 Thank you very much for being with us. My pleasure. Thanks for having me. Can we have a moral capitalism? Is it possible? A lot of people say it's impossible. If it's capitalism, it should be morally wrong. Well, I see it the other way around. I think if it's capitalism, it's morally right. Because what is morality about? Morality is about all of us as individuals having the freedom to make choices for ourselves, free from coercion, free of authority, free of people forcing us to do what we don't want to do. And as long as we're not hurting other people, as long as we're not violating the rights of other people, nobody has a right to interfere in our life. That's the essence of capitalism. Capitalism really is a system of freedom, a system of freedom for the individual from coercion by other people and from coercion of the state. So how did capitalism get its reputation as a selfish kind of economic structure? Well, in a sense it is selfish, but selfish not in the sense that we typically think of as lying, cheating, stealing, bad people, but selfish in the sense that we all go into the marketplace pursuing our self-interest. And why is that a bad thing? Isn't the purpose of life ultimately to live the best life that you can be? It isn't in the Declaration of Independence in the United States, they talk about the pursuit of happiness. Capitalism is about individuals pursuing their happiness and in that sense it is about self-interest. What it's not and what it's often attributed to it is the corruption, the cronyism, the lying, cheating, and stealing. The crony capitalism, that's when capitalists are in cahoots with government officials to get money for nothing. But to me that's not capitalism. To me that's cronyism and cronyism is a feature of statism. The more power you give the state, the more power you give government, the more incentive there is for people to go and try to fix that power so it helps them. And that's true of everybody, that's true of unions, that's true of business people, that's true of all kinds of individuals who try to lobby government to get favors. But that's not capitalism. Capitalism is about the separation of states and government from the economy. It's about leaving the economy free of the coercive nature of government. But the peculiar thing is that now in the United States you have a president, Donald Trump, who claims that he's a very successful businessman. At least he's very rich. I don't know if through capitalism or crony capitalism, but he is very rich. But he claims he doesn't want globalization. He doesn't want free trade. He doesn't want free immigration. In fact, he complained about Enrique Peña Nieto, the former president of Mexico, because he said he was a capitalist president and he prefers someone like Andrés Manuel López Obrador, who's not a capitalist president. No, unfortunately for the United States the choice we had last election was between one form of statism and another form of statism. There was no free market. Hillary Clinton and Donald Trump, they were both against the free market? Absolutely. Both against the free market, both against free trade, both against really freedom. Freedom for industrialists and capitalists and manufacturers to decide where to put their plans, decide what to build, decide where to build it, decide how much to pay their employees. We have now two political parties that are both anti-capitalist in the United States and that's a tragedy and sad for this country that has always represented freedom and capitalism to the rest of the world, is now the opposite of that. That would have surprised Inrant, who was this writer of the 1950s and 60s. In fact, you are the chairman of the board of the Inrant Institute. She's not that well known in Mexico. The question is why is she important? What were the ideas that she espoused? She was a radical for capitalism. She really defined capitalism as the separation of state from economics but she also provided a philosophical foundation for the ideas of freedom, of liberty and of capitalism and I think it's those philosophical foundations that are so crucial and so lacking in the world in which we live today. The left, the socialists, the statists, always take the moral high ground. They present themselves as they are there for the people, they are there for morality. That's why they claim capitalism can't be moral. Exactly and Inrant says, no. You indeed are the immoral ones. Capitalism is the only moral system because it's the only system that leaves individuals free to pursue their own happiness and that's the essence of morality is the pursuit of your own happiness, the pursuit of your own rational long-term self-interest. So Inrant who wrote The Fountainhead and Atlas Shrug both available in Spanish I think was probably the most important defender of capitalism and freedom and free markets of the 20th century and without that philosophical foundation we're seeing what we get today. We're seeing the deterioration of capitalism, the disappearance of capitalism and the rise of status of the left and status of the right who present themselves as defenders of the people but actually the exact opposite of that. Is the free market system which is another way of saying capitalism in retreat in the world today, are you concerned about that? Very much. Particularly I'd say in the West it's in retreat, it's in retreat certainly in Europe, it's in retreat in the United States. You know it's on the rise in certain parts maybe of Asia and again even that I think is mixed because I think China is now in retreat away from expanding free markets. So in general I think it is in retreat in the world and I'm very worried about it because at the end of the day free markets represent freedom for individuals and free markets are not just about economics they're about our personal liberties, they're about our social liberties, they're about living free as an individual and if that's in retreat we're losing our freedoms and that's very sad. But what happened? What happened here? In 1989 the Berlin Wall collapsed, in 1991 the Soviet Union collapsed Francis Fukuyama wrote that this was the end of history that we're going to see a utopia of free markets and democratic systems. What went wrong? What happened was we associate free markets with what really is a mixed economy. See in the United States and Europe for a hundred years now we have had mixed economies, we have some element of capitalism, some element of free market and a lot of regulations and controls and redistribution. And Fukuyama and many intellectuals assumed that that mixture was stable. Mixture is never stable. I'm a radical. I believe that the only alternative is pure capitalism, it's 100% capitalism, 100% freedom. And the left are radicals too. They believe that the only stable alternative is pure socialism. You have full control over the economy. And I think you have to go one direction or the other. The mixture Fukuyama was wrong, the mixture is very unstable. So communism failed, complete control of the economy failed. But the mixture of having a little bit of both, they always claim that socialism failed because it was the way it was supplied and not because it... Of course, of course. But of course they're wrong because everywhere it's applied, no matter how it's applied, no matter by whom it's applied, it always fails and always fails in the same way. So until the West or until countries start recognizing that what they need to do is move away from the mixed economy towards more capitalism. The socialists will always blame the financial crisis, any crisis, on the free element of the economy rather than on the socialist element of the economy. It's funny, they claim or socialists claim that the 2008 financial crisis was a consequence of not enough regulation of the financial system. But at the same time we see that the actual crisis began with a government subsidy to build housing that no one was able to afford. People don't understand that. Absolutely they don't. And again, when you have a mixed economy, it's very difficult to untangle what causes what. I remember George Bush saying, he was president then that everyone had a right to have a house and that his government was going to provide it. It was Clinton and Bush who both decided that instead of 63% of Americans owning their home, it should be, the government decided, it should be 70%. So we have to move to 70%. So we're going to subsidize it. That to a large extent is what caused the crisis in addition to too big to fail, which is a government policy to bail out big banks and all the other regulations. So I would argue, and I think economists generally would argue, that the financial crisis in 2008 was caused by too much regulations, indeed by regulating financial markets. And it's interesting that the most regulated parts of the economy were the ones who failed. Banking is the most regulated business in America. Housing was being subsidized. Those are the markets that failed because of the regulation. You said you're radical. You want full capitalism. What would you do in the U.S., for example? What sort of regulations would you dismantle? What would you change in the American economy to go back to a pure kind of capitalism? How much time do we have? I mean, just give us an idea. I mean, I would start... I don't need a full government program. I mean, I would start by getting the government out of trying to manage businesses. I would get rid of all subsidies. I would get rid of all the ways in which government tries to manipulate all the kind of corporate welfare that exists. I would get rid of that immediately. Which is huge. People don't realize it. And it's extremely expensive. Even in America, huge, inefficient, expensive anymore because you're taking people's money and you're spending it on what politicians think is a value instead of leaving it to the marketplace to decide what is a value. I would then start dismantling the regulations, the regulations of financial industry, the regulations of housing, mortgage subsidies. All of that would go away slowly. So I would first try to stimulate the economy by eliminating government interference in the economy. And then over time, you now start having to deal with entitlements. You now have to start dealing with welfare. Phase those out. I think it would take a long time to phase those out. You're probably looking at 20 to 40 years to really phase out the entitlement and phase out welfare so that one day we get to a point where the business the market is free, but also where there's no redistribution of wealth. There's no pure economic system in the world, but what are the countries that we should look up to and what are the countries that are the example of what is going to fail? Well, from an economic perspective, I think it's very useful to look at the last 75 years at Hong Kong. And Hong Kong was a fishing village 75 years ago. Today it has a population of 7.5 million people. Most skyscrapers in New York City and a higher GDP per capita than the United States of America. So they become rich. And it was poorer than Mexico. Much poorer than Mexico. Absolutely. And all they had there was the British came and they established the rule of law. They protected properties, property rights, and they protected contracts. They have no natural resources. No natural resources and no redistribution of wealth and no safety nets and no free health care. None of these things and yet millions of Asians swam there. They went on rafts just to get to this pace because they were free economically. So Hong Kong is a good example. And today there are countries like New Zealand, there are countries even in Ireland, in Europe, Switzerland where the economies are freer. And you can see the direct correlation between those freer economies. They're not as freer as I would like them to be. And of course the wealth being created. I am Brooke, Chairman of the Board of the Ayn Rand Institute. Thank you very much for this conversation. My pleasure.