Full Transcript for Interview: Both Parties Are Abandoning Free Markets — And Embracing Socialism

00:01:52.590 --> 00:01:58.549 spectrum– And I'd say this has been going on since, well, 2016, 37 00:01:58.540 --> 00:02:02.390 in a sort of bipartisan shift towards the embrace of 38 00:02:02.450 --> 00:02:07.790 the state. We're seeing both sides of politics embracing more 39 00:02:07.849 --> 00:02:11.569 forms of interventionism. On the right, it takes the form 40 00:02:11.729 --> 00:02:17.050 of economic nationalism, and that involves anything ranging from tariffs 41 00:02:17.069 --> 00:02:20.319 to industrial policy, etc., And we see some of that 42 00:02:20.360 --> 00:02:23.599 replicated on the left. We saw some of that during 43 00:02:23.620 --> 00:02:26.759 the Biden administration. I like to remind people that the 44 00:02:26.780 --> 00:02:30.439 Biden administration didn't change any of the first Trump administration's 45 00:02:30.719 --> 00:02:37.330 tariff policies. And both parties have intervened very directly into 46 00:02:37.370 --> 00:02:40.810 the economy. As you mentioned, you mentioned the Trump administration 47 00:02:40.889 --> 00:02:46.439 taking out shares of publicly traded corporations, the Biden administration 48 00:02:46.479 --> 00:02:49.860 played that game as well. So we're seeing a remarkable 49 00:02:49.879 --> 00:02:53.849 shift across the political spectrum towards a more favorable view 50 00:02:53.909 --> 00:02:56.969 of state intervention, more like what we see, for example, 51 00:02:57.050 --> 00:02:59.830 in Western Europe. And I think this is a very 52 00:02:59.990 --> 00:03:03.240 bad trend because we only need to look at Western 53 00:03:03.379 --> 00:03:06.379 Europe to see where this type of, let's call it 54 00:03:06.460 --> 00:03:08.699 social democracy, ends up taking. 55 00:03:08.719 --> 00:03:12.580 That's right. Yeah, we have a malinvestment issue, don't we? 56 00:03:12.639 --> 00:03:15.689 Because when you talk about the invisible hand, how is 57 00:03:15.729 --> 00:03:18.189 it that the marketplace is so much better at making 58 00:03:18.229 --> 00:03:21.770 decisions than individual people, no matter how smart they are? 59 00:03:21.810 --> 00:03:23.930 They may be the smartest people in the room. I've 60 00:03:23.949 --> 00:03:27.479 always looked at this as an information issue. They don't 61 00:03:27.520 --> 00:03:30.259 have the information. You can think of the marketplace as 62 00:03:30.300 --> 00:03:33.620 like a complex neural network, which begs the question. Some 63 00:03:33.659 --> 00:03:37.240 people have said, well, now with AI... We've got a 64 00:03:37.280 --> 00:03:39.620 solution to that. We can be everywhere and watch everything 65 00:03:39.639 --> 00:03:41.740 at the same time, so we can make that solution 66 00:03:41.800 --> 00:03:43.560 for you. I see that as a new danger. What 67 00:03:43.580 --> 00:03:44.360 do you think about that? 68 00:03:45.379 --> 00:03:49.009 So what you're really referring to is what the Nobel 69 00:03:49.069 --> 00:03:53.129 economist F.A. Hayek called the knowledge problem. The knowledge problem. 70 00:03:53.169 --> 00:03:57.449 This is the problem that central planning runs into every time, 71 00:03:57.830 --> 00:04:01.520 but also sort of mild forms of social democracy and socialism. 72 00:04:02.060 --> 00:04:04.979 Because at the heart of any claim to be able 73 00:04:05.039 --> 00:04:10.520 to manage the economy from the top down is the assumption, 74 00:04:10.560 --> 00:04:14.659 and I'd call it a pretty hubristic assumption, that human beings, 75 00:04:14.759 --> 00:04:18.360 that one mind or several minds, even the minds of 76 00:04:18.420 --> 00:04:22.459 some very bright people, can know everything that's going on 77 00:04:22.500 --> 00:04:25.069 in the economy at any one time, that they can 78 00:04:25.189 --> 00:04:29.490 somehow predict and know what everyone is going to do, 79 00:04:29.529 --> 00:04:32.949 because that's the sort of information you need to have 80 00:04:33.529 --> 00:04:36.790 if you're going to manage an economy from the top down. 81 00:04:37.310 --> 00:04:41.550 So I think that's the fundamental objection that you run into. 82 00:04:41.589 --> 00:04:43.129 I talk a lot about this in my book, The 83 00:04:43.149 --> 00:04:46.240 Civilization of Commerce. There's a whole section on this issue 84 00:04:46.279 --> 00:04:49.980 of knowledge and understanding the knowledge problem. Once you get 85 00:04:50.019 --> 00:04:52.980 your mind around that, I think it's very hard to 86 00:04:53.040 --> 00:04:57.800 remain in favor of government intervention or state planning, as 87 00:04:57.839 --> 00:05:00.209 we saw in the sort of centrally planned economies of 88 00:05:00.230 --> 00:05:03.449 the Soviet Union. But as for AI, yes, I mean, 89 00:05:03.509 --> 00:05:05.689 it is going to be able to enable us to 90 00:05:05.790 --> 00:05:11.269 know more things about economic life. But I'm skeptical that 91 00:05:11.310 --> 00:05:13.560 it will solve the knowledge problem. And the reason I 92 00:05:13.680 --> 00:05:17.800 think so is the following. One is the knowledge problem 93 00:05:18.040 --> 00:05:23.680 that what AI does is collate It collects facts, but 94 00:05:24.449 --> 00:05:29.519 it can't really draw much in terms of the ability 95 00:05:29.560 --> 00:05:33.360 to predict what people do with those facts. It also 96 00:05:33.420 --> 00:05:36.870 can't account for things like human creativity or what we 97 00:05:36.910 --> 00:05:41.490 call entrepreneurship. Because entrepreneurship, as you know, involves people seeing 98 00:05:41.589 --> 00:05:45.329 things that they haven't seen before, seeing opportunities, seeing gaps 99 00:05:45.389 --> 00:05:50.019 in the marketplace. It's just harder for machines, even very 100 00:05:50.079 --> 00:05:53.540 sophisticated machines, to do that in a way that's as 101 00:05:53.660 --> 00:05:57.220 creative as human beings. I think we all have this experience, right? 102 00:05:57.259 --> 00:06:00.139 When we suddenly see

something, something pops into our head, 103 00:06:00.720 --> 00:06:04.560 we call that insight. Machines can't have insights. They can't 104 00:06:04.600 --> 00:06:08.730 have things literally spontaneously emerge in their minds that give 105 00:06:08.759 --> 00:06:13.569 them something valuable that has not otherwise been seen before. 106 00:06:13.980 --> 00:06:14.920 I agree. 107 00:06:14.959 --> 00:06:16.410 Yeah. So I think this is a I mean, I'm 108 00:06:16.430 --> 00:06:18.550 not against it. I think there's lots of very useful. 109 00:06:18.970 --> 00:06:21.410 I think that the danger is that people see that 110 00:06:21.490 --> 00:06:23.550 they think that it actually thinks they think that it 111 00:06:23.610 --> 00:06:27.120 has insight. And to me, that is a very dangerous 112 00:06:27.240 --> 00:06:29.720 position that I think we're going to be exposed to, 113 00:06:30.079 --> 00:06:32.259 which brings us back to the other aspect of this, 114 00:06:32.759 --> 00:06:36.810 which is the moral foundation. free enterprise. And I think 115 00:06:36.949 --> 00:06:40.670 regardless of whatever pragmatic arguments you can make and whatever 116 00:06:40.829 --> 00:06:43.870 it is able to realistically do, whatever people want to 117 00:06:43.910 --> 00:06:47.610 project onto it, imagining that it can do, as they're 118 00:06:47.629 --> 00:06:50.389 told by people who are selling it to us, they 119 00:06:50.769 --> 00:06:52.209 will tell us it can do all kinds of things. 120 00:06:52.230 --> 00:06:54.949 But regardless of what it's actually able to do or 121 00:06:54.990 --> 00:06:56.850 whatever they tell us to do, we get back to 122 00:06:56.889 --> 00:06:59.430 the moral aspect of this. And I think that's where 123 00:06:59.569 --> 00:07:02.589 your book is really important, because we've always had the 124 00:07:02.649 --> 00:07:06.069 socialists come out and say, well, Our system is more compassionate, 125 00:07:06.189 --> 00:07:08.379 it's more moral, and we need to make the case 126 00:07:08.420 --> 00:07:11.040 for that for capitalism and for free enterprise. 127 00:07:12.139 --> 00:07:14.360 Yes, because I think that those of us who believe 128 00:07:14.399 --> 00:07:18.420 in free markets and free enterprise, we're pretty good at 129 00:07:18.480 --> 00:07:22.459 making policy arguments. We're pretty good at explaining things like 130 00:07:22.879 --> 00:07:26.170 the knowledge problem, for example, creates some fundamental issues when 131 00:07:26.209 --> 00:07:29.430 it comes to top-down planning. We're pretty good at explaining 132 00:07:29.509 --> 00:07:34.899 how competition introduces dynamism into the economy. We're very good 133 00:07:34.920 --> 00:07:38.579 at all that. What we're not so good at is making, 134 00:07:38.660 --> 00:07:42.980 as you described, this wider cultural moral case for the 135 00:07:43.040 --> 00:07:45.560 free economy. And that's one of the reasons my book 136 00:07:45.620 --> 00:07:49.050 is called The Civilization of Commerce, because I think we 137 00:07:49.110 --> 00:07:52.250 need to wrap up our narrative in favor of markets 138 00:07:53.250 --> 00:07:57.290 in a type of civilizational context. Because I think, for example, 139 00:07:57.350 --> 00:08:01.089 that when we need to keep making the good policy arguments, 140 00:08:01.629 --> 00:08:03.490 But if we don't wrap these things up in a 141 00:08:03.529 --> 00:08:07.910 civilizational narrative, much as people like, for example, Adam Smith, 142 00:08:07.949 --> 00:08:10.189 who's really the person who wrote The Wealth of Nations. 143 00:08:11.019 --> 00:08:15.459 But he has a whole civilizational agenda behind his ideas 144 00:08:15.540 --> 00:08:18.540 about how the economy should be ordered. And I think 145 00:08:18.579 --> 00:08:21.790 that's how you can persuade people. who might be on 146 00:08:21.819 --> 00:08:25.389 the fence or who genuinely believe they want to live 147 00:08:25.430 --> 00:08:27.310 in a just society. They want to live in a 148 00:08:27.370 --> 00:08:30.509 society which is characterized by virtue rather than bias and 149 00:08:30.550 --> 00:08:34.070 all those things. That's great. But I think we on 150 00:08:34.090 --> 00:08:36.710 the free market side, we need to make sure that 151 00:08:36.809 --> 00:08:40.159 we are showing people that we believe in these things too. 152 00:08:40.240 --> 00:08:42.870 We think justice is important. That's why we take rule 153 00:08:42.889 --> 00:08:47.379 of law seriously. We think things like virtue are important, 154 00:08:47.419 --> 00:08:50.720 which is why we believe that market economies need to 155 00:08:50.779 --> 00:08:53.899 exist within a certain type of moral culture. And it's 156 00:08:53.919 --> 00:08:55.620 not hard for us to do this because I think 157 00:08:55.659 --> 00:08:59.649 an older generation of free market people instinctively knew this. 158 00:08:59.730 --> 00:09:02.750 They talked about this all the time. I mentioned Hayek before. 159 00:09:03.309 --> 00:09:07.269 He talked about civilization all the time in his many 160 00:09:07.330 --> 00:09:10.330 works because he understood what And he's perhaps the most 161 00:09:10.409 --> 00:09:13.330 prominent free market thinker of the 20th century, that if 162 00:09:13.350 --> 00:09:18.210 you don't win the moral argument, you lose everything else. 163 00:09:18.710 --> 00:09:21.429 Even if you win the economic argument. You can win 164 00:09:21.460 --> 00:09:24.379 the economic argument, but if you lose the moral argument, 165 00:09:24.740 --> 00:09:25.559 you lose everything. 166 00:09:26.200 --> 00:09:28.820 I absolutely agree. And we seem to live in a 167 00:09:28.879 --> 00:09:31.659 time where people are just looking to see how they 168 00:09:31.700 --> 00:09:35.240 can maximize their wealth. and not really paying any attention. 169 00:09:35.500 --> 00:09:38.379 So often we see ignoring liberty. And that is the 170 00:09:38.440 --> 00:09:41.179

key part, I think, of this moral aspect. You know, 171 00:09:41.220 --> 00:09:43.840 you can make all kinds of economic arguments for this 172 00:09:43.960 --> 00:09:46.379 as this policy is more efficient than that one and 173 00:09:46.419 --> 00:09:49.279 so forth. And yet, if you're going to commandeer that, 174 00:09:49.330 --> 00:09:51.889 if you're going to command that from a central position, 175 00:09:52.690 --> 00:09:55.230 that is going to lead to a society in which 176 00:09:55.830 --> 00:09:56.980 it really isn't going to matter if you got a 177 00:09:56.980 --> 00:09:58.460 lot of money because they'll be able to take that 178 00:09:58.500 --> 00:10:01.000 away from you at the click of a finger because 179 00:10:01.399 --> 00:10:04.179 they don't respect you as an individual. They don't respect 180 00:10:04.200 --> 00:10:07.190 your individual liberty. They're not going to respect your property either, 181 00:10:07.269 --> 00:10:07.529 are they? 182 00:10:08.450 --> 00:10:11.450 No, that's right. And if you think about liberty, one 183 00:10:11.490 --> 00:10:14.049 of the reasons it's so important and why we need 184 00:10:14.070 --> 00:10:16.409 to talk about that more when we talk about markets 185 00:10:16.429 --> 00:10:20.320 is is because liberty is something distinctive to human beings. 186 00:10:21.000 --> 00:10:26.840 No other species can exercise free choice. No other species 187 00:10:26.919 --> 00:10:30.080 can decide to do this rather than that. And that 188 00:10:30.120 --> 00:10:32.720 liberty is also important, right? Because it enables us to 189 00:10:32.759 --> 00:10:36.620 be creative. It enables us to imagine things different to 190 00:10:36.679 --> 00:10:39.580 the status quo. And these are things that make us 191 00:10:39.700 --> 00:10:43.179 different from every other species that exists, which tells us 192 00:10:43.259 --> 00:10:45.940 that If we have liberty, that tells us something about 193 00:10:46.019 --> 00:10:49.929 how special human beings are. And so I think making 194 00:10:49.970 --> 00:10:52.210 that case for liberty, and I think this is one 195 00:10:52.230 --> 00:10:54.330 of the geniuses of Adam Smith, he made it very 196 00:10:54.409 --> 00:10:57.190 clear that he believed in what we would call the 197 00:10:57.230 --> 00:11:00.809 market economy. He believed in competition and free enterprise. He 198 00:11:00.870 --> 00:11:03.769 believed in the invisible hand. But he said this is 199 00:11:04.029 --> 00:11:09.960 all preconditioned upon an appreciation and respect for liberty. So 200 00:11:10.000 --> 00:11:13.059 you can have a society that becomes very wealthy, But 201 00:11:13.100 --> 00:11:16.460 if it loses a sense of the importance of liberty, 202 00:11:17.179 --> 00:11:19.899 not only will it become, I think, not a very 203 00:11:19.960 --> 00:11:22.570 pleasant society to live in, it's also not going to 204 00:11:22.629 --> 00:11:25.669 remain wealthy for very long either. Because once

you throw 205 00:11:25.730 --> 00:11:28.690 liberty out the door, things like property rights, things like 206 00:11:28.769 --> 00:11:33.269 rule of law, key institutional prerequisites for a market economy 207 00:11:33.750 --> 00:11:38.070 start to disappear. And guess what fills the gap? Big government. 208 00:11:38.269 --> 00:11:40.570 That's right. And that's what we're seeing now from both parties, 209 00:11:40.629 --> 00:11:42.899 I think. We're speaking... By the way, I should let 210 00:11:42.919 --> 00:11:46.799 the people know that we're speaking now on Tuesday before 211 00:11:46.870 --> 00:11:50.149 the election has been held. This interview will air on Friday. 212 00:11:50.929 --> 00:11:53.809 So as we look at this, what do you expect 213 00:11:53.889 --> 00:11:56.590 to happen regardless of which way this goes? As you 214 00:11:56.610 --> 00:11:59.309 pointed out, Biden didn't get rid of any of Trump's 215 00:11:59.350 --> 00:12:03.360 tariffs and Trump, I think, kept sanctions and things like 216 00:12:03.399 --> 00:12:05.879 that that were on there with Biden. Both of them 217 00:12:05.960 --> 00:12:09.399 like to have taxes and they like to have a 218 00:12:09.460 --> 00:12:11.580 justification for taking that whether or not there is a 219 00:12:12.139 --> 00:12:14.769 legal justification or not for that. What do you think 220 00:12:14.809 --> 00:12:17.549 about that? And of course, about what people have been, 221 00:12:19.009 --> 00:12:22.769 we've heard arguments from this administration that the people in 222 00:12:22.789 --> 00:12:24.350 America aren't going to pay for the tariffs. 223 00:12:25.470 --> 00:12:29.149 Well, they are absolutely paying for the tariffs, right? Because 224 00:12:29.210 --> 00:12:31.529 we're seeing that in higher prices. Because we know that 225 00:12:32.549 --> 00:12:35.529 the people who pay the price for tariffs, so when 226 00:12:35.590 --> 00:12:37.809 we put tariffs on another country, the people who pay 227 00:12:37.830 --> 00:12:39.590 the price are American people. 228 00:12:39.830 --> 00:12:40.950 Consumers, that's right. 229 00:12:41.090 --> 00:12:43.230 That's that's the problem. That's the fun. That's one of 230 00:12:43.250 --> 00:12:47.629 the reasons we've seen Considerable instability in markets. It's also 231 00:12:47.669 --> 00:12:49.980 one of the reasons why I think we've seen this 232 00:12:50.029 --> 00:12:54.299 what people are calling this calling this affordability crisis But 233 00:12:54.379 --> 00:12:57.480 what I think what whatever happens in the elections one 234 00:12:57.519 --> 00:13:00.320 thing I think is pretty clear. There's a type of 235 00:13:00.700 --> 00:13:04.500 consensus now it's almost a type of bipartisan consensus and 236 00:13:05.169 --> 00:13:08.230 in which people across the political spectrum, and I have 237 00:13:08.269 --> 00:13:11.370 to say here, particularly young people, young people on the 238 00:13:11.429 --> 00:13:14.009 left and young people on the right, who are looking 239 00:13:14.070 --> 00:13:17.559 for the state to do more things in the economy. 240 00:13:18.240 --> 00:13:20.639 And one of the things my book, The Civilization of Commerce, 241 00:13:20.700 --> 00:13:23.320 tries to do is to point out that not only 242 00:13:23.379 --> 00:13:29.820 does this lead to massive misallocations of capital, inefficiencies, restrictions 243 00:13:29.940 --> 00:13:33.720 on private property rights, et cetera, It also leads to 244 00:13:33.840 --> 00:13:39.240 cultural degradation, I think, because when a society's creative powers, 245 00:13:39.779 --> 00:13:41.779 the creative powers of what you might call a free 246 00:13:41.840 --> 00:13:45.860 civilization start to disappear, whether it's under the foot of 247 00:13:45.919 --> 00:13:50.320 a tyrant or whether it's under the ever encroaching reach 248 00:13:50.379 --> 00:13:52.980 of bureaucracy, which is what I think we experience a 249 00:13:53.059 --> 00:13:54.259 lot of in America. 250 00:13:54.379 --> 00:13:54.679 Yes. 251 00:13:55.259 --> 00:13:59.159 Then those creative powers start to wane. They start to 252 00:13:59.500 --> 00:14:04.490 fade or worse. They get directed into people channeling their 253 00:14:04.549 --> 00:14:10.700 creative energies into acquiring important roles in the bureaucracy. 254 00:14:10.799 --> 00:14:13.460 That's right. Or favorites from Washington, I would say, right? 255 00:14:13.480 --> 00:14:13.679 Exactly. 256 00:14:13.919 --> 00:14:17.139 That's how you're going to succeed. You get friends in Washington, 257 00:14:17.460 --> 00:14:18.960 which just leads to more corruption. 258 00:14:19.379 --> 00:14:22.279 That's right. And that's why we have this massive cronyism 259 00:14:22.320 --> 00:14:25.879 problem in the United States today. And that's a consequence 260 00:14:25.919 --> 00:14:30.100 of businesses. getting close to legislators in state capitals as 261 00:14:30.139 --> 00:14:32.580 well as the federal capital. And there's a type of 262 00:14:32.679 --> 00:14:35.610 quid pro quo. You give me money for my campaigns 263 00:14:36.090 --> 00:14:38.230 and I'll make sure that you get something in the 264 00:14:38.269 --> 00:14:41.009 tariff schedule or you get a subsidy or you get 265 00:14:41.070 --> 00:14:45.330 protection of some sort. Cronyism is something that is, again, 266 00:14:45.509 --> 00:14:49.809 another bipartisan problem. It's everywhere. In fact, I think in 267 00:14:49.950 --> 00:14:52.750 the case of both Joe Biden and Donald Trump, I 268 00:14:52.820 --> 00:14:55.100 think they pretty much think that this is how the 269 00:14:55.139 --> 00:14:59.100 world is supposed to work. Sorry, but I really do 270 00:14:59.179 --> 00:14:59.679 think that. 271 00:14:59.820 --> 00:15:02.919 Well, it works for them. They're getting pretty wealthy, right? 272 00:15:03.509 --> 00:15:06.629 I think in many respects it sort of reflects, in 273 00:15:06.690 --> 00:15:10.389 some respects,

they have a rather similar view of economic 274 00:15:10.629 --> 00:15:13.509 life and what its purposes are. So I think this 275 00:15:13.570 --> 00:15:16.980 is yet another reason we need to think about the 276 00:15:17.009 --> 00:15:22.659 relationship between commerce, civilization, and what it means to pursue happiness. 277 00:15:22.700 --> 00:15:25.000 Because one of the things in a commercial society, I think, 278 00:15:25.379 --> 00:15:27.879 the civilization of commerce that you're enabled to do, it 279 00:15:28.519 --> 00:15:31.379 gives you more scope to pursue happiness in a way 280 00:15:31.460 --> 00:15:36.269 that social democracy, socialism, and communism simply can't do. 281 00:15:36.769 --> 00:15:39.490 I agree. I remember years and years ago, I was 282 00:15:39.529 --> 00:15:41.570 reading my, when I was still in high school, I 283 00:15:41.570 --> 00:15:45.610 was reading my dad's business week. And there was an 284 00:15:45.629 --> 00:15:48.340 article in there that has always stuck with me. And 285 00:15:48.360 --> 00:15:53.679 they talked about how European socialism, they called it Eurosclerosis. 286 00:15:54.450 --> 00:15:58.110 It's just almost like a hardening, a rigidity, and not 287 00:15:58.169 --> 00:16:01.909 adaptable to situations. And I think that has stuck with 288 00:16:01.929 --> 00:16:03.889 me all these years. I always think of it as 289 00:16:04.100 --> 00:16:08.100 a sclerosis because it does create this kind of rigidity 290 00:16:08.320 --> 00:16:10.960 and there's no fluidity in terms of people being able 291 00:16:11.019 --> 00:16:13.220 to react and respond to things, to be able to 292 00:16:13.279 --> 00:16:16.480 create things. It is a very restricting thing. 293 00:16:17.480 --> 00:16:21.559 Yes, and it undermines the adaptability of the economy. You're 294 00:16:21.600 --> 00:16:25.950 pointing to Europe, of course, where bureaucratization of everyday life 295 00:16:26.029 --> 00:16:30.580 has reached, I think, an extent that we Americans find 296 00:16:30.600 --> 00:16:34.279 difficult to understand, let alone recognize. But there are parts 297 00:16:34.320 --> 00:16:37.740 of the United States, I think, where you can go 298 00:16:37.879 --> 00:16:40.450 and you are sort of entering into a type of 299 00:16:40.669 --> 00:16:46.799 Eurosclerosis environment whereby you're crushed with regulation and It's better 300 00:16:46.850 --> 00:16:49.169 for you to have a job in the public sector 301 00:16:49.250 --> 00:16:52.230 rather than the private sector, where a lot of people's 302 00:16:52.309 --> 00:16:55.870 creative energies go in terms of trying to acquire privileges 303 00:16:55.929 --> 00:16:59.309 and favors from the government. It's not hard to identify 304 00:16:59.389 --> 00:17:02.340 parts of the United States that are already well down 305 00:17:02.399 --> 00:17:05.640 that path. I think, for example, the Northeast Corridor of 306 00:17:05.660 --> 00:17:08.039 the United States is more or less in that position. 307 00:17:08.500 --> 00:17:11.279 Significant parts of California and the West Coast are in 308 00:17:11.319 --> 00:17:13.509 that position. Now, there's plenty of parts of the United 309 00:17:13.549 --> 00:17:16.410 States where things are much economically freer. That's true, and 310 00:17:16.430 --> 00:17:19.309 that's great. But one of the things about this type 311 00:17:19.349 --> 00:17:22.289 of sclerosis is like any sclerosis, it hardens and it 312 00:17:22.369 --> 00:17:25.309 tends to grow. And once it gets hardened into place, 313 00:17:25.950 --> 00:17:27.880 it gets harder and harder to get rid of it. 314 00:17:28.079 --> 00:17:31.480 That's right. That's right. And so we're talking about California, 315 00:17:31.559 --> 00:17:33.359 as a matter of fact. What do you think of 316 00:17:33.380 --> 00:17:35.519 the wealth tax that is on the ballot? We don't 317 00:17:35.559 --> 00:17:37.299 know what's going to happen with that, but that is, 318 00:17:37.920 --> 00:17:42.069 as you point out– in your communication here, that there 319 00:17:42.089 --> 00:17:43.309 was a lot of stuff that was on the ballot, 320 00:17:43.349 --> 00:17:46.890 especially in California today, which is very, very important because 321 00:17:46.950 --> 00:17:50.309 it sets a particularly kind of an economic trend, if 322 00:17:50.329 --> 00:17:53.230 you will. And we see this trend happening in a 323 00:17:53.269 --> 00:17:56.210 lot of different places, but especially in California, moving towards socialism, 324 00:17:56.230 --> 00:17:58.990 regardless of what happens with the Republicans versus the Democrats. 325 00:18:00.059 --> 00:18:02.799 Yes. So the billionaire's tax, I think, is a classic 326 00:18:02.859 --> 00:18:08.599 example of people wanting to believe that if they tax 327 00:18:08.700 --> 00:18:11.319 the super wealthy, then somehow this is going to benefit 328 00:18:11.359 --> 00:18:15.480 everyone else. Well, it's not. And there's a couple of reasons. 329 00:18:15.700 --> 00:18:20.589 One is that even before we know whether that referendum 330 00:18:20.650 --> 00:18:23.230 is successful or not, We already know that lots of 331 00:18:23.450 --> 00:18:25.829 billionaires are leaving California. 332 00:18:25.849 --> 00:18:26.549 And guess what? 333 00:18:26.589 --> 00:18:29.650 They're taking their capital. They're taking their ability to employ 334 00:18:29.730 --> 00:18:32.579 people with them. They're moving to other states. So that's 335 00:18:32.619 --> 00:18:35.220 a net loss for the California economy. The second thing 336 00:18:35.299 --> 00:18:37.819 is you want a lot of wealthy people. living in 337 00:18:37.859 --> 00:18:41.519 your city, state, town, or country. Because when you have 338 00:18:41.539 --> 00:18:43.619 a lot of wealthy people, that tends to mean that 339 00:18:43.660 --> 00:18:47.230 the medium average income is much higher than it otherwise 340 00:18:47.289 --> 00:18:49.650 would be. We also

need to realize it's not as 341 00:18:49.710 --> 00:18:52.349 if billionaires are literally sitting on pots of gold like 342 00:18:52.450 --> 00:18:56.390 Scrooge McDuck and his money bins, right? All that capital 343 00:18:56.490 --> 00:19:00.220 is invested. That is invested. It provides the fuel that 344 00:19:00.279 --> 00:19:03.720 keeps businesses going. It provides the fuel for businesses that 345 00:19:03.759 --> 00:19:08.859 employ hundreds of thousands of people. Once you discourage people 346 00:19:08.900 --> 00:19:12.089 from acquiring great wealth or when very wealthy people start 347 00:19:12.130 --> 00:19:16.089 leaving your state, the people who suffer the most will 348 00:19:16.109 --> 00:19:18.549 be the people at the bottom of the economic pile 349 00:19:18.950 --> 00:19:21.069 because they don't have the resources. They don't have the capital. 350 00:19:21.349 --> 00:19:24.089 They need jobs. And the way that you generate jobs 351 00:19:24.430 --> 00:19:27.130 is by allowing concentrations of capital, like you see with 352 00:19:27.410 --> 00:19:30.420 quote-unquote billionaires, who can invest it as they want and 353 00:19:30.480 --> 00:19:32.980 as they see fit, which ends up creating new businesses, 354 00:19:33.140 --> 00:19:36.759 economic growth, and employment. So whatever happens in California, if 355 00:19:36.819 --> 00:19:40.799 the billionaire's tax passes, I guarantee it will be bad 356 00:19:41.059 --> 00:19:44.430 news for California, but maybe good news for other states. 357 00:19:44.519 --> 00:19:48.380 insofar as a lot of people will continue to leave California, 358 00:19:48.460 --> 00:19:50.480 move to other parts of the country, and they'll take 359 00:19:50.500 --> 00:19:52.960 their capital and their creative energies with them. 360 00:19:53.710 --> 00:19:55.509 You know, when I look at this, we were talking 361 00:19:55.529 --> 00:19:59.269 about politicians and how, you know, we have corruption that 362 00:19:59.349 --> 00:20:01.839 is involved in that. And And many times the massive 363 00:20:01.859 --> 00:20:05.049 amounts of money that are invested in corporations, and that's 364 00:20:05.069 --> 00:20:07.269 their term, you know, politicians, I should say, they talk 365 00:20:07.309 --> 00:20:09.450 about both of them, both Republicans, Democrats talk about this 366 00:20:09.650 --> 00:20:12.369 as an investment. And that's where that quid pro quo 367 00:20:12.410 --> 00:20:14.910 comes in. And I think that that more than anything 368 00:20:14.970 --> 00:20:17.170 is what is fueling this idea of a billionaire tax, 369 00:20:17.210 --> 00:20:19.650 because they have seen situations where they come in, just 370 00:20:19.990 --> 00:20:22.230 flaunt the regulations and know they can get away with 371 00:20:22.269 --> 00:20:24.930 it because there's so much money. But as so often 372 00:20:24.970 --> 00:20:27.319 we see, I think in politics, we see that people 373 00:20:27.359 --> 00:20:30.700 respond to

a problem that And rather than fix the 374 00:20:30.740 --> 00:20:33.430 root of the problem, they add a secondary problem. And 375 00:20:33.470 --> 00:20:34.829 I think that's really what we're looking at with the 376 00:20:34.869 --> 00:20:37.589 wealth tax here. It's a secondary problem that doesn't really 377 00:20:37.869 --> 00:20:40.450 address the real issue, which is the fact that they're 378 00:20:40.470 --> 00:20:44.150 buying influence or they're flaunting the laws. In Austin, where 379 00:20:44.170 --> 00:20:47.289 I used to live, that was an area where Elon 380 00:20:47.309 --> 00:20:50.750 Musk came in, and he built some facilities there. And 381 00:20:51.410 --> 00:20:54.910 he was dumping stuff directly into the river in violation 382 00:20:55.170 --> 00:20:57.559 of the regulations that were there for everybody else, as 383 00:20:57.599 --> 00:21:01.440 well as cutting his own paths into the road, which 384 00:21:01.500 --> 00:21:04.279 was also in violation of what everybody else would have 385 00:21:04.329 --> 00:21:06.789 to follow. And they started fining him and they kept 386 00:21:06.829 --> 00:21:08.869 fining him on a daily basis and escalating the fines 387 00:21:08.930 --> 00:21:12.289 to the maximum. And he just didn't care. Just like, oh, 388 00:21:12.569 --> 00:21:14.089 here's your money. I'm going to keep doing whatever I 389 00:21:14.130 --> 00:21:15.930 want to do. And so it's that type of thing, 390 00:21:15.970 --> 00:21:19.039 I think, the kind of corruption that we see. And 391 00:21:19.539 --> 00:21:21.099 I always look at the amount of money that is 392 00:21:21.119 --> 00:21:23.269 spent on these elections and I see that as a 393 00:21:23.369 --> 00:21:25.529 metric of corruption because I think it is a metric 394 00:21:25.569 --> 00:21:27.289 of the quid pro quo. And I think that is 395 00:21:27.329 --> 00:21:30.589 what people are reacting to rather than fixing that, rather 396 00:21:30.650 --> 00:21:33.289 than trying to tackle that problem. And it's not an 397 00:21:33.329 --> 00:21:36.009 easy problem to tackle because there again, you start to 398 00:21:36.089 --> 00:21:40.039 tread on people's ability to participate in the political process 399 00:21:40.099 --> 00:21:43.819 or whatever. But that's a difficult thing to tackle. But 400 00:21:43.859 --> 00:21:45.539 rather than tackle it, they go off to do something 401 00:21:45.579 --> 00:21:48.160 else completely different and try to attack it at the 402 00:21:48.200 --> 00:21:50.059 end result. 403 00:21:50.119 --> 00:21:52.799 Yes. Yes, David, I think that this is certainly part 404 00:21:52.819 --> 00:21:56.480 of this wider problem, right? Because the more the government 405 00:21:56.759 --> 00:22:03.170 has the capacity to give people privileges or to regulate 406 00:22:03.230 --> 00:22:05.869 part of the economy in a way that favors certain 407 00:22:05.890 --> 00:22:09.569 types of businesses over others, while the government has the 408 00:22:09.609 --> 00:22:11.710 power and the capacity and the will to do that, 409 00:22:12.150 --> 00:22:15.039 the cronyism problem will not go away. If you shrink 410 00:22:15.119 --> 00:22:18.190 the size of government, then you shrink the ability of 411 00:22:18.339 --> 00:22:23.279 legislators or for example, presidents and governors to give away favors. 412 00:22:23.779 --> 00:22:26.119 And when you do that, then business leaders have no 413 00:22:26.180 --> 00:22:30.140 incentive to keep lobbying legislators because legislators have less to 414 00:22:30.180 --> 00:22:32.960 give them. And I think that's one way that you 415 00:22:33.059 --> 00:22:37.660 get business leaders and young entrepreneurs to start thinking about 416 00:22:38.240 --> 00:22:40.859 maybe I should not bother. There's really nothing the government 417 00:22:40.880 --> 00:22:43.160 can do for me here. There's nothing they can offer. 418 00:22:43.539 --> 00:22:46.140 Maybe I should go back into the marketplace and create 419 00:22:46.200 --> 00:22:49.440 new things and be more competitive and grow the economy 420 00:22:49.480 --> 00:22:51.759 in that way. So I think that now, of course, 421 00:22:51.960 --> 00:22:55.059 legislators don't have much incentive to try and want to 422 00:22:55.099 --> 00:23:00.490 reduce the size of government unless they're convinced that the 423 00:23:00.529 --> 00:23:05.099 case for the market economy is both economically sound, but 424 00:23:05.180 --> 00:23:08.619 also because the market economy has lots of other good 425 00:23:08.660 --> 00:23:11.970 things associated with it that we call civilization and which 426 00:23:12.029 --> 00:23:14.089 we ought to value and uphold. 427 00:23:14.390 --> 00:23:16.210 That's right. And especially, you know, you go back to 428 00:23:16.250 --> 00:23:17.490 Adam Smith and what do you call it? Call it 429 00:23:17.509 --> 00:23:20.109 the wealth of nations. And so as they're looking at 430 00:23:20.130 --> 00:23:23.910 how they can compete against an authoritarian centrally planned country 431 00:23:23.950 --> 00:23:28.380 like China, I'm amazed that These politicians that ever accursed them, 432 00:23:28.400 --> 00:23:30.460 whether they accursed them or not, they never say anything 433 00:23:30.480 --> 00:23:31.700 about it. Well, you know how we can compete with 434 00:23:31.720 --> 00:23:34.700 them is by having more freedom and more entrepreneurship and 435 00:23:34.839 --> 00:23:38.519 more flexibility. They never say that. Their solution is always 436 00:23:38.539 --> 00:23:41.960 to become more like China, for example. Right. 437 00:23:41.980 --> 00:23:47.369 This is so frustrating because the worst thing America could do. 438 00:23:47.930 --> 00:23:49.789 in terms of dealing with China. And China, I think, 439 00:23:49.829 --> 00:23:52.329 is a serious political and economic problem. I would never 440 00:23:52.349 --> 00:23:55.450 deny that. It's a serious problem. But we don't compete 441

00:23:55.509 --> 00:23:59.069 with China by trying to be more like China. We 442 00:23:59.109 --> 00:24:03.670 compete with China by being more competitive, having more entrepreneurship, 443 00:24:04.130 --> 00:24:10.359 less regulation, less bureaucracy, less industrial policy, few or no tariffs. 444 00:24:10.740 --> 00:24:13.579 And we know this because China is using industrial policy. 445 00:24:13.599 --> 00:24:16.720 The hand of the state is very heavy in the 446 00:24:16.779 --> 00:24:19.970 Chinese economy. And that's been going on really since Xi 447 00:24:20.029 --> 00:24:23.509 came to power in 2012 and started reversing the otherwise 448 00:24:23.690 --> 00:24:29.920 relatively liberalizing trends, economic trends that China embraced from 1979 onwards. 449 00:24:30.500 --> 00:24:34.039 China is doing so much damage to its own economy 450 00:24:34.099 --> 00:24:37.319 right now because of all this state intervention that it's re-embraced. 451 00:24:37.980 --> 00:24:41.119 Why would we want to do the same to our economy? 452 00:24:41.700 --> 00:24:42.059 Exactly. 453 00:24:42.079 --> 00:24:42.259 Yeah. 454 00:24:42.339 --> 00:24:44.640 Nobody talks about their malinvestment in real estate, for example, 455 00:24:44.680 --> 00:24:47.349 that is something occasionally you see it, but it is 456 00:24:47.430 --> 00:24:50.859 comical in the extreme. I mean, I've seen pictures of, uh, 457 00:24:51.049 --> 00:24:53.950 areas that just have one mansion after the other. I mean, 458 00:24:53.990 --> 00:24:57.809 these are mansions, they're huge and, uh, very well appointed and, and, uh, 459 00:24:57.809 --> 00:25:01.309 you know, beautiful architecture and everything completely overgrown, uh, like 460 00:25:01.349 --> 00:25:03.470 a jungle because nobody's able to afford to buy this. 461 00:25:03.529 --> 00:25:06.690 That was malinvestment from the Chinese government. And nobody talks 462 00:25:06.750 --> 00:25:10.299 about that. They just gloss past the, um, the aspects 463 00:25:10.319 --> 00:25:11.720 of this. And I think the reason is because we've 464 00:25:11.740 --> 00:25:16.420 seen politicians of every stripe in every country opine occasionally 465 00:25:16.440 --> 00:25:18.299 about how, well, I wish I could do what the 466 00:25:18.339 --> 00:25:20.539 Chinese president can do. I can just order this and 467 00:25:20.559 --> 00:25:23.539 it happens. So it is an appeal to power that 468 00:25:23.559 --> 00:25:24.019 they love. 469 00:25:24.440 --> 00:25:27.619 It's an appeal to power. And it's also shows that 470 00:25:27.660 --> 00:25:30.819 in many cases, they're not serious about liberty. They're not 471 00:25:30.880 --> 00:25:33.619 serious about liberty. They're not serious about property rights. They're 472 00:25:33.640 --> 00:25:37.880 not serious about rule of law. They're not serious about constitutionalism. 473 00:25:38.099 --> 00:25:38.480 That's right. 474 00:25:38.970 --> 00:25:41.059 One of the things my book, The Civilization of Commerce, 475 00:25:41.079 --> 00:25:43.640 tries to do is to show that all those institutions 476 00:25:43.700 --> 00:25:46.720 and all the habits, the moral habits that underlie these things, 477 00:25:47.119 --> 00:25:51.859 things like self-command, self-restraint, wisdom, prudence, the ability to take 478 00:25:51.960 --> 00:25:58.049 risks without lapsing into irresponsible behavior. All these things, I think, 479 00:25:58.109 --> 00:25:59.450 are part of what it means to live in a 480 00:25:59.490 --> 00:26:03.240 dynamic commercial civilization. And that's why my book tries to 481 00:26:03.269 --> 00:26:05.190 sort of revive. If we can make that case, if 482 00:26:05.230 --> 00:26:08.730 we can show people that it's not just about the economy. Yes, 483 00:26:08.789 --> 00:26:11.230 the market economy is the best system that's ever been 484 00:26:11.269 --> 00:26:13.910 designed to get people out of poverty and to keep 485 00:26:14.009 --> 00:26:17.720 people becoming wealthier and wealthier over time. But it's also 486 00:26:17.799 --> 00:26:21.700 part of a whole civilization that if we lose sight of, 487 00:26:22.019 --> 00:26:23.579 we'll lose the market economy as well. 488 00:26:23.960 --> 00:26:25.779 I agree. That's why I think your book is so important. 489 00:26:26.440 --> 00:26:29.450 It reclaims the basis of our civilization. Going back to 490 00:26:29.509 --> 00:26:32.269 Adam Smith and the other understanding of this and And 491 00:26:32.430 --> 00:26:34.130 it is so important that we have that. I remember, 492 00:26:34.150 --> 00:26:37.750 I think, a series I saw Milton Friedman do called 493 00:26:37.769 --> 00:26:40.529 Free to Choose. And he did that. He did it 494 00:26:40.569 --> 00:26:42.210 as a video. I think it's probably also a book. 495 00:26:42.279 --> 00:26:43.579 I didn't read the book, but I saw the video 496 00:26:43.599 --> 00:26:46.059 where he's focusing on Hong Kong and how in Hong 497 00:26:46.099 --> 00:26:48.599 Kong they're basically just left alone because the British didn't 498 00:26:48.619 --> 00:26:51.039 really have any interest in ruling them. So they kind 499 00:26:51.059 --> 00:26:54.240 of let it go laissez-faire. And they prospered under that. 500 00:26:54.269 --> 00:26:56.390 And I've talked about that many times, the difference between 501 00:26:56.930 --> 00:26:59.549 East and West Germany, the difference between North and South Korea. 502 00:26:59.589 --> 00:27:04.960 Not that South Korea or West Germany were really rigorous, 503 00:27:05.599 --> 00:27:09.420 free enterprise, laissez-faire societies, not like Hong Kong. Nevertheless, you 504 00:27:09.460 --> 00:27:12.480 take a people in both of those cases and the 505 00:27:12.500 --> 00:27:17.789 same people, essentially same values, same abilities, and you do 506 00:27:17.849 --> 00:27:20.390 a social experiment. And you put one half of the 507 00:27:20.430 --> 00:27:24.930 people under a rigid, authoritarian,

centrally planned system, and look 508 00:27:24.950 --> 00:27:27.690 what happens. It's hard to keep the lights on, isn't it? 509 00:27:28.220 --> 00:27:30.759 Yeah, I mean, it's interesting you mentioned Hong Kong because 510 00:27:30.779 --> 00:27:34.000 when you think about Hong Kong, it has no natural resources. 511 00:27:34.640 --> 00:27:37.380 It's basically a bunch of rocks off the coast. 512 00:27:38.519 --> 00:27:39.259 And it was always. 513 00:27:39.079 --> 00:27:43.190 Interesting during the period when Hong Kong maintained a fair 514 00:27:43.230 --> 00:27:47.109 amount of autonomy, it was always fascinating to see how Beijing, 515 00:27:47.650 --> 00:27:51.430 particularly when Deng was in power, these people would look very, 516 00:27:51.509 --> 00:27:54.650 very closely at what was going on in Hong Kong. 517 00:27:54.670 --> 00:27:57.109 So people like Deng, who sort of mildly liberalized the 518 00:27:57.150 --> 00:27:59.549 Chinese economy, which really set it up to sort of 519 00:27:59.589 --> 00:28:01.509 grow in the way that it did. They paid a 520 00:28:01.589 --> 00:28:04.210 lot of attention to what was going on in Hong Kong. 521 00:28:04.549 --> 00:28:06.769 They also paid attention to what was happening in another 522 00:28:06.910 --> 00:28:11.549 Chinese ethnic enclave called Singapore. It was also quite free 523 00:28:11.589 --> 00:28:14.720 market and free enterprise in its orientation. So it just 524 00:28:14.759 --> 00:28:16.440 goes to show that you can have people of the 525 00:28:16.480 --> 00:28:19.930 same ethnic heritage, more or less the same language, coming 526 00:28:19.990 --> 00:28:22.650 from many of the same value backgrounds. But if you 527 00:28:22.670 --> 00:28:24.710 have a different system in place, you can end up 528 00:28:24.730 --> 00:28:27.890 with very, very starkly different economic results. 529 00:28:29.470 --> 00:28:31.839 Let's talk a little bit about your book, you know, 530 00:28:32.039 --> 00:28:34.640 What Adam Smith Actually Believed. And we're talking about the 531 00:28:34.660 --> 00:28:36.900 invisible hand. Let's fill that out a little bit for people. 532 00:28:37.769 --> 00:28:40.390 So the invisible hand is a phrase that Adam Smith 533 00:28:40.470 --> 00:28:43.089 uses on basically three occasions. One in an essay he 534 00:28:43.130 --> 00:28:45.490 wrote on astronomy, which I won't bore you with right now. 535 00:28:46.269 --> 00:28:48.869 It was in his theory of moral sentiments, which is 536 00:28:48.990 --> 00:28:52.109 his big philosophical work, which he thought was more important 537 00:28:52.130 --> 00:28:54.589 than his wealth of nations. And then it's mentioned in 538 00:28:55.170 --> 00:28:57.410 the wealth of nations as well. And what it basically 539 00:28:57.450 --> 00:29:00.730 means is this, is that by when we pursue our self-interest, 540 00:29:01.289 --> 00:29:03.029 and by that I don't mean greed. I mean what 541 00:29:03.049 --> 00:29:05.170 we consider to

be in our rational interest if we're 542 00:29:05.190 --> 00:29:08.240 going to flourish as human beings. As we pursue our self-interest, 543 00:29:08.660 --> 00:29:11.490 we engage in trade and exchange with other people. And 544 00:29:11.630 --> 00:29:14.690 Smith's point was, as if by an invisible hand, we 545 00:29:14.829 --> 00:29:20.170 unintentionally benefit other people. We unintentionally help the economy to grow. 546 00:29:20.230 --> 00:29:22.910 We create wealth. Because no one goes into a transaction 547 00:29:22.970 --> 00:29:26.039 and says, I'm doing this because I want to grow 548 00:29:26.099 --> 00:29:29.299 the national GDP of the United States. They go into 549 00:29:29.339 --> 00:29:32.690 a transaction or they're entrepreneurial because they say, profit. I 550 00:29:32.730 --> 00:29:35.079 want to make money. I also find this fun. I 551 00:29:35.140 --> 00:29:38.529 also enjoy this type of activity. And Smith's point is 552 00:29:38.549 --> 00:29:40.319 that when lots and lots of people are doing this, 553 00:29:40.720 --> 00:29:45.380 as if by an invisible hand, wealth grows, jobs are created, 554 00:29:45.799 --> 00:29:50.690 growth ensues. That's what he's talking about. So it's really 555 00:29:50.730 --> 00:29:54.089 a type of shorthand way of describing the fact that 556 00:29:54.150 --> 00:29:58.109 when we pursue our self-interest, we unintentionally benefit other people. 557 00:29:58.539 --> 00:30:03.220 We unintentionally provide jobs to other people. We unintentionally create businesses. 558 00:30:03.960 --> 00:30:06.119 That's the genius of the market. And that's what I 559 00:30:06.140 --> 00:30:07.779 think is one of the hardest things to explain to 560 00:30:07.819 --> 00:30:11.240 people about the market economy because it's sort of counterintuitive. 561 00:30:12.119 --> 00:30:13.509 And I think that this is also one of the 562 00:30:13.549 --> 00:30:17.130 reasons why people are susceptible to claims that, well, we 563 00:30:17.170 --> 00:30:20.950 should really have the state managing this process. Because when 564 00:30:20.970 --> 00:30:23.349 the state manages the process, we have the sense that 565 00:30:23.369 --> 00:30:26.230 there's agency, that someone is taking care of us. Someone 566 00:30:26.289 --> 00:30:29.230 is managing the whole process. But what they don't understand 567 00:30:29.250 --> 00:30:32.859 is that even when well-intentioned people try to manage the economy, 568 00:30:33.230 --> 00:30:35.559 there's all sorts of bad things that happen because, one, 569 00:30:35.599 --> 00:30:37.400 they can't deal with the knowledge problem, which means they 570 00:30:37.440 --> 00:30:41.299 end up making a lot of mistakes. Secondly, they end 571 00:30:41.420 --> 00:30:45.140 up devising policies that are heavily driven by interest groups. 572 00:30:45.460 --> 00:30:49.190 They open themselves up to the possibility of cronyism and corruption. 573 00:30:49.730 --> 00:30:51.789 So it works both ways, right? So the invisible hand, 574 00:30:51.809 --> 00:30:55.789 we unintentionally create wealth, businesses, jobs, everyone's lives gets better. 575 00:30:56.170 --> 00:30:58.539 When we look to the state to do these things, 576 00:30:58.779 --> 00:31:04.119 we unintentionally create circumstances of opportunities for cronyism. We unintentionally 577 00:31:04.180 --> 00:31:07.799 create dysfunctionality in the economy as we misallocate resources and 578 00:31:07.839 --> 00:31:12.630 capital everywhere because we can't know what is the optimal 579 00:31:12.750 --> 00:31:15.690 investment of capital in an economy at any one moment 580 00:31:15.750 --> 00:31:17.930 in time. So I think this is the genius of Smith. 581 00:31:17.950 --> 00:31:20.529 He has a very clever way of explaining things to 582 00:31:20.630 --> 00:31:24.299 us that aren't immediately apparent to us until we think 583 00:31:24.339 --> 00:31:25.079 about them in more depth. 584 00:31:25.880 --> 00:31:27.859 Well said. You know, when I look at this, I 585 00:31:27.900 --> 00:31:30.779 think back about my experience and my wife's experience. We 586 00:31:30.799 --> 00:31:32.640 had a mom and pop retail store, and it was 587 00:31:32.980 --> 00:31:35.440 heavily based on service. And so when I look at it, yes, 588 00:31:35.460 --> 00:31:37.460 we were there to make money. However, we realized that 589 00:31:37.480 --> 00:31:38.980 the way we were going to make money was to 590 00:31:39.019 --> 00:31:41.839 offer the best service to people. And we went out 591 00:31:41.880 --> 00:31:44.000 of our way to do that because that was how 592 00:31:44.039 --> 00:31:46.180 it operated. And I think one of the things that 593 00:31:46.480 --> 00:31:49.029 really concerns me about our society right now is that 594 00:31:49.049 --> 00:31:53.410 we have seen essentially the near extinctions. of small shops 595 00:31:54.009 --> 00:31:57.690 because we've got these massive big box retailers from Wall 596 00:31:57.710 --> 00:32:00.950 Street who essentially have an unlimited source of capital. And 597 00:32:00.970 --> 00:32:04.380 they can take a hit as long as necessary to 598 00:32:04.559 --> 00:32:06.710 drive out of business the small people. So we don't 599 00:32:06.759 --> 00:32:10.700 have hardware stores. We don't have so many of these 600 00:32:10.720 --> 00:32:12.220 things that we used to have before. We used to have, 601 00:32:12.240 --> 00:32:14.859 you know, grocers and butchers and all these other types 602 00:32:14.900 --> 00:32:16.920 of things. You had a lot of people who had 603 00:32:16.960 --> 00:32:19.680 experience in the free market. And I mean a real 604 00:32:19.740 --> 00:32:23.359 free market. I don't mean a kind of Wall Street 605 00:32:23.380 --> 00:32:25.349 capitalism type of thing. I mean a real free market 606 00:32:25.690 --> 00:32:28.950 where the owners are there on the ground interacting with people. 607 00:32:28.990 --> 00:32:31.650 So they don't really

have that kind of personal experience 608 00:32:31.670 --> 00:32:33.470 with it. And I think that's a big part of 609 00:32:33.490 --> 00:32:36.910 the problem. Most people are institutionalized in schools and they 610 00:32:37.190 --> 00:32:39.150 go to work for a large corporation. I've done that 611 00:32:39.190 --> 00:32:42.319 as well. And in a large corporation, you've got this 612 00:32:42.339 --> 00:32:45.839 top-down central planning and bureaucracy that is there. And that's 613 00:32:45.859 --> 00:32:48.480 really the only thing people seem to be getting experience with. 614 00:32:49.109 --> 00:32:50.990 So I think there's two things going on here. One 615 00:32:51.069 --> 00:32:55.769 is that you need some businesses, let's call them corporations, 616 00:32:55.789 --> 00:32:58.809 who are capable of doing things on a big scale. 617 00:32:58.849 --> 00:33:02.069 So a mom and pop shop, for example, it can't 618 00:33:02.109 --> 00:33:04.349 really run an airline. You need a big corporation to 619 00:33:04.390 --> 00:33:06.910 do something like that. But I think the problem you're 620 00:33:06.990 --> 00:33:12.549 pointing to is that big corporations, they can handle the expense. 621 00:33:12.609 --> 00:33:16.369 They can absorb the cost, for example, of excessive regulation. 622 00:33:17.109 --> 00:33:18.789 For them, it's just the cost of doing business. 623 00:33:19.250 --> 00:33:21.670 And it helps them in competition as well because since 624 00:33:21.690 --> 00:33:23.230 they can absorb it and the other guys can't, they 625 00:33:23.259 --> 00:33:23.640 invite it. 626 00:33:24.079 --> 00:33:26.799 Well, that's my point. That's my point, right? Smaller businesses, 627 00:33:27.299 --> 00:33:29.640 medium-sized businesses, and I think we're getting to the point 628 00:33:29.680 --> 00:33:33.029 now where even some large businesses, it's much harder for 629 00:33:33.049 --> 00:33:36.769 them to absorb the costs of regulation. And so a 630 00:33:36.849 --> 00:33:38.470 very large business can come into a part of the 631 00:33:38.519 --> 00:33:41.019 economy and say, well, we're just going to keep doing this. 632 00:33:41.220 --> 00:33:43.960 And we'll take lots and lots and lots of hits 633 00:33:44.579 --> 00:33:47.319 because of the regulatory costs, which we can absorb. But 634 00:33:47.339 --> 00:33:49.940 we know that these same regulatory costs are eventually going 635 00:33:49.960 --> 00:33:54.420 to result in the downfall of smaller, medium-sized businesses who 636 00:33:54.480 --> 00:33:57.319 might one day become competitors of ours. So this is 637 00:33:57.359 --> 00:33:59.099 an example, I think, what you're pointing to is an 638 00:33:59.160 --> 00:34:03.599 example of, again, this type of collusion between business on 639 00:34:03.619 --> 00:34:07.380 the one hand and And government on the other. And 640 00:34:07.400 --> 00:34:09.039 as I said, the way that I think you deal 641 00:34:09.059 --> 00:34:11.380 with that is the more you retract and diminish the 642 00:34:11.440 --> 00:34:14.260 size of the state, the harder it is for the 643 00:34:14.340 --> 00:34:18.300 state to offer privileges and favors to business leaders who 644 00:34:18.340 --> 00:34:20.619 don't want to compete anymore, who don't want to be entrepreneurial, 645 00:34:20.869 --> 00:34:25.050 who've gotten lazy and prefer basically to make money through 646 00:34:25.090 --> 00:34:27.070 getting close to government. I think if you look at 647 00:34:27.570 --> 00:34:29.969 any number of industries in the United States, U.S. Steel 648 00:34:30.010 --> 00:34:32.809 is a classic example of this, right? They've taken subsidies 649 00:34:32.849 --> 00:34:36.170 from the moment they basically came into existence. Or think, 650 00:34:36.190 --> 00:34:39.909 for example, of the big car companies in Detroit. They 651 00:34:39.949 --> 00:34:43.199 basically assumed that they would survive forever by the virtue 652 00:34:43.219 --> 00:34:44.940 of the fact that they were big, they had very 653 00:34:44.980 --> 00:34:47.840 good connections to both political parties, and they're very good 654 00:34:47.860 --> 00:34:52.460 at wheedling subsidies and protection favors out of the federal government. 655 00:34:52.880 --> 00:34:55.900 Small businesses, medium-sized businesses find that much harder to do. 656 00:34:56.320 --> 00:34:58.099 I agree. And when you talk about the regulatory burden, 657 00:34:58.199 --> 00:35:03.099 I always think about the creation of Elizabeth Warren, the 658 00:35:03.159 --> 00:35:05.929 consumer financial protection board. And what we saw in the 659 00:35:05.969 --> 00:35:08.130 wake of that, because of regulation, the way they put 660 00:35:08.150 --> 00:35:10.630 people out of business was with a regulatory burden that 661 00:35:10.670 --> 00:35:13.909 was too big for the small and medium-sized banks even 662 00:35:14.030 --> 00:35:16.949 to bear. And so what you had, these companies could 663 00:35:16.969 --> 00:35:20.230 no longer do business. They couldn't fill out the paperwork 664 00:35:20.269 --> 00:35:22.340 economically to make that happen. So they were going out 665 00:35:22.380 --> 00:35:24.960 of business left and right as the big banks continued 666 00:35:25.039 --> 00:35:26.699 to grow. Yes. 667 00:35:26.739 --> 00:35:30.780 And of course, large banks in the United States enjoy 668 00:35:31.440 --> 00:35:34.780 all sorts of regulatory favors that are not accorded to 669 00:35:34.840 --> 00:35:38.050 other types of businesses. They also are heavily involved in 670 00:35:38.119 --> 00:35:39.780 writing the regulations. 671 00:35:39.949 --> 00:35:41.869 Remember Dodd-Frank? Remember Dodd-Frank? 672 00:35:42.309 --> 00:35:44.590 Who drafted most of Dodd-Frank? I can tell you who 673 00:35:44.610 --> 00:35:47.650 drafted most of Dodd-Frank. It was Wall Street firms. Now, 674 00:35:47.989 --> 00:35:49.989 I've got nothing against Wall Street. I think Wall Street 675

00:35:50.130 --> 00:35:53.369 is a great generator of capital. It gives us the 676 00:35:53.449 --> 00:35:56.969 strongest capital markets in the world. That's fantastic. I think 677 00:35:57.010 --> 00:35:59.469 we need more of that. But what we don't need 678 00:35:59.969 --> 00:36:05.300 is for any large business, be it banking, retail, manufacturing, whatever, 679 00:36:05.639 --> 00:36:08.360 these things do not and should not be given protection 680 00:36:08.460 --> 00:36:12.719 and favors by state, local, or federal governments. Not only 681 00:36:12.739 --> 00:36:16.119 do they become more uncompetitive over time, We're the ones, 682 00:36:16.159 --> 00:36:18.739 the consumers are the ones who end up paying the costs. 683 00:36:18.980 --> 00:36:20.559 I agree. So what do we need? Some kind of 684 00:36:20.599 --> 00:36:23.780 a financial bill of rights? Where's James Madison when we 685 00:36:23.800 --> 00:36:25.639 need him? Because it seems like most of the stuff 686 00:36:25.679 --> 00:36:28.159 comes in with regulations and they always have a good 687 00:36:28.199 --> 00:36:30.139 reason for why this should be there, right? We need 688 00:36:30.159 --> 00:36:32.989 to protect people. We need to have inspection of the 689 00:36:33.010 --> 00:36:35.590 restaurants because, you know, otherwise it's going to be bad 690 00:36:35.610 --> 00:36:37.230 for the entire industry if we've got a bad player 691 00:36:37.329 --> 00:36:39.349 out here. And it's going to give us a bad reputation. 692 00:36:39.389 --> 00:36:41.360 So they come in, they regulate it. to the extent 693 00:36:41.389 --> 00:36:42.869 that it's very difficult for somebody to open up a 694 00:36:42.889 --> 00:36:44.849 new restaurant anymore. And so we see that type of thing. 695 00:36:44.869 --> 00:36:46.530 It's coming in with regulation all the time. What is 696 00:36:46.550 --> 00:36:47.230 the answer to this? 697 00:36:48.429 --> 00:36:50.170 I'm very tempted to say, read my book. 698 00:36:50.210 --> 00:36:53.570 That would be one answer. People should read this book, yes. 699 00:36:54.409 --> 00:36:57.730 But I think really what it comes down to is 700 00:36:57.929 --> 00:37:01.820 we need to ask ourselves this question. What should the 701 00:37:01.860 --> 00:37:05.519 state do? What should the state do in the economy? Now, 702 00:37:05.719 --> 00:37:07.639 Adam Smith had answers for this. He said, well, first 703 00:37:07.679 --> 00:37:11.550 of all, It should protect property rights. It should uphold 704 00:37:11.610 --> 00:37:15.369 the rule of law. It should also provide for national security. 705 00:37:16.349 --> 00:37:19.849 He was even prepared to contemplate things like the state 706 00:37:19.889 --> 00:37:23.170 undertaking public works, things like bridges and highways and things 707 00:37:23.840 --> 00:37:26.500 like that, law and order. Okay, so that's basically more 708 00:37:26.519 --> 00:37:29.420 or less five key responsibilities, none of which are small, 709 00:37:29.460 --> 00:37:32.980 by the way. They're all very, very important and big responsibilities. 710 00:37:33.619 --> 00:37:38.039 But our government today, federal, state, local, they are so 711 00:37:38.139 --> 00:37:41.400 far beyond all those things. If only we were able 712 00:37:41.440 --> 00:37:44.300 to retract the role of the state to the sorts 713 00:37:44.340 --> 00:37:48.940 of activities that people like Adam Smith, Friedrich Hayek, you 714 00:37:48.960 --> 00:37:51.780 mentioned Milton Friedman. If we were able to retract the 715 00:37:51.840 --> 00:37:57.590 state to those types of responsibilities, I think there would 716 00:37:57.630 --> 00:38:01.409 be just a lot more scope for the market to 717 00:38:01.469 --> 00:38:03.230 flourish as it ought. I agree. 718 00:38:04.559 --> 00:38:06.539 Another part of the subtitle of your book is about 719 00:38:06.579 --> 00:38:10.809 the pursuit of happiness. And how does that differ from 720 00:38:10.869 --> 00:38:12.650 the pursuit and accumulation of wealth? 721 00:38:13.750 --> 00:38:15.329 Well, I think it comes down to the fact that 722 00:38:15.409 --> 00:38:18.070 while on the one hand, I don't know many people 723 00:38:18.159 --> 00:38:21.860 who are poor... who are happy. Some people are called 724 00:38:21.900 --> 00:38:24.159 to that sort of life. I don't deny that. You know, 725 00:38:24.199 --> 00:38:27.059 religious orders are examples of people who believe they're called 726 00:38:27.099 --> 00:38:29.059 to live a life of poverty. They take vows of poverty. 727 00:38:29.599 --> 00:38:31.530 That's fine. They're choosing it to do that for themselves. 728 00:38:31.550 --> 00:38:34.030 And that's, you know, in some respects an important witness 729 00:38:34.050 --> 00:38:37.429 to the problems associated with materialism. But most of us 730 00:38:37.469 --> 00:38:39.309 are not called to that type of life. We're called 731 00:38:39.349 --> 00:38:43.389 to be participants in the world, in the economy, et cetera. 732 00:38:44.989 --> 00:38:49.400 And the pursuit of wealth, as I said, it's, you're 733 00:38:49.539 --> 00:38:52.300 generally going to be happier if you're materially able to 734 00:38:52.389 --> 00:38:54.469 meet your needs and you're not starving to death. 735 00:38:54.489 --> 00:38:55.329 Right. 736 00:38:55.570 --> 00:38:58.949 But wealth and happiness are not the same thing. I know, 737 00:38:58.969 --> 00:39:00.710 and I'm sure you know, David, plenty of people who 738 00:39:00.750 --> 00:39:03.989 are very wealthy who are also very unhappy. Oh, yes. 739 00:39:04.349 --> 00:39:08.539 Very unhappy. And I think what my book, one of 740 00:39:08.559 --> 00:39:10.199 the things my book tries to do is say that 741 00:39:10.860 --> 00:39:14.059 generally speaking, you need a dynamic economy that's producing economic 742 00:39:14.119 --> 00:39:16.820 growth and wealth over time. This is a good thing. 743 00:39:17.400 --> 00:39:23.340 But don't think

that you will necessarily become happy, content 744 00:39:23.380 --> 00:39:27.389 with your life because of that. You know, it's important 745 00:39:27.409 --> 00:39:30.480 to have substantive wealth. It's important to be able to 746 00:39:30.519 --> 00:39:32.820 provide for your needs and those of your family, et cetera. 747 00:39:33.800 --> 00:39:36.199 It's important to have more and more people getting out 748 00:39:36.219 --> 00:39:39.739 of poverty. But happiness is a different thing. And one 749 00:39:39.760 --> 00:39:41.079 of the things I also say, though, is that you 750 00:39:41.159 --> 00:39:43.639 can be happy in a free market economy. You can 751 00:39:43.659 --> 00:39:46.519 pursue happiness in a free market economy. It's harder to 752 00:39:46.579 --> 00:39:49.420 do that in a command economy. It's hard to do 753 00:39:49.460 --> 00:39:51.900 that in a socialist economy because you just have far 754 00:39:52.320 --> 00:39:56.139 fewer choices about what type of things you create, where 755 00:39:56.179 --> 00:39:59.489 you work, who you work for, the types of things 756 00:39:59.530 --> 00:40:00.730 that you want to do in your life. In a 757 00:40:00.769 --> 00:40:04.849 socialist or social democratic economy, your capacity for choice is 758 00:40:05.010 --> 00:40:09.989 radically circumscribed. So I think that while markets don't guarantee happiness, 759 00:40:10.369 --> 00:40:13.550 they do provide, in many respects, more opportunities for happiness 760 00:40:13.909 --> 00:40:16.320 than all the alternative economic systems available. 761 00:40:16.679 --> 00:40:19.409 I agree. Yeah, I remember a quote. I don't know 762 00:40:19.429 --> 00:40:21.250 if it was made up or if it was actual, 763 00:40:21.269 --> 00:40:25.710 but supposedly somebody said to George Washington that was a Tory, 764 00:40:25.769 --> 00:40:28.449 they said, oh, you keep talking about liberty, liberty, liberty. Well, 765 00:40:28.550 --> 00:40:30.320 in Britain, people are free as well. He says, yes, 766 00:40:30.590 --> 00:40:34.860 they walk about freely, but between high walls. And of course, 767 00:40:34.920 --> 00:40:37.300 in our time, those walls are getting narrower and narrower, 768 00:40:37.400 --> 00:40:39.340 aren't they? It's almost like they're closing in on us, 769 00:40:39.400 --> 00:40:40.239 it feels like at times. 770 00:40:40.679 --> 00:40:42.199 Well, I've said, you know, it's not like we live 771 00:40:42.219 --> 00:40:45.090 in a command economy. What I do think we do 772 00:40:45.130 --> 00:40:49.429 live in is an increasingly bureaucratized society. And that's the 773 00:40:49.449 --> 00:40:52.469 sort of the little things, the little things that niggle 774 00:40:52.530 --> 00:40:54.920 at us all the time. Now, it's far worse in Europe. 775 00:40:55.519 --> 00:40:58.159 It's far worse in Western Europe. But I worry about 776 00:40:58.199 --> 00:41:01.420 this bureaucratization of society because we end up becoming, that 777 00:41:01.460 --> 00:41:04.900 makes us more and more servile. Over time, it makes 778 00:41:04.960 --> 00:41:08.860 us more subtly, in more subtle ways, servile. less inclined 779 00:41:08.900 --> 00:41:10.960 to exert our liberty and decide that this is what 780 00:41:11.000 --> 00:41:13.480 we want to do. And we increasingly look to the 781 00:41:13.559 --> 00:41:16.719 state to tell us what to do. So that bureaucratization issue, 782 00:41:16.760 --> 00:41:17.360 I think, is a. 783 00:41:18.239 --> 00:41:20.239 And that gets back to the civilizational issue. I mean, 784 00:41:20.280 --> 00:41:23.440 it changes the entire character of a civilization as you 785 00:41:23.480 --> 00:41:27.079 become servile and dependent and bureaucratized and hierarchical like that. 786 00:41:27.760 --> 00:41:30.679 You're absolutely right. You know, what is it that, you know, 787 00:41:30.699 --> 00:41:34.300 we look at this, we think about economic growth and 788 00:41:34.320 --> 00:41:35.719 we talk about the fact that it's great to have 789 00:41:36.039 --> 00:41:39.349 money to a certain level. But once that becomes the 790 00:41:39.389 --> 00:41:41.110 thing that you serve, the be all and end all, 791 00:41:41.670 --> 00:41:44.269 we all know that that tends to become something that 792 00:41:44.289 --> 00:41:46.710 takes over your life. And I think that can be 793 00:41:46.750 --> 00:41:50.130 the case in terms of a country as well. You 794 00:41:50.150 --> 00:41:52.949 don't have to be rich to be covetous, right? 795 00:41:53.550 --> 00:41:54.199 No, that's right. 796 00:41:54.360 --> 00:41:57.070 You can envy other people and want to have their stuff, 797 00:41:57.389 --> 00:42:00.099 but that doesn't mean that you're necessarily rich. So that's 798 00:42:00.139 --> 00:42:02.920 something that can affect people at any social level. But 799 00:42:02.940 --> 00:42:05.889 talk a little bit about how economic growth In and 800 00:42:05.909 --> 00:42:08.710 of itself, materialism like that is really insufficient. It really 801 00:42:08.809 --> 00:42:10.849 is the freedom to be able to move, isn't it? 802 00:42:11.670 --> 00:42:14.690 Yeah, so economic growth we would not want to do without. 803 00:42:14.710 --> 00:42:19.630 Let me just start by saying that. Economic stagnation, poverty 804 00:42:20.010 --> 00:42:25.070 are generally pretty dehumanizing existences to lead. And I get 805 00:42:25.110 --> 00:42:27.570 worried when I hear people talk about degrowth. We need 806 00:42:27.610 --> 00:42:28.869 to degrow the economy. 807 00:42:29.010 --> 00:42:29.469 Oh, yeah. 808 00:42:29.820 --> 00:42:31.570 By the way, you hear this on the political left, 809 00:42:31.590 --> 00:42:33.639 but on some parts of the political right as well. 810 00:42:36.260 --> 00:42:39.699 But when people say to me, well, I find my 811 00:42:39.760 --> 00:42:42.929 whole meaning in life through the pursuit of wealth, I 812 00:42:42.969 --> 00:42:47.389 generally think, well, I think

you're mixing up means and ends. 813 00:42:47.869 --> 00:42:50.909 The pursuit of wealth and creation of wealth is indispensable, 814 00:42:51.449 --> 00:42:54.300 but it's not going to make you happy in and 815 00:42:54.360 --> 00:42:57.039 of itself. You'll get satisfaction, maybe. You'll get some sort 816 00:42:57.059 --> 00:42:58.539 of charge out of making more money. 817 00:42:58.579 --> 00:42:58.940 Et cetera. 818 00:42:58.980 --> 00:43:02.929 That's great. There's no problem with that. But The great temptation, 819 00:43:02.969 --> 00:43:04.820 and people like Adam Smith talked about this, the great 820 00:43:04.860 --> 00:43:08.000 temptation of living in a wealthy society is it can 821 00:43:08.079 --> 00:43:12.340 have this sort of materialistic effect upon us. We start 822 00:43:12.380 --> 00:43:15.780 valuing things primarily in terms of dollars and cents. Now, 823 00:43:15.800 --> 00:43:17.699 we should. There's lots of things we should and do 824 00:43:17.760 --> 00:43:20.099 value in dollars and cents. But if we make that 825 00:43:20.139 --> 00:43:22.460 the epicenter of our life, I'm pretty sure we're going 826 00:43:22.480 --> 00:43:23.039 to be unhappy. 827 00:43:23.260 --> 00:43:25.929 I agree. You know, we talk about unhappiness. We see 828 00:43:25.949 --> 00:43:27.789 a great deal of this from Gen Z. Many people 829 00:43:27.829 --> 00:43:32.389 talk about how Gen Z globally is feeling frustrated. and 830 00:43:32.550 --> 00:43:36.360 getting rebellious, I think there's this constant drumbeat that you're 831 00:43:36.380 --> 00:43:38.159 not going to own anything and we're going to have 832 00:43:38.260 --> 00:43:40.599 AI do everything and it's going to be super smart. 833 00:43:40.980 --> 00:43:44.260 There's not any skills that you can try to attain 834 00:43:44.300 --> 00:43:46.929 that are going to survive our onslaught of AI. Now, 835 00:43:46.940 --> 00:43:48.719 whether or not that is true, it is a very 836 00:43:48.780 --> 00:43:50.909 depressing message that is out there. And I remember a 837 00:43:50.929 --> 00:43:54.849 few years ago following some discussions that were being held 838 00:43:54.869 --> 00:43:58.250 in the Pentagon about asymmetric warfare. And they were saying, well, 839 00:43:58.449 --> 00:44:01.309 you know, many people think that this is a kind 840 00:44:01.429 --> 00:44:03.670 of religious extremism that is there. They said, that's not 841 00:44:03.690 --> 00:44:06.570 really how this starts. This typically begins with the leadership, 842 00:44:07.070 --> 00:44:09.780 somebody who was upper middle class, maybe they had a 843 00:44:09.800 --> 00:44:11.800 degree in engineering or whatever. And all of a sudden, 844 00:44:11.820 --> 00:44:14.719 you know, they feel like because of geopolitical circumstances in 845 00:44:14.739 --> 00:44:17.739 their country, that they don't have any control over their future, 846 00:44:18.179 --> 00:44:20.590 that there's nothing that they can do to improve their life. 847 00:44:20.630 --> 00:44:23.750 And there's no control. That is what turns them into 848 00:44:24.489 --> 00:44:26.730 terrorists who engage in asymmetric warfare. And that's the thing 849 00:44:26.750 --> 00:44:28.489 that really concerns me. That's why I think Your book 850 00:44:28.550 --> 00:44:33.059 is so important for people to understand the foundation of civilization, 851 00:44:33.239 --> 00:44:35.719 the importance of the rule of law, and how these 852 00:44:35.739 --> 00:44:38.639 things all fit together, and why America was so prosperous 853 00:44:38.699 --> 00:44:41.780 when China, as clever as the people were, their civilization 854 00:44:41.820 --> 00:44:43.329 fell into decline. I think it has a lot to 855 00:44:43.369 --> 00:44:46.030 do with an authoritarian structure that was there. 856 00:44:46.610 --> 00:44:50.510 Right, because the institutions that America was fortunate enough to 857 00:44:50.550 --> 00:44:55.889 be bequeathed were basically the Anglo heritage, which is rule 858 00:44:55.929 --> 00:45:01.070 of law, individual liberty, a strong civil society, a government 859 00:45:01.119 --> 00:45:03.449 that is limited, strong enough to do what it needs 860 00:45:03.489 --> 00:45:05.409 to do, but also limited so that it doesn't get 861 00:45:05.449 --> 00:45:09.989 out of control. And also this tremendous emphasis upon economic 862 00:45:10.030 --> 00:45:13.170 freedom and economic creativity. If you have all those things 863 00:45:13.230 --> 00:45:16.809 in place and you have people who understand that you've 864 00:45:16.829 --> 00:45:19.829 got to keep those institutions in place, And don't fall 865 00:45:19.889 --> 00:45:21.929 for the trap of thinking we can speed everything up 866 00:45:21.989 --> 00:45:23.650 if only we just put the right people or the 867 00:45:23.690 --> 00:45:24.730 right government in power. 868 00:45:24.889 --> 00:45:25.230 Yes. 869 00:45:25.590 --> 00:45:28.539 If you have those institutions in place and people understand 870 00:45:28.579 --> 00:45:31.559 what they do and why they're important, then you will 871 00:45:31.599 --> 00:45:34.179 have a prosperous society. But I also think you'll have 872 00:45:34.219 --> 00:45:37.300 a happier society because it won't be a bureaucratized society. 873 00:45:37.800 --> 00:45:41.070 And when people find themselves having opportunities to pursue happiness, 874 00:45:41.360 --> 00:45:43.550 there's all sorts of very wonderful things that can happen. 875 00:45:43.829 --> 00:45:45.849 I agree. I agree. And we certainly don't want the 876 00:45:45.909 --> 00:45:47.889 alternative to this. I keep going back as we're talking 877 00:45:47.909 --> 00:45:51.769 about mom and pops. I think about Napoleon's slur of Britain. 878 00:45:51.809 --> 00:45:53.650 He said it's a nation of shopkeepers. And it's like, yeah, 879 00:45:53.670 --> 00:45:56.000 that really is their strength, though, you know, because they've 880 00:45:56.019 --> 00:45:58.139

got a stake in it. And so we don't want 881 00:45:58.159 --> 00:45:59.739 to have a situation where there's just a few people 882 00:45:59.760 --> 00:46:02.570 in Davos who have, who are the stakeholders and none 883 00:46:02.590 --> 00:46:04.190 of the rest of us have a stake in any 884 00:46:04.210 --> 00:46:06.699 of this. That is not the path to civilization or 885 00:46:06.739 --> 00:46:09.300 to happiness. But your book is very important, I think, 886 00:46:09.420 --> 00:46:12.760 to point the way of how we got here and 887 00:46:12.800 --> 00:46:14.860 what worked and what we need to reclaim that we're 888 00:46:14.900 --> 00:46:17.780 losing rapidly. I think that's very important to look at that. Again, 889 00:46:18.219 --> 00:46:19.989 the book is, let me get the title here, The 890 00:46:20.329 --> 00:46:25.210 Civilization of Commerce. And thank you very much by Mr. Gregg. 891 00:46:25.429 --> 00:46:28.250 And it's been an excellent conversation. I love talking to 892 00:46:28.289 --> 00:46:31.849 somebody who appreciates the free market and free enterprise and liberty. 893 00:46:32.289 --> 00:46:33.909 And that is the essence of this. And we need 894 00:46:33.929 --> 00:46:36.769 to understand that is the essence of our civilization and 895 00:46:36.789 --> 00:46:39.429 the essence of our ability to be able to pursue happiness, 896 00:46:39.469 --> 00:46:42.119 however we define that individually. Thank you so much for 897 00:46:42.139 --> 00:46:44.039 joining us. And good luck with your book. I hope 898 00:46:44.079 --> 00:46:46.579 it gets read widely. I think it's very important, a 899 00:46:46.619 --> 00:46:47.760 book for our time. Thank you. 900 00:46:48.340 --> 00:46:49.619 Thank you, David. Great to chat with you. 901 00:46:49.739 --> 00:47:05.139 Thank you. The Common Man The Common Man They created 902 00:47:05.219 --> 00:47:08.420 common core to dumb down our children. They created common 903 00:47:08.500 --> 00:47:12.539 past to track and control us. Their commons project to 904 00:47:12.559 --> 00:47:17.159 make sure the commoners own nothing. And the communist future. 905 00:47:18.739 --> 00:47:23.519 They see the common man as simple, unsophisticated, ordinary. But 906 00:47:23.659 --> 00:47:26.780 each of us has worth and dignity created in the 907 00:47:26.880 --> 00:47:31.380 image of God. That is what we have in common. 908 00:47:32.019 --> 00:47:34.840 That is what they want to take away. Their most 909 00:47:34.900 --> 00:47:40.380 powerful weapons are isolation, deception, intimidation. They desire to know 910 00:47:40.599 --> 00:47:45.320 everything about us while they hide everything from us. It's 911 00:47:45.369 --> 00:47:48.369 time to turn that around and expose what they want 912 00:47:48.409 --> 00:47:52.269 to hide. Please share the information and links you'll find 913 00:47:52.650 --> 00:47:56.809 at thedavidknightshow.com. Thank you for listening. Thank you for sharing. 914 00:48:02.730 --> 00:48:05.090 If you can't support us financially, please keep us in 915 00:48:05.130 --> 00:48:07.639 your prayers. TheDavidKnightShow.com