 Our main subject is the morality of capitalism. And really, I think to many people, the main force of capitalism, free markets, this is the morality. It's the ability to produce wealth and we've had this incredible wealth engine going on for at least 200 years. But to many people, the dis-oppositional results are not just. And so, but you claim that it is the moral aspects of capitalism that is really the major case for capitalism. Absolutely, and I think one of the reasons we're losing capitalism, that is capitalism I think is in decline globally in the world all around us, is because its defenders have focused only on the economics and have kind of accepted the morality of its opponents. I think capitalism is the only moral system because if morality, as I see it, is about human flourishing. It's about individual human flourishing. It's about individuals having the ability to make choices for themselves, pursuing their own values, using their own mind to figure out what kind of life they want to live and living that life, then capitalism is the system that protects their ability to do that. It's not primarily an economic system. Capitalism primarily is a political social system and it's a system that basically relegates the government to a very narrow job and that narrow job is to protect us, protect us from crooks and criminals and terrorists and invaders and fraudsters, importantly. And other than that, leave us alone. And then we all live our lives based on our own mind and pursue our own values trying to achieve our own happiness. That's what morality to me means is individuals living their life based on their own terms in pursuit of their own happiness. That's what morality is. And what capitalism is a political system that allows you to do that, leaves you free to do that. Every other political system wants to impose on you certain values, certain standards, tell you what you should or shouldn't be doing with your life and whose happiness you should be pursuing. And I think that's morally corrupt. I don't think you can impose morality on people. I don't think you should use force and coercion to achieve your vision of the world. And remember government, government sounds like a nice word. And I'm all for government. I'm not an anarchist. That might disappoint some of you in the audience. I'm not an anarchist. Government is force. Government is a gun. Just if you're not sure, try to not follow the law. And suddenly again comes out and off you'll go to jail. So government is force, coercion. Law is not optional. Once a law is passed, no options. You have to do it. So I think that morality demands that we not use force against one another. Even if we vote for it. I think morality demands that we leave individuals free to pursue their own values and impose values on them. But a lot of people would see the capitalist system as one that's producing a lot of inequality, arbitrary income distributions, which needs to be fixed. Even if they accept your point about pursuing your own values, they would claim the result, the income result is not just, why does one apply justice to income? What is the standard? And again here, I think conventional morality out there says that the standard is some form of equality of outcome. Why? Why should people be equal in outcome? And there's, I don't know, any objective reason for that to happen. I mean, you look around this room, we're pretty different bunch of people. We have different talents, different skills, different abilities, probably different levels of morality. Some of us are ambitious and hardworking, some of us might be lazy, I don't know, I'm just guessing. Why should the outcome be the same for us? And I think it goes to one of the points you made, which is arbitrary distribution of wealth or it's not arbitrary at all. The distribution of wealth is determined by what you produce. You produce, you have stuff. You don't produce, you don't have stuff. Seems just to me, right? It seems just that I get my stuff, you get your stuff. I don't have a right to take your stuff, you don't have the right to take my stuff. You'll produce a little maybe, I'll produce a lot or I'll produce a little, you'll produce a lot. Why does anybody care? How much somebody else produces? And the beauty of the system is that the only way for me to make money, the only way for me to become rich, to become part of that 1% or whatever, however we want to define it, is by making your lives better. There's no other way to do it. How does Apple make money? It's the biggest company in the world, or second biggest, maybe the Saudis are the biggest, but how does Apple make money? By selling me a product that I want at a price that I think it's worth it because the iPhone is worth more to me than the thousand dollars I give up for it. I celebrate when I buy a new iPhone, I don't, oh God, I lost a thousand dollars. When I lose it in the stock market, I lost a thousand dollars, but when I buy an iPhone, I'm like, I'm happy. I got something that's worth more to me than the thousand dollars I gave up. And Apple is happy because they just made a really nice profit off of me, right? We're both happier. The world is better because Apple made the iPhone and made a profit and traded with me. They got rich. I didn't get richer, but I got more fulfilled. I got more potential in my fingertips. I got more music to listen to. I got, you know, I got an iPhone, which is of value to me. I can give a two-hour lecture on why the iPhone is of value to me, but put that aside, but it really is otherwise I wouldn't have given up the money. So the only way to achieve this is to drive everybody up, and indeed, that's the history of capitalism, to the extent that we've practiced it, inequality increases, but the poor get richer, fast. Indeed, the only system in all of human history to eradicate poverty is capitalism. It's, you know, to the extent that we practice it, private property and freedom of contract and people buying and selling stuff based on what they want. That is the only way to alleviate poverty. There is no other way. And what I care about, what you should care about is poverty, quality of life, standard of living. It shouldn't be relative, should be are they poor people? So basically what you're saying is markets and transactions are not zero sum, they have plus sum. So everybody wins, it's their win-win. So is it that so many people see the market and other interactions are zero sum? Is there a good explanation for this? I think economics professors have done a very bad job explaining it. I think our politicians have an incentive to present it as zero sum because they want to play us off of each other. And I think that unfortunately, thinking is an achievement and a lot of people never achieve it. And the reality is that a lot of people out there who don't think, we want to think well of our fellow man, but a lot of people just don't engage in it. They have the capacity, everybody has the capacity. But all they have is a, you know, there's a perceptual level that human beings have, that all animals have, we see what's happening. And what we see is iPhone $1,000. And we think the two are equivalent and then we see Apple getting richer and I didn't get richer because the value I got from the iPhone is you could argue spiritual is not material. The whole, you know how Piketty measures, Piketty is the French economist who wrote the book about, think about how he measures inequality, right? He measures inequality by looking at my bank account, right? I have X amount of money in my bank account, Apple has a lot more money in their bank account, so they're richer than me. And every time I buy an iPhone, I get poorer according to Piketty and according to most economists. Because my bank account goes down by $1,000. There's nothing in his equations that includes the value of the iPhone to me. What we call an economics consumer surplus is not captured in it. So I just look like I keep consuming stuff and getting poorer and the manufacturers keep getting richer but that's bizarre. And I'll give you my favorite example for this because, you know, I don't know, there are not that many young people here but how many of you have read Harry Potter? I mean a few of you have read, well actually some of the older people have read Harry Potter, that's good. I mean Harry Potter is terrible because Harry Potter led to J.K. Rawlings becoming a billionaire. And I became much poorer because of Harry Potter. I don't know about you but I had to buy three copies of every book because both my sons wanted one and I had to buy one for myself. And then there were rides in, you know, in the theme parks and there, what were they, seven, nine, 12 movies that we had to go see all of them. I spent like $3,000 on Harry Potter. I got poorer, poorer by $3,000. J.K. Rawlings became a billionaire. That's not fair. And Piketty would say inequality exploded. She went from a welfare recipient to a billionaire. How horrible is that? And I got poorer and that seems like zero sum because a lot of us got poorer because we all bought the books. But how do we measure as economists, and this is the challenge that we have, how do we measure the satisfaction of reading your children a book or watching your kids in this day and age actually read a book or going to the movies with your kids or doing all that, how do you measure that? There's no measure. But that's the win on my side. The win is the spiritual satisfaction of reading Harry Potter. And she won as well. Good for J.K. Rawlings. I mean, that's wonderful. So we have a challenge of explaining that because it's not perceptual. The benefit I get, and this is why I think Harry Potter example is a good example because everybody's read it and understands the value they got. But they never think of it in terms of economics. But it's all part of it. And Piketty and those economists pull one over on us because they show us statistics which is missing the most important feature. What I got out of all the stuff that I've bought. I have to buy artwork and you get enormous spiritual value artwork. You got poorer, I tell you. And you go, no, not really. Not if you count my spiritual wellbeing and so the whole inequality debate is bogus. There is no issue, there's no problem, there's no reason to discuss it. We need to explain the basic economics and how as people get wealthier and if we are participating, and it's important because participating means we're working, we're producing something, then we all get richer.