 Good morning, ladies and gentlemen. I'm Pauline Schuckmach, your host for We Like the 1%, which is on every Thursday at 11 a.m. for a couple of months. My guest again today is Dr. Yaron Brooke, chairman of the Iron Rand Institute and host of the Yaron Brooke Show. Aloha, Yaron. Aloha. Aloha. I'm glad we were able to get you in again today. Now, yesterday on Outside In, we gave an introduction to Iron Rand and her work, and we're going to go a little bit further with this idea that she emphasizes in most of her fiction and nonfiction, which is the individual versus the collective. And now you're the author, you're an author yourself. You've written quite a few books. And the one most relevant to what we're discussing today is equal is unfair. So, Yaron, could you explain to us why you wrote this book? Well, I wrote the book because the whole issue of inequality was becoming such a big deal. Everybody was talking about it, and it was blamed. The inequality, the gap between the poor and the rich was being blamed for every problem we have in the world. It was being blamed for the inability of the poor to rise up from poverty. It was being blamed for cronyism. It was being blamed for mediocre economic growth around the world. It was even blamed for global warming and terrorism. So, every problem in the world, and it was, and still is, unfortunately, being blamed on economic inequality. And that struck me as just wrong, but worse than wrong, morally offensive. Because at the end of the day, economic inequality is a consequence. It is a feature of political and economic freedom. When we are free, we're going to be unequal. It's only when we're not free can you try to create some kind of equality of outcome. And one of the reasons Ayn Rand writes about this quite a lot, either through her fictional characters or in her philosophy, is because she came from Russia, right? Originally, she was from Russia. And she came to America and she saw a vast difference. Isn't there a vast difference here between the system she came from and what she experienced in America? She grew up under communism, so she experienced communism firsthand. She knew how brutal, how poverty-stricken, how offensive, how anti-life communism was. And she became communism's most significant enemy. She not only cored down both a moral and philosophical foundation of communism, but built intellectually a philosophical foundation for capitalism, the exact opposite of communism. So, yes, Ayn Rand knew of what she spoke, and she thought communism was an evil ideology and evil in practice and evil in theory. And she fought against this ideology her whole life. And she was very, very impressed by what she experienced in America and what she learned about America when she was still in school. How did she come to be so inspired by American thought? She took a class when she was a teenager, I believe, wasn't she? In the class, but my understanding is the primary means by which she was inspired by America was from the movies. She loved American movies. And when she could see in an American movie the skyline of New York, ice scrapers, people dressed up in beautiful clothes, beautiful buildings, cars, and she is in poverty-stricken communist Soviet Union. I mean, it was obvious that the immense gap between the two cultures, between the two worlds, really. And she was first and foremost impressed with a British character when she was in her youth, was she not? So the influence is Anglo-American on Rand's work, basically, and her thoughts. Yes, I mean, she was influenced, she was also influenced by the French. I mean, she loved Victor Hugo. She was a huge, huge proponent of Victor Hugo's literature. But she was inspired by romantic literature. And she loved the heroic. She was also inspired, for example, by a Viking story from Scandinavia. The anything heroic she loved, she was inspired by. The whole motivation, she says in her literature, is to portray the ideal man. So somebody heroic who is using their own free will in pursuit of their own values and willing to overcome any kind of obstacles in their way. And one of the results of the American system is obviously something that's driven by entrepreneurship. That's why America became so successful. It became very powerful, because people were left alone. The Federal Reserve only came about about 100 years ago. So before that, people were left alone to thrive with fairly little regulation, if any at all. So it was Wild West, literally. And the Americans weren't the first, actually, to do this kind of experiment. The Florentine Republic was actually composed of entrepreneurs. They were not interested in equality. They were interested in maintaining status. They were elitists. But anybody, there was social mobility. So anybody among the entrepreneurs in Florence could apply to become part of the Tre Maggiore. So it wasn't, it was really the first time you saw that was the Italian Renaissance period, that you had this kind of activity that there weren't career politicians. There were entrepreneurs, businessmen who were running the government. Yes. And look, at the end of the day, the American political system is anti-quality of outcome, but it is pro-political equality. So part of the innovation of the founding fathers is to create a system, and this is what capitalism is, that protects the individual rights, and that treats all individuals equally in terms of their rights, in terms of their freedoms, in terms of their ability to live their life free of coercion, free of force, but that otherwise leaves them alone. It doesn't try to equate them in terms of outcomes or even in terms of opportunities. It sets up the rule of law. It treats everybody the same under the rule of law equal before the law, and otherwise leaves people alone. Yeah, otherwise it's fair game. So the race starts, and there are a few people at the finish line first, and it's not fair to take the trophy away from them. Isn't that correct? It's morally offensive to take away somebody's achievements from them. Somebody works hard, they produce, they create, they build, and as a consequence, they make a lot of money. It's theirs. The money didn't exist before. It's not reallocated to them. It's new value that is being created. It's new wealth that is being created, and it belongs to the person who created it. In this case, whether they're an entrepreneur, whether they're an artist, or whether they're an athlete, whatever the mechanism by which they have generated this wealth, it is theirs. And it's none of anybody's else's business to try to equate it and to take it away from them and to give it to somebody else. That's all wrong. So where do you think this sort of business about it's not fair came from after the recession? You started this narrative about the victim. You started Snowflake, Safe Spaces, sob stories, this victim narrative that these people up at the top, and this show is we like the 1%. So the super rich are really .000. I think it's 701. That's the super rich. These are the elite billionaire class, which out of 7.5 billion people, they're approximately 2,500 billionaires. And most of them are just barely hanging on around 1 billion. They just made it to the mark. So the gates, the buffets, the Zuckerbergs are very, very rare indeed. But it's not the point that Bill Gates has, for example, what is it now, about 80 billion. He decides what he does with that, right? It's not anybody else's business. He created it. He made it. He built it. And a lot of the resentment towards, I think, the Bill Gates of the world is twofold. One is people who just don't understand how anybody could be that productive, could be that creative, could produce as much as Bill Gates indeed has produced. I think that's one source of the resentment towards Bill Gates. How could anybody create so much wealth? That's impossible. And the second source of the resentment is envy. People hating Bill Gates because he's been successful, because he created, because he produced. So it's two different sources. But generally, one is a rationalization for another. So for the most part, people hate the wealthy because they resent their success. They are envious. And then excuse it by creating a rationalization. You didn't build that. You didn't earn that to quote President Obama. And there's a saying here in Hawaii that if somebody is trying, it's the crabs in the bucket metaphor that they're very fond of here, where if one clever crab is trying to climb out of the bucket, all the losers at the bottom try to drag them down. And while that's funny in a way, I think it's quite sick, actually. Absolutely. It's evil. It's a culture. This is why the crabs are stuck at the bottom of the bucket. It's a way to institutionalize poverty and to secure everybody at the bottom. So the only way you can standardize everybody to be equal is equally bad, equally poor, equally pathetic, equally at the bottom. And that's what every system that tries to establish equality, that's what it generates at the end of the day. And in many ways, this behavior is done because actually most people are capable of doing something creative and producing something of very great value. Most entrepreneurs, they're not particularly highly intelligent. It's just down to character and drive, is it not? And when they see somebody who's actually done something, that envy strikes them. And it's almost as if they have to tear that person down because they don't want that other possibility of them having had a chance at that to happen. They don't want that possibility to exist. I think that's right. But I think that they're envious of somebody who has good character. They're envious of people who are smarter than them. They're envious of anybody who's better in some dimension or another. Envy is the hatred of the good for being the good. That's how I ran to find it. Envy is the emotion that wants to knock stuff down. It's the emotion geared towards hatred, hatred of everything, hatred of life, hatred of existence. And it is unfortunately an emotion that very many people have. It reinforces, it feeds off of their insecurities. So what they try to do to conceal this envy, this very nasty part of the human character is they start playing the victim. Isn't that correct? They start blaming other elements or other variables for their situation. They claim that you didn't build it. That you didn't do anything to actually justify your success. So they claim that your success is unjust and not worthy and wrong. And then they try, so that's one way, you're not that smart. Or the other way is to say, you're just lucky. Bill Gates is just lucky. You just happen to be in the right place at the right time with the right, everything's luck. What they want to do is they want to disassociate the success from you. And then they can tell people, see, he's got billions, but she didn't build it. She just got lucky. And if it's just luck, then now you start having a good excuse to take the money away from you. Yeah, I think luck does play a role to a certain extent. Because I think it's a combination of factors because a lot of people do try their hand at entrepreneurship and a lot of businesses do fail. But people have the courage to try. And I think it is a combination of three factors. There is the hard work. There is the interpersonal skills. You have to be good with people. And I think there is an element of luck, because even Napoleon said when he was picking his marshals, he said, ah, but is he lucky? So there is an element there that some people have more luck than others, don't you think? I mean, that might be possible, but I think it's also true that people create their own luck. People place themselves in positions where good things happen to them. They are prepared when good things happen to jump on them. They are ready. They are focused. So they're really mentally prepared for taking advantage of opportunities. And I think that's what luck is at the end of the day. Yes, it might be a little bit different on a battlefield, but generally I agree with you. And people do create their own luck. You have to do a lot of calculation, a lot of planning. And the same on a battlefield. I think, yes, you know, there's a certain element of luck, but to the extent that you're prepared, you're lucky. Okay. Before you're prepared on a battlefield, the less luck plays a role in it. Great. Okay, so we're going to take a quick break. We are on and we'll be back in a moment. Thank you. Hi, guys. It's RV Kelly. I'm your host of Out of the Comfort Zone, where I find cool people with cool solutions to problems that all of us face. Now the thing is, we're really cool. And I only invite really cool people, but the thing is, I think you're kind of cool too. So I think you should come and watch that Thursdays at 11am here on OC16 television with Think Tech Hawaii. I'm RV Kelly, host of Out of the Comfort Zone, and I will see you next Thursday. I just walked by and I said, what's happening, guys? They told me they were making music. Aloha, ladies and gentlemen. Welcome back to We Like the 1%. Aloha, you're on. We're back after that break. And I just want to start talking about this funny business about wishy-washy lefty things happening on US campuses, which always strikes me as a bit odd. Now, some reporters, I've noticed on certain YouTube clips and other places, reporters go around and ask students. They say, what is it that you want? What are you complaining about? And the thing I've picked up that seems to repeat itself quite a bit is a student saying, they don't care. So I'm wondering who the they are. I mean, is this this white privilege thing that's very trendy now? Who is the they? Is this just a way of deflecting responsibility from themselves when they could make something out of themselves and they're blaming somebody else for their failures? Or what is it? Yeah, so I mean, it's what we call it in the 60s and 70s, the man doesn't care, right? Nobody cares about them. These are these are spoiled little brats whose mothers have been hovering over them their entire life. And suddenly they're expected to make decisions for themselves. And suddenly they might fail a class. And suddenly they have to go out and find a job for themselves. And they have to find a place to live. And they actually have to live a life for themselves. And they don't know what to do. And the conclusion from all of this is people don't care about them. And it is taking care of does this stem from the fact that there's too much choice or too much freedom in America, it confuses people. So you're getting a lot of arrested development, too little choices and too little freedom. No, I mean, that says nothing to do with that. This is all about the fact that these kids are not trained. We have a public education system that is just horrific. They're not trained to think. And if you can't think, you're finished. I mean, if you can't think, if you don't have the capacity to be use your rational mind to think about your circumstances, to solve problems, then you basically lift your emotions. Well, I mean, somebody is not going to lead you anywhere. But to say, Oh my God, what am I going to do? Life sucks. A lot of people who are highly intelligent also happen to be very lazy. So is laziness and also a factor in this? Well, I think laziness is again, a symptom of people who are not using their minds, a symptom of people who have not been trained and have chosen not to be engaged, not to use your mind. We talked yesterday about the essence of Iron Man's morality. The essence of Iron Man's morality is focus, engage with the world, use your mind, don't be lazy, mentally, be completely active. That's what morality is about, being mentally active. So laziness in that sense, mental laziness is a vice according to Iron Man. Yes. And based on all this, in a country as free as America, and it's relatively free, we don't have an example of a perfect country that has a perfect free market, but it's the closest thing possible. Should there be 48 million people on welfare? I mean, does that make sense? No, there should be zero people on welfare. I think that's true of every country. I think welfare is immoral. I think welfare is immoral for two reasons. One, it's taking my money and somebody else gets to decide what to do with it. That's wrong. That's stealing. I should decide if I want to help somebody out, if somebody's struggling, if somebody needs welfare, I can give to charity and I can help them out that way. But nobody has a right to steal my money and give it to somebody else. But also, when we hand people checks, when we hand people welfare, we are institutionalizing them into poverty. We're basically telling them, you're worthless. They'll never find a job. Here's a check from the government. Don't worry, be happy. Of course, they can be happy because they can never attain self-esteem, which the logic sense comes from our jobs and our work, and they have no incentive to go find work. So welfare is a very, very destructive phenomenon, very, very destructive activity. Because it essentially crushes ambition because there's a safety net there. So then you can be lazy. There's the option to do nothing. The safety net should be a private safety net and charities tend to say to people, here's some help while you're struggling, but we're going to help you come out of the struggling. We're going to help you find a job, we're going to help you get yourself established. The government doesn't do that. The government has an incentive to keep people down, to keep people dependent on the government. So, Jaron, this is nothing new, is it? Because the Roman Empire did this as well. Because at that time, people were impoverished through battle. There were wars to be fought, and they came back and they said, we have no more money. And the ruling parties said, well, I'll lend you the money because if you loan people money, you'll always have poor people, you'll always have debt slaves. So nobody rises. So it's not the fault of the 1% or people who are successful and innovative. Well, it's the 1% to the extent that they support governments like this, right? It's the support of the 1% of the people who actually create the jobs for everybody else. But to the extent that the 1% support politicians who then establish a welfare state and support a massive distribution of wealth, to that extent, they had to blame. But not because of their wealth. Their wealth creates jobs, creates wealth, raises people up from poverty. The only system in human history to raise people out of poverty is capitalism. It's a system that creates the 1%. A feature of that system is to help people come out of poverty. And the argument that you hear from the other side is that when you have capitalism, it leaves a whole bunch of other people behind. But is that true? Because very few people... But it happens is the inequality increases, but everybody's better off. I mean, except the lazy bum, right? The lazy bum is worse off under capitalism because in socialism, he gets a check from the government. But if you're willing to work, capitalism makes your life better. It doesn't make your life better in an equal way to everybody else. But it makes your life better than the alternative. You have the best life possible to you as an individual. And what do you think of universal basic income? This idea that when the automation comes, when the robotic workforce is fully deployed, probably in about 10 years time, a lot of people are going to be without a job. It's not because they're not thinking or not because they're lazy. It's just there won't be a job because a robot can do it much more efficiently and better. So what is your opinion of universal basic income? So I'm against any kind of a distribution of wealth. And I'm still against the universal basic income, which is paying people not to work. I don't believe the robot story. This is the story that I've heard for 250 years from the invention of the first mechanized sewing machine or mechanized anything, we've heard it over and over and over again. Oh, there are no going to be any jobs, but there are always more jobs after than before. Robots are going to create jobs, many, many jobs, different jobs than what they are today. If you have a job today that a robot could do instead of you, start thinking about how to retrain, start thinking about changing your focus, start thinking about where job opportunity is going to be in the future. But the idea that there are going to be fewer jobs is absurd. Human needs are infinite, there's always more stuff that we're going to want. There's always more things, more products, more services, more, you know, I don't know. Do you know how many nail salons they are in California? Millions, every strip mall has a nail salon. How many nail salons existed in California 30 years ago? Almost none. It's a whole industry that has just sprung out of nowhere the last 40 years. Now, could I predict that industry? No. Can I predict now what the industries of 40 years from now are going to be? No. But there's always jobs, the gaming industry, computer gaming, programming for games. Hundreds of thousands of people work at very high paid. Nobody could have predicted that. So what are going to be the industries from 30, 40 years from now? I don't know. But if you're in an industry that can be replaced by a robot in the next 10 years, then you should think about retraining yourself. Yes. And, Yaron, in the time we have left remaining, could you talk about some of your other books besides Equal is Unfair and your most recent one that came out? Yes. So my first book with the same co-author with Don Watkins was Free Market Revolution, How Iron Man's Ideas Can End Big Government. And it's a book about how capitalism works and how capitalism is the solution to almost all the problems we have today. Equal is unfair addresses this issue of is inequality a problem. And it shows the evil of equality. And inequality is a good thing because it is a feature of freedom. When it is a feature of freedom, it's a good thing. And then my latest book is called, Wealth Creators, The Moral Case for Finance. And it articulates the case for finance as a moral, productive, innovative, and crucial industry for any growing economy. So it presents financiers as heroes. And they're not evil finance guys, right? They're not evil. Heroes. They're the good guys. They make possible all the wealth that we have around us. Tell us a little bit about JP Morgan then. JP Morgan is a relatively good bank that actually did pretty well during the financial crisis. To the extent that JP Morgan has bad stuff happening, it's because it is one of the most regulated institutions in the world. It has over 100 people working at JP Morgan at the bank. JP Morgan Chase at the bank every day who work for the government but have offices at JP Morgan. And its primary product, money, is controlled by the Federal Reserve. So it's not a free company in a free market. It is a highly, highly, highly regulated company in a highly, highly, highly regulated environment. So your preference would be that there would be absolutely no regulations, right? Because the market has these natural checks. All the government is to protect us from fraud and crooks and criminals who steal from us and cheat us. But other than that, leave us alone. And what should one do about this welfare issue then? Is it just going to continue in increasing in numbers? It's going to continue increasing in numbers unless we fight it. So we have to fight it and ultimately we have to defund it and we have to encourage, we have to create the jobs, we have to create an economy that creates jobs and move people to a work mindset away from an entitlement mindset. Okay. And I think that's the crux of the problem. It's not entitlement. People are not entitled to other people's pie. There's no collective lie. You don't have a way into my stuff. That's right. Okay. And that's all the time we have, unfortunately, you're on for this show. But thank you for being my guest on both Outside In and We Like the 1%. And I hope to see you again sometime soon. Thank you very much, ladies and gentlemen, for joining us. And I'll see you next week. Aloha.