 Thank you. Thanks for inviting me. Thank you all for coming this afternoon or this evening I'm not used to giving talks at 8 p.m. They don't do that in America You guys live night lives So I'm gonna make an assumption about everybody here, which I think is a safe assumption, but but Yell at me if it's not. I'm gonna assume that we all here understand and know The capitalism works Works in the sense of no, I mean I see laughter You don't know if it works or not Okay Anybody not agree or not sure No, it's important Seriously, okay I'll see a little bit about it just to just and you can ask questions But I'm gonna assume I'm gonna assume a certain understanding of capitalism as an economic system Works and what I mean by works is it creates wealth that it creates production that raises a standard of living and it I Believe that the idea that capitalism works the idea that it creates wealth that it raises standard of living is Pretty self-evident. I don't think this is hard. I Think this is simple. I think that anybody who knows anything about history should get it I think anybody who knows anything about the world and has maybe traveled a little bit about around the world should get it and That the real mystery that all of us or those of us who believe in capitalism Have to deal with is the question of why they don't get it Why is the struggle for free markets? Why is the struggle for capitalism so difficult? Why is it so difficult to convince people out there? That indeed capitalism works that it's in their interest that they should support it because clearly in at least in America and You know, I'd say Europe as well. We're losing the battle. We've been losing the battle for a hundred years Those of us who believe in capitalism those of us who believe in free markets who believe in freedom and individual liberty We've been losing the battle for a hundred years In terms of economic freedoms the Western world Europe the United States were free a hundred years ago than they are today and We are moving away from economic freedom at at least again in the US that are ever accelerating great and the question is why given In a sense the self-evidentcy of the fact that it works and what do I base this idea that it's self-evident and Again, I'll do this quickly. I used to spend more time on this, but I'll do it quickly because I assume you guys know this stuff History for the last 250 years. We've been running a social political Economic experiments in the world. We've tried all kinds of systems in all kinds of places around the world Right. We tried communism We've tried pretty close to capitalism 19th century Industrial evolution and capitalism in America and we've tried lots of different mixtures in between a Little bit of freedom lots of state control You know lots of freedom a little bit of state control all the variations of each right and There's pretty much of the recoloration between wealth creation rising standard of living benefits to the to the poor even of The more economic freedom you allow The greater the benefits the greater the wealth The greater the prosperity and yet we move away from it and again, this is history, you know, everybody said planning about You know right now the discussion In Europe and in the US. It's big in the US right now. It's about inequality right this whole issue of inequality Well, 250 years ago. There was very little inequality Why is that why was the very little inequality 250 years ago because everybody was poor? 95 96 99% of the people were poor and there were few aristocrats over here who lived off of these poor people But that's it right So when you look at history she 250 years ago everybody's poor You look at the world a hundred years later than 200 years later than 250 years later and what you see is ever improving human conditions and when you look at What caused this or what you look at what happening in parallel which he sees political freedom Industrial revolution capitalism freedom economic freedom and the correlation is right there It's right in front of you historically You can also look at this Cross-sectionally right you can look at this different geographies in the same period of time different countries to try different systems And again, you can see the same type of behavior Countries where you have more freedom do better than countries where you have less freedom now It's not always easy to measure economic freedom But generally this is the case and you know that again the examples here are fairly obvious If you look at Asia over the last 50 years what stands out as a huge success Anybody here being to Hong Kong Nobody nobody's ever been talking You have yeah Everybody should go to Hong Kong at least once in their lives Hong Kong is an amazing place What's Hong Kong like 75 years ago 75 years ago Hong Kong was a little fishing village. There was nothing there Hong Kong has no natural resources. It's a rock basically a mountain with nothing It's a hard place even to build homes because it's very steep today Seven and a half million people live on this mountain or on the bottom of it seven and a half million They pick up at a GDP of the seven and a half million average is About the same as the United States In 75 years And what did they have on this rock? What what what brought all these people there because they weren't born there, right? They all came and what brought them there? Freedom there was no safety net. There's no social services. There's no, you know, there's there's there's no Socialized health care. There's there's All the British did when they established Hong Kong is provide Property rights, that's it. I Mean some services and I think there's a minimal safety net But basically what they did was provide property rights millions of people flocked in and have done phenomenally well in the place Right across you can see China Which didn't allow property rights for a very long time and where millions and millions of millions tens of millions of people starved to death The contrast is amazing socialism capitalism and yet when China Basically allowed for some private property in some areas that's pseudo private property They pretended they allowed people to have private property. They gave them some economic freedom They eliminated controls and regulations what happened in those regions just in those parts just in the geographic areas We're trying to allow this room. You got unbelievable economic activity Again millions of people coming in not millions Tens of millions of people probably the largest human migration ever Within a country all these people from who are subsistence farming moving into these areas and building businesses creating wealth building prosperity at an amazing rate Other areas of China where they come and kept the controls Nothing nothing changed and in these places you saw the wealth creators again Everywhere you look everywhere you literally look all you need is eyes and A little bit of history knowledge of history what you see is capitalism success what you see is That economic freedom works from a material perspective it creates It helps create wealth Rising standard of living the poor do better So why do we turn our backs on this the evidence is right there in front of us and yet we choose to ignore it And it's not that we don't understand why this happens We understand the economic theory that leads to the wealth creation We've had great economists. We have no shortage. I mean we always have a shortage But we've had some really great economists who've gone through and explained what happens in the capitalism Why wealth is produced? We got a whole string of Austrian economists who've explained this who told us And nobody's refuted what they said So it's not that we can see this with our eyes, but we don't understand why it works And therefore, you know, we think if we tinker with it, we'll make it better We understand why it works or the knowledge is there if we chose To actually apply ourselves and study it But again, the Western world ignores that economic knowledge. It ignores history It ignores the facts of reality. It ignores what's evident self-evident right out there And we have to go back to the question. Why how is this possible people? See this as being successful see it success and you turn their backs to it and ignore it And my argument is that the problem with people is not the knowledge of history The problem with people is not their knowledge of economics not that they don't have eyes is That there's a more fundamental belief set that they have The shapes the way they use their eyes That shapes the way they understand history that shapes the way they approach economics When they don't want to see something they don't see it they evade it When they don't want to believe the history they just ignore it When they don't want to believe the economic theory they pretend it doesn't exist and they create Economic theories that are so complex that they can spend their whole life doing little mathematical equations around it and ignore reality completely So what is it one of these fundamental ideas that cause people not to see reality as it is Not to be willing to acknowledge The incredible success of free markets and capitalism it has and let me just just just for the sake of of Definitional sake when I say free markets, I mean free markets free of what? What does freedom mean? Yeah freedom from coercion freedom from force, right? So free markets mean Markets in which force is not exerting and who usually exerts force on markets The state the government so it's free of regulation free of control free of taxes free of the things that Manipulate the change behavior. So free markets means no government involvement in markets Or the only government involvement in markets is to catch the crooks and the fraudsters the people who exert coercion themselves You have to you know, you have to say this these days because people believe we have free markets today And it has to be clear that what we have today is very unfree our markets are filled with regulations and controls and Taxes and all kinds of government interventions into what we do and you know And if you want my view on what caused the financial crisis why it wasn't capitalism and it couldn't have been capitalism It's impossible that it was capitalism, you know, you can ask me in the Q&A. So what's going on? Why are people so resistant to free markets? So what are what are free markets about? What is the essence of free markets? What do people do when they go to the markets? What are they trying to do trying to do what? trade Markets about trade right, but what is the purpose of the trade? Why do we trade to improve our lives to improve? You trade in order to improve whose life Your own life People go into the marketplace in order to attempt at least to make their lives better So the producers the people who make this stuff, right? Do it. Why why does Steve Jobs make an iPhone white? To make money right and you chuckle a little bit because you know We are culturally ingrained to think making money is a little embarrassing, right? But these things it's true. I mean everywhere you go, right? It's it's it's a little uncomfortable to say this is to make money But it is these things had profit margins of 60% when they were first came out Right if he didn't want to make money, he would have sold them a lot cheaper Steve Jobs Was it only about money is the money the only reason he made this? Yeah, I mean he loves this right. This is a passion vision. He you know, this is his He loves Creating beautiful stuff. It's his vision right so but whose vision is it who loves doing this? Steve Jobs, so what motivates Steve Jobs? Is it me who motivates Steve Jobs? Steve Jobs gets up every morning. It says I want to maximize social utility And they find gonna make an iPhone No, what does he wake up thinking every morning when he when he goes to work I? Love this stuff. I'm having fun and I'm making money That's part of what he says So what's it about making stuff is about him? Steve job is self-interested when he makes the iPhone He's self-interested when he makes my iPhone and I like that I like to say that in 2008 when I went to buy my first iPhone It's when it came out. I went to I went to buy because I wanted to stimulate the economy Right because I was worried the economy was spiraling out of control and because I know that's why you guys go shopping because you care about your fellow man and You want to make sure people have jobs? And you don't know them to lose it out, right? That's why you go shopping. I won't ask who go shopping for that reason I don't embarrass you, but why do you go shopping to make? What yeah to make your life better So the producer of the iPhone is being self-interested He's trying to do this because he loves it because he wants to make money you buy it Because you want a better life because you think this will be more productive because you think it's cool because you think this will improve your life in some capacity in some way So what are markets about markets about people coming together and engaging in what? In trade for the purpose of improving their own lives Markets any market is about self-interest the essence of the marketplace is self-interest Now this is not a new observation. This is not I ran. It's not me, right? This is Adam Smith Right and it was in the world of nation says the baker bakes the bread not because he cares about any of you He doesn't you're not the goal of baking the bread the goal of baking the bread is to take care of himself Take care of the people he loves make a living for himself and the grocery store who buys the bread from the baker and sells it to you Doesn't care about you or the baker It cares about making a living cares about taking care of themselves about the people they love fundamental to the marketplace is Self-interest businessmen are self-interested. They're there to make money they're there To to live to be productive because they enjoy being productive because that's how they you know manifest themselves in the world it's about pursuing self-interest both sides All transactions and who who loses from all of this from this trade stuff when you know We've got people who all be self-interested, right? I bought the iPhone and Apple made a lot of money off of this. Does that mean I lost? No, right. This is basic economics. Why didn't I lose if I bought the iPhone for $300 how much is the iPhone worth to me? 300 It has to be more if it was worth 300. What would happen? I Would be indifferent. I wouldn't bother right three in my pocket iPhone Maybe I'll buy it. Maybe I won't probably stay home Right, but the reason I buy it is because it's worth More than 300 so when I give up my 300 I'm getting something that to me is worth more than it That's why I'm willing to give up the 300 every trade You're getting something that is worth more to you than the money you're putting down if you go and buy a loaf of bread At the grocery store. I don't know how much you got two euro How much half a euro that is cheap here Okay in America customer half a euro the bread is worth more to you than half a euro. That's why you will then you give up the half euro Here's one that's that's hard for people Maybe not this group but but but people out there if you make 30,000 euros a year at your job How much is your time worth to you? How much is your time worth to you? less than 30,000 How much is it worth to your employer? More than 30,000 they make a profit off of you. Otherwise, they wouldn't hire you and you're better off for having a job otherwise, you wouldn't Have the job so your time is worth less than the 30,000 But your work is worth more than 30,000 To your employer so trade Who loses when you buy the iPhone who loses? No one it's a win-win relationship both parties are better off You're better off because you have the iPhone apples better off because they have the cash So trade is a win-win, but let's think about this idea of self-interest. What do we know about self-interest? What do we be taught since we were this big about self-interest? It's generally bad. I mean I I grew up in a good Jewish household My mother tried to teach me right and wrong from wrong and she told me when I was little she said think of yourself last Think of others first be self less Be self-less the opposite of Selfish which means don't think of yourself Now there's a sense in which she didn't mean any of that Right because every mother wants her children to be successful and they want them to be You know to really be driven and so on and those are self-interested activities But we say it to our children We promote it as a moral ideal to be to be selfless to think about us first To sacrifice right if you think about in in the West today, what what does nobility mean? What does goodness mean? What does morality mean? What does virtue mean? It means what? Means sacrifice it means being selfless it means serving others and means living for others It doesn't mean helping others will get to helping others in a minute It means putting yourself down for others That's what nobility goodness virtue literally mean So we look at this businessmen and these marketplaces and what are they about? Self-interest, but we be taught that self-interest is bad Morally bad, maybe it works economically, but it's yucky and we're taught that what's good everything opposite Being selfless is good and the selflessness work in the market place No, the market place isn't about something and everybody knows this Everybody in the world knows that markets about being people being self-interested everybody knows this and They know it's bad So when something bad happens in the world, who are they gonna blame? Although selfish people because they have it has to be their fault because we know that morally they're bad people Because they're being self-interested and that equals in their mind being bad So nobody waits when a financial crisis happens. Nobody waits for the facts Nobody waits for data. Nobody waits for any information. We know that deep down in our gut. We know the capitalism caused it We know who is the representative of capitalism who's the most evil of all capitalists What's that? The bankers the bankers right it's always the bankers fault always For thousands of years it's being bankers fault Because we know bankers are the most self-interested Because they're about they don't have a product to hide behind right they can't say look what I've given you they're all about Profit and money that's all it is right So they are perceptually Simplistically, maybe they are the most self-interested of all of them and if what must be their fault and we do this time and time and time again because I'll fundamentally Morality is what drives us people want to be good. They don't necessarily want to be rich They want to be good. They want to be just they want to be right and notice that the left plays on this heavily Obama doesn't argue economics in America. He argues justice and fairness and goodness, right? He argues ethics The left really gets into the debates of economics really when he comes down to it They really are about fairness and justice and good and we've all agreed with them. We've given them right we've all agreed That what's good is being selfless. What's good Is sacrifice nobody ever challenges that nobody ever questions that I mean think think about somebody like Bill Gates, right? Microsoft He made a lot of money 70 billion dollars right talk about income inequality. That's big income inequality How did he make his money? How do you make money? How do you make money? We just talked about trades. How do you make it? Selling a product, but if you make a lot of money, what does it mean that the product is what it means? It's really valuable to a lot of people right Bill Gates sold lots of pieces of software a hundred dollars at a time and Some software more expensive said like businesses and so on but he sold a lot of them because a lot of people valued What he had to sell and every person who bought the software paid a hundred dollars for it But got how much out of it a lot more than a hundred dollars Otherwise they wouldn't have paid a hundred and it turns out particularly if you look backwards that they got probably tens of thousands If not a hundreds of thousands of dollars out of it Do you think about how your life has improved because of the existence of Microsoft that standardized Platforms that created software that we can all use to communicate with one another the whole computer revolution It's a large extent a Microsoft revolution At least in terms of making it so consumer-friendly So he improved the lives of how many people by selling them a product by becoming rich He made the world a better place for how many people Billions almost everybody in the planet has been touched by Microsoft Almost everybody in the planet has a better life because Bill Gates became a billionaire And yet how much more credit ethical credit does Bill Gates get for helping all these people? None He actually gets a negative credit. What does he get negative credit? Why does he get negative credit? Because he made a lot of money So you were self-interested and that's bad so even though he helped everybody in the world Everybody has a better life He is still considered a bad guy because he benefited while helping them And you can see this more we all because when does Bill Gates become a good guy when he leaves Microsoft? Starts a foundation and starts giving his money away How many people will Bill Gates help by giving his money away? I? Mean he'll help thousands maybe maybe tens of thousands, but not billions Not billions, but he gets lots of moral credit for that Right because he's not benefiting He's just giving More than that. He's still a little suspect. We still don't trust him completely He's not like mother Teresa heroic Right, why not? What's the problem with Bill Gates today? He's so rich and he seems to be enjoying giving the money away He's having some fun doing it and that's self-interested again, and that's no good So how do we generate how do we get Bill Gates to be a saint? Right, how would we get Bill Gates to be a moral hero that people write songs about and poets will sing his phrases What's that? What's that? Yeah, but okay, so but make it real like you'd have to give all his money away, right? And he'd have to move into a tent because he still lives in a big house And what would really help is if you could bleed a little bit Blood goes a long way to getting you sent to He needs to suffer Suffering somehow is good Sacrifice is noble Giving the wealth that you created is good, but creating it. Uh-uh. That's no good. That's suspect Now think about now. This is the culture. We live it. This is the more code. We have around us. This is the world we live in So is anybody surprised that we don't have capitalism? I mean capitalism is about the self-interest part It's not about giving it's about creating it's about building. It's about making it's about pursuing self-interest But we don't trust this we hate this what we like is the giving what's giving consistent with Giving and sacrifice what political system is that consistent with? It's socialism All socialism does is help you give Right, it says you won't do it voluntarily. None of us do enough of it voluntarily So we'll tax you we'll use a little bit of coercion to make you better people like getting you to give more and it works Because what happens and this is the guilt part in capitalism without guilt, right? What happens? When people believe when you as an individual believe the nobility goodness lies and sacrificing and giving and working for other people and living for other people, but you Make money I'm business live a self-interested life. You care about your family more about strange more than about strangers What does that create in sight of you your moral ideal is over here, but you're living somewhere else What does that create in sight? guilt a conflict and that conflict is guilt That's what guilt is all about and guilt is an incredibly powerful tool to use people To manipulate people just to ask any Jewish or Catholic mother and she'll tell you right This is the way to control people to use guilt on them. So you take these businessmen Right, and you tell them that this is them all ideal and they're living here and you say look guys You you're living this selfish self-interested life But your more responsibilities to the poor the needy whoever We're gonna help you become a better person All we need is to raise your taxes a little bit You should be giving more And what are rich people that they say no So Obama when he ran for president in the United States and most of my examples are Americans, I apologize But that's what I know Obama ran for president. He promised to raise taxes on the rich a promise He's fulfilled, but he promised to raise taxes on the rich. How did the rich vote? For Obama or against Obama a vote for Obama meant they were voting to raise their own taxes eight of the wealthiest counties Eight of the ten wealthiest counties in the United States voted for Obama Voted to raise their own taxes I'll take another example in California. We just raised taxes on the rich by 30 percent From 10 percent to 13 percent This is just the state income tax on top of the federal income tax right 10 to 13 percent And it was a referendum. So we all got to vote on it in the last election straight question Are you for or against raising taxes on the rich? How do you think the rich voted? for Because of guilt because of guilt It's not that these rich are benefiting from government taxing them It's that they're suffering from government taxing them and yet they vote for it Because they feel guilty and they should feel guilty. They're not living up to them all code That induces guilt So this in my view the more code that our culture has is Completely inconsistent with capitalist completely inconsistent with free markets completely inconsistent with the individual liberty And we're seeing the consequence of that in the world out there We're seeing policy after policy after policy which is a rejection of capitalism Which is a rejection of moving towards free markets and even when we see short periods of liberalization short periods of a little bit more economic freedom As soon as the next crisis hits everything goes back To the way it was you get the Reagan years bam They disappear within a decade because there's no fundamental shift people are focused on the small code and Which causes them to reject anything's resembling free markets? And it works the other way too, right? So not only do we have a positive perception of sacrifice What do we have what perception do we have concretely? Self-interest what do we associate in our minds self-interested behavior with? We don't think he's self-interested. Therefore. He's creating value. He's creating what all these everybody's better off because of it That's not what we think that's not what we be taught When my mother told me think of yourself last what she told me is if you think of yourself first that means you'll do what? Who are tellers your lies feel cheat stare people in the back do anything to get you away We have a choice in ethics presented to us by the moralists of our time Really of the last 2,000 years you can be a Self-sacrifice that a self-less person somebody who thinks of himself last or you can be a crook Those are the two options self-interest means crook Self-interest means lying cheating stealing Self-less means saint. That's it. Those are two options So when a businessmen is a crook Bernie made off, let's say What do people immediately think they think of course all businessmen are crook? They're all self-interested. We just happen to catch him and this became real evident to me in 2002 and I don't know if you guys remember this bit or know this but in America There was a few scandals where a number of businessmen were caught committing fraud and Ron You remember and Ron and there was world calm. There were a few of them tight go and There's a shorn on Fox bill O'Reilly. You probably heard of bill O'Reilly. It's this obnoxious Anyway bill O'Reilly reflecting populism Said look We caught five CEOs cheating. They're all self-interested bastards And I can guarantee you that everybody they are crooks He wanted to fire every CEO in America. Do you want to do all gone? Because you know, we just happen to catch these guys, but they're all crooks because they're all what? We're all self-interested and self-interested equals in our minds being a crook. I Got to be on this. I went on a show to defend businessmen against all being fired right for this That's how absurd this kind of stuff gets and the United States passed massive regulations in 2002 people forget this Something called Sal Bain's oxley. It doesn't really matter But the point is that the consequence of a few guys committing fraud was it all business in America was massively regulated massively Regulation cost the US economy by some estimates north of 1.5 trillion dollars. That's a T Because of this assumption they must be all be crooks So in my view we need to offer an alternative to this false dichotomy We need to offer an alternative to this notion that Morality is about being self-less that morality is about serving others that morality is about denying oneself Which I think is prevalent and dominate out in the culture and that the only person to offer such an alternative is Iron Man Iron Man says this is a false dichotomy. It's not about being either self-less or being a crook There's a third option and that's being self-interested Her argument is that being a crook is not self-interested Line stealing and cheating don't make you a better person Don't make me you happier. Don't make you more successful. Don't lead to your own human flourishing indeed Line cheating stealing a bad for you if you understand Properly what's good for you as a human being What your nature requires of you? So she says let's look at human beings and let's evaluate What leads to their success? What leads to human flourishing? What leads to human happiness? And she says that's what morality that's what ethics should be about Ethics shouldn't be about how to sacrifice how not to live a good life for you How to serve other people how to place the world being of other people above your own? That's not ethics that's suicide What she does is resurrect the tradition going back to our start Which is the idea that the purpose of ethics is to establish the virtues and values that lead individual human beings to flourish To be successful and ultimately to be happy to live a full life as a human being And what does that necessitate? And you know You can do a lot of a whole course on on just what that means, but Let's just do a little bit What is it? What does it mean as a human being to flourish to be successful to be happy? What what virtues or what value does that really require? What what value Makes everything that we have around us makes all other values possible All the chairs that you're sitting on the clothes that you wear the television screen The the live streaming what makes all this possible? Yeah, human reason I mean we're a pretty pathetic animal when it comes to our physical nature I mean just look around the room We're weak We're slow We have no claws. We have no fangs. I mean try running down a bison and abiding into it I mean you can't do it or Matching up against a saber-tooth tiger I mean we're just weak physically to deal with the environment in which we're born We cannot survive nature If what we rely upon is our physicality What makes us unique what makes it possible for us to dominate As a species is our mind Is our ability to reason Ability to observe to understand reality identified to integrate And to create That's what's uniquely human and that's what makes possible life as a human being And every single aspect of human life depends in the end of the day on human individual reason because The other flip side of that is there's only individual reason. There's no collective consciousness here We don't reason Each one of us Can reason each one of us can think each one of us can observe we can help each other We can stimulate each other to think we can challenge each other to think But we can't think as a group. There's no such thing as group think Literally, there's no such thing as collective consciousness So the value for each individual is the most important value is reason Is his own capacity to think The most important virtue the thing to to to strive towards is rationality is to is to be able to exercise that reason to use that mind to create values and just think about All the notions that that are presented as self-interested right is lying is lying for example They always say, you know, if you're selfish, you're gonna you're gonna lie, right? You're gonna get your way anywhere You can't is lying selfish So it was Bernie made up. You know Bernie made up Was Bernie made up selfish self-interested Well, you're the only one who thinks that so let me see if anybody thinks yes Was Bernie made up selfish? I mean commonly if you ask anybody in the street that I'll say yes, of course you were selfish Right, but did Bernie made up if selfish means taking care of self Making your life the best life that it could be human flourishing did Bernie made up flourish? No And not only because he was caught Because if you ask Bernie made up today He will tell you that he's happier today in jail than he was before he was caught And I believe him Because lying sucks Really bad You can't have human relationships Real human relationships with people you're lying to and Bernie made up by the way stole money from his best friends Right, he couldn't talk to his family in any meaningful sense because he was lying to them constantly and he was hiding stuff from them He was constantly obsessed with the fact that he would be get caught by whom Not by the police But by family by his friends by the people he cared about Bernie made up was miserable because lying creates misery. It doesn't create flourishing And Bernie made up didn't sit down one day And say, huh? I want to live the best life that I could be. I want to flourish as a human being So, you know what? I'm gonna lie seated sheet for my best friends and my family Nobody does that What happened What do you think happened Bernie made up sold pile of money And he felt He emoted I want that And he took it He didn't think He didn't use that one faculty reason rationality He didn't think about flourishing. He just wanted he emoted it was pure emotion Most crooks Don't think They emote They're not being self-interested if we understand self-interest as being focused on reason on rationality It's not rational to steal It doesn't promote your well-being. It doesn't make you a successful person. It doesn't lead to happiness If you thought about it, you'd know that that was true Most people think about it figure that out pretty quickly Most people try it right we all lie at some point And we figure out it's not a good strategy for success In business, it's pretty obvious all you need is to get caught once and nobody does business with you again But that's true in relationships. It's true in life. Generally And you could go on. I mean, it's not that hard to show that stealing and everything else just is not in your self-interest Self-interest is about creating producing building making stuff It's about gaining self-esteem Where does self-esteem come from? What is self-esteem? Self-esteem is the sense that you're worthy of this life that life is You know that you're capable that you're competent that you can do stuff Right, it's not about getting a ribbon. How do you get self-esteem? By what? What? Yeah, by setting goals and achieving them by striving by effort working hard Without self-esteem, you can't be happy And where do we spend most of our time? Where do we gain most of our self-esteem? Placed in the u.s. In europe, it's a little different At work That's right. We spend most of our hours at work And why do we spend most of our hours at work? Because that's where we challenge ourselves. That's where we push ourselves. That's where we achieve That's where we gain self-esteem Productive work is vital to human happiness to human flourishing to human success Working being productive is a virtue It's a virtue Not because it helps society not because bill gates helped everybody else but because it made his life Much much better. It made his life flourished. It made him happy, you know if he took it that way so Work building creating is good Because it's consistent with human happiness with human flourishing And yeah, by the way Everybody else benefits from it as well, right Because we're traders. So everybody else it's like bill gates everybody else benefit it But that's not the moral reason. It's good. The moral reason. It's good. Is it because it helps you So rand's view is That self-interest Properly understood long-term Rational self-interest is the proper ethical system for man It's the proper way to live That there's absolutely no reason in the world you should sacrifice Why? Sacrifice implies that the other person's life is more valuable to you and your own How did that happen? so ethics requires that we You know, we redefine We redefine what good means what right means what just means what noble is to me bill gates Is a hero a moral ethical hero Not because he gives his money away. I don't care about giving money away. I mean, it's nice or not nice. Who knows? But because he built something he created something He made something of his life. He used his life. Well, he lived a full life He exercised his rational capability to its max He you know, it's the creation that matters That's what makes him good It turns out he has horrible political ideas, but we'll put that aside This is why I ran to such a is such a admirer businessman While recognizing that some of them are scoundrels right She admires the essence of what it means to be a businessman The creation of value the building of something that didn't exist before the offering of that value But making yourself better in the process both through productive work and through trade And that's why she is a huge admirer of business So What we need is a redefinition of ethics what we need is an ethical revolution what we need is a moral revolution And this is why it's so hard Why our cause is so difficult to bring to the world because they Because we never talk in these terms We think we'll just explain to the world why economically capitalism works and they'll just go, okay But they don't care that it works It doesn't matter that it works. It's evil and bad and unjust and unfair And we never challenge them on those terms We give them them our high ground And then we think everything's going to be okay Because we talk We've got the numbers on our side and they are on our side The numbers the history the economics all of it is on our side But what matters is not on our side Ethics as understood in the world today is antagonistic towards us and that is why we lose If we want to win We have to dominate them all high ground We have to capture it. We have to dominate it. We have to change their view of what constitutes more What constitutes good what constitutes ethical what constitutes noble If we do that capitalism is easy Economics is easy because the fact on our side and we know the economics And we can just show them You're committed to a good life. You're committed to being self-interested No other system in human history Has allowed people to be more successful to flourish more to achieve more of their values in capitalism And you guys should embrace it because it's in your self-interest First they have to understand the self-interest is good So What iron man calls for and what we call for in the book That was shown before Is ultimately for a moral revolution For an ethical revolution Scrapping the old ethics and replacing them with a new definition with the idea of rational self-interest You know and it's to recapture a certain spirit Now end with this recapture the spirit that I think Bubbled up a little bit in the enlightenment the idea that the purpose of life is the pursuit of happiness Your own happiness and you know and made it into the Declaration of independence of america because it was at the surface of the enlightenment people believed In the idea of the individual's pursuit of happiness And that's what made that error free. That's what made it possible for that error to be free Is the value people placed on individuals and on their Achieving their own happiness I'll end there and I'll take your questions. Thank you Hi, how do you reconcile your notion of Free markets and high standard of living with the scandinavian model where they have a large amount of a large redistribution of wealth High taxes and arguably one of the highest standards of living in the world So Scandinavia is interesting, but there are a few things we have to understand first Scandinavia is not that different than the rest of the world So we look at america and we assume america has Uh, you know free markets and scandinavia. They have massive redistribution of wealth The difference between the united states and scandinavia is an issue of degree Right, uh, the united states redistributes less wealth than scandinavia But the united states regulates business more than scandinavia Basically, the west today is all a mixture of government interference in everything that we do Uh, it's redistributed wealth it regulates it controls, but each country Is chosen a different mixture of these and it's complicated to tell which is freer than which Now let's take let's take sweden for example, right? Because I know a little bit about sweden and and norway is distorted because they have all this oil revenue That comes in and they don't have to do anything. You know right now. They're just living off of natural resources But but take sweden So sweden in the nate in the late 19th century early 20th century was one of the freest most capitalist countries in the world it had no Big social safety net no redistribution of wealth very little regulation almost none And massive amounts of wealth were created during that period of time It was by the 1950 sweden was one of the richest countries in the world Maybe you know really up there if not the richest They had very entrepreneurial people. They created incredible businesses and they did phenomenally well in the late 50s early 60s Socialism became very popular and they decided to start redistributing this wealth and they did They became one of the biggest redistributors of wealth in the west from 1960 You know late 50s early 60s until 1994 When they went bankrupt People forget this but sweden went bankrupt in 1994 sweden was greece We grease this today sweden. I mean better because they had more wealth to start off with But sweden was in deep deep trouble because they basically redistributed much of the wealth that they'd accumulated all that through that period when they had freedom and since 1994 sweden has been decreasing in their social programs cutting government spending Eliminating government regulations. They've actually been moving in the opposite direction of most of europe and certainly of america And yes since 1994 Their economy is starting to grow again and starting to do well again because of those decreases and indeed There's something called the economic freedom index where People rank the free the economies of the world based on the level of economic freedom And anybody want to guess who's number one two Hong Kong and singapore always have been for a long time number one and number two from an economic freedom perspective Anybody want to guess where the united states is? 1213 was a few years ago. It's 18 It's 18 Um, and it's dropping right it's been dropping it used to be number three and it's 18 sweden Denmark are actually rated higher than the united states on economic freedom Because in spite of the fact that sweden taxes more and redistributes more it regulates less And you know, for example, they have school vouchers now. It's not it's not private schools But school vouchers the united states doesn't there are all kinds of things that make sweden free So the problem of comparing countries right now Is that it's not obvious what you're comparing Why is sweden still wealthy sweden is still wealthy because it still has significant amounts of economic freedom in spite of the redistribution of wealth the question is not And and by the way the more they redistribute Ultimately, we've seen what happens. They go bankrupt. So they have to shrink that down, which is what they do But the real question is what could sweden be If it didn't do all those things How rich could we be this is the big problem that we free marketers have We know things would be a hundred times better without regulations and without redistribution of wealth a hundred times better The problem is I don't have a parallel universe that I can show you that on the map I can't point to but what I can point to is history. I can point to the wealth creation of sweden before 1960 And and the rates of growth of economic growth and stagnation that sweden has engaged in since then The educated walk with a much lower rate than it did in the hundred years From the 19th century into the mid 20th century I can show you the united states. We're wealthier than swedes average per capita gdp in the united states is higher than sweden But we're poor We're dirt poor as compared to what we could be I mean, there's no reason there's no economic reason There's no metaphysical reason in the united states gdp Which is a flawed number to begin with but let's just assume it as a proxy for economic growth couldn't be five six times what it is today In other words instead of one percent five percent six percent eight percent And I don't know if you know but a small change in annual gdp makes a huge difference over the long term because of compounding So if the united states had grown one percent less every year Over the last I think it's hundred years. We would have a standard of living below that of mexico One percent makes a huge difference So Sweden works because it created a lot of wealth when it was free and it's still free somewhat The more the less free it becomes The less it works the more freedom they allow the better it works And even the swedish have understood this and that's why they're actually shrinking the government the same happened by the way to canada Canada went bankrupt in the 1990s and since then if you look at government spending It's declined If you look at regulations, they've declined if you look at social redistribution of wealth It's declined taxes have declined And canada is doing very well relative to the united states. Let's say right now because the united states everything is in the other direction So again the economics always work. It's just a matter of digging into the details She's not convinced I have two questions if yes possible, uh, you said and you you said that the second half of 19th century was like the best part of capitalism The three years time from the economic perspective And at the same time it was the hardest time for the humanity who was living at that time And they were living in the misery and I even read that people who were living at that time were living worse than slaves in roman time And second, uh, let me answer that question because I can only handle one at a time That's just bomb It's just not true um So let's take let's take some of the myths associated with the late 19th century um People were working long hours Uh, what kind of hours did people work in the 16th century or the 17th century or the 18th century? Anybody live or lived on a farm? Actually they had 83 days during the year in middle ages Eight with church feast is Sundays and they read everything they had a lot of free days when they didn't have free days. How long did they work? during the sunlight From sunrise to sunset. What did they do in the sunset? They went to sleep because there was nothing else to do there was no light. There's no light. They couldn't afford lanterns They couldn't afford lanterns almost none of them could read Almost none of them could read There was no education. There was a sliver of a population that had an education and what kind of work did they work? Very physical work. What was life expectancy before the late 19th century 36 in europe western europe 36 um What what about children? Oh because during the industrial revolution children worked Historical abomination, right? What did children do before the industrial revolution? Worked from sunrise to sunset and then they went to sleep. How many children got educated? Almost none unless you were born in aristocrats. You didn't get an education late 19th century fast forward, right? Long hours, but not sunrise to sunset Um children are working, but children uh child labor is then declined. Why is child labor been declined towards the end of the 19th century? Why are they getting education? Oh because the parents became rich enough They made enough money so they didn't have to have the kids work to feed themselves So they took them out of work and put them in schools Because for the first time in all of human history the first time People were making more wealth than what they consumed For the first time in human history People working class people Everybody had a surplus And that surplus allowed them to pull kids out of work And get them an education How about life expectancy? What happened to life expectancy? By the late 19th century life expectancy had gone to over 50 and coming close to 60 um Worstons slaves. Wow Could you leave your job and go find another one? Yeah, I mean millions of people liked this idea of capitalism so much tens of millions of people That they were willing to leave their ancestral homes They were willing to leave the farming Which is a horrible life, right? This is why they're like horrible farming is one of the most horrible I mean when we're talking about farming with your hands Because you can't even afford the beast that'll that'll do it You were literally doing it with your hands like so many peasants did Right that they were willing to leave their ancestral homes never to see their families again and get on a ship to go to wherever Right to the united states of america or the or the or to or to south america or to south africa or wherever just to escape right They farm life So they came to britain Right because they wanted because capitalism produced more jobs than they were people So you could bring all these immigrants in and they all found work And they work allowed them a standard of living that they couldn't even imagine when they were on the farm They couldn't even imagine So It's completely false picture of the late 19th century This is exactly a picture of the picotine and a lot of these inequality people want you to believe It's the picture that the left wants you to believe but it is not true The late 19th century is when the middle class was created And you say what middle class there is no middle class But what was mocks talking about when he talks about the bourgeoisie? That's a middle class right There was no middle class In 1600 there was no middle class in the 1700 there was no bourgeois in the 16th and 1700s When did the bourgeois come into being in the 19th century? and we and we know that They exist because mocks writes about them right And then i'm told in america people tell me oh no the middle class was created in 1950s By the unions that's what created the middle class. I mean that's nuts The middle class was created by the industrial revolution by people increasing their productivity and creating a surplus What does it mean to be middle class? Middle class means that you have a surplus that your standard of living is rising That you can afford to invest that you can afford to save That you can afford to buy things that you couldn't even imagine previously Late part of the 19th century was the one of the greatest Periods for human beings ever. I mean think beyond that think you know Let's get away from business right because business is about money What else what else is going on in the 19th century in europe? You get you get an explosion in the arts an explosion Suddenly people can afford to paint and to write music and to write novels And to do all these things that before they needed a patron They need some aristocrat and if the aristocrat turned his back on them. They were dead They would starve or they had to go and do some manual labor Why could they suddenly why is it that suddenly? You know list who's a pianist can go in a tour of europe and live off of the money that he makes touring europe Why because suddenly all of us Poor workers who are suffering like slaves in rom have money Have money to buy concert tickets to go see list play a piano And gain enormous spiritual value from the experience of listening to him Could we afford to go and watch Mozart play a piano? Yeah, nobody would let you in Only aristocrats got to listen to Mozart Common people didn't I mean he wrote one opera right Um Magic flute for the comedy theater where poor people went and it was cheap But great music was for the rich for the for the aristocrats for the rich who made their money by stealing not made made money by producing But by the 19th century artists could become rich because there were millions of us consuming their goods You can see it in Beethoven in the beginning of his career completely dependent on aristocrats By the end of his career people are paying money to come to his concerts. Where did these people come from? capitalism An industrial revolution suddenly you had a middle class that had excess money that they could go buy concert tickets They could buy a novel. Why could they buy a novel? Because they could read because they had time to be educated. They had time to learn how to read How many people knew how to read in the 16 17 18 centuries? As compared to the 19th suddenly boom and explosion and literacy That's not public education That's people having time and money to educate themselves so Everything you be told about the 19th century and this is part of the scheme This is part of how they sell this stuff everything you be told about the 19th century is basically wrong It's true about living standards. I mean the fact that it's wrong is true about living standard It's true about the economics. It's true about the evil robber barons and the monopolies and all everything They've taught you about it is wrong because they don't want you to know the truth Because they want you to continue the myth That allows them to continue this idea of socialism because as I said history is on a side of capitalism So the socialists have to rewrite history in order to win You had a second question Uh Well, basically you said for example, you paid your iphone 100 dollars you had you said the bill gate The bill gates took like 65 dollars of that iphone and 45 were actual costs from that 45 40s plastic And five dollars is maybe for a child in china who was making it maybe And you think that's good. I think it's one ethical I think it's wonderful And unbelievably ethical because what is the option for the child? What's that to stop Why do children go to work nobody no parent wants their children to go to work unless they Have to because otherwise they'll stop and china is a great example of this I mean you go and you you you go to the factories where chinese laborers are putting this together And yes, you would be horrified because you sit here in middle-class europe And you think who I would never want to work in those conditions But you've never been a subsistence farmer You haven't been one of those collective farms and eating uh West i always get that mixed up western china And barely survived you forget that in the mal during the cultural evolution 60 million people died of salvation And now you're offered a buck a day or a buck a week. I don't care what that amount is It's an improvement in your standard of living you were better off And if you talk to the chinese laborers, they know it And the good ones the hard-working ones the productive ones They learn from it. So they go in and they start at a buck a day But they learn and they get better and now they're making two bucks a day And one day they'll make 10 bucks a day or 100 bucks a day or a thousand bucks a day Or they'll become a millionaire. There are plenty of those in china today who started from nothing But if you don't get them started We went through that period in the west during 19th century. Yeah people worked and made very little But it was better than the alternative China has to go through the same thing because of shortcuts. They get a huge shortcut What's the shortcut china's getting relative to america to the west in 19th? Yeah capital from what? We've already done the hard work We built this capital reserve. We built the machinery. We built the technology They can import it like that and they can grow immediately. So they're standard living what we did in 100 years. They're doing in 10 That's why china's growing so much because of our expertise But if you deny them their ability if apple says honor We're not gonna build in china or if we do build in china We're gonna pay people 10 bucks an hour now because i'm not gonna buy this for 400 bucks because it's only worth 350 to me Then after lay off all those people in china and those people go back to the farms and they start to death But that's the alternative when when nike built shoes in indonesia and kids are involved Now again, there's unethical behavior where people are people are being beaten where people are forced to work Put that aside. We all agree that force against people is wrong But if people are volunteering to go to work, it means that their time has worked. What we did this in the beginning If somebody is willing to work for a dollar a day, it means that their time is worth how much less than a dollar a day Because the alternative to working is worth less than a dollar a day. So a dollar a day is an improvement in their lives If you deny them that improvement, you are killing them So it's easy in the west to sit back and say, oh, no, that's unacceptable. Let's stop that But what you're doing is you're killing poor people who can't afford to be killed Well, nobody can afford to be killed you're killing poor people And and it's tragic. I mean You know, we see this over and over again, you know, I'll give you another controversial example Um, we sit here in the west and we worry about global warming And I don't want to get into the scientific debate because it's not important in mind I mean, it is important but for this for my the purpose of of my discussion. It's not important So what are we going to do about it? Now if I were facing a problem, let's say it was true and I said, oh, there's global warming. I said, okay What can we do to change that? What can we do to protect ourselves? What are the risks? You know, let's build big dikes. Let's put something in the atmosphere to cool those down I don't know. Let's figure it out But no the solution that we all have accepted in the west Is we need to shut off the co2 emissions. Otherwise we need to kill fossil fuel Now we're pretty rich we can afford to stupid you in spain particularly right can afford to spend huge amounts of money on solar energy That's a right. You've done this. You've seen the consequences or wind panels, right and all this stuff But what is africa gonna do? What is africa gonna do they do it poor now they have nothing How are they going to become rich without carbon fuels? They can't there is no Scientific there's no economic. There's no conceivable way Africa will ever become wealthy unless they burn massive quantities of co2 I mean of fossil fuel and emit co2 That's just a fact So we in the west again, we're middle-class. We're comfortable. We're great. We're doing good, right? We can afford to waste a lot of money because our standard of living is pretty high But what we're doing is condemning and this is why india and china and africa hate things like Kyoto They hate climate change deals because they're the ones who are being screwed more than anybody else Because what we're basically saying is you'll always be poor the technology to help us get rich You don't get any of that because Because we've decided that it's better for you to be poor and cool than rich and warm I don't know where that comes from. I like I do have to be rich and warm and by lots of air conditioning Then poor and cool and I think every human being on the planet would rather be Warm with air conditioning the solution global warming in their condition on a massive scale It's true. I live on the edge of the desert. I mean I could live there if there was no air conditioning It's too hot Hi What do you think the the traditional moral code comes from And why it has survived through all the history of mankind? Where does the the current moral code come from the traditional moral code? So I think the traditional moral code comes from Comes from really, you know one source and that is uh People who want to control you altruism. I think was invented in tribal society You know, this is collectivism, but it manifests itself in altruism The leader of the tribe has a huge incentive to tell you Not to live for yourself Because that will undercut his authority But to live for the tribe To sacrifice for the tribe and to sack and who knows what the tribe wants Who reads the minds of the tribe who knows what that collective consciousness needs Or he does Or if it's not him then he has a witch doctor right next to him And the witch doctor communicates with the spirits and tells you all what you should sacrifice for But he's the only one who communicates with the spirits So that you don't know what's good and what's wrong and that's how he gains his power So altruism is a way for people in power to control you And it was invented by them in order to subjugate all of us to them Because if you live for yourself You might reject the authority you might want to know the truth for yourself You might open your eyes and say wait a minute. This isn't right. I don't accept what you're saying So the witch doctor and a tiller The hun right the the political leader get together religion and politics get together To teach you what is right and what is wrong and how you should behave and what is right or wrong what is wrong In terms of their interests their interest core power Is to tell you that sacrifice is good because they now tell you to sacrifice too And it's always to them right It's always to the group that they control now How did altruism become entrenched in our world to the degree that it has because there was always a tension Greece Ancient Greece was not altruistic Ancient Greece did not have the ethics that we have they would think we're barbarians given our ethics Even Plato who is a collectivist and was awful politically believed that the purpose of morality is to find your own personal happiness It's to define that into into figure it out The fundamental ethics of Greece is self-interest So the real power that the the the thing that brought about altruism into the west to dominate the west is christianity I mean think of the symbol of christianity The symbol of christianity is jesus on a cross suffering For whom For you For all of us talk about guilt I mean this is the master stroke. This is an act of genius to come up with this idea Because we all feel guilty now He I mean there's no worse suffering than being on a cross. I mean, this is why it's chosen This is why the Romans chose it and this is why the christians chose it. There's no worse suffering There's no worse pain than dying slowly on a cross For us not for himself For you you owe him big time It's enormous guilt inducing And beyond that it's a moral symbol. This is what we should all be like The moral ideal is sacrifice for whom for others What's that for the sinners for the worst people? That's right, right? The best sacrifice is the sacrifice For people that you least have an interest in I'll give you again a bogates example, right? Bill Gates has a lot of money and he's giving it away. He could give it away to charities in seattle He lives in seattle, right? There's a lot of homeless people in seattle There are a lot of problems with teenagers and drug use and a lot of things that you could do with money to help people in seattle But that would be selfish because he lives there So bill gates chooses the place that is furthest away from seattle like he he took a string and he said Where's the furthest away so nobody could accuse me of being self-interested and he picked africa And he's putting money into africa To show to show that it is no self-interested. This is not related. This doesn't affect my life in any bit To show that it's a sacrifice as close to the sacrifices it could be Because that's Christianity. That's what it's ingrained in us Self-interest means pursuing your own values not sacrificing to others Not sacrifice the meek the meek shall inhibit the earth. Why? That's virtue virtue is being meek strong. That's advice So Christianity institutionalized it and Christianity has made it the dominant ethical code for 2000 years And that's why it's so difficult to overcome because it's in our cultural genes if you will It's part of the culture. It's part of our literature. It's part of our religious services It's part of what we believe it needs to be human But it wasn't before Christianity and it doesn't have to be post-Christianity But but that's why it's so hot because you because the challenge is the very core of western civilization in a sense okay, um, well, I'm from the border between Mexico and the us and well, I'm living right here in spain right now but I've noticed that in all three countries, uh, politics is really really deeply intertwined with the business world How are the john gods and the dagnies? Of today, how are they supposed to cope? With this huge mixture because it's one of the main things that I guess like In all three countries. I've been that just doesn't let a lot of intrapreneurs move forward. It's in the whole world I mean, well with one of the things that is killing us today is cronyism It's the mixture of business with government It's the influence of government on business and business on government and and at some point you lose track of who's who right Because they're so intermingled You see that in the banking sector in the united states, particularly with the big banks But you see it you see in the technology sector. You see it all over the place and it's tragic Um, and I'll give you an example before I get to kind of the full answer uh Bill Gates is a great example of this as well How much money do you think bill gates microsoft spent on lobbying? Congress for favors for for stuff like that before Before 1995 in the early days when he was making all his billions and billions, but how much money did they spend? Exactly zero nothing. They didn't have a law firm in washington. They had no office space in washington They did no lobbying. They didn't ask the government for any favors nothing. They stayed away And in 1995 there was a hearing in congress Senator hatch who happens to be a republican because it doesn't matter if you're a public and the democrat He he had a bunch of microsoft executives And he said and yield at them there's a yield at them the transcripts of this You need to start lobbying. You need to start bribing me, right? It's not what he said But that's what he implied you need to build an office in washington dc You need a higher washington dc lawyers. You need to do You need to do cronyism A year after that the justice department went after microsoft for antitrust, right? And sued them and microsoft spent the next five years in court and lost And had all kinds of bad things happen to them. There's no accident that microsoft has declined since then How much money do you think today microsoft spends in washington dc? Tens of millions if not hundreds of millions of dollars a year Because it has to defend itself I mean it has to now what happens when you start out defending yourself what happens very quickly Is it slips into doing more than defending yourself? So now microsoft Asked the justice department. We have to google for antitrust stuff Which is horrific, right? That that's the nature of this process So the first thing to understand is what causes cronyism in my view and this is and rand's view here is different than a lot of libertarian views Is not business What causes cronyism is government? Government puts a gun to the back of your head and you say, okay, we'll pay you off And because this transaction happens lots of times It it's reciprocal, right? So now i'm paying you not to just remove the gun from my head but to put it on my competitors But the process gets started and is accelerated because of government power So the solution to it is not to attack business It's to attack government It's to get it to separate government from business is to basically take the gun away from the government Is to tell government you cannot intervene in the economy So i am a strong believer in the separation Of government from from economics Governments shouldn't have any economic policy. It shouldn't be capitalist. It shouldn't be socialist. It should have no economic policy Protect property rights protect individual rights protect us from cooks and thieves and that's it You shouldn't have monetary policy because you shouldn't have a central bank You don't redistribute money because you shouldn't redistribute You shouldn't regulate you shouldn't control government should have no role in the economy zero You don't need a minister of the treasury because you don't need a treasury Government becomes much smaller In the 19th century government the federal government in the united states never spent more than four percent of gdp Except during the civil war except during wars four percent of gdp How much does it spend today and and we got the industrial revolution explosion of middle class explosion of growth GDP has never grown faster Today how much does government spend? In the united states 22 percent Federal if you add states and local it's over 40 That's why it's very similar to sweden sweden's like 48 in the united states is 42 of gdp not a big difference Four percent to 22 percent on the federal level You could cut government spending today by 80 to 90 percent And have the size of government you had in the 19th century was and have maybe the economic economic performance of the 19th century What a businessman what should they do they should fight government control? I mean the diagnoses and the readers should Stand up and say no um Now they're gonna have to give in because they've got a gun pointed at them But they should give in war protesting I'll give you an example john allison in the united states Uh was a c over bank called bb&t and when top Was the bailout of the banks came about The government said we want to give you a check to bail you out. He said I don't want to check. I don't need to be bailed out And then they took a gun and they pointed it at him and they said yes you do And they said you don't have any choice. You have to take this check. Otherwise, we'll shut you down See took the check and he protested and he said this is wrong I don't need this. I don't want this the government shouldn't be bailing banks out I have to do it because I have my fiduciary duty to shareholders, but I do it on the protest If every ceo Did that Then I think people would wake up and I think I think you would reverse the trend that The likelihood of ceo is doing that is very small unfortunately because they don't believe it You know, they first have to believe it. They first have to be dagnies Ideologically not just I mean there are a lot of dagnies and weirdans out there if you've read out the shrug In terms of their productive ability, but they're almost none in terms of their philosophical understanding I'm aware that you don't have this parallel universe to point out to but maybe you can help me out with this Don't you think that some societies need like as a push to start being productive? and thrive Some help from the state as in building infrastructure building roads Ports, I mean you gave the example of Hong Kong and Singapore, right? I'm assuming that they had some help building the ports that they have over there In Hong Kong has a lot of islands. So I'm guessing they have bridges too and they need Some of that help from the state to begin with so Hong Kong started on one island I don't know who broke the port of Hong Kong. It's a good question I'll have to I'll have to do some research and find out. No, I don't think it's necessary While the state needs to do in order to in order to I mean in order to create Success is to find property rights But in defining property rights what they need to do is to find property rights over everything And that includes the waterfront and includes the rivers and includes the roads It includes the pathways to give people an economic opportunity to make money off of building a road To make money off of building a bridge to create that infrastructure and be rewarded for building that infrastructure But the only way the government can build infrastructure is how How does government build infrastructure? by taking money from You and I'm assuming you're poor because we live in a very poor country. We don't have any infrastructure Taking money from poor people And building roads, but maybe poor people maybe they have a different idea how to spend the money Maybe it's much more productive. Maybe to raise the standard of living much faster than what some government bureaucrat decides I need a bridge right here. Maybe that's not the best place to build a bridge All you need to do is define property rights. There's a there's an economist from Peru Who happens to have the same name as a famous economist from Madrid? De Soto Another de Soto from Peru and he's got a book called capital ideas And he says he says something very simple In all these countries in South America poor people live on land, which they don't own The land is typically owned by the state. I'll give you an example of this I we were recently in Rio de Janeiro Rio de Janeiro is an is the most beautiful Geographic the most beautiful city in the world in my view. It's just amazing, right? But what's fascinating about Rio is you know who has the best real estate The favelas They're very very very poor people. They live up on the hills The stupid middle-class rich people all live down below So if you want to get a beautiful view Of Rio de Janeiro you go up into the favelas You could end In a sense you could end poverty at least in that region of Rio de Janeiro like that By doing what Given the property rights over what? Where they live already they've been living there for decades and it's state owned which means nobody owns it So you might as well give it to them. It's not like you're confiscating it from somebody else And what will they do with it? They'll sell it They'll sell it to resorts and rich people who want to build villas up there and they'll sell it to people who want this amazing view And they'll move down into where the middle class lives and the rich will move up there Right And everybody's a winner. It's a win-win and it's cost you zero all it means Is defining property rights. This is the amazing thing about what this sort of says and it's kind of obviously defining property rights create wealth Because suddenly you've got a piece of land that you could mortgage you could use that money to start a business Suddenly you have capital you've created capital of thin air So that's all you need and how do you build roads? How do you build infrastructure people will figure it out people come together to build it in america in the early 19th century The government did not build roads the government did not build canals private entrepreneurs build roads and canals and then the government took them over And then built started building their own because they were smarter and they knew where to build the roads they didn't you know They wanted to control where things moved but Private entrepreneurs want they goods to get from point eight to point green if there's no road guess what they'll do They'll build one so that they can make money So no, I don't think you need to first start all you need again Is is the rule of law protection of property rights protection of safety like one of the absurdities in brazil is That you can't walk in the street at night without fear being mugged So the one thing the government should be doing protecting you physically they don't do But that's the thing that one thing the government should do is to protect you protect you from coercion cooks and bad guys And for you you have been traveling a lot in europe and I guess throughout the continent as well How are our iron rand ideas accepted internationally? So, um It's still very small the number of people who are even willing to consider iron man's ideas But it's growing dramatically so 10 15 years ago You couldn't come to europe and speak about iron rand. There was nobody there was nothing going on The books weren't translated in many languages or they'd been translated a long time ago and then they were not a print There were there was really no interest out there and this is certainly true in latin america and in asia today You know, I could probably Spend every week of the year traveling somewhere in the world to speak about iron rand the demand is there Her books are translated pretty much every language Every language. I mean three different indian languages in india Into most european languages. It's certainly every major. I mean the big breakthrough when we knew we kind of were on the right path Was when the last me, you know, the who are the last people you think to translate iron rand Into their language what? No, russians did it a long time ago Chinese did it chinese did it a few years ago, but who finally last year had a translation done of atlas shrugged the french So things things are looking up when the french think that that translation atlas shrugged is uh No, I mean it's it's pretty amazing in check in bulgarian in greek and in So it's it's on the rise, but to say that a lot of people are not it's still a small group But it's growing the interest is growing. You're seeing it more on campuses. You're seeing more professors interested in it certainly in the united states 20 years ago She wasn't taught anyway. I mean a few places here and there today. They're probably I don't know Somewhere between two to 800 different classes in the united different professors in the united states Teaching iron rand at ending given semester, right? That's you know, that's new so it's definitely on the rise whether it's on the rise fast enough whether it's you know It hasn't reached real scale But it's very different than it was and and a lot of philosophers taking her seriously for the first time ever She never was taken seriously by the philosophy profession when she was alive The last 10 years are seeing real interest among philosophers in her ideas Which is which is amazing Giving giving that it is extremely difficult To change the moral code Let's look Further, how do you see the free city movement? The free city movement I think the free city movement is a great idea that's completely unrealistic I don't think it can happen. I don't think it could be done. It's the same as the floating islands ideas and Nobody will let you build a free city And if they do and you're successful, they will shut it down No, I mean think think about it It's really free. I mean if it's another compromise then what have you done, but if it's really free I'll give you an example You have a free city or you have a free island or you have whatever and free islands have Free banking which means privacy How long is it going to take before the marines show up at your door If you're not disclosing all the information about your banking practices to the american federal reserve I mean in my view very little. So I've got a solution that nobody will listen to me That I've got a solution for how you make free cities work And it involves nuclear weapons And I'm serious. I'm not joking. You need one You need one targeted to Washington, DC And you need them to believe that you would use it And then they'll leave you alone, but short of that they'll shut you down They'll find a way to shut you down. That's my that's that's my belief existential belief. There's no there's no shortcuts Plus and this is the second part the deeper part if you will philosophically Even if it was successful Unless the people in the free city adopted this new morality It won't last It won't last There will be pressures from within to start compromising to start appeasing There'll be somebody who needs something and charity won't be enough to fulfill their need And there'll be pressure to use coercion to just for this one time because this is what happened in america america was pretty good In the beginning. I mean not perfect. There were a lot of flaws, but it was pretty good historically And you can see the erosion very slowly from the beginning And it's always always using the altruistic instinct. It's always look somebody there They just need a little bit of fire destroyed their home. Let's not let's collect from our own money and contribute Let's take a little bit of tax money and give it to them And if it's to them, what about to them or what about to them or what about to them and need Is a moving target right what people and it diminishes the freedom very very quickly So without the philosophical revolution at least for the people who are in the city It won't last You know, I think it's a great experiment You know all the parts. I just don't think it could you know because of the nuke problem I don't think you can survive because I mean I think I think the united states and other countries are serious about this I mean, I I think they're willing to use military force to shut freedom down I just don't think they'll let it thrive because they're because they know who it threatens It threatens them threatens the powers to be and the powers to be it's just too powerful at this point in history For us to think that we can create an enclave and and and and win I wish I hope I'm wrong It's about the situation with this curse this Nigerian girls that haven't kidnapped by radical muslims in and What do you think what They you say and the western world should what I do about this and the second question is about What's your view on alexander hamilton because I recently read thomas jefferson and it was horrible And I think He was better than than that so Let me do nigerian girls is easier Look as an isolated incident in nigeria The western world should do nothing I mean if you condemn it Because it's horrific. It's morally offensive. It's Disgusting, you know all the terms all the evil terms you want you should list But I don't I there's absolutely no reason an american boy My son Should be sent over there to die for the sake of I mean it's sad and we should all sympathize with how sad it is But the only thing the rest could do is send troops and sending troops I mean american troops in my view Should their lives should only be put at risk to defend the individual rights of americans They should never be put at risk to defend the individual rights of somebody else That's somebody else's problem. I mean this is I'm self interested and I'm not embarrassed to say so. I'm proud of it This is a standard. I believe for going to war You should be able to look your own child in the eyes And say this is a war. I want you to volunteer and go and fight Because it's my life and your life is at stake and therefore you should fight in if you can't do that If you wouldn't volunteer yourself or you wouldn't volunteer your own child Then how can you ask somebody else's child to go fight the war for you? I mean as good as the cause might be now The issue of radical islam or military islam is a much bigger Is a much bigger issue and the west does have obligations there because I believe the west has been threatened By them directly and therefore it needs to deal with them But to take the the issue of nigerian isolation doesn't make any sense The west should have responded to 9 11 and your Bombings and and everything else in a way that it didn't respond and you know We're dying the rest is dying and and and you know We're exhibiting all the signs Of of somebody who has no moral confidence. No backbone. No self-esteem. No self assertiveness and we're letting The barbarians into the gate, which is which is what wome did and what we're doing right now It's happening all over again. We've learned nothing from history But that's a whole different question Hamilton I'm not an expert on the founding fathers But it's enough for me that Hamilton was a strong advocate for central bank I mean central bank in my view is one of the worst Economic entities out there. It is it is a it is It distorts the distribution of wealth away from a meritocracy to who is in favor in a given point of time It is a form of central planning We know central planning doesn't work So let's take the most important price in the entire economy interest rates and give it to a bunch of bureaucrats inside It you know, all you have to do is ask how much is the dollar worth today relative to before the central bank was established It's every dollars worth three cents It's being devalued by 97 percent because of the wonderful federal reserve Federal reserve caused the great depression Federal reserve caused the inflation of the 70s and the federal reserve caused in my view the current economic crisis In my there's no question about that economists will be writing about this In 10 years, it'll be conventional wisdom that Alan green span in fed policy monetary policy caused the 2008 crash Just like today everybody knows everybody in economics knows that the great depression was caused by the federal reserve Just the fact that Hamilton was for that and generally was for Strong federal central government is a weakness. Look, they were all flawed Jefferson was flawed, but Jefferson was a great great Thinker and a great great man in spite of Thank you for your talk. It has been very interesting and thank you for coming to our institute here Let me state clearly that I agree with a lot of what you had said and I like I sympathize with Objectivism, but I have never considered myself an objectivist because I see several problems with it And I don't know if it will be possible to correct them because objectivists tend to kind of idolize and run And if she has said something they kind of take it For granted and and maybe don't don't don't discuss it one of the things Which is I think either incomplete or wrong Is the emphasis of reason And maybe not understanding emotions and moral emotions or moral sentiments you have said That man is special or man's best Best virtue or best ability is it's his reason because we are weak So I cannot survive A lion or I I'm not very strong But there is another solution to that that does not imply Let's call it abstract or technical intelligence which is grouping social cohesion And not the kind That happens in the markets because there what you have is in personal relationships that just come and go This is studied in evolution right now in biology and it is very important to understand how Some animals live individual lives and other animals are highly social In order to have social lives you need to have a special brain A brain that Can process social relationships And human intelligence it is stopped right now and I think correctly that we are so intelligent that because We have to process a lot information about social relationships We are not as good when when dealing with the physical world or physical stuff We just get by but we are very good at at dealing with with other people And not only intelligent, but you need the motivations to live in society So you need to consider the well-being of others You cannot have a stable society If people are constantly telling each other hey, I'm only here Because I'm looking after me because I'm number one and I will only be with you My darling like if you want someone to be your girlfriend as long as it pleases me and then I will leave you It's exactly what we do by the way Exactly what we do exactly this it is it is part of what we do but It would not be possible if you did not have a feeling of guilt which is not it can be abused or induced culture, but if you don't have some remorse In doing some things that you know are also going to affect others I mean if if those feelings make you feel bad. So in the end you are It's the idea of rational selfishness or enlightened selfishness is it's also bad, but so when It is necessary to understand Why do we have altruist feelings feelings for others and how they can be abused? I think in rand is great because altruism is so abused by collect by Communists and socialists that it needs Some someone to fight against it. How do you define altruism? Oh in biology you defined it as something that gives a benefit to someone else and implies a cost to you We know benefits if it if it If that were the whole story altruism Cannot evolve. I mean it would be something very weird What really happens in social groups is that you have reciprocal altruism Which means today I give it to you and tomorrow you give it to me help or goods or or whatever apart from that there is also Indirect reciprocal altruism, which means I give to you and I will receive from someone else before because people in the group see each other And then you build networks and yet you try to associate with people Who are helping others and who have a good reputation in the group and then the higher form of this indirect altruism Is that and as individualists we are we're not going to like What I say, but this is true is that The group becomes an entity in on its own level the same way that we are multi cellular entities and we are the sentence of individual unicellular organisms that develop such strong interactions that then They stopped being able to live independently and Appear as a unit then the group that primitive thrive Is a unit to which you contribute and Which helps you it defends you it helps you in in case of need I have found it interesting when you say the chief of the tribe Uses these ideas To control you that is partly true and it is very important to emphasize it But it's not the whole story. I mean the group also needs those ideas those messages of Let's help each other. Let's avoid being too selfish because if we do not help one another We will end up individually and if we try to live individual lives we will we will we will like I mean this is a long comment. I would just like objectivists To deal with these issues so that the ideas are are more complete so that they just don't Say that usual a is a and use reason and I would say try to understand the motions try to understand why you have them so So I think we do try to do all that we just disagree so I think that the science Of evolution is applied to human behavior As compared to evolution from materialistic, you know, just from the gene perspective It's still very young And I think the scientists who are mostly doing the work Have been brought up in a certain philosophical context And I'm motivated to come to certain conclusions I think it's way Too early to come to those conclusions And I'm I'm not an expert so I'm not an expert but you know objectivists who have looked into this Disagree with a lot of the conclusions about you know The way evolution influences our behavior For example, I don't believe that you would hope to have ideas ideas are conceptual things that don't pass through evolution And I believe that emotions are consequences of ideas They don't proceed most complex emotions don't proceed from A genetic stimuli but proceed from a conclusion that you've come to And you can see that and how our emotions change when our ideas change you can introspect and observe this You have an emotion towards something you learn something new about that something your emotion changes So your emotions follow conclusions that you've come to Not the other way around Now again, we could have a long conversations about this and we would have to delve deeply into the science Which I'm not ready to do because I'm not an expert on this But to accuse objectivism of not looking into it is unfair because I don't think it's true We disagree One of us is right and one of us is wrong You think I'm wrong. I think you were wrong We can discuss this. I mean we should discuss this more the conversation should happen if objectivists ever say you know Bring up the garlic or whatever you do, right? We don't want to talk about that. Then they're wrong. Then they're being dogmatic And and wrong It's a conversation that needs to happen. We need to understand the science better But my view is the science is motivated by a certain philosophy and the philosophy comes and the conclusions from the science are Motivated by that and I think this affects science broadly. It's not just the evolutionary psychology That it's affecting it's affecting it's affecting it broadly I mean, I would love to have An objectivist an advocate of iron man who was an expert in this and who wrote about it And it interpreted the results differently the way I think I think a rational philosophy That doesn't just accept the past would I don't think we benefit from tribal society I know the story is if we didn't have tribes we would all die. I don't believe that I don't believe there's an evolutionary advantage to being a tribe You know altruism altruism You know There's a I mean the vagueness of the of the definition of altruism Yes, there's a certain sense in which Objectivism says you help other people because they're human Because they're a value to human life is a value to me, right? All life is right. I water my plants Because life I like to see life thrive We have pets that we treat well not because they give us something in terms of money But because they give us something in terms of a sense of of thriving life of successful life They benefit us somehow psychologically Well, human beings are better than plants and pets in my view at least So yes, we want to help other people Because there's a value there that we get out of it. That's sort of altruism That's within my the context that I might help you I might not help you but if I help you I in Rand argues objectivism argues This it should be because you are valued to me in some way and I'm not giving up more than I'm receiving In the long run, I mean think about having kids talk about the long run It's a lot of work. It's a lot of effort. You get kids are wonderful And you gain huge benefits from having kids, but it's a long run perspective on self interest It's not instant, right when you wake up at two in the morning and the kids crying You don't get anything instantaneously in return for Feeding them and patting them on the back and calming them down So of course self-interest means a long term and a sense in which there's supercality I might help a stranger with the hope that he goes and become a productive human being out there Works and makes my life better in that sense But I don't need a genetic explanation for that There's a moral existential, but I'm not going to help the stranger if I'm rushing to the hospital because my kid Needs me right because that's more important of a value than that So it's an issue of a high and I'm not going to help a stranger if I think they're a bum And will never work and will never do anything with their life So I think two things are happening. One is we're creating a caricature of what objectivism is You only help somebody if they give you cash right then and there. That's not objectivism. That's never been objectivism It's not what I I mean you forget that Dagny feeds the bum on the train, right? Why does she feed the bum on the train because she's interested She's curious about him. There's a value there. There's a trade going on and she senses He's basically a good person falling on bad times and if she helps him out a little bit He'll become a good person. That's a value to her having good people up So I think there's a superficial understanding about what I'm really means by self interest And then I think and then I think then I think we have once we can clear that up that'll be good And then we can discuss about how much of what we are is driven by genes By evolution in terms of cognitively and emotionally what we are and how much of it are we a blank slate? So how much how much do we start with a blank slate? And and I think that's an interesting discussion there, but I think it's it's worthwhile having it's not I don't reject it I never meant to accuse objectivism of not dealing with it if if I have been understood that way. I'm sorry I know in Rand's thought I mean I have read most of her books and I have read objectivist ideas and I have talked with objectivists a lot But I think they either deal with these issues biological evolutionary psychologically little or sorry wrong Again I think the the problem is the opposite of what you say that some scientists have some preconception and biases I come from the natural sciences. I happen to be a free market of freedom. I And the problem is that I say hey, I want truth and freedom But truth also, I mean if I if I thought this is over first Nobody's free on that the problem is that When I argue these things about objectivist, I always get the same answers for and I see the same reasons reasons in that they want to put reason like in a In a kind of pedestal and when I start telling them about Kind of the unconscious mind and things about like signal signaling theory self-defeat status relationships things that are not really amenable to rational thought They kind of don't like it or feel or feel uncomfortable. So I I just Whenever you want we can continue discussing all this all this Again, I think I think there's a lot of interesting science being done I at least from my understanding question the meaning that it's given and and again I don't think the essence here philosophically is to be free market Free market is is way up there on the philosophical chain it it's it's these kind of issues relate to beliefs about metaphysics of epistemology and ethics and and You know the free market is just a consequence of those beliefs So what you're challenging is their epistemology their beliefs in epistemology and their beliefs of ethics And that's tough and that needs to be discussed and hashed out and fully understood that We hold a position that You know in a fundamental sense not again, don't take this as a caricature. We are born as a blank slate Not I know I know you think that and that's okay I know you think that and I said again not as a caricature of what of what it's a question of what does that really mean? And I don't think we've explained Objectivism has explained what we think that really means because clearly we're not all the same when we're born We're clearly different What sense in which we're different? What are what are things you are born with? This is what are the things you learn? Those are all interesting issues that need to be dealt with And even after we deal with them we might still disagree that What is objective is to say one of us will be wrong? Oh, it could be the both of us are wrong But there is one truth at the end of the day