 It's not enough that the government recognizes private property. It's not enough that the government protects private property It's a system in which all property is private property that is That all the means of production all the land and Whatever you produce Whatever you create Is yours? It's not the states and the state has no Claim against it So capitalism is that political system in which the government's so responsible. These are protection of individual rights individual rights It's capitalism is the political system of freedom It's a political system in which individuals are free free from coercion free of force free To pursue Their lives to pursue the values that they rationally believe are necessary for their lives It's really important to emphasize That capitalism is the system of freedom Capitalism is the system where force is banned outlawed excluded and forces banned even to the majority Even to people who would vote to use it Voting doesn't supersede rights rights are inalienable capitalism is the system of freedom the freedom of action the freedom to pursue values It's not a system that guarantees you anything other than that you can act free of coercion that you can live In pursuit of your own happiness you can live in pursuit of your own values and importantly because of that Capitalism is a system in which the government is separated from your life the government is whole focus only focus is on protecting you not telling you how what to do and Not laying claim over what you produce and what you create and what you own so Capitalism is a system that demands this separation of state of government From economics, it's a system where the government has no say in your actions including in your economic actions unless You have used force against another human being in here I include Ford as force So it is a system of complete freedom You can pursue any value and as long as you're not Using force to interfere with the pursuit of other other people's pursuit of their values you are to be left alone and importantly Capitalism is a system that rewards The rational pursuit of values it rewards those people who are rational Who are productive who are creative who are builders who are makers in in that sense capitalism is a system of justice To the extent that you actually build produce and then Can trade with others? For their own benefit not trade to them as exploitation But trade as win-win, which is what the essence of trade is then You are rewarded for that Not rewarded by some central authority now rewarded by some committee now rewarded by something external, but you're rewarded By your very existence by by by the very nature of the action You are better off. It's win-win, which means you win It's a system of justice in which those who produce those who create those who create values Benefit and the more value you create The more you benefit, you know, you've often heard me probably if you've listened to my talks you've you've often heard me talk about You know how do you become a billionaire and the fact that in order to become a billionaire one has to create Enormous value for large numbers of people and do it at a price where you can make a profit and If you can do that over and over again and sell whatever product you have to hundreds of millions of people Over and over again, you're gonna be a billionaire, but that's only because you produced immense value You produced immense value that benefits hundreds of millions of people through a mutual trade through win-win relationships, so again the focus on capitalism is on The freedom Your rights being protected with rights of freedoms of action on the win-win nature of the transactions of the interaction The voluntary nature of that interaction Because we're all free It's all voluntary who you employ how much you pay for them. How much they're willing to take What you sell at what price Who buys all of that is voluntary. That's the essential characteristic of a free society. That's what freedom means The interactions are not caused so that is kind of the The political system the social system perspective on it and it in some sense from a more perspective There's a perspective that many people take that that's all you need But I think you also need to understand how such a system works economically and the essential characteristic of the system economically is that it allows Great producers to produce to create to build and it rewards them to do that and When somebody produces creates something that is no good It punishes them for doing that and it punishes them on multiple levels and the reward is on multiple levels Give you a quick example If you produce a product that let's say you have a startup and You produce something and the market likes it you sell a lot of it Then not only are you gaining revenue from the from the people buying your product But the markets banks financial markets look at you and say oh He produced something of value People are buying it. There is real potential in the future here. We're gonna lend them money We're gonna buy a stock. We're gonna provide him with capital So what you get here is an ongoing so go as long as you're producing quality products quality based on the fact that people are willing to buy them and You can produce a profit through that that will need to buy them at the price higher than what it costs you to produce Then you can raise more capital grow the business produce more and more But if you slip If suddenly your product is shoddy and people are not willing to buy it or It's quite possible a competitor rises that produces something better than yours Produces something more efficient more productive cheaper better by any dimension Suddenly you don't have that revenue suddenly your market shrinks and Unless you can convince the financial markets the banks the capitalists That this is a fluke and you can fix everything and everything will be fine And and you've got a plan and here's the plan and you can concretize that plan and make it real to them Then that source of capital will dry up and ultimately you will go out of business But again, this is an act of justice you make money when your product is a value to people and You lose money when your product is for whatever reason your fault or not your fault Not a value to the minimum and essentially You know, that's the essential characteristic of a capitalist economy the essential characteristic of a capitalist economy is the production of values and What determines if it's a value other consumers and the whole if you if you if you look at how businesses are created and what You know how they grow and and and how they evolve a key feature of that is the role of what we call capital is the role of People who finance your company. You can't start a company without financing. You can't grow a company without financing So the gatekeepers the allocators of capital that the Determiners of who is successful and who is a failure other financial markets and institutions and I've written and spoken a lot about this and They both reward those who are successful and they're very good and very quick at penalizing those who are not and reshuffling and reorganizing and reorienting an economy or business or an industry and again all consistent with voluntary interaction The financier doesn't owe you anything You don't know the finance see anything unless you have a contract and And The reason we have contracts is because many of these transactions that occur are long-term transactions They're not instantaneous. It's not me just selling you something you providing me with the cash Even there there is an implicit contract that what I advertise. You're actually getting But real detailed long contracts are required because most transactions under capitalism happen over time and they entered in again voluntarily They're entered in for mutual benefit. They're entered in as a trade she've got The creation of value at the heart of everything and to be successful in any point You have to be a value creator at the end of the day even to consume You have to have created some value so you can trade to get the product that you are going to consume There is no free lunch. There's no free anything. There's production everywhere. You look Production of what production of values values to whom values for The people who ultimately consume the product and that is true across the entire supply chain its crew in every single dimension Now note That nowhere in planet Earth do we have a system like this No one planet earth that we actually have a system of freedom No one planet earth that we actually have a system in which individuals can voluntarily exchange value for value Every economy in the world is controlled regulated taxed to some extent or another and every step of Every transaction What we live in today is a mixed economy Where people think capitalism is alive because there's some private property But even the private property we have is to some extent an illusion I mean we have the private property, but Ability to keep it is an illusion. I mean try not by paying your property taxes on your home Suddenly the home is taken from you. You're renting the home in a sense from the government. You're paying rent It's called property tax That's not capitalism Capitalism is the government has no claim against you There cannot be property tax and real freedom or your income you work to produce a value as a businessman or as a worker or as anybody in the whole chain in a chain of production and 20% 30% 50% 55% of it is taken from you Taken from you by force try not paying your taxes see what happens in other words You are gaining property your wage in this case by permission and Only only on the condition you can work and you can gain a living and you can make a living and you can gain some income Only on the condition that 50% of it gets taken away from you and If you're not willing to do that then you cannot work or you are in jail and You can't pay your employees what you want Particularly at the low end. There's such things of minimum wages. You can't pay your CEO what you want there are all kinds of ways in which taxes Impact how much we pay the people at the top then you can't do just straight contracts because Every aspect of everything that you do is regulated to some extent or another so Capitalism today does not exist There are features of capitalism. There are elements of capitalism There's the kind of the pseudo belief that we have property rights which exists everywhere Even in China people think they own the stuff that they own until the government comes and takes it away from them In the United States we have more of a process by which the government takes our property away from us But it still takes our property away from us In China you don't vote here you vote, but the differences in Fundamental terms Do not exist in both systems You are not free. You do not have capitalism What we have is is Variety of different forms of mixed economies Some that tax more some that tax less some that regulate more some that regulate less some that allow you to vote some that Don't allow you to vote Some that offend you and oppress you at the federal level at the state level at the local level But note that rights are violated at every single level capitalism It's not just the system in which the federal government keeps its hands off of you But it's a system of government. It's a system of government in which all Branches and aspects of government keep their hands off of you. It's a political social economic system where you are free To exercise your rights, which means your freedoms of action your freedoms of Action to pursue the rational values necessary for your happiness free of coercion free of force and That doesn't exist and nothing close to it exists So when we defend capitalism we need to be very clear that what exists today is not capitalism but because when you do that The the immediate comment that you get is well the socialists also say there's no cow. There's no there's never been socialism Then how can you judge? How can you judge whether the system is good or bad? Well first you can judge philosophically and morally is the system in which people are free To pursue their own values better than a system in which people are told Which values they can pursue and how is a system of force or a system of? Freedom better now a lot of people don't really get it that and don't really think about things on the principled level But what about examples and people want examples and people like examples and examples are important I think you have to know if you're gonna advocate for capitalism You have to know something about economics you have to know something about history you have to know something about examples And this is the thing about the difference between socialism and capitalism in terms of but there's never been the perfect system, right? That the socialists always tell you Capitalism to the extent that it is tried To the extent that it is tried to the extent that we have private property to the extent That we have freedom to the extent That the government stays away from market transactions to the extent that markets are left free to function To that extent One people are free to pursue their own values and the results are Massive economic success Massive economic success the results are from a wealth perspective overwhelming The more freedom you have the more Elements of capitalism you have an economy the better it does I mean you can show empirical study after empirical study after empirical study that shows exactly that and The opposite is true of socialism The more you have the state owning the means of production or controlling the means of production or regulating the means of production or taxing the means of production The more consistently that is applied The poorer the country is the more violent it is the more destructive it is and The less free people are by definition and there's no accident that those are the countries that end up with gulags or concentration camps so even when you look at degrees Capitalism is shines in comparison to any other political economic system in particular as compared to show social So degrees matter you'd rather be a little bit more free than a little bit less free You'd have it why they have more elements of capitalism than less What we need today, but I called a new intellectual would be any man or woman who is willing to think Meaning any man or woman who knows that man's life must be guided by reason by the intellect Not by feelings wishes women's or mystic revelations Any man or woman who values his life and who does not get want to give in to today's cult of the spare cynicism and impotence and does not intend to give up the world to the dark ages and to the role of the collectivist Alright before we go on reminder, please like the show. 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