 So at conferences like this, we tend to emphasize how bad things are in the world. 15 reasons why Mongolia or any country is troubled and problematic. And yes, all of those are true, and in liberty in many respects, as I think other speakers have talked about, is in decline in the world in which we live, or at least in the western world, in places that have maybe a greater tradition of liberty. But you can take a different perspective on this. We live in the best of times. God, life is so good right now. We're the richest we've ever been, ever been, by a long shot. It's not even close. We live longer. We live healthier lives. You know, we all have supercomputers in our pockets. Now some of us, because usually I talk to students and they don't know what I'm talking about, but this is bigger than an IBM mainframe computer, more powerful than an IBM mainframe computer. They used to fill a room or half a room like this and had coolers and fans and all kinds and punch cards. I did punch cards in college, punch cards, right? This is more powerful than that. And we carry it in our pocket as if it's nothing, as if we take it for granted completely. But it's more than just a computer. That's what makes this such an amazing, I don't know, symbol of the world in which we live. This is not just a computer. What else is this? Camera. Camera? An amazing camera. Anybody remember film? Remember winding film? Remember sending it to be developed and then getting it back a week or two later in this, instantaneous. We take many, many, many more photos. We document everything in our lives. It's amazing what this does for us. It's not just a camera though. This gives us access to all the knowledge in the world. All the knowledge produced in all of history. Anyway, anytime. 35,000 feet up in the air or in Mongolia, right? Which to me is like the other side of the planet. Like the remote place you could come to. And yet here it is. I can access all that knowledge. It's also an entertainment system. And I listen to music. Access to every piece of music ever composed. Any performance I want at a marginal cost of? What's the marginal cost of listening to another piece of music? Zero. Zero. My time. Yeah. Well, it's not a cost. It's a benefit to my time. Same with movies. I mean, this is amazing. And we live in truly amazing times. And I don't think we spend enough time thinking about why that is. How come? After a hundred and, you know, whatever the scientists claim, homo sapiens have been around. How come this is the best time ever? How come we live in such amazing times? That caused all this great stuff, right? We've got bottled water on the tables. Water used to be a problem, right? Chinese drink tea because they had to boil the water. Because the water was contaminated. People complain about the environment. We live in the best environment ever. We drink beer in Northern Europe. Why do we drink beer in Northern Europe? Because the water was contaminated. We had to figure out an alternative. So what made the wealth, the prosperity, the quality of life that we experience today possible? What is it? Well, all of the products that we have in front of us, I mean, many of you have computers in front of you and we have the iPhone and we live long. Why do we live long? What makes it possible to live long? The water bottled by some company. What else? Cleaned by some technology? Yeah, we have food. Food that used to be difficult to attain. Today we can attain any type of food you want pretty much anywhere. Because farmers are farming it and producers are delivering it to your doorstep pretty much. In other words, all the goodness that we have, and of course, you know, if you get sick, you've got those evil drug companies to thank for, so-called evil drug companies to thank for, drugs that actually cure you, vaccines that actually stop you from getting diseases. And who's responsible for all this? Well, for the most part, it's entrepreneurs. It's business leaders. It's people who come up with great ideas and actually implement them and make them a reality. You know, one of the terms I don't like in free market economics, there are a few of them, right? Spontaneous order drives me nuts. There's no spontaneous order. It doesn't spontaneously happen. People make it happen. And the people who make it happen are the entrepreneurs. It's not an invisible hand. You can see it actually happening. Now I know there's a different way to look at it, but we don't give enough credit to the entrepreneur, to the actor, to the person, to the innovator, to the people who actually make the things that we use, that we need in order to live and thrive and succeed in our lives. And it's those entrepreneurs who make our life possible and make life so great so that all of us can be here in this wonderful country. And by the way to the organizers, thank you for giving me an excuse to come to Mongolia again, so thanks for the invitation. By plane, wow, that's pretty cool. A little bit of jet lag, but it sure beats one of those sea-faring boats that used to help us cross the Atlantic Ocean or the Pacific Ocean, not pleasant experiences at all. So entrepreneurs, what makes it possible for entrepreneurs to be successful? Where do entrepreneurs come from and why is it that we've only had entrepreneurs really? What, 200, 250 years? I mean, they were always somewhat, but as a force of nature, as a creator's of wealth, as builders of the technology that we have today, this is a brand new modern phenomena. What makes entrepreneurship possible? And why does some cultures have more of them than others? What is it that entrepreneurs really require? What cultures breed, if you will, entrepreneurship and what cultures don't? I was just in Singapore and one of the challenges they tell me that Singapore has is they don't have entrepreneurs. They have economic freedom, but maybe that's not enough. There's a real problem of people starting businesses, of actually going out there, taking risks of people expanding their mind to innovate. So what kind of cultures cultivate that? So I think it's no accident that we saw the industrial revolution when we saw it. It's no accident that some cultures have many entrepreneurs and others do not. I think at the core, I mean there are many reasons for this, but at the core there are two fundamental ideas that have to be prevalent in a culture, that have to be implicitly believed by the people in the culture and by the educational institutions that cultivate a culture of entrepreneurship, a culture of building, creating, making stuff of innovation, of restaking. And they existed those ideas very much in the culture of Western Europe and the United States before the United States came to being during the 18th century in my view intellectually maybe the most important century in all of human history. What were those ideas? Well the first, and I think the most important at the end is the recognition that human reason is our means for knowing the world. That rationality, the thinking, that critical thinking, that engaging with the facts with evidence is what leads to truth. That you don't get truth any other way. You get it through your reasoning mind, through using your rational faculty. And that was a revelation in the 18th century. That was new. Maybe not new to the ancient Greeks, but new to Europeans of the 18th century. For them, at that point, truth was in an old book. Truth was something that was revealed. Truth was something an authority told them it was. And they had been told that only some people know the truth. That most people are too ignorant, too stupid or too unconnected with the world of forms or whatever, the other dimension to actually know what the truth was. And suddenly this revolution started by people like Newton, by scientists. This revolution in thinking about what you are capable of, what every one of us is capable of. The idea is every one of us has the faculty of reason. Every one of us can discover truth. Every one of us can use our senses and our mind to figure out what's right and what's wrong, what's good and what's bad. We can have ideas that are just as good as any monarch or any religious leader, anybody above us, an authority. And we didn't need permission because it was our mind. So for the first time really in modern human history, it was unleashed. The mind of individuals and it's not an accident that you get or the innovation that you get in the late 18th century and 19th century and you get an industrial revolution which carries us to this day. In many ways, we are cruising on the remnants of the enlightenment, on the remnants of those ideas. Unfortunately we don't back them up quite as much as we should. But that's what still keeps us going. It's a respect for reason. But we don't teach it. So if you think about the backward slide or think about certain cultures that don't produce entrepreneurship, critical thinking, the idea that facts matter, the idea that what matters is reality and your ability to comprehend and understand it, integrate it. These ideas are not cultivated in our school systems and some cultures don't cultivate it. What learning? Follow orders. Just do what you're told. Don't think outside the box. It's about thinking. Life is about thinking. Reason is our as a species, as individuals, our means of survival. It's our means of knowing. It's our means of truth. This is the most important aspect of human life that needs to be cultivated. The ability of individuals to think and think once they think, they will think for themselves. So cultures that don't encourage us, somebody asked me, I think it was Singapore or Hong Kong. Why are you so successful? I'm from Israel originally. Why are you so successful? And I said, well there are many reasons. One of them just related to some of these friends in Singapore was we argue all the time. But we started in the crib around a dinner table in an Israeli household everybody's yelling at everybody else. That's fun. You're arguing, you're disagreeing. Everybody has an opinion. Everybody has to justify an opinion. Everybody is challenging other people's opinions. You better be sharp. Otherwise you're going to be defeated at the dining room table. It's not like, oh behave and this is where the knife is. Who cares about that? It's a conversation or an argument as it usually turns out to be. But that critical thinking, that willingness to challenge, that willingness to disagree and then having as the ultimate arbitrator of truth reality not an authority not at the end of rabbi or the father or the clan leader but reality. That is what reason is about and that's what we don't teach. We teach our young people and that's what kills at the end of the day progress, innovation, entrepreneurship. So that's idea number one coming out of the Enlightenment. But what is implied directly by the fact that we can reason, we can think we can discover the truth? Well, who reasons? Who thinks? There's no group consciousness up here. We don't share our senses. You can't eat for me. Right? You can't feel what I feel and you can't think for me. Each individual thinks. Thinking, reasoning is something individuals do. And one of the reasons I think Newton is so important is because Newton spent a lot of time teaching people that they could understand the physical world around them. They could actually understand how the physical world works. And equations in Newton are not hard and it's easy to run experiments and see how they work. If you don't know, if you don't understand Newton that's because you had a lousy physics teacher or you forgot. But it's not hard and indeed there was a real effort during the Enlightenment to show people how physics worked and that they as individuals could understand how the world works. And people said wait a minute if I have a mind and if I can understand the physical world then how about I choose my own profession? Remember before that you didn't get to choose your own profession. How about I choose who to marry? Before that you didn't choose who to marry. There were authorities that told you who to marry. How about I choose my political leaders? How about I don't ask for permission to do what I need to do to do what I think makes sense for me to do? And thus is born individualism and ultimately political freedom. From this idea that we each as individuals have a mind we each can decide our own fate. We each can make decisions for ourselves. We each can live our own lives for ourselves and we don't need authorities. We don't need people to tell us what and how to live our lives. So individualism the idea of the sanctity of the individual. The idea of the individual as an end in himself and as competent and capable of living their own lives. Think about how many times we hear from statists, paternalists who want to tell us no people are stupid people are irrational people don't know what's good for them. So what are you objecting to a little bit of force? Cursion in the name of helping people live a better life? There's nothing wrong with that. Oh drugs. We can't legalize drugs because people are stupid. We need to make sure that we protect them from those evil things. We know. We are the philosopher kings who know what's good for you. You don't know what's good for you. And again, the forces against this idea of individualism the forces against the idea that each one of us doesn't just have a political right but has a moral right to live our own life free of authority of coercion of intervention of force those ideas those implicit ideas I am my own person my moral right is to live for myself for my own happiness. That makes possible that in our capacity and our acknowledgement of our capacity to think that's what makes possible entrepreneurs entrepreneurs are not they don't go off and work the quite crazy hours they work and invent the kind of crazy stuff they invent because they love us they don't think about us they're too engaged in the project they love the truth they love reality, they love the work they love what they're achieving and they trust themselves they believe in themselves they're real individualists at least in spirit if not in philosophy and the spirit of individualism and the spirit of reason you find in every country where you see innovation where you see entrepreneurship one of the things I love about China in spite of all the problems in China and the horrific nature of much of China is that that spirit of individualism and that spirit is there it's missing some pieces talk about what those are but that is there so when you allow freedom then they jump into the entrepreneurial field they jump into innovation it's not a culture a people who just sit back and wait for things to happen so if we value which we all do freedom and we value the material benefits that we have in the modern world then I think it's really important for us to name the causes and I think those are the two primary causes and they are under attack today I think Tom talked last night about the attack on individualism from the collectivist all over the world today and I see it everywhere I go and I've never been more scared in many ways than I am today because I never thought collectivism would come back with such a vengeance as it has today given that it's a complete and utter failure everywhere it's ever been tried but collectivism is everywhere and what really scares me is Europe's Europe you can understand why collectivism comes back there but for the first time my sense is collectivism is coming back is coming to America the land that was founded on the principle of reason and individualism and the first time in America or put it this way in a more explicit obvious way in America we're seeing the appeal to emotion the negation of reason and the complete negation of the individual in the name of this tribe or that tribe this collective or that collective so I think it's incumbent of us not just to talk politics not just to talk economics they are fundamental ideas philosophical ideas on politics and economics fundamental ideas that make cultures work or not fundamental ideas that shape the life that we all live two of those ideas maybe the two most important ones on individualism and reason and we should all be advocates for them vocal advocates for them because I think our freedom the freedom of this world the prosperity of this world depends on those ideas thank you I disagree with Hayek and Mises on the centrality of the customer I don't think that's what drives entrepreneurs I don't think that's what produces the great innovations that happen oh translator yes I don't think that entrepreneurs are focused on the customer I mean when we study marketing we always talk about focus groups and businessmen doing focus groups how many focus groups does Apple do zero none Steve Jobs created a beautiful machine in his image now he believed we would all love it but the focus was he wanted to make something he loved and we believed that would reflect and I think great entrepreneurs create the supply create the demand by providing the supply they create the demand the focus is on creating a great value and the customers come so again I don't think there's a contradiction there they don't ignore customers but their focus is not what does the customer need I don't think that's the focus of business I don't think focus thing a businessman think about what the customer needs they produce what they think is a real value in the world and if it is a value the customers come supply creates its own demand I also have a different view of entrepreneurship so yes they're all entrepreneurs the grocery store but some entrepreneurs change the world they significantly move a standard of living forward and others don't and you might not like the politics of Silicon Valley I certainly don't the politics are terrible but they move the world they move the world in my view forward and we'll talk about privacy in a minute they've moved the world forward they've improved our life they've made my quality of life and standard of life dramatically better in spite of their politics I wish they had better politics maybe we should think about why it is that the greatest producers in the world today have rotten politics and maybe we should think about how we should appeal to Silicon Valley and maybe if we're going to lose Silicon Valley maybe that's the sign we're going to lose because of the smartest, most innovative most productive people on the planet don't buy our ideas and don't tell me they're all cronies because I don't buy that either Microsoft the famous story Microsoft in the 90s did zero lobbying zero lawyers in Washington zero buildings in Washington, nothing and they were born in front of Congress and Congress said start bribing us basically, are in hatch you got to pay us you got to do something and Microsoft said you can leave us alone we'll leave you alone and we know how that story ended heavily, I mean what option do you have when the guns come out but to defend yourself and then it gets corrupted no question so it's not all cronyism and what did Google learn from Microsoft you start lobbying from day one start lobbying from day one and they did and they've been successful because Justice Department has left them alone so I view these people, I put aside politics I look at productive ability and how they've changed my life now there are serious privacy concerns that the digital age has created and partially that's our fault consumers, because most consumers the fact is don't care about these issues if they did business would have to adapt to it but we don't, we don't change our behavior because of privacy issues we haven't, there's no indication of that second, government is at fault it's not surprising in the United States there's a doctrine that the Supreme Court has confirmed called the third party doctrine and it means that if you give information to a private company then you've given it up and the government can get it you don't own the information you can't give it on contract law is out in a sense so we need to think about how to do privacy in the digital age to young entrepreneurs it's a challenge to legal scholars it's a challenge to all of us how do we do privacy in a world where and there's no easy answer and I don't view Zuckerberg as a bad guy here I view Zuckerberg as struggling with a real problem and trying to figure out a solution that's not obvious I don't think there's an obvious solution so while he might have made decisions that we think are bad and disagree with a lot of his decisions I don't think we can automatically say that somebody else it's easy to make the right decision it's not easy and again it's in the marketplace you don't like Facebook by the way it's easy, don't use it I know a lot of people have gone off Facebook life did not end indeed some people would say they discovered an aspect of life they didn't remember existed when they went off Facebook it's interesting, they're important, they're challenging and I think that the marketplace is still going to evolve to determine what they are but I don't think we should diminish big entrepreneurs who become big companies quite the contrary I think they're the ones who are the most successful they're the most important entrepreneurs they're the ones who actually have changed the world you can't separate the two in my view technology will suffer as a consequence there's no question 50% of all the startups and I can't remember the exact number something like 50% of all the startups that turned into unicorns significant world changing were started by immigrants or an immigrant was one of the partners I can't remember the exact stats but it's a large number I used to live in Silicon Valley and was involved a little bit in venture capital and literally half of the people who came for money were immigrants so just think of the collectivistic view of immigration we heard a really good discussion this morning about the impact of collectivism barriers and immigration on wealth what would that have to place like Silicon Valley right? or the fact that America still has some of the best universities for science and technology for science and engineering in the world and yet we bring all these immigrants come they actually get subsidized by the US government they get their degrees and then what do we do with them because of this cultural turn we send them home packing you know so just that little thing but also one of the reasons that so few Americans in relative terms our leaders of these companies entrepreneurs are driving these businesses is because of educational system which is deteriorated dramatically over the last 50 years and our government educational system and I think because of a culture a culture that emphasizes more and more safety a culture that emphasizes more and more lack of risk taking you have to be compensated for any risk you take you have to sue somebody anytime something bad happens to you you can't tolerate a loss that kind of culture and then I think the new kind of tribalistic and collectivistic mentality will make it even worse so we don't respect science and engineering a reason anymore generally you know what this school is like in America I mean I'm caricaturing but there's an aspect of truth here you sit around the 7 year old sit around the room and they ask how they feel about Donald Trump or about anything but who cares how a bunch of 7 year olds feel you're not in school to cultivate your feelings this is John Dewey by the way the American philosophy John Dewey who believed that schools were about socialization they're about cultivating their emotions of a human being not about learning and thinking not about using your mind so when we train a bunch of kids throughout their education to express their emotions forget about facts what do you feel then is it surprise that free speech is under attack in America today because of people's emotions being hurt you can't handle what I'm saying you can't argue back they call them the snowflake generation and maybe that's an exaggeration but there's a lot of people out there who because they've been trained to feel you're offending me so stop it and I have a right to use force against you because your offence is like force on me and that to them is the world and again I believe it's because of the denigration of reason and critical thinking and thinking and the emphasis on emotion and your emotion are what's true your emotions are what's legit and I'm not anti-emotions I just don't think they're cognition well bannership where where would we go now I moved full disclosure I moved to Puerto Rico so to some extent I've abandoned ship in that sense but I haven't given up I'm still fighting for the cause but I do think whereas 20 years ago I would have said it's either going to happen in America we're either going to turn the American ship around or nothing's going to happen I'm a lot less America centric today partially because I see what's going on in the world I see the energy and enthusiasm of young people I think educational systems in other parts of the world are much better than the American educational system so I think there's hope outside of the United States but I do worry one of the reasons I think China has recently taken a turn away from more freedom and I think it has is because it used to use the United States as some kind of symbol of freedom and after the 2008 financial crisis when we whipped capitalism and whipped ourselves and walked away and turned away from it all they said well if that's how capitalism is we don't want that that's what freedom results in if those snowflakes and those ridiculous ideas is that what freedom leads to why have that I think Ronald Reagan one of the things he said is the idea of America being a shining city on a hill and there's a real sense in which it has been I mean if you talk to Lech Valencia and the inspiration he got from Reagan and from America and the freedom and they over emphasize how free America was but it's still, it was an example I don't think it's an example anymore I think the world is cynical about America I don't think we serve an example I think that's going to deteriorate even further and in that sense I worry the rest of the world doesn't have a model doesn't have anything to hold on to so I'm mixed here I believe in fighting I can't say I'm optimistic but I don't see any other option but to fight life is too precious not to fight for life, freedom is too precious not to fight for it we should continue fighting in America but yeah I've expanded my horizon and I spend more time today internationally than I do in the US for that reason I'm always terrified when Tom is going to ask a question he goes to the jugular it's a question of humility so you focus very beautifully on entrepreneurship as bold, world changing exciting and daring we don't want politicians or judges who are like that we like them to be to recognize their limits not to try daring experiments with entire nations that result in collectivization and fame and so on so it comes back to what you mentioned you saw me a bit rudely shaking my head about spontaneous work you don't like the term it's the context within which bold, daring, beautiful wonderful things happen with the consumer oriented question of if the consumers don't like it they don't buy it and in terms of innovation it doesn't make it through the evolutionary process so come back as a moral virtue and boldness is a moral virtue is humility a moral virtue and if so when is it appropriate no I don't think humility is a moral virtue I'm not particularly humble like people to be particularly humble I want you to be daring and bold and exciting but I think it's a good opportunity thanks for the question because it's a good opportunity to differentiate between entrepreneurs and politicians between the market and politics I'm not an anarchist so I believe politics is necessary good not necessarily evil but it deals with a different part of human life completely different part of human life it deals with force politics is a gun politics is violence there's no other way to put it politics is all about coercion that's what it is and then the question is is there an appropriate role for coercion and I would say no but there is no appropriate role for force one appropriate role for force and that's self-defense that's to protect our rights to protect our liberties to protect our freedoms and if you're going to be bold and protecting my freedoms okay but I want I want politicians I don't want to negate the field but I want politicians who are basically impotent in every field except this one I want them to focus only on this and I want to make I want to create a political structure and I think the founders tried and it was not bad I think it could be improved on that basically limits the power politicians so much that even if they're bold they don't have the power to do it because the constitution has eviscerated that power and again I think the American constitution went a long way towards that I think they had the structure kind of right but we need to reinforce it we need to make it better and after 250 years of experimentation we know what can happen so we could improve on it dramatically I think the American constitution can be dramatically improved upon in reaching that I want to separate human activities the activity of creation and business and trade and satisfying consumers and all of that and the activity of gunslinging of using violence those are two different dramatically different force is the enemy of reason force is the enemy of individualism the idea that individual pursues his own so the only time you use force is to defend you that's it and in that I don't want them to be humble I want them to go out and defend my rights full on they didn't make money from their inventions so look I definitely think there's a difference between inventors and entrepreneurs as many inventors discover the skill set of an entrepreneur is different than the skill set of an inventor and part of the skill set of an entrepreneur is knowing how to build a business knowing how to take your product build a business around it, do the marketing I mean you could argue that to a logic stand Steve Jobs's entrepreneurial skill was in things like design and marketing he didn't write code even in the beginning it was Wozniak who wrote the code but he was the guy who knew how to package it and he knew how to sell it and he knew how to make it in a beautiful form that turned out to be really important so entrepreneurship is often not the inventor the entrepreneur I like the work of Israel Kurtzner the Austrian economist who's 94 years old I think but is a wonderful thinker about this, the entrepreneur discovers the profit opportunities not the product but how to make money at it and how to make money at something is a beautiful thing it's what ultimately makes that something popular and gets it into our hands, a value to all of us that's what entrepreneurship is at it's not about the inventing necessarily sometimes entrepreneurs are both but if you're just an inventor and you don't have the business skills and you don't have that vision and you don't have the ability to turn it into a business then yeah, you never monetize it I mean my advice to them would be find a great business partner thank you