 Thank you for hosting me. It's my first time at GFS. It's a real pleasure to be here. I was telling the philosophers that I attended a Orthodox Jewish day school 50 years ago that I copped in Jewish day school in the Hackney area a long time ago. So it's nice to be here. So, you know, what I'm going to say about inequality is quite unorthodox and quite outside of the mainstream discussion. Because what we're told today, really, any newspaper you open up or any discussion on television or any way about inequality usually says that inequality, the gap between the rich and the poor, the rich and the middle class, the gap in pay, income or wealth, that gap really is problematic. It is creating many of the problems that we have in the world today. And I've seen in places like the New York Times, any everything from the problems in the Middle East to climate change to every economic problem that we have today in the world, all of them blame in one way or another on economic inequality. Yes, I'm here to tell you that I think, I'm pretty sure actually, that inequality has nothing to do with any of these problems. There are lots of problems in the world. Lots of social problems, political problems, ideological problems, and many, many economic problems. Certainly many of the economic problems blame that inequality are real. There's a problem of poverty. There's a problem of social mobility. There is a problem of some people making money who maybe don't deserve it. There is a problem of slow economic growth that most economies in the western world, and the western world here I include parts of Asia, you know, places like Japan and South Korea and Hong Kong, places like that, that there's real problem of slow economic growth. The economies of most of these countries have dramatically slowed certainly over the last 10 years and really to some extent over the last 30 years. Growth rates in places like the United Kingdom and the United States are far less than what they were starting. All of these things blame on inequality, I would argue. None of them have anything to do with inequality. Indeed, there are. Our attempts to solve the inequality problems, to a large extent causing slow economic growth, lower social mobility, institutionalization of a class of poverty. There's kind of the inability of poor people to raise up from poverty, which is tragic, but I think is caused by our attempts to solve the inequality problem. So let's talk a little bit about inequality. So a lot of times this inequality problem is, you know, described as the problem of how we divide up the economic pie. We've got a pie, an economic pie. And, you know, like a pizza, big pizza. Big pie. The problem we're told with inequality is that some people have a big chunk of the pie, and other people have a little chunk of the pie. And this is unfair, and it appeals to us that it's unfair. There's a certain element that says, yeah, there's something wrong with that. And why? Well, because when we're hanging out together, or when we're in a family, and somebody brings a pie, we all expect to get an equal piece of that pie. Indeed, I assume you all have siblings, and you often will measure whether your mother has carved out the piece of the pie exactly the same as your sibling, and you'll argue about who got the bigger piece. Because you associate fairness in that context with having the same slice of pie. When economists and political theorists talk about the pie, they trigger this idea of fairness equals equal pieces, equal portions. But there's a massive problem with this analogy or metaphor of a pie. What's different between a pie and an economy? What would be some of the differences? There are lots of differences. What would be some? Just yell it out. You don't have to put your hand up. Just yell it out. Pie is a right of vote? Well, okay. Pie is an animal. I mean, there's a sense there. What does it mean that the pie is edible? That it what? It will diminish. It will diminish. And what happens in an economic pie? It grows. So a pie that's bought into the home baked and now is going to be consumed is, in a sense, a zero-sum pie. Any piece that I get, you don't get. And it will be diminished. It will be consumed. Generally, consumption. Consumption is the diminishing of something. Think of consumption as destruction. When you eat the pie, there's no more pie. You can't have your pie and eat it too. You know that one? So consumption generally is destruction. So by consuming the pie, it diminishes. But in the economy, the pie is, in a healthy economy, constantly growing. The pie is not static. And it's more than that. Your eating or you getting a piece of pie does not come at somebody else's expense. Let me give you a couple of examples. So I own an iPhone, which is a pretty magical device. Endlessly fascinated by this thing. Because those of us who remember the days when this didn't exist and really think about it, this is magic. I mean, I've never seen anything like it because to assemble everything that this thing does 20 years ago, you would have had to spend tens of millions of dollars. I'm not even sure then you could have done. You couldn't have paid. How much did I pay for this thing? Was it worth to me? Your first economics question. How much was it worth to me if I paid $1,000 for it? At least $1,000. More than because it was exactly $1,000, I'd be indifferent, probably stay home. You can't really tell. So it's more than $1,000. I can tell you, given how magical this device is, that this device is worth a lot more than $1,000. And again, 20 years ago, I would have had to pay tens of millions of dollars to get what this does for me. Because think about it. I remember the days, I moved from, I was born and raised in Israel and moved to the United States in my 20s. And I would call my parents up about once every three to four months. Why? Because it was so expensive. I couldn't afford to call every week. They couldn't afford to accept a collect call every week or to call me every week. Because long distance phone calls were really expensive. Some of us might remember those days. It was a long time ago. Today, I can video conference with my kids before they go to bed. Read them a bedtime story from anywhere in the world. I'd be into places like Mongolia, anywhere. And I can do that at a marginal cost of what? How much does it cost me? How much does it cost? Zero, basically. At the marginal cost. At the margin, the cost is zero. I'm already paying for wife. The extra call costs zero. So this is the most amazing communication device imaginable. And again, 20 years ago, you couldn't physically do that. You couldn't do a video conference. No matter whether you were the richest person on planet Earth, you couldn't do it. So it's a communication device. What else is it? That's incredibly valuable to me. Just that is probably worth more than a thousand bucks for me. What else does it do? Information. What's that? Information. Yeah, amazing information. Basically, every piece of information known to man is accessible through this. Again, you couldn't have had that 20, 30 years. There's no way to get that information. Because of the web, and because this accesses the web so fast, I have access to almost every piece of information ever produced by a human being in all of human history. What that is? These reels, you only had like 32 photos or something, and you had to really watch every time you took a photo and be careful. Now you can take 55,000 selfies and then choose the ones you really want, right? But it's an amazing camera. The quality is better than the film. And you can take an endless amount at, again, marginal cost of zero. What else is it? It's a paying device. What's that? A paying device. A paying device. I can pay with it. So I can credit card. I can, I couldn't have found a school without it. It's a navigation device. It's got GPS. I remember maps. First you have to figure out where the hell you are on the map. And then how you get to where you're going to open it up while you're driving. Pretty dangerous. Now, tells you exactly where to go. And we've missed on one, just one feature. What's that? Music. Music. Exactly. It's an entertainment device, not even just music. Every piece of music ever composed, ever recorded is available here. I can not only choose which of Beethoven's trios I want to listen to. I can choose what performance I want to listen to. And it's available to me instantly at a marginal cost of zero. Not to mention movies, books. Now books are not at a marginal cost of zero. I have to pay for the books. But I travel now. I used to, I used to have to go to my library when I go on a trip and pick which books I would, which book I would take. I could take one or maybe two because they're so bulky and heavy. Now I can take a library of 50 to 100 books on my iPad or my phone and travel anywhere and pick and choose on which flight I want to read which book. The iPhone is worth a lot more than a thousand dollars. So when I bought the iPhone, Apple made money. Apple's the biggest company in the world. Makes more money than any company in the world. And I got poorer by a thousand dollars, right? That's the pie, right? They got a bigger piece of pie and I got a smaller piece of pie because I gave up a thousand dollars, I got poorer by a thousand dollars. I'm going to take my jacket off because it's very warm in here. Is that true that I got poorer by a thousand dollars? Yes, no? Because I have something worth more than a thousand dollars. But if I'm an economist, let's say I'm Thomas Piketty who wrote the book on inequality. Then what do I empirically observe when I look at my bank account? I see a thousand dollars leaving my bank account and I see a thousand dollars entering Apple's bank account. Apple got richer by a thousand dollars. I got poorer by a thousand dollars. Inequality has increased. And yet I am much, much, much richer for engaging in that transaction. Now the richness is spiritual, not material, not dollar-wise. And if I'm a more sophisticated economist than I actually measure the assets I got, then what do I value this asset at? A thousand dollars. That's all we know how to do as an economist. There's no way I can measure what economists call the consumer surplus. That is the surplus value I got. We don't put a number on it. So at best I vote even at Apple got richer. Was redistributed. I'm poorer. There's even a better example than that. I don't know. Do you guys read Harry Potter? Red Harry Potter? Everybody read Harry Potter? So Harry Potter is a major problem. Because Harry Potter has caused massive inequality in the world. My kids were about Harry Potter's age so they wanted to read all of Harry Potter's books. So I had to buy all of Harry Potter's books. What were they, seven? I had to buy three copies. One for each son and one for me. Three copies of Harry Potter. Then we had to watch all the movies. I can't remember how many they were. At least ten. And then we had to go like Harry Potter wise and Harry Potter this and Harry Potter that. So I figure I spent three thousand dollars on Harry Potter. Which means I got poorer again by three thousand dollars. That pie shrunk by three thousand dollars. And what happened to J.K. Wallace? She became a billionaire. She got a big chunk of the pie and my pie grew smaller. And all of your parents' pies grew smaller because they bought you the books. Again, what are we missing? The fact that my life is better for having read Harry Potter. The fact that I enjoy reading it. The fact that I had a good time discussing it with my kids. The spiritual value of having read it. My life is much better for J.K. Wallace becoming a billionaire. And I would argue that you cannot get a big chunk of the pie in an economic sense. Without enlarging my pie somehow. Okay, unless you're a cheat, a crook. Unless you're committing fraud. You cannot enlarge your pie affecting the pies of other people. Gazillions of dollars is only because it makes the lives of Apple consumers that J.K. Wallace becoming a billionaire is only possible because she makes the lives of other people better. There are a few marginal industries where you can question this about drugs. Not the healthy drugs, the illegal ones. There will be an industry where they make your life worse but they get rich. But that's very unusual. That's a real aberration. 99% of wealth creation is created because we benefit from it. All of us. So the pie analogy is wrong first because it assumes that you are some gain. It assumes that your gain is my loss. But in an market economy your gain is my gain. You cannot gain unless I gain. You cannot make money unless I improve my life. I won't buy your product if your product is actually going to reduce my pie. It's going to make me worse off. I have no interest. So the pie is not stable. The pie grows. And the pie grows through win-win relationships through the fact that everybody participating in transactions is actually gaining. So that's the first sense in which the pie analogy is wrong. But there's a deeper sense in which it is wrong. And that is that there is no pie. There is no such thing as wealth of the UK. There's no such thing as income of the UK to then be divided up between people. There's no such thing as one big collective pie. I'm assuming you guys don't work so. You guys make the pie, I make the pie. Each one of us makes our own pie. And yes, as economists we like to squish all those pies together. There's such a thing as an aggregate pie. It's yours. My pie is mine. The pie is hers. Who the hell are you to take my pie and to squish it all together to create a bigger pie? It's mine. You're business. You make money. That is your pie that you are creating. You're not redistributing. You're not taking from other people. You are literally creating wealth of this created. All you have to do is compare the world in which we live it right now to the world in which we lived in 100 years ago, 200 years ago, 300 years ago. And there's no comparison. For a thousand years, for a hundred thousand years, human beings lived, I'm talking about today's dollars, basically 95 to 99% of humanity for a hundred thousand years lived under the equivalence of $2 a day. They've gone from $200 a day to from $2 a day to unimaginable wealth. Not just material, much richer than $2 a day, but spiritual in terms of the stuff enables us to gain values that again, unimaginable in 200 years. We are so much wealthier than our ancestors are. It is hard to concretize. It is hard to make real. And it's not just here. Look at the world. How many people today? So 250 years ago, 90% of the world lived at $2 a day or less. How many people today in the world live at $2 a day or less? What the United Nations calls extreme poverty. There's about three billion. I want a percentage. I mean, I could do the percentages in my math to be divided by eight, but let's do percentages so I don't have to do math. So that would be what? 30, 40%? Yeah. Okay, 30, 40%. Do I have any other guesses? 5%. What's that? 5%. We've got 5. 5.1. You're not getting a price for who's closest. 9.6. 9.6. Wow. I've never gotten such specificity in my life. What's that? No, okay. They're gaming the system. 30 years ago, 30 years ago, you were right in a sense that it was about 30% of people in the world were living on $2 a day or less. Today, it's 8%. 8% of the world population today, so whoever said that was you were right. 8% of the world population, somewhere around 8% of the world population lives on $2 a day or less. Extreme poverty is almost being eradicated from the world. Not at anybody's expense. That's just an increase in wealth. We're just wealthier. It's just grown. The pie is exploding. And the pie explodes when you let individuals make their own pie. So the idea of collectivizing the pie works against the actual growing the pie. Growing the pie depends on people being able to own what they make and to invest it and produce from it. If you think about when this transition happened between $2 a day or less and the beginning of growth, by the way, forever, with a few exceptions and civilizations here and there, generally, the idea of economic progress was unknown to human beings. You basically, children got exactly the same as their parents, usually a little less, because the more children you had, the more you had to divvy up the property among the children. That didn't work. That wasn't as bad as it seems, because even though people had a lot of children, most of them died. It's not just wealth that is increased. Think about life expectancy. What was life expectancy 200 years ago in England? A relatively advanced place. In 1800, what was life expectancy? Yeah, it was 39. 39. You guys are probably going to live well into your 90s. There's a good chance you'll live well into your 100s. If science and technology advanced, you could live well into the 100s. 120 is a nice number. And it's become realistic. It used to be just a wish, a whim. Now it's become realistic, scientific. A long ago, 39 was the max. Partially 39, why? Because how many kids made it to age 10? What percentage of children died before the age of 10? 50. Half of children died before the age of 10. Pre-industrial revolution. Today we take for granted, walk into a room, flip a switch, and there's light. Where are we in life from? Oil in the late 19th century. What fueled the light before the late 19th century? Well, kerosene is oil. And kerosene was only invented in 1850. There's no kerosene before 1850. Before 1850, oil is considered... If you had oil in your land, your land was worthless because it didn't grow anything on it. Oil was only became a value to human beings because of science. And after 1850 or so, 1840, what fueled the lamps before that? What was the oil that they put in the lamps? Photos of fuel. What's that? Olive oil. Olive oil. Way back, maybe. Yes. In the middle. In the west? Whale oil. So for a long time, it was whale oil. One of the reasons the whaling industry was so big in the 18th century and the early part of the 19th century is because whales were killed in mass. Not for food for the oil because it was an incredibly efficient way of lighting land. Indeed, kerosene is probably what saved the whales because once we had kerosene, once we had oil, we stopped hunting whales in such large numbers as we did before that. But how many people could afford whale oil? Very few. Like the aristocrats could afford whale oil. Everybody else lived in darkness. You basically went out. You went to work when the sun rose in your farm. You went to bed when the sun set because there was nothing to do afterwards. You couldn't read. No TV. No iPhones. Nothing. So what was the transition between that kind of life and the life we have today? A life of wealth and the transition. What do you think that changed? The industrial revolution. When did the industrial revolution start? 1850. 1850 is a little late. When would you say the industrial revolution starts? 1750. What's that? 1750. Yeah, somewhere between 1750 and 1850 is when you start seeing a dramatic increase both in life expectancy, quality of life and in wealth creation and income starts going up dramatically. Anybody have a particular year between 1850 and 1750? I mean, I have my favorite year right in between it. 1760. What was that? 1763. 1763. I don't know what happened in 1763 so it's all my favorite year. My favorite year is, and I know the Brits don't like this, my favorite year is 1776. And they have three reasons why 1776 I think is a crucial year in human history. And really the year in which our lives become dramatically better. Three things happen. One, it's the fear in which the steam engine is first commercialized. So you get the first application of a steam engine in a factory in a way that actually produces stuff. So you get the beginning of an industrial revolution. Second, there's a famous book published in 1776. The Love of Nations by Adam Smith which is really the first book that systematizes our exploration and understanding of economics and presents a certain view of economics that basically says market's work. And if you leave people free to produce and to trade, importantly, good things happen. Economies grow, production happens, and good stuff happens. If you leave people that, if you give people that freedom and you don't try to intervene and you don't try to centrally plan and you don't try to control, then markets work that was Adam Smith's The Love of Nations which anybody's interested in economics or the history of thought an important book to read. And what's the third thing that happens in 1776? Maybe the most famous of the three. The Declaration of Independence which in spite of the idea that it's basically a impudiation of Britain is much more than that because the Declaration of Independence is really a universal document. It is not, I believe a specifically American document and indeed the way it's written it's written in universalist language. It says that all men are what? Equal. For the first time in human history a political document actually says there are equal, not equal in outcome equal in what? Opportunity. Not in opportunities because opportunities are just another form of outcome. We're equal before the law we're equal in rights we're equal in our liberties and our freedoms. You're not different if you're born to family A versus family B. Now granted the funny fathers of America were very inconsistent so they didn't practice what they preached. They had slavery. But the idea of creating equal is it doesn't matter what skin color you have it doesn't matter what gender you have you're equal. All men are created equal. That is the idea behind the Declaration of Independence and it's an idea behind the entire intellectual movement that led to the Declaration of Independence which is what? What was the intellectual movement of the 18th century? Enlightenment. The Enlightenment is about equality it's about the pulling down of aristocracy. It's about the pulling down of hierarchies hierarchies that are imposed on us by the law it's about individual freedom it's about the individual's freedom to pursue your own life. And indeed the Declaration of Independence is not in terms of America but in terms of human beings. Every human being has an alial right an alial right to what? What does an alial mean first? Can be removed. Can not be taken away from. Have a right to what? Life, liberty and the pursuit of happiness so you have a right to your own life your life does not belong to a king it does not belong to the state it does not belong to a tribe it does not belong to some entity outside of you your life is yours to live based on your own judgment not based on other people's authority or other people's corrosion or other people's force they cannot force you to do what you do not want to do again these are the ideals unfortunately never fully practiced never went to liberty what does liberty mean? In this context it's really the freedom to think the freedom to speak the freedom to write this is the idea of free speech which again comes out of the enlightenment and you have a right to pursue your own happiness to pursue your own success as a human being based again on your values on your individual interests not to be forced not to be dictated it is a statement of individual freedom the freedom of individual to live his life as he sees fit it does not belong to you but doesn't rule you where your life belongs to you not to the state not to others but to yourself it is that idea as expressed in the declaration of independence as a consequence of being enlightened that leads to the wealth and prosperity that we have today it unleashed individual entrepreneurs individual thinkers to build and do things that nobody could imagine was possible without asking for permission without getting a stamp of approval asking the leaders if it was okay or not to go and invent something new to go to build something to train freely led to where we are today in terms of the wealth and prosperity we have it's freedom the freedom of the individual to act on his own behalf building, creating, trading with whomever he wants and that freedom creates inequality when we're unfree we're equal we're all equally poor and miserable and every society that is attempted to bring about equality has led to nothing but poverty and misery take a group of people any group of people and free there will be an equal partially because to a large extent it's the choices we make life's not about money many of us make choices that are against how economic will be some of us choose to be teachers most of us are pretty smart could have done a lot of other things in life could have made a lot of money I happen to have a Ph.D. in finance I could have gone to work on Wall Street millions of dollars fact is I don't want the millions of dollars you couldn't bribe me to stop doing what I'm doing right now I love this this is fun this is what I live for and most of your teachers love teaching they don't do it for their money they know that's not a path to wealth chosen to be less economically successful than other people who've gone off or invented new things or worked in the city and that's a beautiful thing it would be a really really boring world if we were all the same we have different values, different passions different interests, different motivations if you put us all on a desert island we'll do different things and if you come back five years later on that desert island people will have different levels of what you would consider wealth who cares means that we've made different now it's true that some of the reasons that we're going to produce differently beyond that could use force in order to correct inequality inequality is part of life the solution to the problems we have today which are real is not to try to resolve some pretense of inequality the solution is more freedom it's always worked the more freedom we have the wealth is created the better off people are societies that have large social mobility they're the freer societies the more freedom the easier it is for the poor to rise up the more freedom the bigger the pie even though there is no pie the bigger the pie is the solution to the real ain't trying to redistribute not trying to remake society but to move us back in a direction where we started this wealth came from which is the direction of economic freedom social freedom the freedom to pursue our own lives our own happiness free of coercion free of authority free of force thank you I'll take questions so you started with the idea that in order to make an exchange it has to be mutually beneficial I agree with that it kind of missed the broader point which is why shouldn't we redistribute in order to establish that you have to prove what you alluded to later which is that it prevents the pie from growing and I'm not convinced that that's true for one income inequality is increasing at a faster and faster rate and it doesn't seem that correlated with growth in the second place income and wealth inequality in the second place the real terms aren't keeping up with productivity growth since 1980 has not kept up with real wages so workers aren't sharing in the proceeds of whatever growth is happening so I feel like you maybe need to go further to establish that and then you kind of move on to this moral case where you talk about freedom and I feel like you haven't in any way justified why you're taking such a narrow view but people if you take a comparison in the US of like New York and Florida for instance in New York they have expanded Medicaid and they've made the ACA work for people so that people are less afraid of changing jobs because they're afraid that they're going to get their health insurance do the people in New York really feel like they're less free I don't think they do yeah that's why if you look at statistics people are leaving New York New York is a shrinking state a massively growing state so if you judge success of states by movement of populations then the population of New York is leaving because they're not happy then and they're moving to places like Georgia and Texas and Florida where they are freeing so I think the best indication it's like people say how do you know Cuba, life in Cuba has been tough because people are willing to swim in shark infested waters to get out of there that's how I know Cuba is not a good place and I think if you look at population movements across state lines you can figure out where people want to live and where don't they want to live and generally people are leaving California leaving New York, they're leaving Illinois they're leaving the old northeast which has that more status mentality and moving to areas where there's less of that but let me put that aside because you have a lot of questions and there's a lot of content there let me try to deal with it in a more fundamental sense rather than it's not like Florida's capitalist, the New Yorker's socialist it's like slight variations between them, it's not dramatic so I'd rather deal with the dramatic differences and then we can maybe do the subtleties so the first question was okay so I'm not trying to make a utilitarian argument although I could just say a system that redistributes wealth is bad because the outcomes are going to be bad I'll tell you why in a minute but I don't want to make them all kids I think it's wrong I think it's morally wrong for you to decide for anybody to decide how much wealth anybody should have and how much is appropriate to steal from them in order to give to somebody else why? because I think you have I go back to the Declaration of Independence I think you have a right to your own life I think your life is yours how much to produce and what you produce is yours you can then choose to give it away you can choose to do whatever you want with it so it goes back to the idea that I believe that your life fundamentally is yours and the force any kind of force all coercion is evil the coercion is the anti-life the anti-mind and if you value the human mind and if you value individual human life you should be against stealing but I don't make stealing legitimate by voting for it's just as illegitimate for a group to do something as it would be for an individual to do something so that would be the moral point now let's take the economic point and we can disagree about morality wouldn't be surprised me but economic point causes economic growth and we've got your economic teacher here so we might disagree on this but what do you think causes economic growth what drives an economy in my perspective consumption which is the classical answer and yet in my view completely wrong consumption does not grow economic growth and GDP but that's cheating because the way you measure GDP is you measure consumption if you measure consumption then the more consumption you do the more consumption you'll get which is what GDP is but economic growth is not driven by consumption consumption is the final act consumption is an act of destruction consumption is when we eat the pie and it's gone in order to consume what much you do before you consume something yep, produce so in order to have the money to buy the pie I have to work I have to produce in order to have money to buy the pie that's one act of production but somebody else has to work as well in order to produce the pie so for every act of consumption there's at least two acts of production happening what drives economic growth is production and it's sad that we don't measure it properly the GDP is a flawed measure because it emphasizes consumption and therefore we think that the more government spends the more consumption there is therefore the great economic growth is a theory that has been disproven over and over again all you have to do is look at Japan over the last 40 years where consumption, government consumption has been massive they've built infrastructure, they've spent money left and right and yet economic growth has basically been zero they've had three lost decades what you need is to maximize production and make production as efficient as possible and what is necessary for production savings savings are essential to production savings are future production because what do you do when you save what happens to the money you save what people do with their money savings are invested because if it just sits in the vault like anybody see Scrooge McDuck I don't know if your generation is familiar with Scrooge McDuck Scrooge McDuck likes to swim with his money he goes into the vault and he swims in the money it's not what happens, rich people don't have a vault and they stuff all the money in the vault they invest the money they put it in the bank, what does the bank do with the money how does the bank make money they have to lend it out to somebody who is going to use it maybe for consumption but mostly most bank loans are for production so the way you grow an economy is through saving an investment to save an investment who saves an investment if you want to maximize saving an investment you want to keep as much money as possible because that's what they will do with it which will then create jobs which will then create from a purely economic perspective from a utilitarian perspective absolutely the reason we have slow economic growth is because we have such high taxes on wealth on income it's because we have regulated business to the extent that we have and control them and put them into these neat boxes and don't allow them to innovate and really produce the only innovation we have today in the world is on this stuff because the government doesn't regulate start regulating the salary and you'll see a dramatic reduction in innovation and technology over the next 20 years because the government is about to break up the big tech companies and about to regulate the tech companies it happens in every field as soon as they enter progress declines so I think all the economic problems they've said let me just say something about economic statistics because it's fascinating to me the whole question of whether inequality is increasing right now is not a closed deal so if you actually look at the economics papers that are being published in economics journals right now there's a lot of debate about the data that Piketty and other are using there's a lot of debate about how to measure wages and whether for example benefit should be included in wages or not because benefits in the United States because the mandatory and the government has dictated them have grown significantly so wages might be stagnant but if you add wages to benefits they haven't been anywhere near a stagnant so there's a lot of debate just about the empirics where we hear in the media only one side of this because there's a certain interest of it you know what he was saying the whole question I mean even the financial times which I consider quite left but even the financial times wrote an extensive piece on how the data that Piketty uses to talk about inequality is flawed and problematic but there's been a lot of academic work on the issue of inequality that does not come out quite as easily as saying inequality is exploding because it's not obvious that it has and again how do we measure quality of life what is it worth that in America almost everybody has a smartphone not an iPhone but a smartphone what's it worth that they have it how do you measure the increasing quality of life that this makes possible the time saving that this makes possible you can't measure it in wages but now they can buy this where they couldn't buy it 20 years ago how do you measure them so there's a lot of issues and problems with wage data inequality data wealth data that is over simplified in the way it's typically presented so just two quite small points so there's mostly several corrections bad so say for example I'm Builder and Builder next to me or not Builder next to me say I'm drifting out of the sky that's something I can't work on I'm on the positive line I can't have anything to eat food so we had the Brick cancer? it's a bad example because the Brick has to come from somewhere but say for example who know for what of my own I get cancer you know cancer just around it I get cancer I can't work anymore you have to pay for expensive treatment isn't that a form of correction and that's all bad and you're forced metaphysical reality can curse you so corrosion is something only other human beings can do a lion attacking you is not corrosion it is bad and the Brick falling from the sky hurting you and you getting cancer is all bad but the different categories are bad and one of those categories is corrosion, corrosion involves other human beings forcing you to do something you don't want that's the that's what corrosion is in terms of the material of that though but it's the same someone putting a gun to my head and getting cancer yes absolutely it's the same one involves choice somebody's choice and one doesn't so I can't prevent you I mean I wish I could but I can't prevent you from getting cancer that is something beyond you know particularly if it's genetic or something that's beyond my abilities right but I can't prevent other people from putting it that to me is we create an institution whose job is to prevent people from hurting you which is called the police or called the law that rights law is preventing from doing that I can't have a law against cancer so corrosion in the sense of somebody choosing to hurt you that I think is always bad oh and then the second similar point was you said about the can they've had 30 years of stagnant growth yes they also have holding population and in fact if you look at life expectancy quality Japan is amazing they live for ages they have great lives they have amazing education so I think it's somewhat disingenuous to suggest that Japan is stagnating well okay so even if you control the population shrinkage Japan is the fastest shrinking population in the world but they're very happy they have long long if you don't know that they're happy they're certainly not as happy as by happiness measures that Danes are if you believe that and I don't but you know you go to Japan and the Japanese are no more happy and don't seem to let me talk to Japanese than anybody else I mean this idea that this is some kind of idyllic society I think is wrong and dangerous partially because they would say they're happy because they're homogenous and they don't have immigrants and they don't have people who look the same as they do and there's all kinds of other reasons why they might feel that way than maybe are not as pleasant for us to acknowledge so I would be suspicious of the idea that everything is great in Japan because if you talk to Japanese people they're complaining about lack of economic growth they're complaining about lack of opportunities they're complaining and this is why they constantly try to create economic growth the central bank of Japan is constantly trying to print money and lower interest rates and do all kinds of machinations to increase economic growth because they value it even if you far they call they live these idyllic lives I'm not convinced that that is actually the case I'm really sorry I'm going to have to stop you there thank you so much