 I'm going to be making the fairly controversial argument today that inequality is irrelevant, that inequality doesn't matter from an economic perspective, and that indeed the battle to establish economic equality is causing a lot of the problems that we associate with inequality. So let's start by the fact that recognizing that we have real problems. There are too many poor people. Absolutely. There's too little mobility in our economy where people are coming out of poverty and succeeding, rising to the middle class and into wealth. Absolutely, that is a problem. There's a problem at the top of way too much friendliness, you could call it, between business and government. Cronism would be the technical word I would use. Way too many people making money in that sense off the backs of the taxpayer. All of those problems exist. And I would argue, and I will argue today, that all of those problems are made worse by our attempts to deal with the gap. Inequality is just a gap. It's the difference between what poor people have relative to what rich have or between what the middle class has and the rich or any way you want to measure it, it's a gap. From an economic perspective, from a moral perspective, from a political perspective, that gap means nothing is irrelevant and too much energy and focus is put on that, instead of actually going and solving the actual problems. So let's talk a little bit about inequality and what it is. So let me ask, let me start by doing this, how many of you have read Harry Potter? Alright, good, love this audience already. This is good. Now Harry Potter is a real problem when it comes to inequality. Because I don't know about you, but I have calculated that I have spent thousands of dollars on Harry Potter. I mean you can do your own calculation, but I had two sons, they were about Harry's age. Every time a book came out, either I had to go stand in line at midnight and get two copies, or they, you know, and they got old, they got to stand in line and get two copies, each hardback copies, right, because they wanted the heart off the presses, they couldn't wait and they spent the night reading it. I also wanted to read Harry Potter, I loved the books, so I had to get them on audio tapes, a third copy, so that's three times seven, twenty-one, multiplied by about twenty-five, thirty dollars, do the math, then there's the movies. What are they, sixty-seven movies, because they turned every book into two or three movies to get as much out of us as possible, right? So take into account all the money you spent on the movies, and then add to that the Disneyland rides and all the other Harry Potter stuff that we have had a purchase to make our children happy. I spent thousands of dollars, I indeed, if you look at my bank account, got poorer by thousands of dollars because of Harry Potter. But the real evil here is not only did I get poorer, what happened to J.K. Rollins? She became a billionaire. I mean, give me a break, this is horrible. Inequality exploded. I got poorer, she got richer. This can't be good. We're told, we are taught, we read in every newspaper that inequality is a bad thing. Well, here's an example of inequality. She got rich, I got poorer, she got rich off of my back. My money came out of my bank account, straight, I mean, a few other people got rich in the meantime, right, in the middleman, but straight into her bank account. And yet, we all feel like there's something wrong with this example, right? Why? Why isn't it comfortable to say, you know, this is a bad thing, right? Well, because what happened, why did we spend those thousands of dollars of Harry Potter? Why did we spend it? Yeah, because we enjoyed it, because it gave us pleasure, because it gave us certain spiritual values. We benefited enormously. I'm thankful to J.K. Rollins. If I met J.K. Rollins on the street, I would say thank you for letting me spend those thousands of dollars. No, I'm serious. I'm serious, I would. That's exactly what I would say to J.K. Rollins. Wow, the pleasure you gave us is unimaginable. Very few authors have ever given us as a family, not just for me individually, as a family, so much pleasure. So did I really get poorer? No. I mean, I got poorer materially, but spiritually, I think I got richer. And I was happy to give up those thousands of dollars, because I had fun. I enjoyed it. So I am richer for the having Harry Potter, and I don't. I'm happy that she got to be a billionaire. She deserves it. She made all of our lives better. She made the world a better place to live. And she got rich. Who cares? Life's not about money. I have to remind my leftist friends of this, because the left seems obsessed about money. But I don't think life's about money. I would rather read the book than have the money in my pocket. I think most all of us would. That's why we gave up the money, because we believe, let's say the book costs $25, that the book, the experience of reading the book is more valuable to us as individuals than the $25 in our pockets. And that's how inequality is created. How do you become a billionaire? This is important, guys, because you could go out and if we figure out exactly how you become a billionaire, it's open to anyone of you. How do you become a billionaire? What's the secret? Have a great idea. Lots of people have great ideas. I think I have a few here and there, but I'm not a billionaire. What's that? Well, that's a shortcut to becoming a billionaire. So let's assume we become a billionaire in a free market where you can't manipulate the dictator to give you the money, right? Yes. So in a sense, there's something true there, right? What is it that takes to become a billionaire? Have an idea and put it into action, I assume. Create a value. Create something that how many people want? Everybody, hundreds of millions ideally, right? Want it. And are willing to pay you what for it? How much are they willing to pay for it? Well, not everything. What they think it's worth, which for you to become a millionaire needs to be what? More than it costs you to produce. So the secret of becoming a billionaire is very simple. Create a product that hundreds of millions or ideally billions of people want. And if they want it many times over, even better and are willing to pay you more than it costs you to produce. Now if you do that, that's every billionaire out there, except for the crooks who have used Putin and so on. But in the marketplace, every billionaire out there, that's exactly how he became a billionaire. Steve Jobs indeed created this product, which costs, this one costs about $6 when I go back to States to get the new one. It's $1,000. Why am I willing to pay $600 for this? I wanted, yeah, but why am I willing to pay $600? I want a lot of things. I want a Ferrari. Since I can't get it for $600, I'm not buying one, right? So it's worth it, which means this is worth more than $600 to me. It might not be to you. You might not have one of these. I doubt it though. I sure otherwise I couldn't buy this. If I didn't have it, I wouldn't buy it. And if I didn't have the $25 to spend on, on Harry Potter, I wouldn't buy it, right? But I have the money and this is worth more to me than $600. That's why I'm willing to spend it. And by doing that, I am richer because I have an iPhone. And by the way, almost everybody in the world has one of these. So almost everybody, not in the world, almost everybody in the West and in large parts of Asia has one of these. So almost everybody in the world can afford this. And almost everybody out there is better off having one. I have a super computer in my pocket. This is more powerful than the Kray computers you were in the 1980s or the computer that sent man to the moon. It's pretty amazing. And yeah, somebody became a billionaire making these. Thank you, Steve Jobs. Thank you. Because I get a lot more value than $600 out of this. This is worth to my life. Tens of thousands, if not more than that, of dollars. I can, I can, I can Skype with my kids from the other side of the world. I can read them a bedtime story, which I could not have imagined when they were born that I would ever be able to do that, given my travel schedule. I can stay in touch with work, family. I can look up every piece of music ever, ever composed. And it's right here available to me instantaneously for almost no money. What's a subscription to Spotify or subscription to Apple music is nothing as compared to how much you get in return. I can watch movies and I can look up an encyclopedia. You remember buying the encyclopedia Britannica. I don't know if any of you ever and getting volumes once a month or whatever. Oh my God, it's all here. Every single one of those articles is right here at a cost of basically zero. So somebody became a billionaire making my life better. Why would I resent that? Why would I resent that? Indeed, I'm thankful for it. I'm thankful to the billionaires of the world. They have made my life and whether you want to admit it or not, your life's better. They move civilization forward. They invent and have the ideas that we don't, we don't affect billions of people in the world. I don't, I don't make that much money because I'm a teacher. I've chosen not to make a lot of money because by teaching, I only affect a certain number of people. I can't reach hundreds of millions, maybe with the new technologies I'll be able to. But as of now, I can't, so I'm never going to become a billionaire. Who cares? I don't care. So inequality is an expression of a reality. It's a reality that we produce different values that are worth different to other people. If you produce something that's worth something to a lot of people, you get rich. If you could use something that's not worth a lot to a lot of people, you don't. That's the reality. It's not anything mystical. It's not an issue of exploitation. It's not an issue of fairness. It's the reality. We're all different. If you look around this room, if you look around any room, we are all different people. We have different skills, different abilities, different inclinations, different talents, different moral character, different characters. Some of us are lazy. Some of us are hardworking. Some of us love to listen to music. Some of us only watch movies. We're different. And as a consequence of being different, if you leave us free, if you just leave us free, what will happen? We're not going to become the same. We're going to stay different. So if you leave us free, we're going to have different outcomes. We're going to produce different things. We're going to have different interests. We're going to follow different paths. So inequality is just a feature of freedom. When people are free, they're always going to be unequal. Now what do I mean by freedom? I mean freedom from coercion, freedom from force, freedom from authority, freedom from somebody telling you how you must live, what you must do, what values you must consume, and what values you must produce. The freedom from authorities and from coercive elements. That's the freedom I mean. And with that kind of freedom, you're going to have inequality. Now I'm not willing to give up that freedom for the sake of equality, for the sake of anything. I can't think of anything more valuable, certainly politically. Then my freedom to make decisions about my life, to do what I want, and to let other people do what they want. I don't want people telling Steve Jobs that he couldn't build an iPhone, or that he should just send an amount for the iPhone, or they should have certain features that it doesn't have. I want the genius that is a Steve Jobs to build the iPhone based on his vision. We all have benefited from that. I want J.K. Wallace to write the novel. She wants to write. Not the novels we vote to have written. I don't want the people who have real ability to change the world, the people who have the ability to actually make our lives better. I don't want them to be told, to be forced, to be forced into doing what somebody else wants. I don't want any of us to be cursed into doing what we don't want to do. You don't want to buy an iPhone? Don't buy an iPhone. You don't want to read J.K. Wallace? Don't read J.K. Wallace. That's the beauty of freedom. In freedom, you get to decide what you do. You get to decide what you sanction, what you approve up, what values are important to you, and you get a walk away from the values you don't believe are good for you. But in order to achieve equality, if we value equality, if we think equality is a good thing, equality of outcome, then how do we get there? What is the only way to get there? The only way to get there is through coercion. The only way to get there is by limiting people's choices, by telling them what they can and cannot do, by reducing people's freedom. So to achieve equality of outcome, you have to trade off freedom in order to achieve it. So I would rather have my freedom. I think freedom is more important for individual human beings and to let us all flourish and be successful. Again, I don't want to be cursed. I don't want to be told what to do. There's one form of equality that I think is crucial and essential for human success and flourishing and prosperity. And that is equality of rights, equality of liberty, equality before the law, if you think of law appropriately. Not equality of outcome, but the equality to live your life as you see fit, free of coercion, free of force. And that is exactly the equality that gets destroyed when we try to move towards the idea of equality of outcome, any kind of equality of outcome. Because the only way to get people to become more equal is to do what? What's that? To standardize, to limit, to reduce opportunities and to take from some to give to others. And to take physically, forcefully take in order to give to others in order to somehow bring about this equality. But they created it. J.K. Wallens wrote the books. What right do I have to come and take her stuff away? She provided a value. I've already, you know, I chose to provide her with those dollars in exchange for the value she gave me. By what right do I come to her and say, by the point of a gun, you have to give up more because what? Because there's equality, and it's an ideal, and we love it, and we want to achieve it. We call it a tax, yes. I know. We make it sound like it's not cursive, and it's not violent, and there's no gun involved. But try not paying that tax, and you'll see how much a gun is involved, and how much coercion is absolutely there. Yes, we call it a tax. But why? Why do we tax those who change our lives more at a greater rate than those who change our lives less? What does need have to do with it? And what, how do you categorize need? Does anybody need an iPhone? I think so. I think you need an iPhone. I need an iPhone. And who are you to tell me what I need? Who gets to the side? Do we need houses? We used to live in caves. So as human beings, as an animal, we don't need a house. We can live in a cave. Do we need a car? We used to ride horses. So do we need a car? And who is, who is anybody to tell Jeff Bezos what to do with a hundred billion dollars that he has? Not just one, he has a hundred. But I think it's a beautiful thing, because you know what it makes possible. It makes possible for Jeff Bezos to dream in a way that none of us can dream. It makes it possible for Jeff Bezos to think about how does he invest his money to take humanity to Mars? And wow, I think that's a beautiful dream, and it's his money, and it's he's taking the risk with it. And who am I to say no, don't do that? If it was up to me, Steve Jobs probably would have never invested an iPhone, because I would have said, ah, who needs a super computer in your pocket to waste of time. Now I can't live without it. Why would my limited imagination, limit the imagination of Jeff Bezos or Steve Jobs? I benefit enormously from Amazon. Yeah, when Amazon first came out, I said, what a stupid business. They mail you books, right? But it's changed my life. So instead of allowing people to be free and imagine and create and not telling them what they need and what they don't need. And if Jeff Bezos, if he wants to go to Mars, needs a lot more than a hundred billion dollars, and luckily for him, he's probably going to make it, right? And luckily for us, he's going to make it, because if he can achieve going to Mars, we will all, I think, our children or grandchildren will benefit from that fact and the science created around that and everything else that's involved. And instead of NASA deciding what should be done about space, let individuals decide with their own money what should be done without space. Instead of taking my money and I don't want to go to space, you're taking my money to send a man to the moon. That I don't need. I don't need my money going to sending a man to the moon. Amazon's money, Jeff Bezos' money, I don't care. Good for him. But you know, we talk about these things as benign, but if we want equality of outcome, why only in money? Money is just one type of outcome. There are many outcomes. We're all different. What about equality of good looks, or equality of intelligence, or equality of education, or equality of a million different parameters that we could have out there? Why only equality of money? Why is money so central? Indeed, if you really take your egalitarianism seriously, you wouldn't just want equality of money. You would want complete equality. And I'll give you one example. Granted, a pretty extreme example, but a true example, nevertheless, of what the striving towards equality can generate. So in the 1960s and 70s, a small group of intellectuals went to study in Paris. And they studied under the great philosophers, the Camus, and the Satras, and the Foucaultes, and all these great egalitarian philosophers who taught them that equality was the only thing that mattered. And what really matters in life is to achieve equality of outcome. They went back to their home country and they achieved political control. And now they could actually apply these things in reality. They looked around their country and they saw some people live in cities and some people live in the countryside. How do you make them equal? How do you make them equal? Cities have huge advantages. There's infrastructure and the people in the cities would tend to be richer. People in the countryside were subsistence farmers and struggling. How do you make the two equal? Move one to the other. You moved everybody from the city out of the city into the countryside and they literally did this. This is in recent history. They moved everybody out. But even in the countryside, all these people in the countryside, some people were educated, some people were not. Some people were smart, some people were not. Some people were good forages for food and some people were not. Now, people say, well, you educate and you bring everybody up. But these people in a hurry, they wanted equality now. They didn't have time to wait generations to bring people up. They wanted to establish an equal society. So what do you do? What do you do with the fact that some people are educated, some people are smarter, some people are more knowing. You kill them. This is the killing fields of Cambodia. If you wore glasses, they shot you. If you had a college or high school degree, they shot you. If you were good at foraging, they shot you. Two million people, 40% of the population was killed in the name of equality because they didn't settle for just monetary equality. Why settle for just that? They wanted complete equality. So in my view, I can't think of an idea given human nature, given how different we all are. I can't think of an idea more evil than the idea that we should all be equal. And if the idea of all of us being equal is bad, then why are we even trying to strive towards it? And the fact is that the inequality we have is not, as I said originally, in and of itself a problem. If the people who are getting rich are getting rich by producing values for all of us. And yes, when economists looked at my bank account, when Piketty, the famous French economist who wrote that wonderful book, 21st Capital in the 21st century, or it's like I like to call it Das Kapital in the 21st century, it's just German pronunciation for exactly the same title. When he looks at my bank account, I got poorer, they got richer. But I got richer for having read the books. And this is true of all of that phenomena. We get better when we are free. We get better when we allow the J.K. Wallins and the Steve Jobs and the Jeff Bezos to do what they do and allow us to do what we do. And if you want to solve the problem of poverty, then create lots of opportunities, create lots of jobs, create lots of opportunities for people to find work and rise up. The more you limit those opportunities, which you do when you redistribute wealth, the more you institutionalize people into poverty and you create those problems, you want mobility, create opportunities, maximize the opportunities in the world that they, and you do that by again allowing people freedom. So in the trade-off, the inevitable trade-off between freedom and equality, I'm 100% on the side of freedom. Thank you.