting a welfare check, that's out the window for you and to me the welfare state is immoral to a large extent because of that. I thought about that a lot and I thought about just with people and what they achieve and oftentimes that comes as a result of hardship and error or mistakes in certain areas and their ability to overcome that and learn and achieve because of it. I don't think there's anything that can replace that and I look at a free society and how that allows for those opportunities and as you said it really does allow people to understand what they're capable of and I'm not sure if there's another way to do that. I don't think there is. Well it's at the end of the day you go down to freedom. You have to have the freedom to try. You have to have the freedom to experiment. You have to have the freedom to fail but you also have to have the freedom to succeed and to benefit from that success so that everything else is motivated and that's what capitalism provides. Capitalism is just again the system that leaves you free to do all those things and that's how you get great innovation. People try stuff out. They come up with crazy ideas. Everybody around them I'm sure said that's nuts. You're insane. Nobody can do that and then they go do it and sometimes those crazy ideas turn out to be crazy and they fail but sometimes and maybe less frequently they turn out to be brilliant and they turn out to be what changes the world and socialism you don't have that and socialism or under any political system any political system where the state is involved you basically have to get permission in order to innovate. You have to get permission and if you take any great idea in human history and you put it in front of a committee it's going to fail. Is the world, is earth going around the sun or is the sun going around the earth? The committee of the catholic church decided no no no it's the sun goes around the earth. Galileo you're all wrong and of course they shut him up and they imprison him or they put him in house arrest so he could not articulate this fallacy. In a free society Galileo would be out there, hey I just made this incredible discovery and the speed of which science would have developed after that. Would it mean so much faster? We would be so much richer today but no everything got slowed down because the committee couldn't decide if this was a good idea or a bad idea and I think if imagine I always ask my audience imagine if this was designed by a government committee what would this look like? You know you don't need to even get the answer you know what's going on inside of people's heads they can see some monstrous machine that's too big and doesn't work and is a disaster and but nobody Steve Jobs didn't need to get permission he didn't ask anybody he just did it. Yeah I think it's stifling and I think it's interesting what's going on in our country today with the government shutdown and 800,000 people not working but it's one of those things. What's that? Permanent. I mean I would love to see the federal government fire tomorrow 800,000 people. I think we as a country would be richer, we as a country would be safer, we as a country would be would be formal capitalist and formal innovative if we just got rid of these bureaucrats I mean I my only concern about the government shutdown is these people are going to get back pay I mean I would like to see them fired I would like to see the government shrink by like 80% you could probably get rid of 80% of government officials keep the military keep a few policemen and get rid of everybody else what do we need them for? They only constrain our lives they only hinder our lives they don't add anything to it. Hey listeners thanks for tuning in my book the amazon bestseller heads I win tails you lose a financial strategy to reignite the American dream is completely changing the way people look at saving wealth and retirement want a sneak peek head on over to www.headsortalesiwin.com forward slash podcast for a free audio and text download of my favorite chapter again that's headsortalesiwin.com forward slash podcast. Yeah it was interesting last week I was uh have you been to CES before in Vegas? Actually being I read about it all the time it sounds like a great time to be it's cool yeah it's it's one of those just you know it's it's it's this whole it's this whole topic you you experience the results of this this topic but I was talking I was in line doing like a demo for the the self-driving cars and I was talking to the head analyst at Intel who's creating kind of like the you know the technological framework for that and yeah the the biggest impediment was you know it was it was government he was approving this and approving this and you know it's one of those things where it's it can stifle uh in innovation at that level but it also stifles it at that lower levels that we've discussed as well primarily the welfare welfare state how we're robbing individuals of just an awesome experience to figure out their life and to figure out how to overcome challenges and problems and get employed I mean it's there there's so much in human a human's mind and their ability to create and and prosper and it's just it is it's it's robbed from them over and over again and it becomes a habit and that just just it destroys human life it's it I would consider one of the more you know biggest tragedies of our of our day and age I mean I think that's absolutely right and it robs it robs us from their productive capacity and it robs us it robs them from their productive capacity and it robs us from their ideas I mean just because they want to offer it doesn't mean if they weren't with the right incentives if they if they wouldn't be the next uh you know the next innovator the next entrepreneur the next somebody who created something really important but we rob them when they're children we rob them but but think about the other great tragedy under capitalism education would be private and education would be competitive and education would have to be good otherwise I wouldn't send my kids there but today we have a rotten educational system through and through particularly if you're poor we have an awful educational system that cripples these kids doesn't give them the tools it cripples them and and again this is socialism in practice we have socialism in education and what is the result worse than mediocrity it's it's pathetic awful imagine if education was competitive if entrepreneurs instead of thinking of the next app for the iphone thought about the next educational product the next school that they could create the next chain of schools that they could build where they would drive prices down and drive quality up imagine if we saw billboards with our school if your son you know is inclined towards math our school is great for him or your son likes the daughter likes the paints you know our school is great for you and and here's for you know female science future scientists and they compete on those things and they market and they advertise that would be a capitalist world that would be a worthwhile world what we're taking is sheer human potential and destroying it by grinding it through a government educational system and eight i won't even send a letter through the post i'd rather use ups and fed x why would i send my kid to the equivalent of the post office which is what government education is but yeah last so we'd you know i was telling you before we started recording that you know last year we focused on uh john lock life liberty and property and you know what those principles were and one of the guests was uh he wrote the book uh free to learn his name escapes me right now uh but he you know talks about the Sudbury school Sudbury school system and how you know kids are kids like are are creative they're naturally curious about life and he robbed them of that experience by you know it's a shoving curriculum down down there down their throat and expect them to be creative and like it and i think my competition is we discover which educational system is best right there would be competition and and parents might disagree and they might all kinds of schools and and we would all have different preferences and some would be more successful than others and it would be innovative and and and we would go through the market process of discovery which educational system was best just like in any other field we figure out what's best through competitive markets and the fact that we deny this of our kids and we deny this of our of our society and our culture is tragic truly tragic so let's let's do this we could probably go on and on and on with all because there's so much to talk about because there's so much application to human to human life and that you know our experience on earth uh but let's let's end with this like as you've researched this and debated this and thought about this to the you know the nth degree what what would you say are the most compelling reasons at at maybe an individual level to embrace the the principles of capitalism well i think the most the most compelling reason is that you value your own life that you want to be free you want to have opportunities you want to pursue your own dreams you want to be happy i can tell you it's it's it's very difficult to be happy under under socialism certainly under communism or fascism or statism of any form i think the most compelling reason to one capitalism is to is to want to live it's the it's the it's the want to go out there and produce and create and build and make stuff and and it's not even about the money although money is nice and and money comes with all that creation but it's about the sheer fun and enjoyment of pursuing something that you love doing and doing something that you love doing and and making a difference in your own life and challenging yourself and setting ambitious goals and achieving those goals and it's living it's it's and i think capitalism is the only system that really allows you to do that fully in in one of the great tragedies in america today unfortunately we think of america today as capitalist and we're not with this mixed economy with some capitalism still some freedom and a lot of regulation and control and and fascist socialist kind of structures imposed on us and if we can only get just rid of that and and you know we could really get richer get happier you know flourish in in a in dimensions we can't even imagine everything becomes better with with with freedom the arts get better the spiritual life gets better and our material life suddenly gets better well you're on this has been a fascinating discussion and there's like you mentioned in the beginning if you google your name there's a lot there's a lot of stuff out there so what but why don't you just maybe cover the best ways to follow you best ways to learn about the iran institute and learn more about about capitalism well sure first i recommend everybody read alishwagd in the fountainhead iran's books i mean the kind of american classics everybody should be reading them anyway so go go pick up a copy and and they're available in every format known to man so he said no excuses a lot of people a lot of people are listening to them to them these days right so just get get the downloaded on audible and take a road trip um you can find about iran in iran dot org a y n r a n d dot org there's a ton of content a ton of material there if you want to study objectives in deeper there are lots of videos and audio and podcasts and you know just many many years worth of content that's available some of it iran herself some of it some of her leading philosophical students who really know her ideas and study them uh to follow me i the number of ways the easiest is probably to go on youtube and to subscribe to my youtube channel there's you know again uh thousands of videos uh up on on youtube of mine and i constantly producing more i do a video show at least once a week usually three four times a week so there's there's a ton of content being produced constantly and you can do the regular follow me in twitter and follow me on facebook and um and i do have a website iran book show dot com and as far as your books are concerned can you know are they all available on amazon or on your on your website yeah i mean they're all available on on on amazon they're all available again in every format that is available i have three books one is called um free market revolution how iran's ideas can end big government so it can bring us capitalism the second one is equal is unfair and the third one is the mall defense of finance so it's a it's a book about the financial industry and why it's a noble productive virtuous mall industry so that'll shock a few people and as a companion to that i do on youtube have a talk called the morality of finance which is interesting are you looking well iran it's been a pleasure it certainly has thank you again for for your time and uh and yeah everyone out there you know hopefully this has struck a few chords and it got you to think about capitalism the principles of capitalism the principles of freedom at a deeper level thanks by check