 OK, hello, everybody. Thank you for being here at Romanian American University. We are very proud to host this event. We, like representative of Romanian American University, I'm, of course, my colleague from the Marie Robert Center and our partners and friends from Saudi. In the same time, we are very honored because of his excellency, Mr. Marcin Vilcek, the ambassador of Poland. It's here with us today. And of course, because we have a very special guest, I will offer you just a very brief introduction in order to recover a little bit from the time. The topic of today is the morality of inequality and entrepreneurship. And our special guest, it's Dr. Jaren Brook, director of Ayn Rand Institute in Irvine, California. He's the author of several books on the topic of capitalism and income inequality. And constant contributor for different newspapers and magazines like Quartz was the journal USA Today. And a member of Association of Private Enterprise Education and of the Mount Berlin Society. Now, I'll ask Dr. Jaren Brook to have the floor. You can remain seated. It's not a problem. It's better to be an informal discussion. Good. Well, thank you. It's a real pleasure and honor to be here. OK, it's better. It's a real pleasure and honor to be here. Thank you all for coming. And I'm going to start a conversation and talk for a little while. But feel free to jump in with questions if you have them. I want to make this as interactive as we can. It's a small group. I've already got some friends who are at my talk last night who are ready to challenge me on pretty much everything I say. I want to start with a discussion of what has become one of the major topics really of debate in the culture in the West today. And that's the whole issue in question of inequality. We are being told by leading authorities in the world, from the Pope to President Obama, to pretty much every world leader out there that this is the issue of our time, the thing that we should be most concerned about. So let's try to think about what is inequality, what we mean by inequality. So their concern is the gap between the rich and the poor, or between the rich and the middle class, or some definition. But the problem they see in the world around us is a gap between those who've been very, very successful and those who seem to still be in poverty. And the idea is that this gap is a reflection of something really, really wrong in the world, and in the culture in which we live. That there's a real problem here, both a moral problem, an ethical problem, and an economic problem. And indeed, they have invented all kinds of economic theories to explain that this gap is now holding back economic growth in the West and has become a real obstacle to economic success in countries that have large inequalities. Now, I would challenge all of that. Because what is this gap? And what, does indeed, does it reflect? And let's do a little bit of history before we talk about the modern times. What was inequality like 300 years ago? What was inequality like 300 years ago? What percentage of the population 300 years ago was we could define as poor? 50%, 20%, 5%, even more than that, around maybe 1%. I would actually argue over 90%. Almost everybody was poor 300 years ago. Almost everybody was poor 300 years ago. There was very little inequality. There were fewer aristocrats up here. And everybody else were either a subsistence farmer, a subsistence farmer, somebody who farms and eats what they could use, or a workman in some shop in the few cities that existed in Europe 300 years ago. We might romanticize that period, but the fact is that everybody was poor. And inequality, as measured by Gini coefficient or any economic number that you want to put on it, was almost non-existent. There was almost no economic inequality back then. Everybody was the same, poor. And then something magical happened. Not so magical, but it looks magical if you look at the numbers. Suddenly, inequality exploded. So if you think about it, everybody's poor. Everybody's equal. And then suddenly what happens is this. Everybody gets richer. Everybody gets richer. But some people get richer faster than the others. That's called the Industrial Revolution. It's called the 20th century, the 19th century, then the 20th century and the 21st century. Some people, everybody's poor. And then some people, everybody gets rich. But some people get richer than others. Now that's beautiful. That's great. What's ugly? What's bad about that? We get richer. The poor are less poor. They suddenly have running water and electricity. And in America, most poor people, 90% of poor people have an automobile. 88% of poor people have air conditioning, the ones who don't need it because they live in the North where it's cold. They have a supercomputer in their pocket. Each one of you has a supercomputer in your pocket. So yes, there are people much, much, much richer than you. But you're relatively rich. So the gap is not a problem. Who cares? It's the question of, are we getting richer? Are we getting poorer? Indeed, it's more than that. The gap is the feature of what happened to make us all suddenly become richer? We became what? We became free. Property rights were respected. Individual life was cherished. Political freedom was established in many countries. And the consequence of all that was people became rich. Freedom, as a consequence of freedom, we become unequal. And why is that? Why is it that when we're free, we're more unequal than when we're not free? When we're not free, when we're all slaves, we're all equal. Slavery equalizes us. It's freedom that makes us unequal. Why is that? What is it about freedom that makes us unequal? It allows us to exercise our talents and our skills. It allows us to express who we really are. And if you look around the room, you will notice that we are all different. Thank God for that. Imagine if we were all the same. Even if everybody was like me, that would be incredibly boring. It would be terrible. The fact that we're all different, we have different skills, different abilities, different interests, different passions, different motivations, we are different. And when we let us free, when we leave us free to go and exercise those differences, manifest those differences, guess what's going to happen? We're all going to do different things. Some of us will become teachers, and therefore remain poor for the rest of our lives. Because the fact is, even in the first economy in the world, the economic value of teaching is not that high. Some of us will become entrepreneurs and create great value in the economy and become very, very rich. Some of us will choose to be doctors. Some will be lawyers. Some will be artists. And again, probably stay poor. So what? The beauty is that we have the freedom to exercise our abilities, our skills, our passions, our interests. And yes, we're going to make different amounts of money. Why are we going to make different amounts of money? What do we, how does the market work in terms of how much money you make? Who gets really, really rich in a free market? When you have freedom, who gets really, really rich? The one who's smart, but not necessarily. Some of your teachers are really smart. They're not going to make a lot of money. I mean, I consider myself in this group because I'm a teacher, right? It's just a fact that we chose a profession. We're not always smart, right? A doctor, well, doctors make okay money, but you can think of a lot of smart people who are never going to be very, very rich, right? Like Bill Gates, or Juan Buffett, or Steve Jobs. Why is it that they became super rich? And we, as teachers, are not going to become super rich. What is it that they do that we don't do? We are not lucky. They invented something so brilliant. Yeah, they invented something that is incredibly valuable, not to 30 students in a classroom, but to 300 million people out there. That's the difference. As good of a teacher as I am, I will speak and teach thousands of students over my career, and I will provide them, I believe, amazing value. But it's only a few thousand people. So even if I charge them the full value of what I'm providing, I can never become super rich. But imagine if I now create something that every person on the planet wants, like one of these. I don't have to make a lot of money on every one of these in order to become super, super rich because how many of these are selling? Billions. And every year they sell because every year you want the latest, right? As soon as I get back to the States, I'm getting my iPhone 7, right? So the difference between me and Bill Gates, or Steve Jobs, is that they changed the world for hundreds and millions and sometimes billions of people who are willing to pay in order to improve their own lives. So the way you become rich, this is the secret, write it down, right? Entrepreneurs, future entrepreneurs. The way to become rich is to offer a value to people, a value people who are willing to pay for, where you make a profit, off of it. So however much it costs you to produce one of these, people are willing to pay more than that for this because you've created such a value in this little package. You don't become rich from exploiting people. People will figure out that you're exploiting them and walk away and they'll never buy your product again. You become rich by improving their lives, by providing them a real value, by providing them with something they cannot get elsewhere at a price they're willing to pay and why are they willing to pay it? How much is this worth to you? I'm selling it, right? Here's the option. How much does it worth? A few hundred dollars. How much has it changed your life? I mean, think about this little supercomputer. Any argument at a bar, you can now, you know, about some factual thing. You can now Google and find out the answer. You've got all of human knowledge at your fingertips. How much is that worth to you? A huge amount. So yeah, you will need to pay a few hundred dollars for it. Who, when you, I only paid 300 bucks for this, but 300 dollars, how much is it worth to me if I paid 300 dollars for this? More than 300. More than 300. How much was it worth to Apple less? Who lost in that transaction? Nobody. Nobody. Everybody won. That's how you become rich. You become rich by creating win-win transactions, win-win relationships, with lots of people. And the more people you do it with, the richer you will get. The reason Bill Gates is so rich is because he affected billions of people. Not hundreds of millions, not millions, not thousands, billions of people. When you affect billions of people, when you provide a value to billions of people, you're gonna get rich. Does it worry me? Should it worry me that Bill Gates is much richer than I am? Should it upset me? What's the appropriate response to somebody being super rich? Who's done it by creating something? Admirations. Admirations and gratitude. When I see a billionaire, I go, thank you. Why? Because the only way they became a billionaire is by making my life better. Or fraud. Or fraud, but then they should go to jail, right? We know how to deal with fraud and if they did it off the backs of governments of manipulating the system, sure. Then they're bad guys. May I ask a question? Sure. At this particular point. Sure. You mentioned a number of aspects regarding Microsoft and Apple and so on, but let's look a bit at the derivatives market. The value is $720 trillion, while the global GDP is $74 trillion and they sell something, derivatives and people buy them. Yes. So let's apply this analysis to these tools. Love to. I love derivatives. I'm a finance guy. Derivatives are one of the most valuable values that exist out there. That's why the 740 something, notional value by the way. It's not real value, it's notional value because it's offset by $740 trillion somewhere else. The actual value of it is zero, right? Because it's offset. All these things are offset. What if derivatives add? They are massively crucial for risk reduction. Massively crucial for allocation of capital, proper allocation of capital of Rusty Conn. Now, we live in a world today where government has distorted financial markets in dramatic ways. So anything you look at at finance, it's hard to tell what is at free market and what is distorted by government. Most derivatives that exist on the books today exist because of regulations. In a free market, probably would not exist. But derivatives in and of themselves, what's the most basic derivative contract? Everybody know what a derivative is? I'm kind of assuming you guys have no knowledge of finance. But the most basic derivative product is a futures contract. And futures contracts are there to reduce risk. Who would the original buyers and sellers of futures contracts? Farmers who need a protection against the risk of weather. There's nothing wrong with derivatives. Derivatives are cool. They're great. Options contracts are a way to control for risk in a different kind of way, right? They're important for investing. They're important for all kinds of other things, right? CD, what do they call it? Not to allow you to write that. CDSs, credit default swaps. What are credit default swaps? Use evil instrument to cause the financial crisis. Didn't cause anything. Credit default swaps, insurance policies against company bonds going bankrupt. And government bonds going bankrupt. A lot of people who bought CDSs to hedge their risk against the Greek bonds did very well, good for them. People who didn't buy CDSs against Greek bonds lost a lot of money. They deserved it. So derivatives are wonderful. They're a beautiful thing. And if people can make money off of derivatives, good for them. And the fact is that derivative markets wouldn't be $740 trillion unless they served a purpose. And the purpose is to hedge risk. And in a world like we live in today with massive amounts of risk, massive amounts of financial risk, you don't know if Deutsche Bank is solvent or not, then it's wonderful to have a CDS market where I can go and hedge my risk against Deutsche Bank. Now, does some people use that for gambling? Sure. I hope they lose a lot of money. And what we should encourage our governments to do is let them lose money. Instead of too big to fail, instead of bailing people out, let people who take bad risks who take bad gambles lose. But we don't allow that because we want to have our cake and eat it too. We want to be able to have a risk-taking and not ever to suffer the downside of risk. So the whole attitude towards inequality assumes two major, I think, cognitive errors, if you will. Errors about the economy that exists out there. One is that we have a zero sum world. That all transactions are zero sum. That if I get rich, it's at your expense. Then I would be upset about people getting rich because they're getting rich by exploiting me. They're getting rich at my expense. But if my life is better off as they get rich, because the only way for them to get rich is by making my life better, I like the fact that they're getting rich. I don't resent the fact that they're getting rich. I support their wealth creation. I don't resent their wealth creation because it's improving my life. And in a free market, that's exactly what happens, even in derivatives. So how do we know the zero sum world? Do you know what a zero sum world is? It's the idea that there's only so much wealth and now it's just, think of a pie. People like to use the pie. There's a pie out there and it's a constant pie. And now it's a question, who gets what piece, right? So if we have this massive pie and we're sitting here, how are we gonna divide the pie? And some of us get a big piece and some of us get a little piece. We go, wait a minute, why did those guys get a big piece? What did they do? But it's not one pie, right? What's the problem with the pie analogy? Yeah, it's a fixed size. It's a fixed size. The pie is constantly growing. And the way it grows is by entrepreneurs going out there, creating and building new wealth that grows the pie. So it's not a zero sum world in a center of fixed pie. It's a growing pie. But it's actually worse than that. There is no pie. The pie is an abstraction. There is no such thing as societal wealth. There is no such thing as the pie of society. You have a pie and you have a pie and you have a pie and you have a pie. And who makes that pie? You do. You do. So we all have our own pies. And then what these people want is to aggregate all these pies and then re-divide them up. And I go, why? I created my pie. Keep your hands off of my pie. I get to eat my pie. You don't get to take my pie. And I get to keep my hands off of your pie. So there is no one pie that we get to divide up. Each one of us has our own pie. And this is the second myth, the myth that wealth is social. There is no such thing as social wealth. There is no such thing as the wealth in Romania, or Romanian wealth, or American wealth. There is your wealth and your wealth and your wealth. And yes, as economists, we can aggregate all that up and come up with a number that represents how wealthy Romania is. But it's an abstraction. It's not a property right. There is no ownership over that wealth that's collective. Each one of us owns what we create. And if we create different amounts, then we have different amounts and we deserve different amounts. If some of us are lazy and we don't build and we don't create much, then we have a little and that's what we deserve. Some of us are hardworking and we build and create a lot and we get more than we deserve a bigger pie. Why is it right for us each to have the same pie, an equal pie, when we're all fundamentally different? When we're all making different pies, we're all baking different pies, right? In Romania you have a lot of pies, right? I mean, people like pies. It's a national food, right? Well, some people make really good pies and some people make not so good pies. Some people make big pies, some people make little pies. But that's an analogy to wealth. You don't have a right to somebody else's pie. So the whole issue of inequality is distorted and perverted by these ideas of zero sum and the idea of social wealth, social pies. Wealth is individual and it's not zero sum, it's created and additive. Now, in every respect though, equality of outcome, equality of wealth, equality of income is a distorted idea because there's only one sense in which equality is a meaningful idea. This idea of equality, because if you look around the room again, we're all different, right? We're not the same. In so many respects, really in every respect, we look differently, we act differently, we have different ideas, we have different, we produce differently. What is the sense in which equality is a meaningful concept? So the founders of America in the Declaration of Independence, they write that all men are created equal. What do they mean by that? Do they mean that all men should have the same stuff? No, they mean that we're all human. What's that? They mean that we're all human. They mean that we're all human, but what does that mean? So why is that, in what sense does that? About freedom. What's that? Freedom. Freedom, exactly. We're all equally free. I mean, they were inconsistent because they had slaves, right? But the intention was that we're all equally free. That is, that we're all equally have the rights and life, liberty, property, and the pursuit of happiness. We all equally are free to live our lives as we see fit. We're all equally deserve the protection of the state from coercion, from violence, from fraud. The whole notion of equality is a political equality, not equality of outcome, not equality of opportunity, but equality before the law. And what equality before the law means that we're all equally free. We all equally have the right to live our lives as we see fit, free of coercion, free of force, free of authority telling us what to do and what not to do. And when we are free like that, we're gonna be unequal in terms of outcome. That's just the way life is and that's a good thing, not a bad thing. And then the only way to make us more equal is to reduce our freedom, is to use coercion on us, is to violate the idea of political equality. And I mean, give me an example, not from wealth, but you know, I like basketball. You guys like basketball? Romania is a good basketball team, right? Not so good. Are you any known who LeBron James is? Michael Jordan? Yeah. Magic Johnson, you're older. We're the Chamberlain. We're the Chamberlain, we're not playing for Romania. They're not playing for Romania. They play for the, so LeBron James plays for the Cleveland Cavaliers. I'm really upset that we don't have basketball equality. I want to be as good as LeBron James, and I'm not. You haven't seen me play basketball, but let me guarantee that if LeBron James and I played basketball, I would not be able to score a single batter, right? I mean, have you ever seen this guy? Yeah. I mean, he's a six foot two or something. No, no, he's six foot eight, I think. And he's big, right? He's wide, he's athletic, and all of his life, he has trained, worked hard, practiced, thought about basketball, which has made him the best basketball player in the world today. But I, in the name of equality, demand to be able to go on a basketball court with LeBron James and play one-on-one basketball, and I want to be able to score a basket. How do we make that happen? Bring the game. Maybe tie his hands together. Yeah, tie his hands together, right? We can break his legs. The only way to achieve equality there is to handicap the person who has ability. It's to weigh him down. It's to use coercion and force against him. There's no other way, because he has more ability than I do. This is not good. What's that? It's not good when we speak about equality, like equality between man and a man in a labor market. That means they have the same qualification and sometimes men are better paid than the woman. That's why it should be regimented and defended sometimes these things. Your example is that it's not very good in reality because people say, yeah, about equality or you don't want to employ an African-American because he's black. So these things should be solved. Yeah, but how do we solve them? So do we solve them by using the force of coercive government in order to solve them through regulations? Or do we solve them by letting people voluntarily exchange and figure out how to make it better? If you use government, which is what the Americans did through affirmative action, what you create ultimately is racism. Just in reverse. Now we favor blacks on top of whites. This is positive discrimination. That's not positive. Discrimination can never be positive. Racism is racism is racism. Whether you're racist in order to so-called correct past problems. I never had slaves. I've never discriminated black person but I might lose my job because a black is competing with me who's not as good as I am and he gets a job because of affirmative action. And what is that gonna cause me to feel resentment towards him which is he encouraged whites to feel racist and this is Donald Trump. Why is Donald Trump so successful in America today? In my view, because America's become more racist, not less racist because of affirmative action. So Donald Trump is an expression of America being more racist rather than less racist because we try to correct racism by racist means. Which is absurd. So yes, there's a lot of injustices in the world. I'm all for fighting injustice. You don't fight injustice with a gun. You don't fight injustice with coercion. You fight injustice just like you fight everything else by using argument and reasoning and discussion and persuasion. But when you start to force, when you take, you know, if women are paid for exactly the same job and the same skill set less than a man, what would happen in a free market? There would be women would be hired more than men. Yeah. And what would happen as a consequence of that? What would happen to their wages? They would go up. They would go up until when? Until they would be equal to those in the man. So if it was exactly the same skills, that's the way markets work. It's the way markets work over and over and over again. And it's not like with- But it's not always perfect, it's not always perfect. It's not always perfect. But why do we think that markets are not always perfect? No, they're not. It's messy. It's noisy. It takes time. And yet central planning, that's perfect. Giving a bunch of bureaucrats the decisions to make it is a lot less perfect and creates distortions and creates resentment and always creates problems. Regulations and controls from government down always create distortions and problems that then require more regulations and more controls that build up more regulations and more distortions and more resentment. They don't solve problems. You don't solve problems. Indeed, what happens when you try to force incomes to be the same is that people with lower skills get higher wages than they deserve and people with higher skills get lower wages than they deserve. Because you take the decision away from the person who actually knows what the skills are and you give it to some bureaucrat who doesn't. If you allow me, problem of mechanism, these regulations, when I'm totally open to what you're saying, they are produced by the parliaments of the Congress which supposedly represent the will of the people. So what is the problem? They are not representing the will of the people or the will of the people is wrong because I share- The will of the people, in my view, is irrelevant. So the will of the people is irrelevant. The will of the majorities, when it comes to economic issues, is irrelevant. And when it comes to individual rights, the will of the people is irrelevant. It's the will of the people that kill Socrates, right? I mean, Socrates was walking around Athens and corrupting the youth and the people didn't like that. So what did they do? They tried him and poisoned him and killed him. So there's no free speech if you consider the will of the people. Will of the people never want free speech. They want only what they want to hear. They don't want the youth be corrupted. They would never allow me to speak. So we give up democracy? No, what you do is what the founders of America did is you limit democracy. You make it so the will of the people only applies to very narrow issues. There's certain issues where the will of the people does not apply. In America, for example, which is what makes I think America so strong is the will of the people doesn't apply to free speech. You cannot vote to silence anybody. Congress cannot pass a law that says Iran cannot speak. They can't do that because there's a bill of rights that says there's a right to free speech. Now there's also a right to property which means that me and my business, I should be able to pay my employees whatever I want. And the will of the people be damned. Who cares? It's property rights. So they are rights that are not democratically voted on. That's the whole point of rights that you have in the Declaration of Independence, it says that every human being has an inalienable right. What does inalienable mean? Inalienable means cannot be taken away by anybody, including a majority. So what did the American founders do? They said, look, government can only do this amount, a very little amount. Most things are beyond the scope of government. Government can only do this. In this one realm, people can vote. But in all these other things, free speech, property, and a bunch of other things, right? The right to bail on, so whatever they, right. Majorities don't matter. It doesn't matter what people say. This is a human right and you have it where the majority thinks it's good or bad. So is that anti-democratic? Absolutely, right? In a sense of majority rule over everything. And that's why America is not a democracy. It's a constitutional republic. It allows for voting on very restricted things, which is the appropriate thing for government. Government should, you should not have unlimited democracy. What you get is a mess, right? Because when you violate our rights all the time. You know, if the neighbors decide that they could use your house as a basketball court, then should they be allowed to vote to turn your house into a basketball court? We also, oh no, it's my house, but that's democracy, right? So yes, so if you ask me if I'm against that kind of democracy, yes, I'm against that kind of democracy. I'm for a constitutionally limited democracy where you can vote on very specific things. What is the role of government? I'll get to the question. I don't want you to get tired. What is the one role of government? The one role of government is to protect my rights. That's it. That's the only role of government. And what does that mean? It means that it has to have a police force in it to protect me from crooks and criminals and fraudsters. It means it has to have a military to protect me from terrorists and invaders. And it means it has to have a judiciary to arbitrate disputes among us. And other than that, the only job of government is to leave me alone. And the only job of the majority, it doesn't have a job. So you can't vote to decide what to do with my house. You can't vote to decide what to do with my business. You can't vote to decide how much I should pay my employees. You shouldn't be able to vote on any of these issues. These are not issues that a majority has any relevance on. Yeah. Contrary to your limited democracy, by saying that one of the best nations in the world is, let's say, Switzerland in terms of how it's governing itself. And it's not a limited democracy. On the other hand, actually it is a forced democracy or we can call it a imposed democracy. You are forced to go to a referendum. You are forced to express your ideas. And secondly, I would like to tackle a bit the fact that you said that freedom or freedom because of inequality is because of freedom somehow, but you express it only to a value point of your, to a financial point of view. What I would like to express is that value comes from a person which is a human resource or a human value which cannot have a financial value attached to it. So it is morally wrong to attach a value to a person because that person actually creates value. It's the means of creating value. Value is not generated because of a company. It's not created R.E.U. It's not because it's R.E.U. It's because the people are over here because of the students that are over here. That's why it's valuable. Okay, so let me remind you what the first one point was. The first point was, oh, Switzerland. Yeah, I mean, Switzerland's not a bad country. It's not great, but it's not bad. It has lots of problems and part of the problems are created by each Canton having different rules and regulations. So for example, I know a businessman in Switzerland who used to own a trucking company and he had to give it up because every Canton had a different set of regulations for regulating trucking. So he would literally have to drive to the border of the Canton and take all the goods off of his truck and put it on a different truck because he couldn't drive into another Canton in Switzerland. Now, Switzerland's not okay for a variety of reasons. It's isolated. It's homogeneous and most countries could not function the way Switzerland functions. In California, we have referendums very similar to Switzerland. It's a disaster. These referendums are contradictory. They change all the time. It's really hurt the economy of California. The discriminatory, they treat immigrants really badly. All kinds of stuff is a consequence of the so-called democracy. So while you can point to a country like Switzerland as being, yeah, better than most countries. I'd say it's spite of the democracy, not because of it. That is not an ideal motto and you have to have a theoretical framework for this. In my view, the essential unit in a society is the individual human being. A little bit linked to your second question, right? That's the real value. The only reason an individual human being needs a government is because when in society he needs protection against those who would commit fraud and force against him. So the only reason he needs that government is to protect it, to protection agents. Anything beyond that that a government does is harmful to the individual. Regulations, controls, redistribution of wealth. All of that is harmful to both the person whose wealth is being taken and in my view to the person who's receiving the wealth. So I stuff an individual and build upwards and the only kind of government that's a consequence of that that makes any sense is a government that is limited to the protection of wealth. And yet within that realm, you have democracy, you vote. But that's a very, very narrow realm which no government in the world today abides by. All governments today are much broader than just the protection of wealth. Now, where does value come from? Value comes from individual's choice, from what the individuals create. Individuals create value, right? And sometimes individual gets together in a university or in a corporation and they create value together. And then we attribute that value to the university or to the corporation as a shortcut because it's easier that way. Some values will create a monetary. Some values will create a non-monetary. Education is not a monetary value, although it can have a monetary value, it's called tuition. The monetary values that we create can be measured. Some people create lots of monetary values. Some people create very little monetary value. It's based on how productive you are. Bill Gates is more productive than me when it comes to monetary value, not when it comes to other values. I'm do more education than Bill Gates. So my education value is higher. But you don't measure my education value in monetary terms. You measure it in other terms, satisfaction, I don't know, effect on other people's lives. So I don't have a problem with people, some people get rich because they're creating economic value, they're creating monetary value. Other people don't get rich and still might be creating immense value. Michelangelo never got rich but he created unbelievable value. Spiritual value, for all of us, we still benefit from it. But that's not a monetary value, it's not a value we pay for. So he's never gonna be rich or at the time he wasn't rich. So one has to separate what kind of values human beings are creating. I have no problem with some of those values, having monetary value and other not having monetary value. That's determined by voluntary transactions between individuals. If you don't wanna pay for what I produce, I can't force you to pay for what I produce. I don't have a right to force you to pay for what I produce. Who gets to decide? Some artist is out there starving and is creating some art, right? If nobody wants to buy it, then what monetary value does his art have? None. Now, a government bureaucrat can come and say, ooh, but it's really valuable and it's really beautiful. So I'm gonna steal your money and give it to him because I think it has a lot of value. But that's theft. That's just, he's being a crook. He has no right to take from some people and give to other people because he thinks it's good. If we all thought that art was good, we'd go buy it. Or we'd give him a contribution. Ugly goods. Give me an example of a public good. For example, highways. So that they take money from... Who built the first highways in America, for example? Private corporations built first highways. There's no public good in a highway. If there's a need for a highway, then there's value there to be made and somebody will build the highway. I don't need the government to do that, to take from, for example, in California, we need a lot of highways because everybody has a car, two cars, three cars, right? So we all drive and we need lots of highways. So let's tax somebody who lives in Iowa who doesn't need any highways, take his money and give it to me so I can build a highway in California. How is that just? Instead of making the highways in California private and when I drive on them, they bill me and send me a check and I pay for the highways that I use. Wouldn't that be better? It's not a public good, it's my good. It's your good. So I would much rather see highways being privatized and people paying for what they use rather than people who don't really take it. You decide you want to ride a bicycle everywhere but your taxes are still paying for my highways. So I would like to see even roads privatized ultimately but that's a long way in the future. But I don't know what private public goods are. It's a nice thing that economists throw out their public goods but what is a public good? Schools, why schools are public good? So in the United States, I don't know about Romania. In the United States, why is it a public good, right? It's a good. They are teachers who produce a product and they are students who consume a product. Just like with iPhones, why aren't iPhones a public good? Everybody needs one, everybody wants one. Why doesn't the government just buy 100 million iPhones and start distributing to everybody because it's a public good? Education is a good. Indeed, if it was private, it would be better. We would treat our students like customers. We would treat parents with respect. We would actually have to produce a product that had value instead of just keeping the kids in the classroom, right? What about people who cannot afford to pay for children education? So what would happen to people who can't afford to pay children's education? You'll have a group of people which will be uneducated. Do you really think that would happen? See, I don't. And I'll give you two reasons for that. One is education can be very cheap. Education is not expensive. There's a wonderful book called The Beautiful Tree by an English scholar whose name is James Tully. Thank you. James Tully. And he describes schooling in the slums of Nigeria and India. And he went into the slums there because the kids were not going to the public schools. And everybody was saying these parents don't care about their kids' education because they weren't even, we built these beautiful public schools for them and they're not going. So he went into the slums and started asking parents, why didn't you send your kids to public schools? And the parents said, because the public schools are lousy, we sent our kids to private schools. And he said, what private schools? And what he discovered was hundreds of little private schools inside the slums. They charged very little because the teachers lived in the slums so it was cheap. Yeah, they didn't have swimming pools, they did have basketball courts and they didn't have soccer, but they had an education. And they were providing a better education than the public schools at the periphery of the slum. And the parents care about their education and they paid for those schools. Private schools can be very, very cheap. So cheap that people can afford them. That's one. Second. How many of us, and I don't know, I've never done this exercise in Romania so we'll see if it works, right? How many of you would be willing to pay some money into a fund that paid for poor kids who couldn't afford the private schools to pay for scholarships for those kids to go to private schools? How many of you would be willing to put money into a fund that would pay for that? Now I ask that question in America and everybody raises their hand. So I don't see a problem. But I do see a problem with public education in America. Now there's my experience as America and Israel, I grew up in Israel. So I can tell you, public schools in America are terrible. And public schools in poor areas are a waste of time. Horrible. Horrible institutions that guarantee that poor kids will never get an education and always stay poor. The best thing you could do for poor kids in America is get rid of public schools and privatize them all and create an, imagine. Imagine if the next entrepreneur, instead of thinking of the next stupid app to develop for the iPhone, thought of the next way to educate poor kids and how to make money off of that. I know there's an entrepreneur in Austin, Texas who's trying to create a network of small schools that are really, really cheap. But still make money. And he wants hundreds of these all over the United States and really, really cheap means in America about $2,000 a year, which is really cheap. Imagine, a whole network of schools, hundreds of schools with $2,000 a year and he makes a profit out of it. Imagine if entrepreneurs were doing that and competing and trying to come up with innovative ideas and maybe creating online schools because today you could get an education online. You don't even have to go to a building. That would be exciting. Instead, the government controls the schools. There's no incentive to become better. There's no competition. There's no profit motive. Who cares how good the educational product is that the government provides, nobody. So what does it provide? It allows the education, particularly to poor kids. While you're talking, I was thinking constantly, you are perfectly right from a philosophical perspective, but life is such more different than that. There are so many different situations. And you talked about Bill Gates. Yeah, I would say Bill Gates, thank you for many, many reasons. And to all entrepreneurs, I would say thank you. Bill Gates is donating 99% of his income for whatever causes. While others, entrepreneurs are not doing that. And we just shouldn't. I mean, Trump is giving charity money for his own business. Yeah. Well, Trump is a bad example of anything, so let's not use Trump. Yeah, exactly, but it's his money and he makes whatever he wants out of it. But nevertheless, I think that systems are extremely important and systems should be fair. It shouldn't be liberty for all in anything. But what does fairness mean? Sorry? What does fairness mean? Well, fair could mean something for some communities and other things for some other community. This is why people should decide for their community. So this is why, but what happens if we have a community and some people think fair means X and other people think fair means Y and the people who think it's X are 51% and the people who think it's Y are 49%, the 51% gets to impose their view with force, with a gun on the 49%. I think that's wrong. I don't think that's fair. Of course it's wrong, but never the latter. But that's democracy. People, yeah, of course. I believe in democracy, but I don't believe in socialist states, for instance. Even if I should choose, if I had to choose, I don't know to live in the states or in Sweden, for instance, except New York and San Francisco and maybe Chicago, I would choose Sweden. So let me ask you this, let me ask you this, if we had open borders, it's an thought experiment. If we have open borders between Sweden and the United States and people could go in either direction, where do you think people would go? Would they go from Sweden to America, America to Sweden? Probably many would go first in the States and some of them would later go to Sweden. So almost everybody would go from Sweden to America. Nobody wants to live in Sweden. I mean, the fact is Sweden has a massive brain drain. If you're entrepreneurial, you leave Sweden, you don't stay in Sweden, you go to America. Silicon Valley is full of Swedes. Minnesota and Texas are full of Swedes. Swedes in America live in bigger homes, have more money, have better healthcare, live longer and unhappiness measures score happier than Swedes in Sweden. That's true. So if you are speaking about people who have above the medium level, let's say, from every perspective, intelligence, wealth, and so on, so they are perfectly well in the space. But if you are talking about people and advantages, but I'm mentioning most from a, I don't know, health perspective, they have personal problem or whatever, they are just born in a poor, I don't know, poor village, for instance. Then in Sweden for those people, it's better than in the states because the system helps them. And I will give you just an example. But you see, this is because they don't value freedom. So if you look 100 years ago, those poor Swedes are the ones who left Sweden and went to America. Why? Because 100 years ago, we still valued freedom. The problem of the European welfare state is we have lost the sense of what freedom means to the individual, the value of freedom. What we've done is we've institutionalized poor Europeans into a welfare state. We destroyed their lives. We've taken away their self-esteem. We've taken away their sense of personal responsibility and personal freedom. And we have crippled them. And if we actually opened the borders, there would be a massive brain drain and they'd be stuck in countries that created no wealth and therefore couldn't redistribute wealth to them because they'd be nobody creating the wealth because they'd all move elsewhere. So I don't think we've done any favors to poor Europeans by creating the kind of system that we have today, but let me address your earlier issue. See, I believe fairness means equality before the law, that the law treats everybody the same, not, which means equally free, leaves people alone, leaves them in liberty. And I think it's wrong, it's wrong, in the name of some abstract term like fairness, for the 51% it poses well over the 49%, which is what democracy does every day. It's wrong to use coercion to limit people's freedom. Yeah, I've told you, I think our perspective of perfect life, that's not perfect for people. But that's a theoretical perspective. A lot of people living in Sweden and another one living in the States, and the kids are going to public schools in one country, another in another country. So the funny thing about Sweden is, Sweden has school choice in vouchers the United States does, and Sweden actually has more freedom in education than the United States does. Exactly, because the systems are different for poor people. The system in Sweden is better than the system in the state. And I'll give you another example why the system is important. Muhammad Yunus, he saved, let's say poor communities because they are not relying any more on banking systems who are not good for them. But another system, a fairer system, could help poor communities to get better. And this is extremely important. It's not true. So the Swedish system is not better than the US system. It's certainly not better than the US system used to be. It's kind of like poor people. It's not, it's not. Because the poor people, now again, the United States is not what it used to be. But in a free society, the poor people are far better off than in a pseudo-socialist society like Sweden. I don't believe in socialist states. But you're defending Sweden. No, I'm... Now Sweden is not very socialist, correct? It depends on the system that could help people. But Lea, I want to say something about what you said about Bill Gates. Because I want to argue that it's a shame that Bill Gates is giving away 99% of his wealth. Why? It's his right. Because he can do whatever he wants with it. I'm not gonna tell him he doesn't have the right to do with it. He has whatever... It's a shame, for our perspective, because it's not a good use of his money. If what you care about is human prosperity, human achievement, human success, Bill Gates would make our lives much better if he invested them on it. But he invested the money that he's making. But again, charity does not change the world. Charity does not help the poor. Charity does not cure malaria. What helps the poor? A billion people, one billion people have come out of poverty over the last 20 years in the world. One billion people. Because of charity? No, not a single person has come out of poverty in the world because of charity. A billion people have come out of poverty in the world because of what? Because of capitalism. Because China moved towards capitalism in 1978, because India moved towards capitalism in 1992, because South Korea and Taiwan and Hong Kong and Singapore and Thailand and all these Asian countries have moved towards capitalism. A billion people, maybe two billion people are not poor anymore. That's amazing. So why do we care about charity? What we should encourage is investment in the ideas of liberty. What we should encourage is investment in the ideas of capitalism. The ideas of liberty and capitalism, these theoretical ideas, do more to help the poor than any charity has ever done if you accumulate it all together. Yes, you're right. Well, so these theories, these abstract theories are what change the world. They're the ones that have an impact. They're the ones who actually affect the lives of poor people. And the more we advocate, so instead of Bill Gates spending gazillions of dollars in Africa, which is almost all wasted, if he was advocating for capitalism in Africa, Africa could become rich. That's what will save Africa. When Africa adopts property rights, when Africa adopts individual rights, when Africa adopts freedom for its people, liberty for its freedom, Africa could become the richest continent on the planet. They have natural resources, they have competent people. The only reason Africa is not incredibly rich is because it's not free. It's because it doesn't respect property rights, because it doesn't respect individual rights. It's also because, I don't know, the system of beliefs and education and maybe if somebody invests... Some systems of belief are really, really bad and hold people back. And if your parents are poor, how can you get education in a primary school if you advocate for private primary school? I don't get the chance to be equal as you to gain a new corporation or a new business. I cannot read, I cannot try. How can I get the chance to get a wealth and to get a piece of life? So I answered this a few minutes ago. Education will be cheap. Everybody will be able to afford it. And if those who can't afford it really can't afford it, we'll get charity. The education will be a thousand times better than it is today. And look, I'm not arguing that we'll become equal as a consequence. We're not. We're never gonna be equal. There's no such thing as equality of opportunity. There's no such thing as equality of outcome. If you're born to poor parents, you're gonna have a rougher time than if somebody's born to middle class rich parents. That's just the reality of it. That's life. There's nothing wrong with it. There's nothing positive about it. It just is what it is. Why would you share your piece of pie with somebody else? I just ask everybody here, how many of you are willing to put money into a fund to educate poor kids? Why? Because it's in your interest to have poor kids educated. Why? Because if they're educated, they'll be more productive and they'll create more value for you. I benefit when human beings are successful. I suffer when human beings fail. So I have a vested interest, a selfish interest in the success of human beings. Therefore, I'm willing to contribute to other people's success. Not because I'm altruistic. Not because I care because I'm selfless, because I'm selfish, because I care about myself. I want other people to be successful so they can create goods and services and values for me to consume. Your poor kid might be the next Michael Angel or might be the next Steve Jobs or might be just a middle-class worker, a doctor or a lawyer or just a worker and a factory. But he's gonna create values that I'm gonna benefit from. So it's worth my while to invest in that kid. And we're generous. Free people are very generous. It's unfree people who tend to be cynical and ungenerous. Yes, Ambassador? If I just, I just came back to be a student today, so anyway. I'm not here to invest. First of all, are people interested in being free? And secondly, can you find an equilibrium and who is possibly able to find an equilibrium between freedom and democracy? So are people interested in being free? No. Unfortunately, most people are not interested in being free. I, you know, George Bush during the Iraq War said that all people have a desire for freedom. No, they don't. A lot of people don't have a desire to be freedom. I think freedom is an achievement. It requires a certain set of values and ideas. And this is why most of human history, 90% of human history, we've been unfree. And we've accepted that. The fight for freedom is relatively new. It's a consequence of the enlightenment. It's a consequence of a particular philosophical view of human life. It's the idea that the individual has value above and beyond the group. And that reason is our means of survival and therefore reason must be let free in order for individuals to flourish. That's new before the enlightenment. You know, when the Scottish, everybody see Braveheart, the movie Braveheart? Yeah, everybody see Braveheart, right? Remember when they yell freedom, what do they mean? What they mean is we wanna be ruled by a Scottish king instead of ruled by a British king. That's our freedom. It's who is gonna be our dictator? Do we want the Russians dictating things or do we want the Ottomans dictating things? But you still want a dictator? That's our freedom. Freedom means individual freedom. Individual exercise are free. So I don't think, I think it's an achievement. I think it requires a certain set of ideas and I think the West achieved it with the enlightenment. I think it's starting with the scientific revolution and Newton and then Locke and culminating with the establishment of the United States of America in 1776. That's when people learned about freedom and suddenly freedom became a value. In terms of the balance, I think the balance was best achieved with the American foaming. I think the founders had a good sense of the balance. That is, we establish a government we need, I'm not an anarchist so I believe in government. We establish a government but the government is limited in its scope of authority to protection. And people can vote in order to appoint their representatives but the representatives are very limited and we create a divided government. The whole point of the American government is gridlock. We don't want them to get along because we want it to be difficult to pass laws. So we have two houses, we have an executive branch and we have a judiciary all looking over each other's shoulder and all disagreeing with one another and only when they all agree does something go past. So we make democracy very difficult but we still have it but it's very, very limited in scope and I think that was the best balance achieved and I think one of the problems America faces today and has for the last 1,500 years is that balance has been distorted. America's become a democracy, a majoritarian wall democracy where we look for the will of the people to dictate what happens instead of a constitution that limits these facts. The constitution in America has become irrelevant. There's no real separation of powers anymore. But I think the founders of America had it as close to perfect as you can get in a messy world. Comments, questions. Yeah. Having that, let's say, opinion on charity means that you are also having the same opinion vis-a-vis Christianity, for instance, because they are supporting charity. I am, okay, so I'm gonna get in trouble now. I was intending to. I know you were. I am not a fan of Christian morality. I think Christian morality is the problem in the world. It's why we can't establish liberty and freedom because I think it goes against it. I think religion generally is anti-freedom because religion is what? Religion says that there's an authority and you have to abide by that authority and it's your moral responsibility and duty to abide by authority. And I, as a free human being, don't believe in authority. I'm my authority. I decide what I want to do and what I don't want to do. And I don't want to listen to something that tells me what's right and what's wrong. And my favorite story here, I have a lot of stories because I actually read the Old Testament, so I was raised on the Old Testament. God says to Abraham, go kill your eldest son. Now if God said that to me, I would say go to hell. I'm not killing my eldest son. I don't care what happens. That's a ridiculous idea. But Abraham is a moral hero for religion. All three religions consider Abraham the moral hero. Why? Because he said yes, sir. And he goes to kill his eldest son. Now God prevents him because in the storybook, we don't want to have a sad ending. We want a happy ending. But the idea that you would just salute and say, yes, sir, I'm going to kill my eldest son, that's moral authoritarianism. That's not a spirit of a human being who wants to be free. Free people don't say yes, sir, and march off to kill their most cherished value. So I think religion stands in a way of true freedom and liberty. I get into trouble when I say this because America and Romania and Poland and many of these other countries are very religious. But I think that's the reality. And Christian morality, which says that your primary moral obligation is to serve others. Your primary moral obligation is to sacrifice, is to be selfless, is incompatible with an economic political system that basically encourages and rewards self-interested behavior. Capitalism is all about pursuing your own interests. It's all about making the best of your own life. It's all about pursuing happiness and success and prosperity. That doesn't match up with an ethic that says, sacrifice, sacrifice, sacrifice. Give, give, give. I'll give when I want to give. What about next life? I got the same question yesterday and my answer to that is I doubt it exists but even if it does exist you have one life here on this earth. Make the most of it. Live the best life that you can live. Be the happiest you can be. Be as self-interested as you can be to make your life the happiest fulfilling successful life that you can have. And if God at the end of the day tells you that that was a sin and you're going to hell then he's a bad God. I can't think of any other way to live in this world than to make the most of the one life that I have in this world. I'm going to make the most of it. Do the best. Now do I know what God thinks is good and bad? You don't know. Some guys wrote a book called The Old Testament or The New Testament and they claimed that God spoke to them. I know a lot of people who claim they hear voices. I don't listen to them. Now if God actually spoke to me then maybe I pay attention. But there's no... I mean, really, these are books. Guys wrote. You have to look at them critically. If you actually followed what it says in The Old Testament life would be horrible. Right? The Old Testament's a horrible book. There's no freedom of speech in The Old Testament. If you don't agree with the Jews in The Old Testament they kill you. Think of what happens to Moses. Moses would come down from the Mount Sinai with 10 commandments. Right? Comes down with a thing. And some Jews are worshiping a golden calf. What does he do? First of all, he drops the commandments. He breaks them. But then does he go up to them and say, look, you guys have free religion. Go and do your own thing. No problem. Freedom of speech. No. He takes up a sword and he kills 30,000 people that day. And what does God do? He rewards him. And he makes his brother Aaron the priest of the Jews because he killed all these people who worshiped a golden calf. That's the kind of world you want to live in? Not me. But that's the rule that also exists in the government. That's why I'm against government having all those rules. I'm for a government that has very few rules. Basic rules like no fraud. I can't force you to do what you don't want to do. I can't steal your stuff. That's basically it. It's very simple. Right? Now it gets complicated because how we define private property and stuff like that is complicated. But the basic rules are you can't use force. Force is banned. I can't take out a sword because I disagree with you and stab you. That's all the government has to do. So the government has a police force and military and judiciary. That's it. It doesn't regulate. It doesn't tell us how much to pay our employees. It doesn't tell us what to sell our goods for. It doesn't tell us how to treat each other. The only time it intervenes is when we are using force against each other. It's a simple government. It's a simple, pure, limited government. Because exactly for that reason. Because otherwise, the government becomes authority. It becomes an authoritarian and we are not free. And I value individual freedom more than anything else. But maybe freedom is not everything. For instance, you make several I don't know, historical incursions. I think that's the word. Anyway. So in ancient war, people were just giving up their freedom in order to become slaves because living as slaves was better. They could be richer being slaves. They had a better life as slaves. So they were just voluntarily becoming slaves. That world sucked. Nobody would want to live in a world like that. That might be true. I'm not going to argue whether that's true or not. But a world in which being a slave is being better, is better than being free. It's not a good world. It's a world you want to change. It's a world you want to fight. It's a world where you want, where freedom is a good thing. Now, the reason that was the case was because as a free man, government, society limited what you could do. So, you know, I'm not full. What is the least in a really bad situation? What are the least worst options? I want the best option. And the best option is freedom. Freedom in a true sense in a full sense where I can really exercise my abilities. And I'm not giving up my freedom for slavery, even if you give me money. Some people do. That's their problem. But I'm sorry. Isn't it the same thing, actually, if you transpose it in nowadays lives? You go to a multinational corporation where you actually work for a team, because it's a teamwork. And the value is not given back directly to you. It's given to the company and to the team. So, based on this, I could conclude that the only way of actually being successful and free is engaging in an economical, from an economical perspective to engage by yourself, by your own means and your means only. You know, there's no teams as long as you're joining the team voluntarily and as long as you can leave the team whenever you want to leave it. There's nothing antagonistic between a team and individuals. Teamwork is the way in which individuals often produce real value because we're good with one another. We add value to one another. So teamwork is incredibly beneficial. If you go to work for one of these so-called evil multinationals, they're multinationals that are producing all the stuff that you consume that makes your life so good. So they are wonderful multinationals. I love multinationals corporations. I think they're a huge added value to life. I'm serious. Absolutely. I mean, the idea that multinational corporations somehow become evil because they're multinational or because they're corporations I don't get. They're producing great values for human life. They're wonderful things. And they're employing thousands of people. You choose to go work for them because your time is worth less than what they will need to pay you. So you're gaining a value by working for them. And if you could get that value somewhere else more then you'd leave and go work for somebody else. Or if you started your own company and want your canoeing you could earn a greater return on your time than by going to work for multinational then you would do that. So the beauty of freedom is you have all these options. Go work for multinational. Go work for your father-in-law. Go work by yourself. Go work for 100 different companies and you get to choose which one. That's the beauty of freedom. In ancient societies there wasn't that much freedom. Even today in very poor societies there's very little choices. They have freedom but they have very little choices. And that's sad. We live in relatively wealthy societies relatively. Well we have a lot of choices we should celebrate that. And those choices by the world were created by multinational corporations. They're the ones who create their choices because they bring value. They create businesses and those businesses will create lots of small businesses that supply them. So there are lots of businesses that feed the multinational so they create a whole ecosystem around that. That jobs that wouldn't exist if they didn't exist. So they increase the number of choices that we all have both as consumers and as employees. No doubt about it but at the same time I'm looking at Japan and I cannot be blind and not see Toyota, Honda all these large huge corporations that are some of them are taken on this one. And they're all sheep. The workers are sheep. Yeah that's right but that's not because of the corporate. It's not freedom. Let's look at it. I agree with you but Japan's not a free country not free in the sense of in the sense that I mean freedom because those corporations are shielded from competition by the government. So there is no real competition in Japan as you said some of them are state owned if they're not state owned they are subsidized by the banks and the banks are subsidized by the government. There is no real free market in Japan. And this is why since 1991 so how long is that? That's 20 25 years. Japan has barely grown. Japan has no economic growth and Japan has 220% debt to GDP. The largest of any country in the Western world it is basically bankrupt. It's in deep trouble. It's the fastest aging population in the world. So it's the fastest shrinking country in the world. They don't allow immigrants because there's their real I mean they believe to be Japanese you have to be Japanese and you can't become a Japanese by immigration. State owned or by immigration it's a very difficult country. Japan is a very difficult country so I wouldn't use that as an example. It's not an example of freedom. And freedom is not only you know corporations over there. Freedom is also it's a cultural phenomenon and people have to going back to the question people have to want their freedom and in Japan they want comfort they don't want freedom. They want regularity they don't want freedom. And I said freedom is an achievement. Freedom is something each one of us needs to achieve the value of freedom. It's not something that we just have an urging for have a yearning for it's something that needs to intellectually be argued for. Most of human history we have lived without freedom. It's not the corporation that creates the dumb down if you will. It's the people. But corporation also supports political and politics generally especially. Yeah I'll say yes he is right. For example if you speak about freedom and you put fight a kid against a grown-up man you did a help from somebody to fight that man right? Yeah. To say example if you have a shopping mall and you have a local small business the government should help that local business to fight and to compete with the big shopping mall. No. No that's a disaster. Why? So I mean think about this when automobiles just supporting the mall the authority. But the government is not helping the mall. The mall is creating more value than the small shops so the mall will always win. But here's the example when automobiles came into existence there were a lot of people who were making buggies. You know what buggies are? Things that behind the horses right? So the government should have supported the buggy industry because it was being driven out of business by the automobile industry. That would have made it impossible to progress to advance to improve and would actually have reduced the number of jobs reduced the level of productivity and reduced the amount of wealth going to workers because the workers left the buggy industry went to work for the automobile industry and they don't want more money. The workers who work for the little grocery store leave the grocery store they go and work at Walmart and they make more money because they're more productive at Walmart than they were at the little grocery store. You can't stop advancement. You can't stop improvement because you as a central planner feel sorry because somebody can't compete. That's the whole point of competition. The whole point of competition is some people won't compete. Some people go out of business and when you try to bail them out you get the 2008 financial crisis because you bail people out instead of letting them fail. If you let them fail the crisis would have never happened. The crisis was a direct result of the fact that bankers knew that they would be bailed out that the government would protect them no matter what. So they did stupid things. When you bail people out they do stupid things. But you said something before that. I can't remember. So no, government should not help the small business. But cronyism I want to get to the other side you mentioned cronyism. Big corporations got a lot of big government and they could get favors from government and that's bad. We don't want that. But why do big corporations do that? They do it because government has power over them. And when somebody has power over you you want to be able to influence them. I want the government to have no power over corporations. I want the government not to be involved in the economy. No economic power. I want to separate government from the economy. I want to have no economic policy. The government should have no economic policy. Just leave the economy alone. It will do much better than having economic policy. Hayek has written extensively on why central planning fails. Central planning fails when it's big. Central planning fails when it's small. Government planning does not work. So government has no role in the economy. Government should just not be in the economy. It should set out the rules of property rights and trade and non-corrosive interaction and leave the economy alone. Anytime the government starts intervening in the economy it creates distortions and perversions. But let me let me give you an example of cronyism. When Microsoft was started and was really building up a lot of wealth in the early 1990s it was it was really it was the biggest it was one of the biggest corporations in the world maybe the biggest in the world at the time. And it did zero lobbying. It spent no money on lobbying no money in Washington DC. They just they just did their own thing. And they were invited in front of Congress in front of the Senate in the United States. And Armin Hatch Senator from Utah he's still in the Senate to this day yelled at Microsoft. He says you guys need to start lobbying. You guys need to get involved in Washington. You guys need to build a building inside Washington DC. You have to show that you care about your government. In other words you have to bribe me. That's what he was saying right. And Microsoft said the Microsoft executives were there. They said look you leave us alone we'll leave you alone. And they walked it. Guess what happened? Microsoft got sued for monopoly. Six months later knock on the door the Justice Department is there and we're suing you. Why we're suing you? What was the sin? Microsoft committed that the Justice Department went after them. Anybody you remember? Yeah. But what was the what was the how did it manifest itself? I don't trust you. They were they're developing a web browser that they were offering for free. Yes. So they the sin the Microsoft sin was they were offering a product for free. Internet Explorer. Now you all take for granted because you're young the fact that web browsers are free. But before Microsoft introduced Internet Explorer you had to buy Netscape. Netscape was a browser. Some of you might remember this. You had to pay $70 to buy a browser to browse the internet. And then Microsoft said we're just going to bundle it with DOS. When you buy an operating system you get the Internet Explorer for free. And the Justice Department said wait a minute that's antitrust violations and we're going to sue you. So what does Microsoft do today? My point is about about about cronyism. What does Microsoft do? What did Microsoft learn? What was the lesson they learned? The lesson they learned was they better lobby. They better play the game. Said today Microsoft has a beautiful building in Washington DC about equal distance from the White House and from the House of Representatives. Right there it's a beautiful glass building. They spent tens of millions of dollars every year bribing politicians and playing the game. Because if you don't the Justice Department will come knocking on your door and accuse you of antitrust. And antitrust is written in such a vague generalized way that everybody violates antitrust laws all the time. This is my... You know antitrust laws? I don't know for a mania. We have a regulatory commission that's... So let me give you my short description of antitrust laws in America and I think it applies everywhere. Antitrust laws are written in such a way that you're always in violation of them if you're a business. And this is why. If you sell your product cheaper than your competition like Microsoft selling it for zero. What's that? Dumping. That's called dumping and that's a violation of antitrust laws. If you sell it more expensive than the competition what's that? You must have monopoly power because otherwise how could you get away with selling it more expensive than everybody else? Why would anybody buy it? You must have monopoly power. And if you sell it at exactly the same price as everybody else what's that? Collusion. So no matter how you price your goods you're always in violation of antitrust laws. Now that is the best kind of law if you're a politician because then that politicians get to decide when to apply it and when not to apply it. You see rigorous laws are not good for authoritarians. Authoritarians like what she, what she, what she lost because then they get to decide I don't like you so I'm going to apply the law to you. I like you so I'm going to let you get away with it. And that's what antitrust laws are. They are incredibly authoritarian. Governments could be unethical so corporations could be also unethical. Yeah. For instance I don't know if it's true but some add-on doesn't work, don't work for Microsoft products so there could be something in there not permitting you know other companies. What happens they, so there are two types of unethical behavior that corporations can engage in. One is is just stuff that's you know that just doesn't make any sense and what happens in the marketplace when you do something that's just stupid. You get plenty of money. People don't buy your product if you're going to have add-ons that destroy your computer nobody's going to buy those add-ons. Another form of unethical behavior is actually fraud or actually destroying the competition and that's the one thing government should do. It should catch fraudsters. It should put them in jail. But that's the role of government. Governments should put some limits and speaking about food industry if the government wouldn't put some limits on what's in it then oh my god Mike absolutely if we had true freedom McDonald's would poison all of us because the best way to make money in a free market is to kill your customers. I mean that's ridiculous. No, that's the most ridiculous that is a ridiculous claim. The food would be a lot safer if you didn't have government involvement and if you could sue companies who produce bad products. In the United States they're in California when a farmer produces vegetables they get inspected by the Food and Drug Administration and they get inspected by the supermarket who's buying the produce. Who do you think is tougher? The supermarket. The supermarket. Much tougher than the government because what's the government inspector going to lose if they screw up? Nothing. Is any government supervisor ever been fired for approving a product that wasn't any good? No. They have tenure. Nobody ever fires a government inspector. But what happens if a private company that's in charge of inspecting the food screws up? They lose money. So what would happen to McDonald's if they poison us? They go out of business very, very quickly. You're perfectly right if we are talking about food poisoning you know sudden food poisoning but if we are talking about the types of ingredients that they are using they're not killing us instantly. So what would happen? So I would take my patty and I would give it to a lab and a lab would inspect it and say it's garbage and I would stop eating at McDonald's and somebody would inspect the food just like there's a there are private inspectors who inspect automobiles and they have ratings of automobiles that come out every year. They have safety ratings and they have speed ratings and it's all private and it's all funded privately and you have magazines devoted to this the same thing would happen with food. I don't need a government inspector to tell me what food is good and what food is bad. I trust the marketplace a thousand times more than I trust a government inspector. Do you trust media? I trust some media, absolutely. Increasingly more or increasingly less? Well increasingly less but that's because we're increasingly less free. The more free we are the more I trust the media. How much is that increasing? Media today is more freedom now. Media is more freedom today. That's why you're becoming less media becoming less trustworthy. Because it's less free because it's much more influenced by politics. I mean look at the media in the United States today. Fox News is 100% Republican and half the other networks are 100% Democrat and it's all about politics. There's no free there's no truly free inquiry in the media today. It's all politicized all of the media today's politicized and the reason is is they get famous from the government. They're influenced by the government left and right. If you look at if you look at who runs the media it's all crony. Media is the most crony of all industries. It's at least it's the least free of the industries. And yet are people leaving Volkswagen in the United States and buying something else just because they're more ethical and because of the diesel case scandal? Sure. I mean because of the diesel case scandal they don't have a sense of because they do Volkswagen is losing a fortune in the United States right now. It is. And it's not an issue of ethical it's an issue of I'm buying a car that I thought we had ex-fuel efficiency and it doesn't. It has a lot less. You guys screwed me. You sold me a car under false pretence and people are returning the Volkswagen and they're not buying Volkswagen. Volkswagen is taking a beating in the United States. That means the Romanians are based on it for them because there's an increase of sales in Volkswagen. Yeah because you guys are relatively poor. So you're willing to buy Volkswagen because they're cheaper right now. But because you're poor I don't blame you for buying Volkswagen. I I'm it's great that you because we've got surplus in the United States you should buy that surplus because it's cheap. Right. That's not an issue of ethical. What's the ethics stage? You know what you're buying. You know it's an automobile that is raided falsely. As long as you know it then it's not fraud. The problem is the original Volkswagen was sold under false pretence. So that was fraud. But now there's no fraud anymore. Now everybody knows Volkswagen prices have gone down and you guys are buying more of them because you're poorer and you can afford less. That's all. Or maybe people just have freedom but they just are not informed. So because they are not well informed they are taking wrong decisions. So it's not really a matter of freedom. It's a matter of education. I agree. It's always a matter of education. Therefore let's invest in education. Let's let's invest privately in educating people what you don't want is government to educate us because government education is always going to teach us the dogma that the government decides is right. What you want is competition in education just like you want competition in media just like you want competition in fruit production. You want competition because competition will drive good quality. The worst thing in terms of information and education is centralization because then people only get one perspective. They only get one point of view. Well but I don't know the job of the government is not to impose what it's did what it's taught. Your government is not to have a point of view. To set a system. A system. Yeah. To set a system. And a system is to no. The job of the government is to protect individual rights. It's not for the benefit of anybody. It's just to protect individual rights. In my view governments are not capitalist they're not socialist. They shouldn't have ideas. Governments should not have any ideas other than its job is to be a policeman. That's it. If you want to be a communist under free society you can get a bunch of your friends voluntarily start a commune to each according to his from each according to his ability to each according to his needs and live miserably ever after because that's what communism leads to is misery. I don't have any power to force you to be free. If you do not want to be free don't. But you do not have to you do not have any right to force your values onto me. You want to help a grocery store that's coming in go help them. Don't force me to help them. When you use the government you're forcing me to help them. You want to help poor kids get an education. Raise a fund and give them a scholarship. Don't force me to do something I don't want. So the whole issue here is do you have a right to force me to act in ways that you think are right and I think are wrong. And I say no. I should live my life. You live your life. And you know if you're worried about the food that I'm producing don't buy it buy it from somebody else or go grow your own food. That's what freedom means. Freedom means you can't force another human being to do something they don't want to do. I don't want to be forced. When I make money I want to be able to keep it. I want to be able to spend on what I think it should be spent on not on what you think it should be spent on. That's the principle. And you should want that because each human being is going to be better off if we use our minds to pursue our own values and learn from our mistakes we have to learn from our mistakes. Nobody else can teach us what's good for us. Nobody else can make mistakes for us. You have to learn for yourself. And if you don't you suffer one way or the other. Speak without state regulation the monopoly will swallow the world then. The fact is that being already why would they care then? When there were no state regulations there were no monopolies. When there are state regulations they are monopolies because the state creates monopolies. When you look at the so-called monopolies of the 19th century in America Rockefeller Standard Oil what was the problem with that monopoly? They had 93% of all overfinding in the United States. What happened to prices? They dropped. They dropped every single year. What happened to quality? It increased every single year. What's wrong with that kind of monopoly? That's a great monopoly. And as soon as they would have raised prices they would have gone out of business. Somebody would have competed them out of their business. The same with Alcoa Steel Alcoa Aluminum had 87% of all the aluminum manufacturing in the world. What happened to prices every single year? Went down. What happened to quality of aluminum? Went up. So why do I care there's a monopoly? And you know Microsoft is as I don't know a percentage of who cares, right? Apple innovates. They make one of these and Microsoft becomes irrelevant. In a dynamic free market there are no monopolies and in a dynamic free market is the only answer the only solution to so-called monopolies. What you want the thing that creates stagnation the kind of monopolies you hate where prices go up where quality goes down where they're inefficient they swallow up everybody is government. Government creates those monopolies. Whenever government gives you special favors that's what happens. You get inefficient you overpaid you create lousy products. Government works in the interest of population. No it doesn't. Government never works in the interest of population. Government works in the interest of those in power all government. I don't know a single government that is except for the early maybe American government that works in the interest of the population because the only interest of the population the only real interest of the population is to be left alone. It's understandable monopoly on technologies because you can come with a new idea but if you have monopolies on resources like oil and petrol then you become a slave of that monopoly. But that's ridiculous. There's never been again I give you the example of standard oil. Standard oil at 93% of all the oil refining capacity in the United States. Prices went down quality went up. America was far better off for having Rockefeller do that. Why did he have it 93% because he established economies of scale he could reduce prices he improved quality and as soon as soon as he raised prices or as soon as somebody figured out a more efficient way to produce oil than he did capital flow to that person and his percentage of the total share of oil refining went down. Monopolies in any industry cannot exist for very long. And if I may add on the subject of standard oil by the time the government disbanded the company in 1912 they were already losing market share because of competition. They already had only 30% or less of 30% of market share they were not for 90 something. And after they disbanded standard oil to increase competition because they argued that five companies is better than one. Competition didn't increase. It all went downhill for the oil industry after that. And by the time the first world war came they regulated and they nationalized the industry and it led to the 1970s oil crisis and so on. I mean I hate to say this with your professors Nguyen because I know these professors don't teach this. Everything you've been taught about monopolies is untrue. When you learn perfect competition model and the monopoly model that is BS. There's no such thing as perfect competition and there's no such thing as monopolies like they draw on the wall. That's not how markets behave. There is no such thing. Monopolies are not a problem of free markets. Monopolies are problems of government. Government creates them. Government nurtures them. Government supports them. And they don't exist under freedom. There's no example in the freedom in history of a corrosive monopoly, of a destructive monopoly. The best case is with the taxi industry and Uber. Yeah, the taxi industry is protected. It's a protected monopoly and here comes Uber and it's protected by government. The taxis are all regulated. They're all by the same government officials. And then a new industry comes to disrupt but Uber would never exist today. If taxis had not been regulated, if taxis were not a monopoly created by government, if taxis were free, then there would be no Uber because Uber would have no advantage. What Uber is doing is arbitraging. It's a regulatory arbitrage. It's not a market arbitrage. Uber is a phenomenon of regulation. It's a way around regulations. Yeah. I want to mention something about the monopoly. It's a very interesting situation has been created by Budweiser, the beer, which at one time had almost about over 80% of the market. What happened? The quality of the beer went down just because the monopoly had... Budweiser was never very good. It was selling. Yeah, it was selling. It was selling. Because Americans don't have good taste in beer. If you hear my end of the story, so the quality went down. Yeah. So the micro breweries start to appear in the free society. There were three a week. Three a week. There are hundreds of them now. And there are hundreds, but three a week came out. And therefore paid a challenge for Budweiser. And Budweiser started losing tremendously the share on that. So that's an example of monopoly who thinks he'll secure about giving a product and therefore gives a better quality product. There's no such thing in a free market as a monopoly in the sense of control over market where they can raise prices and quality. It's never happened. But I want to continue, if I may. I hate to disagree with you. Gosh, I've been happy before. But you really give me a bed wrap on the media. Now, you can see the media probably television papers and so on. But I think we're living in the most fantastic moment for the media democratized in the internet. You absolutely. Yeah. So in a sense this monopoly in which the other you had to go to an editor to approve your article and so on and so on has disappeared. The trouble is that when I ask somebody would we have this information? They tell me from the internet. Now when I turn on the computer nowhere is written internet. So I know I ask him, tell me what site. What source. So I would know exactly what kind of political color has that site. That's one thing. And secondly, you know, Fox is not bad. Fox is terrible. Fox is not bad. You're right. It's awful. It's horrible. It's terrible. Jon Stossel is pretty good. I can't watch anything on that channel except Jon Stossel. So no, Fox is terrible. But look, you're right about the media. We live in a golden age in the sense that the media is being democratized in a sense. Anybody can start a media company at almost zero cost. The internet is a revolutionary tool. You can put up content on the internet and the marginal cost of getting a billion people to read it is zero. There's never been anything like it in human history. And it's an opportunity. It's the one opportunity we have to get our ideas, the ideas of freedom of liberty out there into the world. You can add to the list, Wall Street Journal. I like the Wall Street Journal mostly of the time. But you know, the Wall Street Journal split. This is an insider. But the Wall Street Journal has a great editorial page. Used to be. Awful front page. Front page is Marxist. Used to be. Used to be before before Murdoch bought it. Used to be two papers you want. He had the editorial in New York. And I'm talking about going back to Reagan style. And the rest of the paper was for the left wing paper. Okay, it's it's pretty. Pretty much. And one thing. Then the last thing so I can. It's something that everybody talks. Wasn't the talk here too much. But everybody's talking about government investment. Which is stupidity. To show you my point of view. I'm sure that you have a even a better point of view. If somebody in the government is such an intelligent person to know where to invest. I think he should get some investors. Okay. And come with the brilliant idea. And instead of staying on a 100,000 dollars, how much he measures whatever a year, he should become a multi-millionaire by investing. If he thinks he's such a good idea. But he likes to gamble. With other people's money. And with no consequences. Because if he loses the money, nothing happens. No. Absolutely. There's no such thing as government investment. All government does is consume. Let's look at the gas hole. You remember? When they were afraid that they're going to run out of gas. And they produced it from corn. One result was that the price of corn went up. And Africa suffered a lot from food. People are always afraid that we're going to run out of stuff. As human beings, for some reason, we have this tendency to believe in doom and gloom. The world is going to end next year. For 2,000 years. Forever this has been the case. So it's going to end this year. Every decade we come up with a new reason why we're all going to die tomorrow. And every time we're proven wrong, it doesn't stop us from inventing a new reason why we're all going to die tomorrow. Killing the planet. That's why. Well, in 1968, we were convinced that the world was going to die because of overpopulation. Hundreds of millions of people were going to die in the 1970s. And nobody died. So they had to come up with something new. So then it was global cooling. And we were all going to die because the world was going to be covered with sheets of ice. This was in the front page of the New York Times in 1974. And then we didn't die from that. So now it's we're going to die from global warming. And when that doesn't happen, there's something else. We're going to all die from CO2 emissions. I believe in CO2 emissions. Every time I breathe out, I am in CO2. But we don't feel now the consequences. They don't come later. The consequences will come later. You will have more plants on the planet because plants love CO2. Do I believe that the globe is warmed over the last 40 years? Yeah, sure. I mean, you look at the data, it's warmed. Do I think that human activity has caused it? Maybe. I'm not a scientist. I'm not convinced that human beings have caused it dramatically. But yeah, it's possible that human beings have caused it. Do I believe the world is going to end in the next 50 to 100 years because of global warming? Absolutely, unquestionably, no. Do I believe it's going to cause catastrophic, unbelievable millions of people dying over the planet? Unquestionably, the answer is no. This is the same doom and gloom hysteria that people come up with every decade. Every decade or two, somebody comes up with a new theory why we're all going to die. It ain't happening. Stop worrying. You know, instead of getting warmer, you know what the solution to more? Actually, in a day like this, that wouldn't be bad. It's kind of cold outside. But what's the solution to greater warmth? Wear a T-shirt. Air conditioning. I mean, I live on the edge of the desert in California. It's pretty hot. It might get hotter. So use more electricity and have to use more air conditioning. So what? You're talking in a country that hates air conditioning. Well, that's sad. I think air conditioning is one of the greatest inventions ever, and it would be nice if it was more of it right now. Ever in human history, it's made vast areas of the globe habitable. Large populations, like the millions of people who live in Houston and Dallas and New Orleans and Las Vegas could not live there without air conditioning. Air conditioning is unlawful of human ingenuity and fabulous. And it makes the quality of life dramatically higher. And I like to say global warming actually happens. Canada will become habitable. In 1970, the Club of Rome, which we know what it is, it's an arm of the Politburo. That's not an arm of Politburo. It's just that Marxist-motivated bad group. They decided that the United States was going to run out of gas by the year 2000. Peak oil, every few years there's peak oil and yet every few years we discover more oil than we ever had before. And now they export, they change the rule that... We can export gas. Exactly. So exactly the reverse is happening. And that's when you allow the people to be free. In this country we still have... So we have to end because they're telling me we have to end. So let me end with this statement. I highly recommend that anybody who's wide about the environment read Julian Simon, the great economist, Julian Simon who died. I guess about 10 years ago. There's a wonderful book called The Ultimate Resource. And what Julian Simon illustrates is that there's only one resource that's limited. And that is the human mind. As long as we can think, as long as we can reason, and as long as we're free, we can overcome anything nature throws at us, including global warming. We can solve these problems. We can find ways around them. As human beings, we are unlimited in terms of the amount we can innovate and create and solve problems. We've done it for thousands of years. We're doing it at an accelerated rate because of technology today. Stop worrying. We live in the cleanest, healthiest, best environment human beings have ever lived in in human history. You would rather live in today in the most polluted city in China than 200 years ago on a farmland. Because it's cleaner, it's easier, you live longer and you live healthier. You have more cancers. Yeah, because you live longer. When average age is 39, nobody dies of cancer. But when people live to be 80, people die of cancer. It has nothing to do with pollution. It has to do with how long we're living. Life expectancy before the industrial revolution was what? 49. 39. Life expectancy today in the most polluted countries in the world is what? 60s, 70s, 70s. So yes, they get cancer because they get old. Our bodies, when we get old, screw up and start creating cancer cells. And you know what? The only reason we get old is because we have enough wealth to live into old age. And the only reason we have enough wealth to live into old wages is because we're polluting. Pollution is a consequence of wealth creation. There's nothing wrong with it. It's a positive externality, not a negative externality. And when we become rich, we clean up the pollution because we're rich and now we can afford to clean it. So in America, it's relatively clean. In China, it's still dirty because they're still in the process of creating enough wealth so that they can sustain their life into old age. And then when they get rich, they'll clean up the air. But the Chinese today are so much better off than they were 50 years ago when everything was supposedly clean. They were dying of starvation back then. Now they're living to be 80 in relative wealth. Thank you, guys. Thank you very much.