 Thank you all for coming. It's it's a real pleasure to be here and a real honor to be speaking Really my first speaking engagement in London public speaking engagement in London under the To be honored to be under the auspices of the Smith Institute So thank you for inviting me. There are still seats up on it. I promise I don't buy it These are these are very difficult times To be defenders of capital to be defenders of free markets. I get asked all the time, you're on How can you continue? To defend free markets, how can you continue to defend capitalism given everything that's happening? Hasn't hasn't what's happened over the last 18 months prove capitalism and free markets do not work And I look at them and I say What are you talking about? What free markets? What capitalism? When do you see free markets of capital? that have failed because We understand free capitalism to me or free markets capitalism to me No government intervention and economy We understand capitalism to me a system of government where the government serves to protect and defend individual rights To defend us against force and against fraud but basically leaves us as individuals to contract and Negotiate and transact voluntarily with one another Then where is this capitalism that was practiced and then failed? Because that's what capitalism means and I think one of the one of the most important things Those of us who defend capitalism need to do is clearly define our terms We didn't have capitalism 18 months ago We didn't have free markets 18 months ago We had elements of freedom with elements of capitalism, but we had lots of elements of stating intervention in those markets heavy heavy elements of state intervention So first we need to define our terms Capitalism has not failed something failed But it means capitalism what failed is The mixture that we have the mixture of the regulatory state the mixture of socialism and capitalism the mixed economy Has indeed failed And to those of us defending capitalism that is not a surprise at all So I think the first thing we have to do is is is protect our terms protect our definitions Protect what it is that we need by capitalism and let's look at what actually failed What actually caused this financial crisis isn't the element of capitalism the elements of freedom a little bit of freedom that exists in In the financial and generally in the markets that has destroyed our economy Oh, is it the mixture of regulation and the mixture of state intervention that has caused this crisis And I think when one looks at the actual facts the sequence of events that have led to the crisis that we face today It becomes quite a quite obvious indeed Though what has led to the crisis we felt face today is government government intervention Primarily, I would argue The wall that the central banks of course They're very existence in my view take a radical position in the very existence of a central bank is evidence. We don't have capital I mean a bank that sets interest rates for all of us Interest rates are pretty complicated twice the set You know in the Soviet Union they try to set the place of prayer Right, and they always got it wrong. It was either too high. What happens when it's too hot you get Yeah, much of something or more common. They said twice too low, and then what happens? You get too little of it and you have those lines outside Wait for people trying to get the bread because they were so little of it prices don't adjust supply and demand Never match so a bunch of your crats in the Soviet Union sat around the table and figured what should be the price of bread today And they got that wrong red Is a relatively simple commodity to relatively simple but interest rates are far more complicated Well, and yet in the United States we trust 12 members of the Federal Reserve to sit around the table and decide What should interest rates be today? It's supply supply They get it wrong almost every time And if you want the source of this town crisis I would take you back to 2003 When in a wisdom the Federal Reserve in the United States and I know less about what the Bank of England was doing But I suspect something very simple the Federal Reserve in a in their Wisdom lower the interest rates to 1% when inflation Rated which banks bought like for one another where inflation was that three percent so The rate of interest was negative the real rate of interest was negative now. What happens when a rate of interest is negative Everybody follows money. You're so stupid. You're stupid if you don't The pain you to borrow my they're begging you to borrow my so everybody follows my and indeed if you look at the increase in credit Coming out of 2003 all the way through 2005 2006 it goes through the roof people Borrowing money by homes people are borrowing money on the credit cards people corporations were borrowing money Everybody was leveraging the investment banks went from 12 to 1 leverage the 40 to 1 limit Why not when money is almost free? And if this crisis is about anything This crisis is fundamentally about too much leverage too much debt too much credit And when you borrow that credit it basically One two three percent and then suddenly the Federal Reserve Jack's interest rates up right they underpriced it And they over-priced up to five and a quarter percent In the steepest increase of interest rates, you know, I think US history from 2000 You know starting 2005 2006 then suddenly something you could afford when it's just a one percent You can't afford any more when it's straight to five Suddenly people start defaulting on the religious and on the other day so this Christ Without any question is a classical Austrian economics Hayek and von Wiesers and economists like that would have predicted this case of bad monetary policy Now if there's necessarily anything, you know any such thing as good monetary policy Not a big believe in monetary policy, but this is clearly a case of Now he had onto that this notion of Housing policy in the United States the fact that it's part of the American dream to own a home American dream that's been encouraged by every president since FDR since the 1930s Whole institutions were created in the United States to help Americans Achieve the American dream and whatever costlessness are including subsidizing new mortgages Encouraging banks to lend money even to people who the banks themselves knew couldn't pay the money back But in order to gain political capital if you will to gain political favors They did it anyway because they will you know, they were asked to and in some cases required to by by legislation Freddie and Fannie, which was subsidizing Freddie Mac and Fannie Mae which was subsidizing mortgages Um, and it's just a bully pulpit. President Bush in 2003 was in Atlanta telling everybody that Housing was the American dream and his administration makes sure that everybody who wanted a house to buy a house in America And indeed home ownership in the u.s. Went from 65 percent to 70 percent in a very short period of time Anybody could get a subsidized mortgage at very low rates The banks weren't asking for anything in terms of documentation Prices were going up because You know a classic asset bubble the Fed was putting money the money was going into home prices prices were going up everybody's Spelt great until we just really started So the cause of this crisis not only do we not have a free market Not only it cannot be capitalism because there wasn't capitalism But if you look at the elements within our mixed economy that caused this crisis The elements clearly that caused the crisis are the governmental elements The elements of the regulatory state the elements of central banking and and all the various regulations in in the u.s Over the banking industry and over housing policy I don't think that anybody looking at the data honestly can come to any other So to me the more interesting question rather than what causes To me the more interesting question is why? as a culture in the u.s. And certainly in europe Why are we so eager? To blame capitalism Why are we so eager to blame the bankers? I think every single financial or economic crisis in the last 1,000 years Has been blamed on bankers I think the only differences in the old days the used to blame it on jewish bankers now they drop the jewish Because it's not politically correct anymore to blame it on jewish So but it's it's the bankers the bankers have always been at fault somehow Uh on these crises. Why isn't there was so eager? So You can see it. You can see the commentators of tv that you know, they're foaming They're so excited about this wonderful opportunity to go at the capitalism and people support it You know in america if you follow the elections the recent election You know obama and mccain competed with one another Who could be the most aggressive? Uh candidate to blame the financial crisis on wall street on capitalism on the banks There was no We markets pro banking pro market candidates in the u.s. This last Obama went out because he was more effective in blaming the crisis and you know because To life because he was not pushing was associated with pushing anyway as mccain was and you know one day he's charismatic He doesn't say much, but he says it with what he doesn't say he says we're past And you know you engage in kind of way and The truth is that americans truly did one change and to some extent they didn't care what change So why is it why was so eager uh to blame capitalism? I think this is really where um iron rand I'm just curious short hands. How many of you have read Something by iron rand Um This is iron rand real. I think innovation is is an is an identified The cultural philosophical moral roots of the antagonism towards capitalism um Why isn't that people are so eager? to blame business to blame capitalism to blame And I think the reason is that capitalism is inherently So much People under capitalism are pursuing their own suffering A businessman can hide behind The mantra of what they do benefit society and everybody's better off if they make a lot of money But bottom line is when they get up in the morning and go to work they're going to work to make money For whom? For themselves But they're sharing capitalists Everybody really under capitalism is in it for themselves The workers are going to work because they enjoy the work They enjoy the work Because they get paid for the work because they get paid for so that they can take care of themselves and their family Very few people get up in the morning and say Oh joy, I'm going to go to work so the world can be a better place That's just not how capitalists function They go to work because they love it Because it's fun. It's exciting. They go to work because they want to make a lot of money They go to work because it's what they It's the way they fulfill their lives, you know Steve Jobs I like my iPhone because I like to show it off And it's it's one of the coolest devices I think ever made um Steve just didn't make this in order to make the world a better place He made this to make Apple a more profitable successful company He made this because he had a passion for beautiful effective efficient products He made this because he believed him he believed it He wanted to see the the manifestation and reality of a product of his imagination was engineer's imagination It was all about him And Apple and that's what motivates capitalists But more than just the capitalists I provide as a capital. That's what motivates Most people within a capitalist economy. I think bottom line most people are pretty selfish most of the time I used to have my students. Oh when I taught I used to ask my students How many of you before you decided what to major at university made a list? Of all the different professions you could do and then rank them based on a social You know, what would maximize social utility And then chose that profession that would maximize social utility and usually they'd be one poor soul in the bag And then I asked them well, how many of you chose your profession based on what interested you Based on what you wanted to do with your life based on what you saw would be the most fun The most money the most interesting whatever But about your values and of course everybody raises their hands Because most people were successful before Function to try to benefit their own lives as much as they can and yet Yet when I say capitalism is selfish The people under capitalism behave in some interested way Even you guys are kind of squirming in your seats. That's That's kind of an uncomfortable thing to say But because what have we been taught since we were little kids? About being selfish I mean, I know what I was taught I come from a Jewish family and I was always told to think of myself last To think of others first to take care of others. That's what morality means Reality means the well-being of other people And if you think about yourself, it should be the last person you think of And to the extent that you think about yourself at best that's evil And it was it's evil Shea shea shea, you know, you that's That's what the kids are taught in the sandbox No private property in the sandbox I was I was uh You know when I talked to parents and they uh, you know, I I told them the sharing story in the sandbox All parents told their kids to share their toys and I asked them don't don't don't you think the kids get the hypocrisy But some stranger not for your door and asked to use your automobile Your car for for for the day to share your car. How many people would let them? One There's always one Nobody would you know, I'm gonna let just a stranger drive up in your car Um Yeah, you're gonna ask your kid to share his toys with the stranger every single time Why? Because we still have an idealized vision of kids and our ideal is some kind of Commune in which we invite everybody to share with all our stuff And now we as adults we're too cynical to actually do it Right because it doesn't work So we won't do it with ourselves But we project idealism onto our kids and ask them to be idealistic communists Even though we won't do be that Because that is the ethic that is in our culture the ethic of our culture is around Placing the world being of others first Altruism altruism doesn't mean being nice doesn't mean being friendly and polite And and being willing to trade it means being selfless It means self sacrifice Sacrificing oneself for others It means that the literal translation is other ism altruism is other ism It's an ism around, you know, it's a theory of others. It's not of yourself. Self is less Now in my view that morality that idea of what is good and what is small is incompatible But capitalism capitalism is about self now does that mean that The traditional idea of selfishness that you know, what do we talk to selfishness is that it's uh, You know, it's lying stealing cheating doing whatever it takes Well, I mean those of us who are you know, who actually trade out there and in the real world know That lying stealing cheating just at the very minimum just doesn't work You don't do well in business by lying stealing and cheating and indeed I would argue that in general in life The most anti-selfish thing you could do is lie stealing cheating It hurts you more than it hurts anybody else. It's a disaster. I mean, I'm sure you've all told the lie At some point in your life. It's not a good idea It messes up, you know your relationships and messes up your thinking it messes up your ability to function in the real world The real world is the truth now. I find You know as we get older I find that it's hard enough for me to remember what actually happened Never mind if I have to remember what actually happened in the lies You know one of the ways you you make yourself more efficient thinker Is to just focus on facts just the truth And leave all the rest to side. That's what being self-interested and selfish really means Yet a culture that is driven by altruism Where altruism is the dominant effort I think is always looking for the flaw in capitalism Because those bankers are clearly Suffaged we know that and we can't deny it and the bankers Try to deny it and nobody believes them And yet in our culture selfishness equals lying steered and cheating So when they do when one of them lies steals and cheats, what happens? We go See Told you so if one of them does it they all must be cooks And let's regulate all of them Which is one of the ways in which we get regulations time. It's everything. It's all being toxic in the united states It's massive regulation of all business That was passed in uh in uh 2002 I think was And then it came as a result of enron You know, there was some bad guys in enron who did who committed fraud But the extrapolation was See told you so if you leave them alone. This is how selfish people behave. Therefore we need to control everybody All businessmen the innocent business. They have to suffer for the sins of a few But that comes out of this suspicion of anything so interesting It comes out of this morality that we're all ingrained That is part of the fabric of the culture we live in That is going to be time and time again. It's suspicious of capitalism suspicious of markets suspicious of self-interest to be here and therefore I'd rather argue I would argue That if we are to defend free markets if we are to defend capitalism We need to acknowledge the nature of capitalism And be willing to defend the morality that underlies We need to be proud to be defenders of selfishness properly defined We need to be proud to defend self-interest properly defined And for that we need to we need to reject this notion of Altruism and what altruism means we need I don't think I know we cannot win the case for capitalism if we play into the the hands of a morality It is in principle opposed To capitalism and too often defenders of capitalism have tried to do this The conservatives and and that's a little bit is considered as the American conservatives Although I think many of the very conservatives suffer from the same same problem The conservatives in the us think capitalism is a great economic system They get they get how it creates wealth and how people are better off under it But they find it distasteful Because it's focused on self-interest So for example, urban crystal a famous american neo-conservative wrote a book called two cheers for capitals Now why only two cheers? Why not three? Because it's a system that promotes self-interest and selfishness Not only that it rewards it right if you make if you make a lot of money for film you get big bonuses You encourage to make more money to be more successful I mean co-pay bonuses all of that are rewards for selfish activity For being selfish So urban crystal said no I cannot get capitalism a third cheer It's a good system and what's economically? Well, but it's a little distasteful Now, I don't think you can really defend capitalism Based on that the offender of urban crystals Michael Novak Gave a talk in Asia about the virtues of capitalism And he goes through the whole talk about how wonderful capitalism is, how good it is And he gets on the last segment and he says look Even though it produces all this wealth and it's really good and everybody benefits You know, urban crystal gives it two cheers I don't really think it deserves that. One cheer is good enough And this is in a big speech, defending capitalism, this is the conservatives They're altruists, they bought into altruism, they believe in altruism, they committed altruists They cannot mesh that with their understanding of capitalism and they try a balancing act And the reason, and as a consequence, what happened to the conservative movement in the United States is that it drifted leftward It drifts towards the left Because whose economic system fits perfectly with altruism or the socialist? They're collectivists, they're oriented towards others, sharing all of that Far more consistent with socialism The conservatives know this deep down And they're willing to continue to see compromises with altruism And they continue to see drift leftward That is being the history of American politics for the last 100 years How the white has moved left You know, there are a few blips in the other direction But the systemic, the long-term projection is left And I think the cause of that is the fact that they never bought into the ethics associated with capitalism The libertarians on the other hand Tend to avoid all discussion of ethics altogether That's not for them That's philosophy We start with the non-initiation of force We're not interested in morality And I think, by doing that, many libertarians have given up on the real battle for capitalism Because again, I believe the real battle is not at the level of the non-initiation of force I think you have to prove the non-initiation of force I don't think the non-initiation of force The non-initiation of force is this idea As long as we don't initiate force against one another Everything's fine and the government doesn't initiate force, that's fine But how do you convince people that that's a good idea? Most altruists think that initiating force is fine As long as you're making another person better For example, tax is a good use way to initiate force Because you've got too much He's got too little What can be immoral about me taking some of your money and giving it to him? It seems like a completely reasonable thing to do If you're an altruist Libertarians can't win the argument just on the basis of politics In order to win this argument, we have to go to morality We have to argue against altruism as an ethical system Against the notion of selflessness Against the notion of self-sacrifice And for the notion of what I'm going to find as rational egoism, rational self-interest And let me just spend a couple of minutes outlining what that actually means And I encourage you to read Aimee Read some of her nonfiction essays In which she deals with this in more detail But this is not about the life stealing and cheating This is about figuring out And this is hard work In my view, being self-interested is very hard work Because it's not about life stealing and cheating It's not about doing what you feel like doing There's feelings on our tools of cognition Just because I feel like doing something doesn't make it good for me Being rationally self-interested means really thinking through Figuring out what is really good for me Over the long term Over the scope of my life What are the actions? What are the values and the virtues that I need to hold? Over the span of my life to make me The best person I can be The happiest person I can be The most successful person I can be That takes thinking It takes hard work It's not about being driven by your emotions It's not about Lying, stealing, cheating Which are anti-productive, anti-selfish actions It's about really figuring out what makes you happy And how one goes about achieving them It's about figuring out how to be productive How to make a living And going about figuring out how to do that as well as one can do So in my view, if we're going to defend capitalism If we're going to save capitalism Clearly, in the US at least, a clear leftist drift It's, I think, slow, but it's a clear left wing drift We need to start advocating not just for the economics of capitalism Which I think, by the way, the economic arguments of capitalism were made As well, 50 years ago as they are today The Austrian economists, some of the Chicago economists Have solved, I think, the puzzles from an economic perspective There's nothing new in economics that needs to be done In order to save capitalism We need to start together with those economic arguments That need to continue to be made We need to start making these moral arguments We need to fight for something that people are still quite uncomfortable with This notion of rational self-interest This notion, and I think, at least in America I think it's a little more difficult in Europe America has this wonderful political heritage It has this founding document A document that has, I think, in the most profound Political statement in human history It has a statement that each one of us has an inalienable right To our own life, our own liberty And in the most selfish political state in the history of mankind Each one of us has a right to pursue our own happiness Not the happiness of the community, not the state Not anybody else, but our own happiness The way to pursue happiness is profound And I think that that's what, you know That's what the pro-capitalist movement At least in the states needs to latch on to that Because Americans still believe in that to some extent And if we can give that content If we can give that a philosophical grounding I think this is winnable This battle that we're all fighting Many of us are fighting for more freedom More capitalism Freer markets So, I hope you all join me Read Wineland Educate yourself about these small issues I think they're really crucial And let's bring the debate, let's make this debate deeper Let's make this debate not just about the economics of the debate I think we've won a long time ago Let's make this debate about morality And if we do, I think the future's ours Thank you I think that Adam Smith will be intrigued But perhaps disturbed by your arguments Because while we don't owe dinner to the altruism Of the brewer or the baker, as he might have said It's not in time for self-interest That we pull the drowning child out of the river What's the answer? Well, I do think it's in our self-interest That we pull the drowning child out of the river Under certain circumstances And I think there are certain circumstances Where you wouldn't pull the child out of the drowning river You know, in circumstances where you are sure to die And it's not your child It's not clear that that's the appropriate action Or that's an action that most of us would take But I think it is Adam Smith presents the best of the alternative case for capitalism A case that I think has failed But I do think it is a problem It's a problem that we need to face Because ultimately the justification for capitalism That Adam Smith provides That I think many defenders of liberty have provided Is the social well-being aspect Ultimately, it's a form of utilitarianism And I think that that is a... I think it's a case that is now winnable It is a case that once you accept That there's some kind of social utility function Out there that we're trying to maximize Now you can have lots of arguments and lots of debates On how to calculate the social utility Who gets to say... Who gets to say in calculating it There is no principal guidance in terms of What a political system should look like Under utilitarian system And I think the fact that that argument Has been around for several hundreds of years now And I don't think gaining traction I think quite losing traction Is to me suggests that the utilitarian argument Has been won by the left Not by the pro-capitalist elements And we need a better argument Which I think I may have provided Why would you jump into riveting a drowning child Why is it in your self-interest Under certain circumstances to do that I think this human life is a value to you Every human being is a potential ally to you As a potential productive person As a potential wonderful thing I mean we take care of plants in our homes Because we love life We like to see them blossom We like to see them grow Life is a value If we're willing to water plants A child is much more valuable than a plant I would certainly jump into the room Under the way certain circumstances But I don't think it's a moral obligation When they had the American election I wondered if the Republicans moved To the religious right That actually put people off So the Republicans have moved Towards a religious way To what extent they've put people up I think it did I think there's no question That the Republicans have become A party that owes its success To the extent it has its success To the religious right And therefore has alienated much of the population The evangelicals unfortunately dominate The internal process within the Republican Party Where candidates are chosen So even though those candidates Are often not appealing to the general population They get the nomination from the Republican Party Because they appeal to the internal mechanism My personal view is that the religious right Is the greatest threat to liberty In the United States today Much more so than Obama in the left Partially because the religious right Is fundamentally leftist Not the way it is when it comes to economic policy I think you saw that I don't know how many of you follow American politics But you saw that with the candidacy Of Mike Huckabee Who is the candidate of the religious right Very much a populist when it comes to economics Anti-free trade, anti-immigration Anti-wall street And very much wanting to move The party left with when it came to the economic And at the same time wanting to control our lives When it came to personal choices And wanted to actually at some point Said that he wanted to be Right in the Constitution So the religious play a bigger role in it Than it does today And actually Palin Who was McCain's choice For vice president Played the same kind of role Trying to get evangelicals By appealing to religion That her economics were very popular McCain and Palin started Every speech attacking The old companies and drug companies Big oil and big drugs So the people who provide The lifeline of western civilization Who run everything that runs on People who make us better When we get sick and have the potential To prolong human life Who knows by how many decades If they're left free Those are the enemies that the Republicans Need to be against I think that wing of the Republican Party Is very dangerous I think it's growing in influence I think that the Republicans If anything are going to move more Towards the religious right After the defeat in this election There's a battle going on within Between the free market people And the religious conservatives The religious conservatives Clearly have the out by hand It's going to be a real struggle Over the next eight years Of an Obama administration To see who wins with that struggle But if the religious right wins Then I'm not sure where For America lies Because it certainly doesn't lie with Democrats But nothing left of the Republicans Can I just ask a question To meet and drink to an objectivist Is that one of the problems With people's understanding about What's happened in the financial market Over the last 18 months or two years Is the fact that even amongst The supposedly intelligent members Of the Republican Party Is the ability to make abstractions And to understand calls and effects So your point about central banks Pumping the world full of cheap money Not just for the Federal Reserve Or the Bank of Japan Because the narrative To use a terrible new layer of expression Is that we are seeing the demise Of unregulated capitalism And if anybody who works in financial markets Will know that there's nothing unregulated At all. You've got salaries You've got the European Union You've got God knows how many regulations Anyone who works in banks will tell you How regulated it is. So how it does How do you think That the correct Interpretation of events If you open any mainstream newspaper Magazine or TV channel The same old messages we are seeing Of unregulated capitalism It's completely rubbish but unfortunately It's very difficult to And there seems to be very few people Apart from themselves and a few others Seem to be trying to counteract it Absolutely and I think the way to counteract it Is to speak up and I think the first thing Before we get to any of the more complex issues Before we get to the moral issues Or anything like that the first thing That we have to make is There is no such thing as unregulated capitalism There is no such thing as Cannot be afraid of capitalism Because capitalism isn't healthy The left has taken over capitalism It used to be that everybody was for capitalism Why? Because it was this mixed economy You could have a little bit more socialism A little bit less socialism But if you accepted this mixed economy as capitalism Then nobody's against it Everybody's for it because nobody's for pure socialism And if the mixed economy is this capitalism And Clinton was a capitalist Obama would say he's pro-capitalism What we need is to capture what capitalism really means So what I try to do when I go on television When I write something is First, this is what capitalism is Capitalism means unregulated free markets Now how many of you think our markets unregulated? Nobody even Nobody really thinks that But unless it's Pointed out to them Their mind doesn't go there Because you're right, the narrative is To use that whole word But the narrative is No, this is how you're supposed to think about these things What we need to do is change the narrative We need to start asking questions And you can do it by just asking questions Where is this unregulated capitalism? Where are these unregulated banks? Do you realize how many Lines of regulation there are In the U.S. bank regulation bills? Every aspect of a bank's Functioning is regularly Every aspect You know, from the fact that in the U.S. We have deposit insurance now Of course you in the U.K. have unlimited deposit insurance So We don't care where we put our money Which bankers put our money because We don't have to think about who's safe Who's not, make us all grade it Right off the bat Of course that creates Huge moral hazard on the part of the bankers The bankers as they get into more financial stress Have a greater incentive to take on more and more risk Because it's not their capital It's their positives and their positives don't care Because they're government guaranteed It's a really interesting phenomena In the U.S. that, you know, I know this Back in the 80s In the 80s the U.S. went through the S&L places The Savings and Loan places where these Savings and Loans were going back up that way And what was fascinating is that the Wall Street Journal Used to publish a little chart Which was which S&Ls around the country were offering The highest rates on accounts On checking accounts, saving accounts, CDs Money markets And they would see of course People want high returns People would send them huge quantities of money Because they were offering high returns Of course that chart was predictive Almost at 100% of which bankers Were going to go bankrupt But then 6 months most of the ones on this chart Were bankrupt So why were people sending the money To a bankrupt institution in the verge of bankruptcy Because we don't care because It's all guaranteed by the government They were doing when they got this money In those days they were paying 10-12% On some of the money Well they had invested in ventures That they expected to get 50-25% On Now what kind of ventures get those kind of returns Very, very risky I call it they were basically buying Lottery tickets And once in a while One of these banks won the lottery And they're the survivors Most of them lost the money That's why most SNLs may not have existed During the 1980s But the mechanism to make that happen Is creative I said just pointing out All these little regulatory aspects What kind of loans bank can make The very fact that the Bank of England And the Federalist are set to interest rates All of those We just need to Keep conveying this message Where failed is not capital Even if you don't make the positive point About what really caused the crisis Is a simple bank Just enough to get A narrative change And it's going to take a lot of work Because we're outnumbered We just are And unfortunately I've seen so many Free market economists crumbled With this crisis Something changed their stripes Or turned the other way I happen to think that a big part of that Is this small Yes With the idea of capitalism That causes people to switch I'm probably one of the In-house objectivists at the ESI Over the years I've been working on this for 900 years What do you regard As the role of governments In an objectivist society But in particular foreign policy In a sense So I think the role of government is The role of government is Police To protect us against criminals And to protect against For a judicial system A judiciary That arbitrates disputes And of course prosecutes those Committed for and committed crimes And a military That is protect us From foreign invasion From terrorist attacks From violation Of our property rights And you know I think there's an open debate At which point a violation Of American Of America's property rights overseas Would justify A military intervention I think that's a debatable issue Of what point that happens But I certainly think there is a point In which massive confiscation By a foreign government of American property Is justification enough For us to use a military force To protect the individual rights of its citizens So the overarching idea is The role of government is To protect the individual rights The individual rights of its citizens That's why we have nations Rather than the individual rights of all citizens All over the world American government is set to protect the individual rights of Americans UK government is set to protect the individual rights Of the British Now if all governments are doing a good job at that Then you know they all look the same And there's not much difference between them Unfortunately we don't have that kind of circumstance I'm not sure I get a sense that you're asking more In terms of the foreign policy But I think A government is set to Protect the citizens So if it's attacked, its job Is to defeat the enemy As thoroughly, as quickly With as few casualties to itself as possible And then bring the troops home So my view is Crush the enemy and come back home No nation building No martial plans No helping established democracy In the world as Bush would have liked No setting up puppet governments Overseas You penalize the people who've Inflicted, who've Violated your rights And you get out of there as soon as feasibly possible Again, the criteria for all those Actions is What is the action necessary to For the interests of your citizens While minimizing the risk To your own decision How do you reconcile The basic enemy objective Maybe we need to please The mass of the majority If they don't fight that So I don't reconcile Objectivism with democracy I don't I'm against democracy If democracy Is understood as majority rule That is I'm against the Athenian style of democracy Where they don't like what Socrates has said So they all get together in the arena And they vote to execute And of course Socrates takes the poison Because he believes in democracy too And the people have spoken And Plato's sophisticated escape plan Goes to waste So I'm against majority rule And I think this is why defining the role Of government is so crucial If I know all the government is protecting Individual rights Then no majority Should ever be allowed To violate somebody's rights The fact that 51% Of the people want me silenced Gives them no way To actually do it The fact that 51% Of my neighbors want Me to keep the trees And I want to chop them down Gives them no way to do it And I'm sure in the US today And I'm sure in many other countries they can't My neighbors can decide what kind Whether I build onto my house Whether I chop down a tree or not All of that is decided democratically In the United States America's moved towards democracy The whole idea of a right to property Is an anti-democratic notion It says that 51% Of the people can't vote my property away from me Eminent domain Which is democracy is applied to property in the US Freedom of speech says 91% can't silence 99% of the people can't silence So I'm a strong believer In constitutional republic In the context In the framework like the founding fathers Of the US establishment Where they are individual rights Nobody can take them away from you No majority, no democracy The things people can vote on are very limited They can vote on their representatives And their representatives can do very few things Things like Clear a definition of what Property rights actually mean Property rights are an evolving concept That new challenges the property rights Continuously, we need a legislature To continuously define And look at how you define property rights Of the internet, how you define property rights Over minerals They went a long way in the 19th century For example, property rights And at some point in the late 19th century All new thinking about property rights Basically stopped And today we don't have property rights Today it's just whatever the community wants So I think we need to get away From the market And towards protection of individual rights And away from the majority And towards people voting On very narrow things Only things that are not Violations of other people's rights First, if you say a few words about modern people And secondly, presumably The reasons you are too committed You would be very much against Legislating Against Holocaust denial Second one is easy I'm definitely Against legislating against Holocaust denial So if somebody wants to deny the Holocaust They should have complete freedom to do so I think it's despicable But that's just The legislation has no role Yeah, freedom of speech is absolute One part is a little bit more complicated I really dislike Ron Paul quite strongly I think Ron Paul is The Long kind of Combination of libertarian Which combines A strong religiosity And as a consequence An unwillingness, for example, to take a stand On abortion Or fudge your stand on abortion By saying it should be left up to states I.e. democracy I claim it should be left up to states I.e. democracy I claim it's an individual right We're never saying you're following it It's an individual rights question It's either you're violating individual rights or you're not And it should be an absolute yes or no It shouldn't be up for a vote I haven't a say that abortion is fine And the mother has rights And the fetus does not But whatever you've followed It's an individual rights ticket stand It's very accommodating on religion And Ron Paul is Quite religious himself I also dislike his foreign policy A lot I think that Ron Paul And many in the American libertarian movement Came out strongly With this idea that 9-11 was America's fault It was somehow Our presence in the Middle East Or something like that that caused this I disagree with that I don't have the time here to go into it But I disagree with that strongly I think the notion that America should apologize after 9-11 Which is what many of these Many of these libertarians wanted I think is horrific I call it A certain wing in the libertarian movement It came out of Which is Anti-American in a very, very Deep sense It comes out in sections for the Soviet Union Over America They hate government so much Because they're anarchists They reject that hatred on the American government More than they do on any other government in the world And I think that's what led them To blame every crisis in the world It was America's fault And Ron Paul unfortunately I think comes from that tradition So I oppose them also And now I love the fact that In a debate he could say this should be a better result That was fabulous And there's certain things that he said that were just great But he also carries this other baggage That doesn't matter One section is no situation And everything is taken all at once I've got a very simple question Are you optimistic? I can't even remember I'll remember the point So optimism Socialism is not compatible with altruism Because I'm forced to pay taxes It's not altruistic at all Secondly I agree that the present crisis Is a catastrophic failure of monetary policy That if we didn't have central banks Would it have been avoided And the last one then The emotional book for your narrative You need an emotional book as well As a logical rational book Otherwise you won't be able to land it Yeah I just thought about it Alan we spoke about rights and foreign policy I was wondering what the status would be Of torture regardless And then taking torturing Okay Okay Socialism is not progressive How about we do this Let's leave emotion And torture Emotion and optimism to last Because you want to end on a positive note Let me do socialism, torture And then No there's nothing in altruism That says that it has to be voluntary Otherism does not Acquire you to voluntarily sacrifice It's fine For most people to sacrifice There's nothing in the Christian ethic There's nothing in the Jewish ethic In the Islamic ethic There's nothing in the Continent That suggests voluntaryism If I think you're not giving enough To the poor It's completely fine for me to force you to give More and you'll still land up in heaven As a consequence So the fact that you were forced to do it Doesn't change its moral status Necessarily But the other orientation Is Consistent with socialism You can sell socialism With altruism much easier Than you can sell capitalism with altruism Capitalism is unaltruistic Even though it's voluntary Even though it's charitable Even though people give more under capitalism to charity Than they would under any other system Their formal pro-life pro-charity Pro-people Than under any other system Their motivation is not altruistic It's selfish fundamentally Even when they do charity And altruism is up That's a quick answer Torture How many of you watch 24? Oh, yeah There's a percentage of you watch 24 There's no question in my mind That under certain circumstances Life or death circumstances Torture is absolutely maul Not only that, I would argue That it's a maul and excessive That not to torture somebody That torturing them will save lives When you know that that person is a bad guy I'm assuming that Torture a person is a bad guy You know the person is a bad guy And lives will be saved if you don't Then it would be immoral not to torture Because then these people are dying I'm also assuming something else that tortures is effective I have no opinion one way or the other about that That's a technical question You have to ask the experts I think it is But that's just a personal opinion I shouldn't have been Israeli military intelligence A long time ago I didn't actually do any torture I'll give you an example And actually this comes from a leftist Alan Dushowitz Who's an American leftist But is written on torture And this example is You make it personal Your child has got a bomb strapped And the terrorist is right in front of him And only he can dismantle the bomb Are you willing to do whatever it takes To get that terrorist To dismantle the bomb My question is about terrorist suspects As opposed to known terrorists I think that's usually where the question is There's no question There are great areas here You don't torture somebody you don't know But It's what I like 24 Because it presents these kind of mall deliverance There's a new going on in Los Angeles right now You've got a person that you convince 80% is a sponsor He's the only one who can dismantle the nuke The nuke goes up and 50,000 people are going to die What do you do? Well there's a certain point where If he's innocent There's no torturing will be ineffective It would be stupid to waste the time You've got a bomb to dismantle At some point it becomes the only practical thing to do It's great And that's why it should only be An extraordinary circumstance And you know I think it's left to the experts To make those kind of evaluations So I don't rule torture out Is my point But it certainly don't suggest That every criminal should be tortured Or every suspect of a crime should be tortured Emotion and optimism Emotion and optimism I am optimistic And I do believe that we need to make an emotional case For capitalism And as you can see I'm a pretty emotional guy And I think we can make an emotional case I think we have to make the rational case But we can do it with passion Secondly I go back to this notion of the pursuit of happiness At least in America We can hook people With this idea Of here's a morality That completely Justifies Provides a basis In philosophy and morality For your pursuit of happiness You don't have to feel guilty For being successful You don't have to feel guilty For working hard and taking care of your family And not worrying too much about starving kids In Africa You shouldn't feel guilty about those things Americans at least And I think generally human beings Respond positively To that message of self fulfillment Self actualization Happiness, individual happiness Taking care of oneself and one family I think that is the message that needs to be conveyed And the capitalism Is the system that allows them to do that It's the only system That leaves them free To pursue their own happiness That's something people can really Respond to and relate to And the reason unhappiness is because of that People still respond positively to that message And you know I believe that Iron Man is probably the best Communicator of these ideas ever And part of my optimism Is the fact that Through many of our programs We believe that about a million kids in the United States Every year are reading Iron Man Iron Man sales In the bookstores are related to our own activities Iron Man sales at the bookstores She sells somewhere close to double What she sold when she was alive So that was struggling Sells about double the number of copies today Every day in the bookstores There was a best seller in New York Times Best seller in 1957 The birth rate is clearly upward More and more people Are talking about her ideas More and more people are taking her seriously Today there is a chair In the philosophy of Objectivism At the University of Texas in Austin A top 20 philosophy department In the world As a chair in the philosophy of Objectivism Their regular seminars Among philosophers to talk about her ideas You know they are at least Somewhere between 50 To 100 universities in the United States Where Iron Man is being taught on a regular basis So I am very optimistic Because I think these are powerful ideas And if we can expose enough people to them People respond positively to them Our enemy is ignorance And if we are getting these ideas out there People are reading the books People are being engaged with these ideas Then I cannot help but believe That we will Thank you all