Yaron Lectures: Virtues Of Capitalism, Federalist Society - University of Arkansas

thank you good mic on okay thank you all I really appreciate you all coming this afternoon so we live in a look at a pretty amazing whoa we all have these super computers in our pockets you know more powerful than the computers that send man to the moon more powerful than those IBM mainframe computers they used to fill up a whole room now we carry them around in our pockets but the amazing thing is this is not just the computer this is just also communication school we can communicate with one another across oceans across the entire world these days from 30,000 feet by video at a marginal cost of our marginal cost of another Skype call zero cost anything when was the last time you paid to communicate now some of us old enough to remember long-distance phone calls we're just a call from Arkansas to New York could get to be hundreds of dollars of long-distance charges today we can call each other for nothing on one of these being access every piece of music ever written on this so it's an entertainment center as well I mean one of the things that I think is true of young people of any generation but maybe more so of this generation is how much one takes for granted you know this is brand-new ten years old this technology and yet it's ubiquitous it's everywhere I travel all over the world and everybody house not everybody but almost everybody has one of these life's pretty amazing we live your generation will live probably into their hundreds right over a hundred we don't just live long we live healthier lives we know more about health we have a very better medical treatments we have an every aspect almost a physical material human life life is the best that it's ever been by far by far and this good life is a pretty recent phenomena I mean it's like a perspective having such a long lifespan having so much wealth having the kind of computing part of the entertainment part of the communication power that we have today is really really unusual from a historical perspective 300 years ago what was life like for 90 if 99% of the population what was life like I'm planet Earth but human beings a man you got up in the morning you went out into the fields you find all day you came home when the Sun was about to set you a dinner you went to sleep repeat and repeat and repeat and repeat you were born with the same stuff you died with over and over and over again every generation was exactly the same as the previous generation it wasn't this idea my children will be wealthier better off than I am that's a modern concept never existed in human history but 300 thousand years from an average economic perspective nothing changed in human life if you look at wage income or average wealth during this period 300 years ago was about somewhere under $3 an hour that's re P dollars a date he doesn't know it would make you unbelievably wealthy three dollars a day and it basically stayed that way for three hundred thousand years it went up a little bit in ancient Greece came down and went up a little bit in ancient Rome came down in the Dark Ages bridge in the world it basically stayed flat until suddenly kind of out of nowhere completely unexpectedly it went like that and I have to jump because it goes whale because from a better perspective we are not 300 times richer than we were 250 years ago but battle perspective it doesn't capture the real value of how much life is better today because it doesn't catch up life expectancy it doesn't capture quality of life it doesn't capture the fact that we have the really clean in spite of our complaints really clean water doesn't capture the intangibles it doesn't capture the actual value of this as an economist if I'm adding up the value of the iPhones out there in the world what do I do that if you're just doing economics I know you're law students so you're not supposed to know economics but you know just the simplest way I capture the value of all the iPhones in the world today I take their price and I multiply by the number of people who matter right so this cost a thousand dollars let's say there's a billion people out there who bought them let's say the the total market of iPhones the value of rifle is 100 billion dollars but how much is this iPhone worth to me how much is the psyche phone worth to me if I paid $1,000 for anybody take any Connor how much is that phone worth to me how much sure they are the clothes you're wearing would to you if you paid a hundred bucks for them how much are they worth you you just paid a hundred bucks you should know what's worth what at least a hundred I mean generally you would say more than a hundred because they're worth exactly 100 you wouldn't matter like you'd be indifferent between $100 and the stuff you buy now for when I paid a thousand bucks for it's worth to me much more than a thousand dollars much more I just described by the amazing thing this thing can do to me to my life this is what tens of thousands of dollars don't tell Apple to raise the price on me but this is what tens of thousands of thought now that gap between what I paid for the thousand dollars and the ten let's say ten thousand dollars that I think it's worth to me that nine thousand dollars we don't measure there's no measure of that that's the moment and it's improved my life by nine thousand volts there's no economic measure with that there's no way to capture that in economics no way to do it it's one of the problems with all the inequality measures that we have are we measuring inequality of dollars but the values we get are not measured in dollars they're measured in increased quality of life which we can't measure and the inequality in quality of life I would argue has gone down not up over time think about the fact that both that the difference in life quality between me and Bill Gates in terms of dollars the difference between Bill Gates is astronomical right these were seventy billion dollars I'm worth a lot less than that believe me right but it does a quality of life I have an iPhone iPhone I don't think his iPhone is much better than mine maybe has a little bit more memory of stuff but not no big deal right he has access to the same information I do the same effect that I do here's a bigger house oh we met that house my pretty decent house we both fly in a private jet anytime we want to go let's say to Europe the only differences I say my private jet with 300 other people and he gets the fly by himself but again a big if you think about travel 100 years ago suddenly water was 200 years ago when that trip was three months or years and today we can do that trip so what's the demoscene me and Bill Gates in terms of quality of life is very small inequality in terms of quality of life is very small today because we can't measure quality or we can measure up physical things so today we are so much better off than 250 years ago that that 300 X number under estimates that by probably a factor of 100 with thousands of times better off than we which won it and the question I think that's important for us to understand is why what happened 250 years ago to make a so rich so successful what is the difference between life 250 years ago what is what made it go through the roof because it was and then suddenly went like that and what would you put the dates where it kind of looks like that what would be a good date globally for that or at least in the West 1800s not a bad date right somewhere around there I like to think it's anywhere in those decades I have a particular date in mind which I like in particular it's 1776 you know which is a nice date easy to remember but three things happened in 1776 most Americans know of one but they're actually three things important things that happen in 1776 one was it was the first time that year that the steam engine was commercialized so steam engines had always existed but the commercialization actual use of a steam engine for production first time was 1776 in that sense you could say the beginning of the Industrial Revolution a famous book was published in 1776 that has to do with capitalism the title I talk what was that what's the first book the wealth of nations by Adam Smith is published in 1776 and of course the most important event in 1776 is the publication of the Declaration of Independence in the United States to me in my mind the most important political statement in human history because what does it say because I think it's the sentiment it's the ideas in that document that make that make that progress possible it makes wealth possible because what does it say you have to be careful acres we enclose lawyers what does it say it says says that all of us as individuals are equal equal in what respect was run as equal look around the room we're clearly not equal so what do we call in what respect does the Declaration apply equality to us and granted the founders didn't exactly do this consistently right they didn't apply it fully but the idea behind it what is that idea we're equaling what and what respect what's that a human value and how does that manifest itself in the political document in political application what's the application of that equality what's the idea that it comes in a sentence the sentences that follow it we're equal in the fact that every single one of us are born with rights with inalienable rights in a libel meets cannot be taken away from you it's not in the modern sense the way understand of today unfortunately relates in a sense that we're all born free we're all born free of coercion what along with a way to live free from because free for having force applied to us free from Authority the dictates what we must think what we must do how we must act right a concept that relates the freedom of action right say you are free to act on behalf of your own life you're free to act in pursuit of your own values unless some unless you're infringing as somebody else's rights unless you're using force of somebody else you're free so the document is basically thinking it's saying we should be free as individual to live our lives as we see fit free from coercion free from force free from Authority and while it was applied inconsistently throughout the West that idea the idea that comes from the Enlightenment they comes from thinkers like John Lacan a Scottish and English and French enlightenment of that 18th century that idea that all individuals are inherently free should be left alone should be protected from cohesion applied on them but always left alone to pursue the pursue their values that ID unleashes something what is it unleash but an unleashes human ingenuity it unleashes human entrepreneurship it unleashes people to think for the first time to be creative to think outside of the box to innovate to think new thought without the fear persecution think about Galileo radical idea that the earth goes around the Sun not the sound around the earth and what happens to what's in house arrest forces used against them because an idea that he has because the authority doesn't accept the idea objects the idea and it can apply force against it within 200 years thinkers in the West reject that notion that there's bergna that that some of poverty is gonna apply to all of us and they flee up the human mind for the first time really in human history maybe with the exception of Greece what happens in the early part of the 18th century is this there's a rediscovery of the idea that what makes us human what makes us human and don't say thumb what makes us human what makes the human animal unique and different from any other animal out there what's that I'd almost a conscious conscious right the conscious of the world around them but there's something about human consciousness that is different than other consciousnesses right what is it what what makes it different our capacity to do what the reason to think to be rational to abstract the thing concerns an abstract concept to integrate the facts of reality into greater and greater abstractions no an animal can do that you know people talk about human beings as being able to communicate animals can't communicate but communication is a is a derivative from the fact that we can think can use a reason and the beginning of the 18th century suddenly people discover rediscover this idea that yeah what makes us unique as a species is our building you think ability to use our mind and it's not an accident that at the same time you get a scientific revolution suddenly people are saying look we can use our minds explain the physical world Newton comes out and he explains the laws of physics and we can actually understand why things move the way they move and everybody can understand it you know if you don't if you didn't get the physics of Newton it's your teachers fault they're not that hard this is not difficult stuff the people who because waited knowledge come before this where the knowledge come from before that where did the truth come from before Newton and before this idea that reason was a tool for discovering things how do we know stuff yeah from ancient books from some authority telling us this is the truth you must abide by the truth why because it just is it's revealed 18th century people said no we don't accept that it's revealed we want evidence we want proof and suddenly people saying wait a minute if I can understand the laws of physics how things move if I can if I have a mind if I have a capacity to reason as an individual then why can't I make other decisions for myself in this world why can't I decide what profession to go into for the 1800s your profession was dictated by whom what your profession your parents had you didn't get a choose why can't I make that decision for myself I have the capacity to reason I can know the truth for myself I don't need an expert to tell me what the truth is why can't I choose who to marry old lady okra Mantic love the whole idea of choosing somebody was new and it's a product the fact that we suddenly discover we can't think for ourselves each one of us every individual has the capacity to reason and then why can't actually is my political leaders so it's not an accident that you get the declaration independence it's a consequence of this idea that every human being has the capacity to reason and that reasoning capacity leads to making decisions for oneself in every realm of one's life and then why can't I invent this machine I don't need somebody's permission why can't I start up a factory without asking for permission why can't I do and you can see how this leads to an explosion of innovation creativity building creating making it leads to capital because what is capitalism capitalism is a nice word people throw out just like socialism they don't bother to define them but what is capitalism what does capitalism mean what is capitalism you get lawyers you're supposed to define stuff means what first comes into your mind we see capitalism yeah free-market capitalism is a female free of what free of what free markets another one of those terms you need to define what a free of what yeah overwhelming regulations right who defines overwhelming clear regulations free of controls free of coercion free of forests free of intervention free markets mean free markets free means no coercion no force no regulations no controls that you might not like free markets you might say oh we need some regulations I don't say that but some people might say that right but free markets actually mean no regulation leaving it up the choices of you as individuals assuming you all have the capacity to reason for yourself to make the stations that are in your self-interest rationally and to act in the marketplace free from that Authority free of that coast of nature of the state Wharf crooks and criminals assaults are free of the code so capitalism is free market capitalism is the system capitalism is this system it's a social system economic system political system the basically where the government's whole job is to protect rights and otherwise leave us free it's a system with high property rights all property is owned by individuals all property is private property in which the state's job is to protect that property and nothing else so no coercion by the state it's there to protect you from the crooks the criminals the fraudsters but nothing else that's what capitalism is an ideal means and it's as an ideal it's never been practiced we've never had complete capitalism but that's you have to know what it means to know how close you are to it or whether you want to go all the way or not you have to first know what it is what happens in 1776 and in a hundred years that follow is that that spirit of freedom gets unleashed governments shrink to only deal with protection for the most part right for the most and leave markets free to innovate to produce to create to build and what you get is an explosion explosion of economic growth for the first time in human history and sustained economical and today we know if you look around the world you can measure them to the extent that we practice those three markets nobody's perfect that's an extent that we practice them we're rich to the extent that we don't we'll put you know country after country after country you take the economic freedom index and the countries at the top are dramatically richer than the countries at the bottom or even the countries in the middle economic freedom makes all the difference so the greatest virtue of capitalism is that it's a system that sets us free it's a system that leaves us free to think whatever thoughts we want to have and to act on those thoughts it's a system that rewards productiveness rewards the rational rewards being honest go into business and try it being dishonest for a while doesn't last for very long and tried your personal life – all right take your best friend like to them for a date see what happens really bad strategy for living particularly bad strategy it's the same in business lying is just a bad strategy so it's a system that rewards honesty certainly rewards hard work and productiveness Woods innovation and thought it were words individuals striving to make their lives better it rewards virtue virtue probably understood don't you properly understood and it makes us all richer it extends human life it gives us all the benefits all the stuff that I talked about before is a product at the end of the day of whatever capitalism we still have in the world it's no accident what's the most innovative area in our economy today what's the one area where you get innovations constantly yeah well we contact generally right so technology why is that the most innovative area like take a plane so it planes a area where there's massive innovation going on what's that there's a one in the one but you could argue there's a wooden airplanes you can still you know if you came up with a completely new way of doing aircraft with that you don't you can make a lot of money but why is there almost no innovation in a plane it's highly regulated highly controlled last innovation in airplanes what last beacon of aging anybody know the Concorde Concorde supersonic but well it took New York to London I think was three hours pretty amazing maybe four but pretty amazing a little a quick plane when was the last time a Concorde flew long time ago and why does nobody invest there's a beginning right now the number of companies developing a supersonic technology but why I say be no investment in that over the last 20 30 40 years it's to regulate it's to control regulations hamper innovation what what is the essence of regulation what is the essence of regulation all regulation what's that so it's protecting your business from the bad guys is that the essence of regulations what's the essence of regulation what's that monetary policies are part of the regulation but what's the essence of a regulation what's so really she trying to do yeah it's the restrict to it you're trying to tell you how to run your business if you have good excuses we're doing this in order to protect consumers with doing this in order to you know I don't know help you protect you from competition which often this is the case right we're doing this because it's good for society we're doing this because it's good for something but the essence of regulation is Authority the essence of regulation is the Catholic Church telling Galileo no that's wrong you can't say that because we the experts know better we in government have figured out that you can do that supersonic jets no good yeah since regulations for us cohesion authority and what's the excuse given for regulations always it's good because we're the experts and we know in other words you're too stupid the marketplace is too stupid figure it out you don't have reason you don't have the capacity to think for yourself you don't have the autonomy to make those kind of decisions for yourself because so-called the social cost whatever that is it's too hot but the essence of regulation is authority is somebody telling you what's right and what's wrong whatever it is to innovate in whatever is not to innovate in what areas you can explore what areas you're not allowed to explore it limits your universe it limits your thinking it limits your capacity every industry that's regulated there's very little innovation ultimately what you discover is there's a lot of fraud it's no accident when you look at fraud cases in the past again you guys are probably too young but the last big explosion of corporate fraud was Enron will calm Tyco there was a whole series of them in the late 1990s every single one of them every single one of them in a highly regulated industry there's almost no fog in Silicon Valley because what Silicon Valley about production creation building making stuff what a regulated industry is about if you're running a company that's highly highly regulated what do you spend half your time doing getting around regulations or lobbying Congress lobbying the president lobbying the state regulators lobbying people and that's a different mentality I called the schmoozing mentality CEOs and regulated companies are really good at schmoozing CEOs of unregulated companies are really good at producing schmoozers are much more likely to be corrupt than produces the way politics is about power about exchanges of power production is about what what's the essence of free markets how do we relate to one another in a free market trade we trade and what's trade based on win-win it's about making stuff better so the essential characteristic of capitalism is that freedom to think and to do based on your judgment and again as long as you're not hurting other people you're free to innovate to produce to trade to act as you see fit without asking for permission the essence of a regulatory state is that you need permission to act permission to produce permission to innovate permission to do everything else and there's no accident that those industries where you don't need permission technology for the most part you don't need it innovate advanced produce move us forward and those who you do need permission we stagnate what is the last innovation in the internal combustion engine in automobiles it really hasn't be again because it's heavily heavily regulated heavily rigged so the virtue of capitalism the virtue of freedom is that it frees up the human mind it frees up human thinking and it makes it possible for this innovation of progress and success increased standard of living to occur I mean one could only imagine if we eliminate the regulation or loosened up the regulations on things like biotech and healthcare what kind of life expectancy we could actually attain and what kind of progress we could actually attain in those fields today again those fields are hampered restricted constrained by asking for permission in almost every single dimension that they occur so capitalism has produced the greatest wealth ever so many systems produced any wealth no other no other political economic systems used any wealth in human history socialism everywhere it's tried in any way it strike any place it strike is a complete and utter disaster all you have to do is look at Venezuela today and if anybody doubts that Venezuela is socialist ask me about it you know because it qualifies you could go down the book right it's not a hundred percent socialist any more than America's 100 percent cap capitalist but it's tilted in that direction without any question and any country that tilts in that direction it's a massive failure and what I find interesting and what I'm gonna give a complete answer to this whatever I find interesting and intriguing is how attractive socialism is and how unattractive in our culture capitalism how cool for young people socialism is and how uncool capitalism and I think part of the answer is capitalism basically says that your life is yours which means the responsibility for your life is yours it means that you you get to act any way you want and you are going to make mistakes you're going to fail and it's up to you to deal with that failure it basically demands it basically expects each one of us to take full responsibility novo and live it also implicitly assumes that we have the capacity to do it that is we all have the capacity to reason to think to be rational think about a modern culture so much our modern culture tells us that we're not capable of taking care of our own life then reason is not efficacious in reality is not objective it's not I mean some philosophers tell us it's not even there nevermind we all see it differently so reality is not one thing right this is all logic we're told today you know women have one logic men have one logic logic depends on the color of your skin logic depends on your genes logic depends on all kinds of things no there's only one logic it but if you think there million types of logic then there's no reason there's no truth there's no reality there's no capacity to actually discover truth there's no capacity actually take care of oneself so we live in a little bit undercuts reason at every opportunity undercuts the relationship between our consciousness and reality at every opportunity and if you doubt it again ask me in the Q&A I'll list you to all the philosophers that don't believe in human reason and then capitalism expects you again to take personal responsibility over yourself it also says implicitly that your life is worth taking care of and that it's your MAOIs possibility to take care of you that your primary metal responsibility is to take care of yourself again we live in a world in which we are taught and expected it supply me more responsibilities take care of others don't think of yourself too much don't be self-interested don't be greedy don't be selfish all about other people it's all about the group it's all about the collective it's not about you so in the world in which we live it today ideologically is opposed to the prerequisites of freedom and prerequisites of capitalism I think capitalism is important because I think the quality in the stand of our life depend on but I think in order to preserve it in order to grow it you know it's a move where I would like us to move which is more you know in a direction of more consistently capitalism we have to resurrect we have to rediscover those foundational ideas which they had at least implicitly in the 18th century we have to rediscover the efficacy of Reason we have to have a renewed respect for human reason everybody's reason not just the reason of the elite who can guide us all down there but the reason of everyday every human being at least the capacity to do it we need to expect them to do and then we need a politics and I'm already of individualism an idea that individual life is sacred the individual life is sacred and your life is sacred and your life is your responsibility to live as you see fit using your reason as your guide and if we do that the world is significantly better off but the focus on the individual versus the focus on the group again we live in a world right now where the focus is tilted dramatically towards the group towards a tribe even these days towards collectivism rather than individualism so capitalism to be defended we must defend reason and we must defend individualism those are hard things to defend the philosophical things and in my view the best offer the best philosopher to ever defend them and therefore the best author the best philosopher David ever defend capitalism is Iran so I'd encourage all of you to read Atlas Shrugged The Fountainhead and maybe more importantly the virtue of selfishness capitalism nonno an idea or non-fiction writing which he articulates in essay form these ideas thank you and I'll take questions on anything give me an example of a common pool resource yeah yep yeah so in any case we call this the comments right so the tragedy of the Commons and the tragedy of the Commons is of course that because nobody owns it it usually is depleted it's it's overused or it's filthy or it's polluted because nobody owns that therefore nobody cares and indeed if you look around the world the most filthy places in the world are the ones that have the most comets that is the ones that have everything comets are the most Billy place in the world was Eastern Europe when the Berlin Wall came down communism is filthy and my solution to the Commons is pretty simple not have any that is my solutions in comments it's the private size I'd go all the way I mean I don't know how to privatize in the air I'd love to figure that out I don't think that can be done and a few places I think there's a real challenge like oceans and fisheries which is a challenge but places like Iceland and places like Norway I've come up with very very creative ways to to create private property with lots of fish and fish and and and ability to fish now whether they're the right ones whether that's the right car I'm not an expert on that so I don't know so oceans are definitely a challenge but I think you can do things that create the create private property over what matters in the ocean which is the fish the ability to fish um but streams absolutely rivers absolutely Lakes absolutely beachfronts absolutely all of it should be privatized so to me technical ISM is the system where all the property is all privately owned all the property privately and so anything that has a human use is gonna be privately owned by somebody and I think what happens then is you solve a lot of these problems because we know from common law going back hundreds of years right that you can't dump your garbage in my backyard that's me settled way back if I have this property you can bring your garbage in yeah well I own this piece of the lake or this piece of the river you can't pollute upstream and damage my river and there's nineteenth-century law that has to do with rights and things like that goes back to when the West was actually privately owned and when rivers were deemed to be private and where the cows pooping over here affected and as how do we deal with them right and and you can deal with that through through legal mechanisms the we that we know I think the problem is when it's common because what happens when it's not privately how do we settle any dispute on any issue where the issue it's not privately-owned it's a collective action problem but at the end of the day the only way to settle it is through a democratic process and when a democratic process always leads it well to either the majority dictating to the minority what they have to do in other words violating the minorities rights of action or it's after not even a majority it's often the loudest my knowledge that gets the dictate it's the one we're willing to pound on the table the largest it's a pressure group that has the most political levers and we see that the more government has grown in terms of its intervention in the economy the more regulations we have the more controls we have the more we become a society in which much of the decision-making is done by pressure group politics by which pressure groups has the most levers in Washington but who lobbies the most right there was very little lobbying in Washington 100 years ago let's compare it to today but the more power you give the more in a sense everything becomes public property because if you think about it there's a sense in which there are no private corporations in America today because the whole so heavily regulated there's a sense in which you don't really own your land try not paying taxes on it see what happens you're actually renting it from the government it's called property taxes there's a sense in which we've turned into everything into the Commons and in that sense now everybody lobbies everybody's a pressure group everybody tries to manipulate the political process and politicians are more and more and more powerful whereas in American history politicians were relatively little power today they're all powerful that's what politics has become such an important part of our lives when maybe a hundred two hundred years ago you know wasn't that big of a deal because politicians didn't have a lot of power over their lives so what you get is this pressure grew politics to determine use of the Commons and everything's a common because of regulation yeah excellent yeah I gave a talk in no way a couple of years ago its online about the evils of the Scandinavian welfare state so yes it was it was they never heard anything like it they were there the the the poor students at bogan University were quite shocked and half eclectic about it so let's start by the fact the simple fact that no way Sweden Denmark are not socialist I mean you can argue about what they are but there's certainly not socialist they the government does not own the means of production and socialism the government owns the means of production that they do not own the music production and indeed in many respects I kind of like Denmark is less regulated than in the United States so for example it is easy oh the fire and employee in Denmark than it is in California I don't know about Arkansas but in California it's almost impossible to fire somebody Denmark has incredibly flexible labor markets very little regulation we label it easier to open a bank in Denmark than it is to open a bank in the United States less regulation of financial institutions I know a banking Denmark good friend of mine built a very successful private bank he wouldíve the only place in the world where he would not open a branch is the United States because we so heavily regulate a financial institution so on an economic freedom index if you you know people ranked economies based on economic freedom there are a couple of different rankings one by heritage the one by Cato then look in Sweden and the United States about in the same place Scandinavian countries regulate less they redistribute more we regulate model and redistribute less when Bernie Sanders called Denmark socialist the prime minister of Denmark went in front of the press to object because Denmark is not a socialist country so that's 0.12 the Scandinavians are just not that's they're not that rich we're richer than they are if Denmark was one of the fifty United States the states in the US they would rank somewhere around 43 44 and 50 people down just ahead of Mississippi right but I mean people think of them as these successful places because you go to Denmark it's clean it's nice I love Copenhagen it's one of my favorite cities in the world it's a fantastic city there's a lot of people's homes this small and if in the stuff they have they're just not as wealthy as a man that's just a reality now the point a mark a slightly better off than the poor in America but the middle class is certainly far behind the middle class in America in terms of well 11 teens moved to America a lot of Swedes moved to America a lot of Norwegian smooth to America and the late 19th century early 20th century there was a mass of migration in Scandinavia in America what you can do and people have done is they've done studies comparing Danes in America with Danes in Denmark Danes in America a richer Danes in America are just as happy as Danes in Denmark Denmark is supposed to be the happiest place on earth Danes in America turn out just to me as happy as vanes in Denmark because you know if you ask people if they're happy if you ask a Scandinavian if they're happy they say yes because that's what you're supposed to say there are happy people like if you ask you know I'm I'm my origin is Jewish yeah Jews if they're happy they never say yes like it would be an insult you're happy happy Hey and so much of this is cultural and yet we take these happiness studies as if there's some if you look at the actual actual studies they're very poor science so they're just as happy or if your life expectancy right life expectancy in the u.s. is relatively low as compared to some of these countries but if you adjust for jeans Danes in America live just as long it's not longer than veins and then so you know what are the vents they redistribute while more so yes as a consequence of that there's less mystic risk-taking in Denmark it's less entrepreneurial than the United States is you know because because you've taken away some of the risk elements you've inculcated low risk behavior into the culture through the redistribution mechanism and then in some respects or less free in other respects they're more free but to compare the u.s. to Denmark this is similar to actually come to any conclusions again they're not social and I'll just give you my quick story in Sweden because you know I get the Sweden question I usually don't get a den mother you can get Sweden and I get it so often that I've got my stick down right see is this some version of the economic history of sweet right true but very condensed and short before 1870 Sweden was the poorest country in Europe it was dirt poor it's it's the period in which many Swedes left and came to America settled in the in the in Minnesota Wisconsin in that part of part of the US but really all over the u.s. pre 1870 good poor poorest in Europe 1870 they do massive reforms they basically establish the rule of law property rights basically they become the most capitalist country in all of Europe Sweden the most populous country in all of you indeed they stay from 1870 until about nineteen fifty-five fifty-six the most capitalist country in all of you have in terms of respect for property rights no regulations and and freedom they become very quickly the richest country in Europe by the dollar World War two Sweden is the richest country in Europe per capita GDP many of the great big industrial companies in Europe are based in Sweden and then in about late fifties early sixties they decide to experiment with socialism so they start redistributing wealth on a massive scale and they nationalize some of their industries what happens is GDP per capita basically it was going slow goes dramatically and its growth Sween becomes you know middle of the road not the poorest country in Europe but middle of the road it loses its place as the richest country Europe those big industries disappear by 1979 what is the biggest industry in Sweden the biggest money-making sweetie buddy no biggest money-making Sweden 1979 you know a little bit about pop culture you know this answer to this Baba yeah Abba there are blue there pop goo number one all the industries were gone Abba became the number one money making up a to money maker in Sweden with you on book the tennis player who left the Monaco in order to avoid the big tax taxes I think elbow so some of the Abba members left Sweden because of the high tax rate by 1994 Sweden was basically bankrupt it couldn't pay its debts in 1994 Sweden was the Greece what Greece is today not quite as bad but close since 1994 again Bernie Sanders never tells the story since 1994 Sweden has been reducing regulations dramatically it is privatized all the nationalized industries and now in private hands it actually has school vouchers which even we in the United States don't have it has lower taxes lowered welfare benefits it is cut dramatically the size of gonna not as Republicans always do cut the growth wait they've actually cut government spending government spending from year to year is lower in absolute terms by the way almost exact same thing happened in Canada Canada was almost bankrupt in 1994 and actually if you look at government spending government spending started declining from 1994 but Sweden it's dramatic so Sween is actually proof that socialism doesn't work in capitalism does even in a well advanced Western country so nothing about Scandinavia today is social I mean other than redistribution of wealth more than yeah yep yep yep what do people goofy yeah okay yeah yeah yeah sure no it's a good question but but let me put it this way I mean I'll flip it on you right things like slavery things like massive discrimination a features of human history from day zero pretty much the the treatment of women like you women of second-class citizens a features of human history from day zero there in the Bible the God tells you how to treat your slaves right slavery was legit in the bite there's no prohibition against slavery in the Bible women a secondhand citizens is in the Bible right it goes way back you know really really really just use the first thing they pray the first prayer they make every single morning I mean this is I'm not making this up the real really just ultra-orthodox thank you gods and I'm making me a woman this is ingrained in these religions so that's human history that's the way what and then comes capitalist sudden you get the elimination of slavery I mean not completely but almost and suddenly it legitimized it that's capitalism suddenly women we expect expect you to treat women as equals rightly so right that's capitalism we can talk about American Indians I think Indians a particularly egregious situation but we can talk about them I think I think to this day it's just a horrific what we do with American Indians well we'll talk about that minute capitalism is the first suit system economic political system to actually liberate everybody because what does this say it says every individual not member of a group an individual has the capacity reason and we're leaving them alone to live their life as they see fit and suddenly the focus is on individual on your virtues as an individual not as your membership in a group I think one of the problems in the world we live in right now is we're reverting back to do politics identity politics is what they call it that right so the way to resolve those issues is to really treat people as individuals at the very least from the legal framework and one of the great tragedies of how we dealt with is okay we fought a war to end slavery right good you got rid of slate but then then we institutionalized into the discrimination Jim Crow laws which existed until the 1960s so we you know we didn't allow for real capital and it might be the only solution to that is capitalism you you don't solve anything by reverse discrimination you don't solve anything by reverse racism because all you're doing if you reverse racist if you reverse it if you do things like formative action in my view is you create racism of a different form and I think there's no accident that we're seeing identity politics today I think it's a consequence of the affirmative action and and our legalization of looking at people as members of group rather than as looking people as individual

  1. Yaron,
    Great talk. Just too bad the audio was so bad.
    Provide better audio in the future if you want me to increase my monthly donation to you.

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