 Maybe you've read Tiki's book, and there's questions for whether inequality is going to get worse or better. And that's what we're going to talk about today. Is inequality a problem right now? Is it inherently and always a problem in principle? Is it getting worse or better? Can we fix it? Should we try to? Is it a problem that needs fixing? And that's what our two speakers will be discussing. So our two speakers today are Max Borders and Dr. Hassan Al-Shugali. Max Borders is the editor of Freedom and director of content for the Foundation for Economic Education. He's done something wrong or super well. Why would he stop worrying about the gap between rich and poor? And he'll be claiming today that we don't need to worry about the quality of this non-problem. Dr. Hassan Al-Shugali is an assistant professor of English at UT Austin. He had a PhD in English from University of Caledonia and the End English Economics from Trinity University. He won a mental fellowship in Humanistic Studies and published articles extensively in a wide range of peer-reviewed journals, including the International Socialist Review, and has appeared in a commentator on TV, including Park Bald and CNN. So join me in thanking them. The format today will be each speaker will present for eight minutes, and then they'll have a four-minute rebuttal with the other person's position. After that, we'll open it up to questions from the audience. We're asking for genuine quick questions. They'll both have a chance to respond to your questions, and then they'll have a two-minute final remarks at the end of the week. So that's the next question. Thank you very much. Well, I'd like to start off by saying that one of the most unfortunate conflations of our time is that between the free market on the one hand and cronyism on the other. That's because the free market involves entrepreneurship and voluntary exchange for mutual benefit. Where cronyism involves the coercive apparatus of the state, transfers of wealth from poorer people, often, to richer ones. Now, inequality that flows from free markets is not necessarily bad. Indeed, I'm going to argue that it's national and productive. But inequality that flows from cronyism is destructive. Most of the world labors under varying degrees of cronyism, including the United States. From stadium owners to city corp executives, much of our economy is on corporate welfare. I predict my opponent will fail adequately to distinguish between free markets and cronyism. I also predict his argument depends on the fetishization of inequality itself, which overworks the true nature of wealth and poverty. Whether wealth is transferred from poor to rich, or rich to poor, or both, as in the United States, prosperity gets destroyed in the process. That's because entrepreneurs, innovators, and investors are the economic drivers of all prosperity. These drivers flourish in a truly free market, but so do the least well-off in society. Crony capitalists and redistributionists, however, play a political zero-sum game in which wealth is either transferred or destroyed. That is why most of the world fights over scraps left by predatory state powers. That is why much of the world is still in poverty. And yet, thanks to entrepreneurship, innovation, and investment in the developed world, we currently enjoy standards of living unprecedented in human history. We have the luxury of giving surpluses to charity. We can afford to pay professors to teach bad economic theories. The poorest quintile in the United States is richer than two-thirds of the world. My great-grandmother, a poor tenant farmer from North Carolina, lived to be 104. In her lifetime, she went from outhouses, lamp light, and animal power to refrigeration mobile devices and advanced medicine. She didn't die rich, and yet she is a testament to the kind of wealth we should be measuring. That is upward mobility and consumption power, which we all have inherited. Despite impediments to prosperity caused by corruption in predatory states around the world, things are still getting better all the time. In the last 20 years, extreme poverty has been cut in half. This is a testament not to the redistribution of largesse, but to the power of increased entrepreneurship and global trade. Prior to that, they tried things my opponents' way. Large donations in NGOs range largesse down upon poor countries. This amounted to fertilizer for corruption and subsidy for poverty. It didn't work. It still doesn't work. Entrepreneurship, investment, innovation, and trade, these work. Despite the state capitalism of China and India, these folks are undoubtedly better off than they were under Mao's socialism and Nehru's autarchy. That's because they opened their markets. And that is precisely why we shouldn't bother asking so much why poor countries are poor, as much as we should ask why rich countries are rich, for the answer comes down to a few basic things. Institution, incentives, and the flow of all natural systems. In these systems, inequality of outcomes is a fact of life. You see, all natural systems, river systems, ecosystems, economic systems have unequal outcomes. Think about the mahogany rainforest. In this flow system, these massive trees soak up so much of the resources in the forest, and yet no one questions their function. They are essential for the growth and development of the ecosystem, including all the plants and animals. Without them, there would be very little life. The trees are stewards of resources. Likewise, successful entrepreneurs and investors are stewards of capital, and when they're not, they don't stay rich long. Such is a system that allows our poorest to be relatively better off. Ecosystems you see emerge, but those who want to create equal outcomes are committed basically to cutting part or all of the rainforest down. Ultimately, they care about egalitarian outcomes for their own sake. But why? Consider this thought experiment. Suppose you have two choices. A is that everyone will be made worse off, but all are made equal in their material condition. B, great swaths of humanity are made better off, but there are more billionaires around. Which would you choose? A or B? I believe those who would choose the first are under the spell of what I call the Stone Age Trinity. The emotions of guilt, envy, and indignation. There was a time in our human past when we hunted and gathered in clans. Food spoiled. So communal arrangements in small groups were essential to human survival. Guilts, envy, and indignation made sense. If I saw somebody had less than I had, I felt guilty. If I saw someone had more, I felt envious and so on. So people evolved with these emotions. But today we don't forage out on the step. We cooperate and exchange. To redistribute the surpluses equally is to eat the seed corn. And yet these cavemen instincts are still with many of us, being politicized and used by demagogues. But we cannot take the Stone Age Trinity to scale, willing up with mouths, famines, and Stalin's gulags. Go halfway and get Greece. And yet when we orient ourselves toward the virtues of entrepreneurship and charity, we get the flourishing of Singapore, Australia, and Hong Kong. The major problem with the inequality fetish is that it recommends the redistribution of wealth, but redistribution of any kind creates enormous problems. First, incentives. You cannot expect society to flourish long when you pay people to be poor and punish people for creating wealth. When you tax and redistribute, this is what you're doing. Such incentive systems are unsustainable. Just look at Greece and France. Second, institutions. You cannot expect that people with the power to create winners and losers to be angels. There are no angels. The idea that if the right people are in office, we will all be better off is simply a utopian fantasy. People cannot be trusted with power because power corrupts. If we don't like the idea that rich people can buy state power and have access to its coercive apparatus, then we should have less state power. What my opponent would have us increase state power and install the angels. Now, wealth has first to be created, and that's how entrepreneurs make our lives enormously better. We, all of us, rich and poor, have the wealth creators to think, not to plunder. Thank you. So I'm in the weird position of having had a nonversion of my argument debated with me, so you'll forgive me if some of this comes sort of at cross purposes, because I'm not going to make the argument that has been sort of attempted to be refuted here. I'm actually going to make a relatively different argument, which is that at its heart, capitalism, free market, whatever you would like to call it, breeds an undemocratic inequality because of the very nature of what capitalism does. Inequality by itself, I think we have to understand in a disaggregated way, but let's just begin with some of the basic things of what happens with capitalism when it's in the picture that we're being offered here. If we believe that wealth creation is a relatively good thing and we would like states to go away, we need to understand why crony capitalism emerges. I don't actually think there's a distinction between the free market and crony capitalism. All crony capitalism is non-market-based competition, so people using other ways of competing with their rivals by whatever means necessary. Sometimes that means going through the state, sometimes that means going around regulations, sometimes that means organizing militias, sometimes that means going to war, et cetera. Crony capitalism is actually inbuilt into the logic of the free market. It is the use by whatever necessary mechanisms are available to you to fight. This is actually how capitalism was built in its initial stages, the plunder of raw materials from what we now call the Third World, the enslavement of Africans for use in American plantations. All of these things were non-market-based kinds of competition that were designed to create now what are called the rich nations. If we want to talk about why certain countries are rich and certain countries are poor, we need to sort of understand that. But I'd like to begin by sort of disaggregating what inequality is. I think that the problem here that we have is that most libertarians only tend to focus on one aspect of inequality, and that's resource inequality. That's sort of who has wealth and who doesn't have wealth. Inequality can actually be measured in multiple ways. I don't know if people in the room are familiar with the work of Goron Therborn, but he argues that there are three kinds of inequality that are worth measuring. Resource inequality, vital inequality, meaning the differences in life expectancy, health, et cetera, and existential inequality, meaning the different kinds of rights that people are born under. All three of these kinds of inequalities are actually mutually reinforcing, so that we now know, based on most of the sociological data that's available to us in Amartya Sen, Nobel Prize-winning economist confirms this, that the biggest determinant of whether or not people become wealthy or become poor has everything to do with family income. So people who are born into poor families tend to have worse access to education, worse access to healthcare, worse access to decent food, and turn out then to be bad on the market when they grow up. Inequality actually ends up sort of leaching out whatever competitive power that would exist in humanity from the very, very sort of beginning. But the second reason that I think we ought to worry about inequality is not simply because I fetish it, I actually think that inequality ends up producing non-democratic or anti-democratic outcomes. He's right when he says that power corrupts. Wealth also is power, and what wealth does is produce the conditions by which the very, very rich get to determine exactly how governments work, how states are organized, how societies are put together. You can talk about sort of the corruption of certain kinds of corporations as distinct from the free market, but that's what they think that they're doing. That is what the Koch brothers think that they're doing. They think that they are creating a free market by generating large political action committees and then influencing government whatever way that they would like to. It is in fact inbuilt into the very act of creation of wealth that you have anti-democratic outcomes. And I guess the third thing that I would have to say about this is that even though the argument about job creation and wealth creation has sort of been made repeatedly, there are two problems with the argument that never sort of make it into our debate. We'll never make it into sort of the public discourse about the debate. The first is whether or not it is actually the so-called job creators that are actually creating the jobs or whether it's not actually... I'm sorry, that are creating the wealth, whether it's not actually the labor that they employ that's creating the wealth. And this is, I think, the primary difference between certain theories of economics, sort of classical political economy, going back to Adam Smith even argued that it was labor which created value, which created wealth in the sort of outcomes that capitalism was organizing. But we haven't actually proven the thesis that competition or the free market actually does lift all boats. So when he gives you that choice between whether you would all like to be equal and worse off or unequal but better off, it's a false choice. It's not actually the way that the world works. In 2013, the World Health Organization estimates that we have about 3 billion people on the planet living on less than $2 a day. That is not a condition that you can simply attribute to crony capitalism in large chunks of that third world because it's a condition that is created by exactly the kinds of competitive markets that we would sort of be talking about. I think it's also worth sort of pointing out that the argument that inequality is natural is a non-starter of an argument because the question we have to ask is we don't live naturally. We're not hunter-gatherers out in fending for ourselves in the Hobbesian state of nature. We're actually organized socially. So we should ask what kind of society we would like and then try to figure out exactly what kind of society that would be. And I think the society in which we have more or less said that people have to fend entirely for themselves is a bad kind of society. What it ends up meaning is that people who are disabled, people who are mentally handicapped, the old children, etc., always end up losing on the basis of simply market-based competitive advantages. And I don't believe that that's a good way of understanding exactly what kind of society we would like to create. I'm not going to fetishize state ownership. I'm not going to fetishize Mao or Cuba, etc. I don't believe that Mao and Cuba were good examples, but I am going to fetishize democracy. And I think that in a democratic society in which we all got to say in how wealth was used, we could come up with 100,000 better ways of reorganizing the economic production and the use of resources and the one that has currently been organized by the market. I want to end, I think, with a sort of final point about just the ways that I think many libertarians get out of a lot of the discussion by disaggregating crony capitalism and free markets or just sort of competitive capitalism. I began with the notion that these are actually very similar, but here's where the problem really does sort of come in, because libertarians like to claim the advantages of or claim the benefits from unfree competition in a regulated marketplace as simply being derived from the market and then disavow any of the benefits or any of the disadvantages that come from that unfree regulated competition in the marketplace. I think that this is an illogical proposition. If you want to talk about where those advantages come from, from whatever has happened right now under capitalism, you have to talk about state intervention into the economy, state intervention in acts of war, state intervention into research and development, state intervention into the very things that create the kinds of... I work at a public university. These public universities do massive amounts of research and development for private institutions. That is where the sort of innovation in many instances actually comes from. I do not believe that you can simply disaggregate that as just coming from the free market and not having any state intervention into it and then say crony capitalism is just all the bad stuff. That is a non-struggler proposition and it's also the reason why the differentiation between crony capitalism and the free market is a non-starter of a distinction that I think that we have to in this debate continue to understand why... I continue to understand what can be used to get out of the problems that capitalism generates. Sure. Let me go directly to the point of this notion of what he terms the illogic of disaggregating crony capitalism from free markets. I don't remember ever claiming that there is a free market on earth and in fact we must aggregate these because there are varying degrees of state intervention and what we find if you look at all the freedom of the world indices is that by degrees outcomes on whatever dimension of inequality you like tend to be better whether it's rights, resources and I'm not sure I understood the first one, the vital inequality or vital equality but on whatever dimension you like they tend to be better on those countries that enjoy the most economic freedoms. Now this is unquestioning. This is really difficult to question and it's not merely correlation. I think we can make a causal argument for the very reasons I suggested. Now the more we have freedom in free markets and the less we have state intervention the more we tend to get the good things we want including relative equality, at least equality before the law. Now moving to that I think we have a very different idea about political equality that I think that is perhaps even a worse fetish than the inequality one and that's the democracy fetish that he admits he fetishizes. Democracy can and usually is mob rule. We have problems of rational ignorance with voters. We have problems of rational irrationality. We have tons of different kinds of problems with voter paradoxes that make democracy a golden calf. If we have this expectation if you can vote Hitler into power or vote any manner of socialist policies into power because you think it benefits you and you get corrupted by some authorities in the process I just think that this is wishful thinking. It's utopian thinking that democracy is this wonderful thing that's been announced to what I would term a golden calf. Real freedom and now real freedom freedom that is unencumbered where people are allowed to exchange and cooperate through voluntary means gives us all the good things including charity. The idea that we should be a compassionate society that we should ask ourselves as he suggests what kind of society we want to be is a non-starter question. We don't agree on these things. We have different priorities. We have different charitable impulses. We have different causes we want to support. So the very idea that we're going to be a compassionate society is ridiculous on its face. Compassion cannot be compulsory. Compassion comes with individuals and the groups of people we form with in order to engage in the kind of charitable activities that a flourishing and robust charity sector will give us in relatively free markets. And let's push towards freedom and against state aggression. That, I submit to you, is the way forward. So I don't agree that making a distinction between inequality, sorry, crony capitalism in free markets is a non-starter. Indeed, we must do it conceptually in order to unpack why some countries do better than others in all of these outcomes. Thank you. So here's where we, I guess, don't see the world similarly again because the countries with the freedoms we're talking about actually produce the conditions in which the countries without freedoms don't have freedoms. That was what colonialism was. It is what that servitude under the World Bank and the IMF is. It is what the colonial occupations of Afghanistan and Iraq are. It is what the United States has done for the last 100 years by popping up dictators in country after country, rigging elections, sending in the CIA, et cetera. I do not believe that you can say that the reason why those countries are not doing as well as the free countries doesn't have anything to do with the way that those free countries have acted in the rest of the world. Now, he wants to say that that's simply state aggression generated by crony capitalism. And I think that it's actually what capitalism does. It uses what wealth it has to compete in the globe in non-market-based ways because that is the natural tendency of competition. It is to use whatever advantage you have to secure your access to markets, resources, and profits as best as you can. Historically, the way that that has worked is by using non-market-based things. Crony capitalism, if you want to call it that, but also through wars, also through rabid exploitation. I hope that you were paying attention because he basically called you all idiots. The part where he says that democracy is mar-brule is essentially an indictment of your ability to think for yourself or at least one of you in this room is somebody who he's talking about who behaves rationally, irrationally, or in the office. And I think that that actually is some of the sort of arrogance and hubris of libertarian thinking that it knows that it is not actually one of the people who it critiques by saying that, you know, those people believe in mar- or if you let those people decide they will be the mob rulers and not the friendly libertarians who are compassionate and only want to give charitable work. He's actually indicting the position of being a socialist, telling him to leave America if he doesn't believe in democracy. First time that's probably ever happened in the United States. But I actually do think that we have to think really hard about what capitalism does. Capitalism says you compete. You compete for markets, you compete for profits, you compete on the basis of innovation. And one of the innovations that capitalism had in the, you know, it added genesis was that it could use wars to compete. The idea that the state gets rid of that, it's not true. There were private militias in the 18th and 19th century that helped, you know, secure the access to resources. The East India Company was, when it colonized India, was a purely profit-driven venture that ended up producing its own army and colonizing an entire country. The idea that this is not what free markets do is, I think, a non-starter. And then to sort of say the free market is a concept, but we're going to use 12 examples of what capitalism has done to prove this concept and disaggregate all of the externalities from it. That's what I think is a non-starter. Because what capitalism did at its genesis, what it continues to do, is generate inequality. So much so that in the United States today 20% of the 20 is, sorry, the richest 20% in the United States controls something like 85 to 90% of the country's wealth. The bottom 20% controls 0.1% of the country's wealth. It's an extraordinary gap. That means that bottom 20% is constantly in an uphill battle against access to bad schools, access to bad healthcare, access to the bad environment, et cetera. And the world in which we all started at zero and then began to compete in the market is not the world that we live in. We actually do inherit the inequalities of our parents. And they do determine in many, many ways the outcomes that we have in our lives. And I think that the kind of sort of hopefulness that capitalist non-compulsory compassion will generate the kind of world in which the disabled, the handicapped, et cetera, the young, the elderly actually get the resources that they need to survive in the world is, I think, a fantasy. Okay, cool. Sorry. Oh, yeah. Thanks for coming and participating better. I'd just like to say that. First of all, I'd like to say that while I'm probably not an idiot, I am really ignorant on a lot of different as far as my knowledge goes. So I'd like to know how you address the Hayekian-based knowledge problem when it comes to democracy and voting on issues where individuals participating in the vote don't have enough local knowledge to govern, let's say, how a family farm best produces fresh produce for the community. Education. Okay, thank you. I think he's he may not be familiar with Hayek. He may not be familiar with the concept of rational irrationality or rational ignorance. I'm very, I've read the Hayek. Okay, well rational ignorance is a problem that what he's talking about is that maybe there's a farm in Wisconsin, a specific farm in Wisconsin, or there's a mohair subsidy. There's no amount of education. It would fry his neural circuitry to get the requisite education to make him a quote-unquote informed voter. That's what he means. He's asking you to answer that. Come get a PhD. We'll help you out. It's not a PhD. You can have 40 PhDs. I actually don't think it's that difficult. I actually think that on a daily basis, people understand very complex things. What's a mohair? How much a mohair subsidy does the mohair industry get every year? I don't live in a world in which I'm asked to make that decision, right? That's a person in a democrat border. We don't have actually where I get to say what the mohair subsidy would be. If we were in a world in which I get to decide what a mohair subsidy would be, I could learn about it. Mr. Borders, you said that free markets breed equality. Please respond to the contention that the relative equality of the middle of the 20th century was caused by the state intervention rampant during that period, where inequality has exploded since then with the relative deregulation of the 1980s and 90s. Can you repeat the last part of the question? Respond to the... Please respond to the contention that the relative equality of the middle of the 20th century was caused by state intervention rampant during that period, like the 40s, 50s, and 60s, where inequality has exploded relative since then with the deregulation of the 1980s and 90s. I think, and this is actually to his point, we have to talk about the different kinds of inequality or equality. We're talking about political equality, but what we saw in the course of the 20th century was basically the state getting ahead and laying claim to popular movements towards political equality. Women's suffrage on into the middle part of the century where women were working as part of the workplace as a factor of the war economy. There were lots of these kind of phenomena that we can't really say were a factor of the state or not. Minority rights were in 1968, the Civil Rights Act was sort of getting out in front of popular movements where there was a national shame of mistreatment based on Jim Crow laws and so on. Look, and Jim Crow laws were, by the way, laws. They were implementations of the state and of democracy. So I would say that we have to be very careful in disentangling these things. Some of these phenomena are sociological, some of them are economic and very many of them including slavery are sanctioned by the state. Yeah, but slaves were called property and that's the one thing that libertarians I think agree on is some sort of state-based property rights definition. Not in other people. That changes over time. That is a counter to our... Look, what counts as a person and what counts as a rights-bearing subject in any society changes over time. What we think as a person now is not what we thought of as a person 100 years ago. It will not be what we think of as a person 100 years from now. Which means that currently it is possible for us to treat as things, things that we will later treat as humans. That is where I think the sort of idea that we... I actually think that slavery is a pretty serious indictment of capitalism. It was something that people believed that they had access to. They could control. They had property rights in. They had a determination of it. They used states to protect it. I don't think that you can just say that racism was the state and not actually connected to the free market. This was again wanting us to sort of think about non-market-based competition always accompanies market-based competition. There is no free market that can exist in a vacuum. It could only happen conceptually, which means that externalities like slavery, like racism, like the fact that there's a wage gap today, 80 cents on the dollars what women make on average in the United States exists because of non-market-based competitions which drive down certain people's wages so that you can compete with your next biggest rival. I don't think that that answers the charge. I will speak to us today. My question is directed to Dr. Shingavi. Given that capitalism uses any and all means to secure a profit and advantage how do you create this democracy which is divorced from this sort of drive by capitalism to use any and all non-market advantage? How do you arrive at this general will, if you will? By people. By people. You say that like you just did a mic drop. I don't, yes, by people. By people? Yeah. Okay. I mean, could you be more specific? I don't understand what the question is. It's not like if the general will isn't the people. I don't understand what you're asking me. How do I create incentives? Is that what you're asking me? No. How do you create a democracy which is not influenced by... I eliminate private property. I eliminate private property. Okay. That can't be news to you that I think that. Yeah. I wanted to ask this question for Dr. Shingavi, but I wanted to just get an idea of what do you think of this new wave of 21st century socialism especially from Ecuador. So I'm really interested to see really what to review on it given the recent circumstances in Venezuela and such a strong wave going down even more in Ecuador. What do I think of the popular movements for socialism? I think some of them are very exciting. I think that they're raising really interesting questions. I was part of the Occupy protests here when they happened and I actually camped out in front of City Hall for several nights with the other Occupy protests. I think that's an exciting thing because what they are asking us to do is think very hard about what exactly is creating inequality in the world today and I think that they were all vibrant, exciting things to be a part of. Is that what you're asking? No. 21st century socialism is the idea that you put the risk on human capital rather than organizations and companies and so forth. The idea that you believe in is the idea that we're putting all the risk on human beings rather than corporations as being capitalists. You're using terms in ways that I might not use them so I think that we might sort of miss over each other. If what you're saying is that humans end up bearing the penalties for the decisions that are made by corporations and the government currently, I agree with you. If what you're saying is that's a better arrangement than the one in which states and corporations take the bear the brunt of the responsibility for what happens and I disagree with you because I don't think that's actually the way that things are organized today. I think that corporations usually get off scot-free for all of the criminal things that they do whereas individuals have to bear a substantial amount of the burden for the wrongdoing of corporations and of the government. I think it's interesting, I want to riff on that a little bit I'm not sure about 21st century socialism but I think what's interesting in the contrast between my worldview and my opponents is that I really am into lateralized relationships relationships of relative equality to interact and exchange with people in ways where they're equals whereas I think if you institutionalize something like non-private property or state state property abolition of private property that either leaves a tragedy of the commons or it leaves a situation in which someone has to be the steward of those resources and that someone is someone with power that creates up what Vincent Ostrom called the ruler-ruled relationship and indeed he said the most radical source of inequalities in human societies is the ruler-ruled relationship that's the inequality we should really be worried about in my opinion I don't know what he just said because it was sort of a tautological definition but I do think that it's inconsistent to say that you're in favor of accumulating wealth at the top and not say that that is also inequality when that kind of wealth also gets to make governing decisions I am saying that collectively as humans we can talk about these things and figure them out I think that we can learn the things that are important to learn and figure out sort of the major questions of the day I don't think that private property is any longer necessary to advance human society to generate technological innovations and I actually believe that socialized cooperative kinds of arrangements are much better at producing innovations in our competitive ones that are driven by private profit Well the problem even there is that it's simply not the case and I think maybe my opponent would agree with me at least on this narrow point that democracy and I don't think there are any forms of democracy that would allow this apart from maybe some sort of virtual peer-to-peer networks where people are exchanging stuff in an open source way but in terms of look I mean the way you learned about democracy is honestly just wrong and I think Mansur Olson really did a good job and Mansur Olson is a man considered to be somewhat of the left and the way he described the problem of the logic of collective action under democracy was as follows you get concentrated benefits with these processes but dispersed costs one of us has as any particular incentive to follow up and to look into the kinds of things we've been describing all the myriad issues and things that to say the federal government does space shuttles, mohair subsidies this that or the other I mean there are literally literally thousands hundreds of thousands of perhaps millions of things that the federal government does that the idea of delegating responsibility to angels is what we're wrongheaded about and the reason that is is because special interest group have very very deep incentives to be the squeaky wheels for their particular committee in the senate or their particular bureaucracy in Washington and we don't that is the concentrated benefits aspect the logic of collective action so I'd encourage you to look into Mansur Olson's work and you'll see and it's kind of a depressing and nihilistic view of this golden calf of democracy now he's going to say we didn't have private property we wouldn't have this problem but we would have a whole host of other problems like starting with the socialist calculation problem that a mesis identified and destroyed and Marxism back in the 1920s I still yet to see anyone to buy that one that's that's the civic religion we've been given since birth but I'm afraid it's just wrong if you look up public choice theory just look up public choice theory read two books in it I promise you I don't want to you know go read a book but the problems of democracy are so many but I think the problem of democracy that we really need to look at is the one that he's held up which is a democracy without private property because this is really we have to imagine ourselves as some kind of high brain in order to and there's huge information problems processing problems we need to in order to be able to do something like this we'd have to decentralize power and have hyper localization in order to have any kind of insight to make any kind of rational decision about what's being made by those we elect I don't actually think it's that difficult I think that if you watched what happened in some of the big movements of the squares that took place two or three years ago you would have seen collective decision making in the absence of government it was people setting up food service setting up hospital service with people taking care of each other educating people in the streets deciding other ways of governing because the state wasn't what they wanted it is possible for humans to figure this stuff out I'm only talking about low level examples but larger larger collectivities that figure this stuff out in the absence of the state and the absence of private property I think the vision that is advocated by my opponent is one in which we all get guns and fight it out on the streets to protect our own little plots of land that is a date what a free market actually that's wrong my vision is I don't think three minutes I don't think that this is a kind of abstract problem I think that it's the problem that I began with which is that 3 billion people in the world today live on less than a dollar 25 a day that is an extraordinary extraordinary problem one in which we cannot pretend is only the result of current capitalism one that we cannot pretend that doesn't have everything to do with how the rich have gotten rich in the world today and what I think is built into the DNA of free market capitalism the initial pioneers of free market tiering we're talking 18th century sort of thinkers who wanted free markets as they were escaping the tyranny of the kings and what have you were the ones who advocated this kind of adventurism which resulted in the colonialism in India I think that there is a deep deep connection between the ideas of what we want in the world without states where people can amass wealth develop their own fortunes produce the goods that they want to produce go unchecked and results in what we know happen which is the creation of wealth generates non-market based competitive practices and I that's when wars happen that is when the Koch brothers emerge that is when we have environmental degradation the tragedy of the commons is not a unique problem to any human society free markets have solved free markets actually are the worst when it comes to the tragedy of the commons because people with money get to do whatever they want to to the commons the reason why we have things like a global warming catastrophe that we're looking at now is because unregulated industrial capitalism was allowed to do whatever it wanted to to pollute the air and run rampant in the places that it wanted to do to de-force etc and the idea that at the end of the day we're continuously compassionate to solve the problems that exist in the world today doesn't exist and the reason that we know that it doesn't exist is because 3 billion people in the world today are still poor despite having more wealth than we have ever had as a planet in the history of humanity we have more money, more resources more access to medicine more technology, more ability to do things and yet 3 billion people live in absolute immiseration and I actually think that we have the ability to solve that problem but it won't happen by simply getting rid of states and moving to that sort of utopian version that Hayek and Mises have in their head of a stateless market that actually breeds the very thing that you're attempting to get away from non-market based competition always arises and that's I think the problem that he hasn't shown you what his check on that will be he hasn't actually demonstrated how it is that free markets or capitalism have ever been able to solve inequality the history of capitalism the history of the free markets as we have them today have only bred and created more and more inequality and I stand by the thing that I said at the beginning you cannot take credit for the advantages generated by a regulated un-free market as part of your free market thesis and then disavow the externalities that's just a non-starter because it takes as a given something that is actually in question I think the biggest takeaway from this talk what the component has done is point to instances of state overreach or the exercise of state power and call that free markets that to me is just baffling I don't understand by definition a free market is one in which the state does not intercede so I'm curious about that and I hope you are too I think it's grossly mistaken and I think it's the sort of the two-step that folks like my opponents like to do to try to bash capitalism apart from the evocation of the Koch brothers at every turn but I think the problem with my opponent is he's stuck in the 19th and 20th century he's stuck in the 19th century with respect to his ideas on Lenin's colonialism he thinks all the evils of the world are caused by the capitalist exploiting third world countries and thinks that that still sort of lives with us today and I think in some respects it does but probably not for the most part and in the 20th century with respect to his ideas on how economy should be run which we have seen when you abolish private property what happens we get the awful situation of the starvation under Mao and I don't think there's very many ways around that if you can find a clever way to do it I would encourage you to find it on a small scale with competitive governance structures but certainly let's not have this as the institution of the world now if you think equality is so wonderful ask yourself where you'd rather live among the unequal societies of the world Hong Kong, Switzerland or the US and then these aren't perfect places by any means but among those most equal societies Venezuela, Cuba or Myanmar strictly speaking the statistical measure of inequality in country is meaningless it's an abstraction the better question is what opportunities are available to any given person for them to be upwardly mobile and to have purchasing power and equal, relatively equal political rights the better question the better questions are these so upward mobility and purchasing power are important not inequality per se unless you're under the spell of guilt, envy and indignation it's no accident that the top 20 freest countries in the world are also the wealthiest countries my opponent may try to tell Leninist tales of exploitation and colonialism and yet despite the evils of colonial oppression countries that have embraced relatively free markets have thrived after colonialism those that have embraced socialism the freest countries in the world are rich precisely because they are free not because they confiscate wealth