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Aug. 19, 2017 - Freedomain Radio - Stefan Molyneux
01:04:30
3796 Is Capitalism The Real Problem? - REBUTTED!
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Are you ready to consider that capitalism is the real problem?
Let's take a little stroll through an article.
We haven't done that for a while, and it's very instructive to do so.
This is from fastcompany.com.
So, after a bit of a fluffy introduction, the writers get down to the meat of the matter and say, A YouGov poll in 2015 found that 64% of Britons believe that capitalism is unfair, that it makes inequality worse.
Even in the US, it's as high as 55%.
In Germany, a solid 77% are skeptical of capitalism.
Meanwhile, a full three-quarters of people in major capitalist economies believe that big businesses are basically corrupt.
So, as a philosopher, it's always instructive.
And I really, really want you to wake up to this reality as well.
It's always instructive to notice when people don't define their terms.
When they don't define their terms, what they're doing is hoping to create a big conceptual black hole wherein you can pour all of your prejudices and frustrations and immaturity and resentment and all that kind of stuff.
So we've got this big blob called capitalism.
How is it defined? Nobody says.
Are they saying that the modern system of economic disorganization in the West is somehow capitalistic?
Well, the only person who could say that is somebody who has no idea what capitalism is.
And they're just using the word to smear the current chaos in the system, which I'm heavily critical of as well, because it's not capitalistic.
Capitalism is, keep your word, keep your stuff.
Contract, enforcement, and absolute property rights.
You cannot strip someone else of his or her property completely.
Through the use of force, through the initiation of force.
That's capitalism. It's all it is.
Property rights and contract enforcement.
And those are sort of two sides of the same coin.
When you have a system such as we have in the West, where you have government deficits and debts, a debt accumulation that is approaching 100% of GDP, guess what?
That ain't capitalism. When you have government control, Of currency production and of interest rates, guess what?
That ain't capitalism.
When you have government control over the developing minds of children through forcibly and coercively funded and sometimes attended government schools, that ain't capitalism.
When you have taxation rates, 40%, 50%, 60%, 70%, that ain't capitalism.
See, taxation of 100%, well, that's slavery.
Taxation of 50%, see, that's half slavery.
And in fact, there are some pretty significant economic arguments that say that slaves kept about 80% or more of their product, right?
They would make a certain amount and they wouldn't be paid, but they would get room and board and healthcare if they needed it.
So slaves got to keep about 80%.
So slaves were taxed.
At about 20% or so.
And we're taxed at 40, 50, 60%.
And that ain't the free market.
That ain't capitalism.
When a third of Americans need government licenses to do their jobs, when the barriers to entry are enormously high to compete with established coercive monopolies, all the way from the trades to unions to government monopolies, that ain't capitalism.
The free market. So people who talk about capitalism and think it has anything to do with the current system are off by, I would guess, about 100 years or so.
You could argue that capitalism had some flexibility, some actual imprint on modes of production in society late 19th century.
And... Of course, that's all been smeared as the age of the robber barons, which brought in a whole bunch of government controls to control things, which, you know, the Gilded Age created the Progressive Age to control the, quote, excesses of the Gilded Age, which then created the Depression, which then created World War II, which then had a brief flare-up of capitalism with very high tax rates, and then you had the welfare warfare state, and then you had, I mean, just massive government controls over the economy.
It's not capitalism. It's not capitalism.
But this argument that capitalism promotes inequality is really interesting.
Because for that to be true, people would have to be naturally equal, but capitalism would make them unequal.
Now, if corporations are using the power of the state to prevent competition, to prevent either competitors growing up economically in their neighborhood or preventing foreign goods from coming in and undercutting their prices and so on, and if they're using government power to prevent workers from organizing intervoluntary unions and so on, that's not capitalism.
It's not capitalism.
It's not capitalism. You know, in both a marriage and a kidnapping, someone lives in your house, but they're not the same thing at all, and confusing the two is basic.
Sophistry. So, if we're going to say capitalism promotes inequality, then we must believe or accept that human beings are inherently equal to begin with.
And they're not. They're not.
People are born with differing levels of attractiveness.
People are born with different heights.
People are born obviously male and female.
People are born with various abilities, different singing voices.
They are born with different physical frailties and different physical strengths.
They are born, perhaps even most importantly, with vastly different levels of intelligence.
So in the West, and this is growing, about 15% of the population are IQ 90 or below.
Now IQ 90 or below, that's kind of the threshold for reading basic instructions and following them.
And there are a lot of people below that.
And there are some people, of course, at the very highest edges of intelligence, and they're almost exclusively male.
Males have a couple of point IQ bonus relative to females, and at the highest levels, there are almost no females at all.
And that's nature.
That has nothing to do with environment.
IQ has a little bit to do with environment, but over your life, by the time you get older, past middle age, that's about 80% or so genetic.
So people are born with vastly differing abilities and intelligences.
There are personality traits.
You can do research on this.
The big five personality traits are largely genetic.
So your outgoingness, your agreeableness, your level of neuroses, of worry and so on.
To a large degree, that's just you roll the dice and that's what you're born with.
That's what I call diversity.
But apparently it's really bad. Diversity is really good.
But diversity of human abilities is just horrifying inequality.
Now, in a free market, something very interesting happens.
We'll talk about it with regards to farming initially.
So in a free market, if you're a really good farmer, and this means both like a work ethic and intelligence and a willingness to experiment and try new things, If you're a really good farmer, then you can bid more for land than a bad farmer.
So if you're a good farmer, you can maybe get triple the profit off the land, which means you can bid more for the land.
Also, if you're a good farmer and produce a lot of, say, peaches, millions of peaches, peaches for free, If you're a really good farmer, you produce huge amounts of peaches.
Then what happens is that drives down the price of peaches.
And what that means is the other farmers who aren't as good can't make money.
If it costs them a dime per peach to produce things, to produce their peaches, and it costs you, because you're good, a penny, a peach to produce yours, then you're going to produce a lot more peaches over time, price is going to go down, and they won't be able to cover their costs.
So what they're going to have to do is sell the land to you, probably, or someone like you.
And this is the way in which the free market helps accumulate to those who are the most productive, the most resources.
And that's really...
Like, if you're really good at creating software, then you can make a lot of money, a lot of profit.
And because you can make a lot of profit, you can pay...
The best coders to come and work for you.
And so the best coders end up working for the most efficient and most innovative companies.
Now again, tons of exceptions, and I can hear everybody's mental gears, oh I know, tons of exceptions, and so on.
Those exceptions are temporary in a free market, and the degree to which they're permanent is the degree to which corporations have controlled the market in order to benefit themselves through the power of the state.
See, the state automatically is paying for It's enforcement mechanisms, right?
The police, the IRS, the courts, the prisons, and so on.
Whereas companies could not compete with other companies if they had to pay for those enforcement mechanisms themselves.
Like if you are a sweater manufacturer and you want to ban or you want to prevent all foreign sweaters from coming into your country, what are you going to do?
Are you going to hire enforcement agents to go to every single port and every single airstrip and make sure that none of those foreign sweaters, blah, blah, blah?
You can't afford to do that.
Plus... You would get blowback from other companies.
They would sue you and so on. Or the police would arrest you for interfering with free trade.
But if you have a government that's willing to interfere in trade, then what happens is you lobby your government to pass a ban on foreign sweaters.
And you don't have to pay for the enforcement mechanism.
That's Socialize.
That cost is socialized to the general population.
So you have to pay a couple hundred thousand bucks to lobby a congressman and the congressman can get a law passed to ban foreign sweaters.
You don't have to pay for the enforcement.
And, of course, nobody's going to take the customs agents to jail for enforcing the regulations or the law.
So this question of inequality is really, really important.
I mentioned this before, something called the Pareto Principle, which is that the square root of workers produce half the value.
If you've got nine workers, three of them produce half the value.
If you have 100 workers, 10 of them are producing the value and so on.
With big corporations, you've got tens of thousands of employees, but a couple of hundred people are producing half the value.
And this holds pretty much, you look at sports, look at music, this holds pretty true across the entire spectrum where creativity is financially rewarded.
And that's just the reality.
Capitalism did not invent the fact that there's a bell curve in terms of IQ and other abilities.
So the idea that capitalism creates inequality It's completely insane.
It's like saying that food creates inequalities in height.
Or that record companies, like recording companies, produce inequalities in singing ability.
No, there are inequalities in singing abilities and songwriting abilities.
And because there are those inequalities, that's why you have...
Record companies or recording companies, right?
That's why you have those. There are differences in people's abilities to explain complex material in a generally digestible format, I like myself, and therefore there is a disproportion in the number of views that I get versus other people.
And you understand.
It's like saying that sports teams create inequality in athletic ability.
No. Because there is inequality in athletic ability, you get sports teams.
If everyone had exactly the same level of singing ability or exactly the same level of sports abilities, there would be no recording industry and there would be no...
Sports teams, right?
So there is this natural inequality in the species and capitalism does not promote that or does not enhance that.
That is just the natural result of allowing private property and free trade is that resources are going to accumulate towards those who are either the hardest working or the most able.
Now, the fact that there is this inequality, like if somebody just works harder than you, You know, the Malcolm Gladwell idea, like 10,000 hours, which has some controversies, but, you know, 10,000 hours to become a master.
So he pointed out that everyone who played, you know, concert piano had practiced for 10,000 hours, and everyone who was a music teacher practiced for like 8,000, and whatever it was.
And if it's just hard at work, then, yeah.
Good for you.
Good for you. Then you can't really get mad at other people for working harder than you.
I mean, you can, but who's going to have much sympathy?
If you don't study for a test, and your identical twin studies for a test, and he does a lot better, are you going to say that somehow the system is unequal?
Come on. So, there is inequality in the human condition.
And we can suppress that if we want.
Like, we can say to farmers that you're not allowed to own more than 50 acres of land.
Well, first of all, all that will happen is there will be under-the-table ownership, right?
And you see this with affirmative action where you put some minority in the head of a company that's not really doing anything and it's sort of puppet-stringed from outside and so on.
There would be that kind of fake ownership, which is very hard to root out.
But even if you could absolutely make it work and make it happen, that...
Farmers could never own more than 50 acres or 100 acres.
All that would happen is people would starve, right?
Because we have a population in the world at the moment that is utterly dependent upon the free market exploiting people's massively higher abilities in order to produce disproportionate amounts of goods and services, right? So because really great farmers...
Can own more and more land, you end up with massive amounts of excess food.
That's kind of foundational as to why literally billions of people live.
You can restrict people's ownership, and they did this in Ukraine.
It's called the Holodomor.
It's the Ukrainian basically starvation genocide in a way that happened.
It's their holocaust where the communists, the Soviets, they came in.
And they took away the land from the most productive farmers called the Kulaks.
And then they distributed it to everyone else.
And then everyone stopped to death.
Of course they did. Because you're taking...
I mean, if you said you're never allowed to sell more than a thousand songs on iTunes or CDs for those who are slightly older school and 8 tracks and LPs for those who are even older.
If you said no one's allowed to sell more than a thousand songs...
Who's going to bother becoming a songwriter?
Who's going to bother cutting an album?
Who's going to bother making videos, spending a million dollars on a video?
You just kill the music industry.
So this idea that capitalism somehow promotes inequality is false because of this.
And it's also false, fundamentally, because as the government has taken over more and more of the economy, with the ostensible or stated goal of reducing inequality, as the government has taken over more and more of the economy, inequality has increased, of course.
Because as the government has the power to redistribute income, and as the government has the growing power to control free trade, then what happens is the government takes money from the rich and uses it to buy the votes of the poor, thus basically trapping them in the roach motel of perpetual welfare.
And, of course, it also has the ability to benefit...
The corporate owners who can donate to the politicians and give them favorable conditions for maximization of, quote, profit.
It's not really profit if you're using coercion and government power to get it any more than you get yourself a raise by stealing office supplies and furniture.
But so, yeah, as government control over the economy has increased, in other words, as we've had less capitalism, we've had more and more inequality.
And this is not that complicated to figure out.
I'm not going to do this for every paragraph.
I just want to sort of lay the foundations to begin with.
So, come on.
And, of course, people feel that corporations are basically corrupt –
And is that because they have independently studied all of this stuff, or have they just been subjected to endless video game and science fiction movie and general popular culture tropes about evil corporations and, you know, mustachios, monocled evil monopoly figure corporate capitalists and so on, right?
Is it an objective thing?
And also, what is the source of that corruption?
Is it the case that where there was no capitalism, or very little capitalism, as in under the communist rule in Russia, under the USSR, was there no corruption?
Of course, there was massive amounts of corruption and theft and stealing and so on.
When you look at Africa, where there's very little free market in operation, is there less corruption or more?
No, of course not. In a free market, corruption is very expensive.
And if the government doesn't have the power...
To control trade, to set up situations where you can profit more, then it's very, very expensive.
So if you're taking in a bid to build a stadium, say, and you end up being bribed to take a less efficient bid, the most efficient bid and best bid wouldn't need to bribe you, right?
You only cheat when you're going to lose.
So if you take some money as that corporation to have a less efficient company, So the article goes on to say, why do people feel this way?
Probably not because they deny the abundant material benefits of modern life that so many are able to enjoy.
Abundant material benefits of modern life that so many are able to enjoy.
I wonder where they came from, those abundant material benefits.
Did they come from capitalist countries or did they come from socialist countries?
Have you bought yourself a nice Cuban cell phone lately or anything like that?
Go on to say, or because they want to travel back in time and live in the USSR. It's because they realize, either consciously or at some gut level, That there's something fundamentally flawed about a system that has a prime directive to churn nature and humans into capital and do it more and more each year regardless of the cost to human well-being and to the environment we depend on.
Okay, so this is where sophistry goes ballistic, goes postal, gets all green and rips up trees.
It's because they realize either consciously or at some gut level...
See, I don't want to appeal to your neofrontal cortex.
I don't want to appeal to the seat of reasoning in your mind.
I want you to make decisions according to the bacteria that is currently digesting your falafel, right?
I'm sorry. At some gut level, there's something fundamentally flawed about a system that has a prime directive.
To turn nature and humans into capital.
And do it more and more each year!
Oh, the endlessness of it, yeah.
I've noticed I have a lot of religious beliefs.
Well, you know, we believed in a God for a thousand years.
It's just going to be more and more?
Do we want just more and more people to believe in our religion?
More and more and more? Yeah, right.
So, churn nature and humans into capital?
What on earth does that mean?
People like houses, and therefore people will build houses for them.
Is that churning nature and humans into capital?
See, capital... Capital has no fundamental value.
You can't eat the numbers in your bank account.
You can't eat money. Right?
I mean... What's that scene in Hotel Rwanda where they basically are wiping their asses with the currency because it's become valueless?
Money has no particular value.
Money, in as far as it represents goods and services, has value.
But what people care about is not capital, but those goods and services.
Now, sometimes you need to save your money in order to invest in better equipment.
Like, I have a mixer here, I've got a nice mic, a decent camera, and I saved my money and spent that, and thank you for your donations at freedomainradio.com slash donate to make that possible.
And... So capital has no particular value.
And the value of how you invest your capital is dependent on whether it serves the needs of your audience better or not.
Like, I could do this show by just talking into a cell phone.
But I think that the audio quality and the visual quality is relatively important for the quality of the show.
Plus it shows that I care about how this show presents itself, which hopefully will help people understand that I care even more about the quality of the arguments I'm putting forward.
And so I can always tell when people have never had a market-facing production of particularly goods, And I'm going to assume that these writers don't have that.
So they don't really understand that I can't compel you to watch my videos or listen to my podcasts.
I can't compel you to read my books or to order the upcoming book, The Art of the Argument, available in August, which is fantastic, by the way.
I can't compel you to do any of it.
Not a bit. So I have to appeal to you in some way, either because I'm insightful or illuminating or maybe just entertaining and goofy or whatever it is, but I have to appeal to you.
You could watch anything, you could listen to anything, and you could do anything.
You could choose to go and learn basketball or basket weaving or you name it, rather than consume what it is that I'm talking about here.
So the only way that you're going to voluntarily consume what it is that I'm putting out is...
If there is a benefit to you that is greater than anything else you could be doing with your time.
And trust me, I'm fully aware of this and I try to respect your time as much as possible.
I sort of put out these new Daily Arguments short videos which I hope are helpful and it's great to know that the new most popular guest is The Door.
But I have to provide something of your value that's greater than anything else you could be doing.
Am I churning nature and humans into capital?
No, I'm trying to provide value to you.
I'm trying to provide value to you.
So the idea that capitalism just destroys nature and regardless of the cost to human well-being and to the environment we depend on...
Again, I mean, this is boring and it's nonsense.
Somebody who can make the most efficient use of natural resources is going to make the most money.
So recently I did a call in, Joey, we talked about the robber barons.
And one of the robber barons, Rockefeller, he found a way to use byproducts of the production of oil.
And he produced like a hundred or more other products from that.
And therefore he was able, instead of paying the cost to dispose of all these waste products, he found a way to turn them into products which saved money.
You understand, right?
I mean, just to take a silly example, if you take a giant tree and use it to produce one toothpick, then your toothpick is going to have to be very expensive because you're wasting most of the tree.
If you take a giant tree and you can produce 100,000 toothpicks, then you're using just about every part of the tree that you can.
And let's say that you repurpose the bark into live role-playing shields or lizard habitats or whatever it's going to be, then these are other things that you can do.
And of course, if you buy land, if you can turn that land into a renewable resource, so much the better, right?
So up here in Canada, of course, Christmas is still allowed and a big thing.
And there are people who grow Christmas trees.
I don't know how long it takes to grow a Christmas tree, like 10 or 15 years or whatever.
But if you're going to buy land and you're only ever going to produce one round of Christmas trees, you can't bid that much for the land.
But if you're going to plant trees every time you pick one, then you get a renewable resource so you can bid more for the land because the profit is basically eternal.
So reducing waste and increasing utility in the long run is very important.
Farmers will leave fields to lie fallow so that they can recharge with the nutrients that plants need.
Why?
Why? Why?
Why? Cod and other fish had been a permanent resource for over 400 years.
It was considered to be so thick at many points that you could, like, walk across the ocean on this teeming, squirming cod.
And then the government came in and started managing it all, and within a couple of years, the cod has been completely wiped out.
Are people saying that there was no environmental destruction in the USSR? You've got entire lakes of weird biochemicals that, you know, swallow and replicate fish and all that kind of crap.
Are we really going to say that capitalism and the free market, which profits off maximum use, efficient use of resources, is going to somehow create a massive amount of garbage and destroy things?
Capitalism is not a push system.
It's a pull system.
You understand? Capitalism doesn't just...
People don't march into your house, dump crap on your floor, and then snatch money from you at gunpoint.
That's government with government schools.
But it's not a push system.
It's a pull system. If you want people to consume fewer resources, then convince them to consume fewer resources, and that's what they'll do.
And the other thing, too, when people say, well, capitalism is somehow preying upon the environment...
They don't actually care about the environment.
I mean, that sounds like a startling thing to say.
It's very easily provable.
They do not care at all about the environment.
And do you know how we know that?
Anybody who cares about the environment and doesn't talk about government debt is a sophist and does not care about the environment.
If you look at America, like north of $20 trillion in debt, right?
That's $20 trillion of environmental use ahead of time.
You understand? That's $20 trillion of environmental destruction and deportation that has occurred ahead of time.
If there was no national debt, the environment would be $20 trillion, just in the American example, would be $20 trillion better off.
And people say, well, that's capitalism.
Nope. That's the government.
That's national debt. That's government and central banking running together.
If you care about the environment, central banking is the first thing that has to go because central banking creates a debt-based economy.
And a debt-based system is unbelievably horrifying to the environment.
I mean, look at America has like way north of $150 trillion, 10 times the GDP, $150 trillion of unfunded liabilities.
That's basically environmental destruction that has been promised to people that has not yet occurred.
So if you care about the environment, you're not talking about...
Coercive government debt that's preyed upon the environment and preys upon the young, the unborn, the yet to be born, the yet to be conceived of, the yet to be a twinkle in their daddy's eye.
Now that is incredibly destructive.
And that's my litmus test. If somebody genuinely cares about the environment or is just an anti-capitalist hack looking to get you to surrender your property rights to their control, it's this question of, do they talk about the national debt when it comes to the environment and its destruction?
They go on to say, because let's be clear, that's what capitalism is at its root.
That is the sum total of the plan.
We can see this embodied in the imperative to grow GDP everywhere, year on year, at a compound rate, even though we know that GDP growth on its own does nothing to reduce poverty or to make people happier or healthier.
Increased wealth does nothing to reduce poverty.
Are you kidding? Look at the number of people getting out of poverty.
Hundreds of millions of people grown out of poverty in the last 20 years, particularly in China, particularly in India.
Of course it reduces poverty.
I mean, this is, I don't know, people just live in these echo chambers or just don't look up basic stats and statistics?
Makes no sense to me. It's crazy.
Now, here's something that's interesting.
High IQ populations, and I sort of think of Japan and so on, high IQ populations When they become wealthier, they have fewer children.
For a number of reasons. Wealth basically means more opportunity, means more free market and more scope for your abilities.
So for a lot of people like that, it's more fun to go out and conquer the world in art or business or some other fields rather than, you know, stay home and change diapers and stuff like that.
Even though I really enjoyed the diaper change.
All that kind of stuff was great fun.
But smarter populations, high IQ populations, when they become wealthier, they have fewer children.
Hmm. Low IQ populations.
And here I'm thinking about the average IQ 70 that occurs in sub-Saharan Africa.
Low IQ populations, when they get wealthier, they end up having lots more kids.
So this is why when you have a high IQ population, which is necessary for a free market, you really can't have democracy or a free market when you have an average IQ in the country lower than 90.
So when you look at a poor country, just go look up its average IQ. When you look at these kinds of dysfunctions, high corruption, low productivity, low contract enforcement, low honest judiciary, low enforcement of property rights and so on, just go look up the average IQ. It's not the only thing that matters, but it's well worth putting in the top three of your things to look up.
And so, yeah, this is why it's really tough to make low IQ populations wealthier, because you give them more money and they just have more kids.
Whereas high IQ populations, when they earn more money, they have fewer kids.
Plus, of course, you can save for your own retirement and so on.
So this article says, global GDP has grown 630% since 1980.
And in that same time, by some measures, inequality, poverty and hunger have all risen.
See, by some measures, are they quoting anything?
And of course, inequality. Inequality is going to grow when you have a free market, because people are different.
You know, when there was no recording industry, when you couldn't sell any songs on iTunes or anything like that, the best singer in the town could make maybe a couple of times more than the average person.
But, when you have, you know, giant megalothic, megalolithic, or whatever word I want to use, giant Brobnabagnian, ooh, there's one I haven't used in a while, Brobnabagnian, giant recording companies that can sell, you know, millions or tens of millions of songs or albums around the world, then the best singer-songwriter is going to make a huge amount more money.
You know, baseball player in your town, it doesn't really matter, but if there's a giant baseball league, you can end up making tens or hundreds of millions of dollars.
So sure, when there's a free market, you get a growth of inequality.
Is there growth of poverty and hunger?
Well, is that the free market?
It's certainly not the free market, for instance, when Western governments force the taxpayers to subsidize foreign aid, which means dumping money into the arms, so to speak, of foreign governments, which they then use to buy Western arms and so on.
So you give foreign governments $50 million, they have to spend that money in America, or because it's dollars, you can't spend it necessarily everywhere.
It's a reserve currency, but at some point it's values because you can buy things in America.
And so you give foreign governments a lot of money, and they use it to buy weapons, which they can then use to oppress their own people, and you dump massive amounts of food and other resources on the local markets, which destroys those local markets.
But that's not capitalism.
Capitalism is not taking money from poor people in rich countries by force and giving it to rich people in poor countries.
Capitalism is not... Taking people's tax money, using it to buy food, and then dumping it for free on foreign markets, destroying local capacity for farmers to make any money whatsoever.
So sure, poverty may have increased, hunger may have increased, but that's not because of capitalism.
And it is also partly because, again, lower IQ people, when they have more resources, generally tend to have more children.
That's not really the fault of capitalism.
That's just the wonderful diversity that Mother Nature has graced the human race with.
Go on to say, Well, okay.
Stock price, again, I've made this case a million times.
We don't have a free market stock market because money gets herded by tax laws and other things into the stock market.
Money that just doesn't want to be there, but it's on the run from the baying hyenas of the tax collectors.
And so there are these problems.
It's not capitalism. It's not capitalism to say to people, I'm going to take your money at gunpoint unless you invest it in the stock market.
That's like a shakedown.
That's not the free market in any way, shape or form.
The share price in a free market, the share price increases because the company is serving customers better.
It's giving them more of what they want, and it's serving customers better than...
The competition. So it's not arbitrary.
People think you can just will this.
Like you just will your stock price to be higher by screwing your employees and so on.
I mean, it's all Marxist nonsense.
And again, it's people who've never run a company and never had the challenge of retaining talent.
When you have somebody very talented working for you, retaining them is a very high priority.
And because they produce 10 times or 100 times...
And I know this. I was a chief technical officer.
I ran a huge R&D department and so on.
And really great coders are 10 times or 100 times more productive than average coders.
So you have to pay them a lot more.
And the other coders get resentful because it's like, well, everyone's just typing.
It's like, well, it's like saying everyone who bellows into the microphone is the same as Freddie Mercury.
It's like, nope... It's really not the same at all.
So this idea that as a corporate owner, all you want to do is reduce everyone's wages and, you know, dump all of your toxic crap in everyone's apple orchard and so on.
It's not how it works in the free market.
Why don't all companies just pay their employees a dollar a day or a penny a day then?
Or why don't they pay them nothing at all?
That's because nobody would shop for work.
And if you really want workers to be paid more, you need to increase competition for workers, which means reduce licenses, reduce barriers to entry.
Because when you increase competition for workers, then you bring up the wages of those workers.
So, again, it's just a complete lack of knowledge of how the free market works and a confusion of what's going on right now with the free market itself.
And they say, just look at the recent case involving American Airlines.
Earlier this year, CEO Doug Parker tried to raise his employees' salaries to correct four, quote, years of incredibly difficult times suffered by his employees, only to be slapped down by Wall Street.
The day he announced the raise, the company's shares fell 5.8%.
So?
So? Look, if they start paying their employees more...
There will be less money available for shareholders to be paid dividends on their shares.
Of course. If you take $10 million that was otherwise going to go to shareholders and you then divert it to raising the wages of your employees, then for a short amount of time the shareholders are going to get fewer dividends and some of them may sell their stock.
Why? Because they're old.
Maybe they're going to die in a year or two.
Maybe, you know, maybe they are very much around short-term gains.
So what? Is it wrong for people to want short-term gains?
What's wrong with that? The stocks are going to lose a little bit of money for sure.
Of course they are, because there's less money available to top up dividends or stock value.
But other people will say, okay, well, so they're paying people more, which means they're going to retain quality people, which means that the value of the company is going to go up in the long run.
But some people are in stocks for the short haul and some people are in stocks for the long haul.
So what? So what?
You know, there are some women, they say, I'll have sex with you on the first date.
And I guess they're in a certain kind of demand for people who have very strong immune systems or subsidized STD vaccines.
And there are other women who say, nope, I'm not going to sleep with you till we get married.
Okay, so some people are in sex for the short term and some people are in sex for the long term.
Should it be illegal to sleep with a woman, to sleep with a man on the first date?
Should it be illegal to wait until marriage?
No, it's just how people negotiate.
There's pluses and minuses. So the fact that this guy said I'm going to pay my employees more and the shares fell 5.8%, so what?
It doesn't matter what happens that day.
It matters what happens in the long run.
Now, of course, in the long run, if you continually underpay your employees, in other words, if they can get much better jobs elsewhere, then you'll lose people.
And here's the danger. You'll lose the most important people first.
Remember the Pareto Principle, right?
In a company of 10,000 people, A hundred of them produce half the value.
Right? So it's those people you really need to keep.
And if you have to kind of underpay the other people in order to retain those people, that's essential.
That is essential.
So that's important.
You have each individual, and of course, even within that hundred, ten are producing half of the value within that.
So ten people are producing one quarter of the value of the entire company.
Right? I think I got that right.
You understand? Like, 100 people out of 10,000 producing half the value and 10 within that producing half that value.
So, of course, they're going to get paid a huge amount.
Why? You expect the roadie and Bon Jovi to be paid the same?
No. Right?
Bon Jovi isn't there because the roadie did a good job.
The roadie's there because Bon Jovi is in high demand.
So, anyway, it goes on to say this is not a case of an industry on the brink fighting for survival and needing to make hard decisions.
On the contrary, airlines have been raking in profits, but the gains are seen as the national property and the natural property of the investor class.
This is why J.P. Morgan criticized the wage increase as a, quote, wealth transfer of nearly $1 billion to workers.
How dare they? And again, the idea that you're paid by the whim of the employer is people who have no understanding how a business works.
You're not paid by whim of the employer.
You're paid by the value you provide to your employer.
If you're a movie star who people will come and see the movie and interview you and write articles about the movie just because you're you...
Well, then you're going to get paid a lot of money.
If you're some extra, nobody sits there and says, oh man, that guy's an extra in this movie.
Let's all go. I mean, they don't.
You need the extra to make the crowd scenes look authentic.
But it's not just arbitrary.
You pay the movie star $10 million, you pay the extra $10 an hour.
It's not arbitrary. It's the value you provide to the film.
The movie star provides more than $10 million worth of value to the film in terms of ticket sales.
And the extra doesn't.
So if you want a raise, don't nag your boss.
It's ridiculous. You know, if you want to date a woman who doesn't want to date you because you're fat, lose weight.
If you want to date her, I guess you can try and pull out this dysgenic bullshit called body positivity, but it doesn't really matter in the long run.
If she doesn't want to date you because you're fat, you can nag at her or you can just lose weight.
If you want to be paid more, produce more value, work harder, get more skills, take risks, come up with great ideas.
Whatever. Produce more value.
Or be in more demand. Which I guess is kind of the same thing.
Like if you're making $30,000 at one place, you get an offer for $60,000 at another place, you're probably going to jump ship, right?
Now maybe you're still only worth $30,000 and the other people are crazy for paying you $60,000, in which case you're going to get $60,000 for a little while.
The company's probably going to go out of business.
But this idea that there's just this arbitrary thing.
Oh, we could just double everyone's wages.
It's not how it works.
You pay people according to the value they provide, which is why...
Things like minimum wages are so bad.
If you can't produce 50 at least, well usually it needs to be at least double, right?
Because you've got, you know, if you're sitting there typing away, they've got to give you computers, they've got to give you office space, they've got to give you a phone, they've got to give all this kind of stuff, right?
Heating and taxes and square footage costs for your office and all.
So you need to produce a lot.
But if you can only produce $10 worth of economic value, nobody's going to hire you for $5.
Any more than you'd show up someplace and just give them $5 an hour for no reason.
That's not how it works. But again, this idea that it's just the whim of the boss rather than...
And fundamentally, it's not the boss or even you who determines your salary.
It's the customers. Why does the movie star get paid $10 million?
Because the customers want to see him.
It's the consumers, it's the customers, it's the end group that consumes your goods or service.
They're the ones who pay your salary.
And they're the ones who choose how much you get paid.
So if you are a salesman and you sell a lot of shoes, then clearly the customers really like you and will buy more shoes when you sell them.
So it's the customers who are showing the value that you provide.
Not the boss and not even fundamentally you.
Provide more value to your customers and you will be paid more.
And if you're not, go find someone who will pay you more or go start your own business and do better that way.
I don't know. It's just people don't understand this.
It's not that complicated. But I guess because I've been an entrepreneur for many, many years, I mean...
Majority of my professional life has been working for myself or working directly facing customers, dealing with customers, negotiating with customers, selling stuff, developing stuff for customers and so on.
Customer is king. Customer rules.
Customer determines value.
So nagging the CEO and the employees and so on, it's sort of pointless.
They go on to say, what becomes clear here is that ours is a system that is programmed to subordinate life to the imperative of profit.
Ah, profit.
Profit, profit, profit. I actually used to go crazy, melting my brain trying to figure out what the hell profit was when I was in my late teens.
Well, I'll do a show on that at some point.
I think I've done one years ago.
Profit means that you're efficiently serving people's needs and preferences.
That's all it means. Nobody's going to pay $500 for a popsicle.
So if you produce a $500 popsicle, you're wasting resources.
And nobody's going to buy it.
So if you can produce a popsicle that people want to buy, well, that's profit.
If you can produce a popsicle for 50 cents and sell it for a dollar, then you've made 50 cents.
So fantastic.
You've served people's needs in a way that they like.
So profit is service to human needs.
Profit is successful satisfaction of human wants and desires.
That's all it is. Profit represents how well you're able to satisfy other people's needs and desires.
So this idea that somehow life and human beings are in opposition to profit is crazy in a free market.
Because profit is the mark of how well you're satisfying human needs and preferences.
They go on to say, for a starting example of this, consider the horrifying idea to breed brainless chickens and grow them in huge vertical farms, matrix style, attached to tubes and electrodes and stacked one on top of the other, all for the sake of extracting profit out of their bodies as efficiently as possible.
I mean, people need to eat.
Now, you can convince people not to eat.
Bit of a challenge there. Or you can try and convince people to have fewer kids.
But you see, that is a challenge for people.
Because white people are already having fewer kids.
Japanese, East Asian people are already having fewer kids.
And in China, there's been a one-child policy for many years.
So what you have to do is you have to go to the third world and say, Stop making babies!
Because it's destroying the environment.
But you see, people are these brave moral heroes.
They will say to people in the first world who are already not having kids, don't have kids!
And be like, okay, I'll think about it.
But going to the third world and saying don't have kids, well...
So yeah, if you don't want chickens to...
Well, first of all, you can say to people, don't buy this stuff.
It's fine. Or you can say to people, stop having as many kids.
Or you can say to people, stop eating as much or stop eating chicken and so on.
But... I'm sorry if I have to choose between my child's life and a headless chicken's life.
Well, not that complicated, and I hope it isn't that complicated for you either.
They say, or take the Grenfell Tower disaster in London, where dozens of people were incinerated because the building company chose to use flammable panels in order to save a paltry 5,000 pounds.
Well, that is a judge of the market.
I don't know the details of this, and I'm sure if you look it up, there are a bunch of building codes that people are supposed to build by, that are enforced by the state.
So if they were in spec, if they were in code, then the fault is the government's.
But you see, you have to build according to what people can afford.
And so if you have to cut corners to build something so that people have a place to live, then that's what you will do.
Right? I mean, you can buy a tablet for $50 and you can buy a tablet for $5,000, like a computer tablet.
The one that's $50 is lower quality.
But because people, most people can't afford or won't spend $5,000 on a tablet, the fact that there are $50 tablets means that people have a tablet rather than don't have a tablet.
There are cheap and crappy cars and then there are cars that cost a quarter million dollars or more.
The cheap and crappy cars are built less well and will not last as long as the cars that cost a quarter million dollars but so what?
So, it is the customers who said, I would rather save some money on rent and risk fire.
Fundamentally, I mean, this sounds harsh, but we make these compromises all the time.
All the time. You know, if we had a speed limit of five miles an hour, nobody would ever die in a traffic accident.
Nobody, if we grounded all airplanes, nobody would ever die in an airplane accident.
We make these compromises all the time.
We say, okay, well, we'll have 100 kilometers an hour speed limit on the highway, and a certain number of people are going to die because of that.
And we can get rid of that at the cost of nobody being able to get anywhere, right?
I mean, so we make these compromises all the time.
I don't know the details of this one, but the idea that profit trumps life no matter what, it could be That it was the person who started the fire who's morally to blame.
Could be. They go on to say, it all proceeds from the same deep logic.
It's the same logic that's sold.
Lies for profit in the Atlantic slave trade.
Oh, God. Why talk about the Atlantic slave trade?
Which was tiny, tiny, tiny relative to the Middle Eastern Muslim slave trade, wherein 100 million blacks were killed.
You've got to talk about the Atlantic slave trade, because you've got to always avoid the Muslim slave trade and only focus on the white slave trade, which was tiny, tiny.
Only a few percentage point of Americans ever owned slaves.
Where did white people get their slaves from?
From blacks who went in and caught...
The blacks and sold them to the whites.
And which was the group that ended the slave trade once and for all at the time around the world, not just in their own areas?
It was the whites. So whites bought blacks from blacks.
Whites used slave the lease, leased and whites ended the slave trade internationally.
And now there is a slave trade.
50 million people kept as slaves in the modern world, none of them in white countries.
But who's only and forever talked about when it comes to slave trade?
Plus the slave trade was a violation of capitalism.
Capitalism is self-ownership.
And if you are property, you can't be property.
So capitalism was a violation of the slave trade and the height of capitalism in the 19th century There was no slave trade by the end of it.
You see, what happens is capitalism automates.
And once you automate, it becomes less economically efficient to have slaves.
I mean, there are moral considerations which were fought for very, very hard as well.
But capitalism overtakes the value of slaves by automating things.
So the turn of the last century, 70-80% of Americans were involved in farming.
Now it's like 2% because of automation.
So capitalism is opposed to slavery, both morally in terms of property can't be property, property owners can't be property, and also because automation makes slavery far less valuable.
It's a logic that gives us sweatshops and oil spills, and it's the logic that is right now pushing us headlong towards ecological collapse and climate change.
Why are there oil spills?
America has tons of oil.
Why is it shipping it across the seas from the Middle East?
Because environmentalists have convinced the government to restrict people's free exercise of property rights to drill for it, extract and process oil.
I mean, if you want environmentalists to be able to control people's property and kibosh and squash local drilling, then you're going to get oil spills.
But that's not the result of the free market.
That's the result of government interfering in the free market.
Also, if you're really, really concerned about oil consumption, then you should want to privatize all the roads.
I mean, the only reason that we have such a sprawled out North American society is because the government forcibly took money, or basically indebted the taxpayer in order to build roads.
And because they wanted to be able to move troops around in the event of a nuclear war, so the interstate highway system was entirely funded by the government and imposed, and this allowed everyone to spread out.
I don't think roads, the way they are currently constituted, are even remotely efficient.
I know they're not, because they're run by the government.
So, again, it's just thinking these things through.
If you're concerned about ecological collapse and climate change, the government should stop Using the roads.
It should stop controlling the roads.
The roads should be privatized, and therefore people can be charged to drive on them using GPS and other things, and that will diminish people's desire to drive.
And that's how you solve these things.
It's the lack of the free market.
It's the lack of private property ownership and control that is creating most of these ecological disasters or government interference.
And they say, once we realize this, we can start connecting the dots between our different struggles.
There are people in the U.S. fighting against the Keystone Pipeline.
Hmm? Oil spills are terrible and pipelines are terrible.
Well, you gotta pick one there, my friends.
They're going to say there are people in Britain fighting against the privatization of the National Health Service.
Well, that's healthcare.
Healthcare should be private, and it should be private because it's so important.
Why doesn't the government run the entire food system?
Because if the government ran the entire food system, we'd run out of food in about a month.
Just as happened in Soviet Russia, just as happened in Ukraine, under the holodomor.
So, of course, national health services, government health services, are a complete violation of capitalist principles.
People want stuff for free, especially incompetent people want stuff for free.
And so, of course, they're going to want this kind of stuff, but just because you want something for free doesn't mean you should get it.
It doesn't mean that it's right and just for you to violate other people's property rights in order to force doctors to provide you with services.
That's wrong, and that's bad.
They're going to say there are people in India fighting against corporate land grabs.
There are people in Brazil fighting against the destruction of the Amazon rainforest.
There are people in China fighting against poverty wages.
You know the people in China who are the most fighting against poverty wages are those who create businesses that raise demand for workers.
Like if I had an idea for a plant in China that was going to employ or a product in China that was going to employ 100,000 Chinese workers, then that would create a demand for 100,000 Chinese workers.
Now that demand can't be filled by the next generation because I need them now.
So I'm going to bid those workers away from their existing businesses and they're going to end up making more money because I've just increased the demand for workers by 100,000 in China.
And think if this is just local to one town, the wages could go up enormously.
So if you want to raise people's wages, go create a business and hire people.
That's the way you do it.
This whining and complaining and bitching and crabbing.
It's just noise.
If you want people to make more money, go hire people.
Go increase demand. It doesn't have to do it directly.
You know, if you invest in a company and that company then goes and opens a factory, then they're going to be hiring more people.
I mean, there's lots of different ways to do it.
You don't have to directly do it.
But at least support the free market, which will do all of this sort of stuff.
Fighting against poverty wages!
You know, if you want to save the Amazon rainforest...
Go and raise money and buy the land.
Oh, that's right.
The government won't sell it to you in perpetuity.
The government will sell you logging rights, but not the actual land, which means you have only an incentive to go and strip mine the resources and not replant.
So again, violation of property rights, violation of the free market is causing these kinds of problems.
They go to say, these are all noble and important movements in their own right.
But by focusing on all these symptoms, we risk missing the underlying cause.
And the cause is capitalism.
It's time to name the thing.
Actually, you named it at the very beginning.
What you didn't do, actually, was define it.
And they say, what's so exciting about our present moment is that people are starting to do exactly that, and they are hungry for something different.
For some, this means socialism, that YouGov Paul showed that Americans under the age of 30 tend to have a more favorable view of socialism than they do of capitalism.
Well, of course they do. Because they're on the receiving end of tax money.
Yeah, it's really not that complicated.
You know, I find that the people who win the lottery have a very favorable view of the lottery.
And the people who lose at the lottery have a less positive view of the lottery.
Ooh, you're a statistical genius.
And of course, I mean, you're on the receiving end.
You know, you get your first paycheck and you're like, I'm making X. And then the giant piranha bite of the hamstring of profitability the government takes out is like, oh...
Oh, that's socialism.
That's leftism. Ah, now I'm on the other side and it's a little different.
And they say, so, young people have a more favorable view of socialism.
And they say, which is surprising given the sheer scale of the propaganda out there designed to convince people that socialism is evil.
Are you kidding me?
The entire educational system is run on socialist principles.
From each according to their ability to each according to their need.
Except there's not even need.
People are forced to pay for the indoctrination of their children to get their children to swallow massive national debts taken out in their name for a future that they can't possibly grow up and pay off.
So the idea that there's some really great pro-capitalist propaganda out there in government schools or in the media, I mean, I don't even know what to say.
I just, I don't.
Man, same planet, different worlds.
They go on to say, but millennials aren't bogged down by their dusty old binaries.
Okay. Dusty old binaries.
That's a very early computer code, probably involving an abacus.
They're going to say, for them, the matter is simple.
They can see that capitalism isn't working for the majority of humanity, and they're ready to invent something better.
What might a better world look like?
There are a million ideas out there.
We can start by changing.
Oh, hang on. So there are a million ideas.
That's the whole point of capitalism. Creative destruction.
A million ideas about that.
How to make a better mousetrap.
How to make a better tablet. How to make a better computer.
How to make a better podcast. A million ideas out there.
And the free market will let the most efficient and productive idea win.
So we want a free market of ideas.
We want a free market of different implementations and opportunities, which means no government monopoly control of these outcomes.
A million ideas out there.
How are they going to win? Well, you're going to debate.
You're going to argue. You're going to start companies.
You're going to figure out which one is best in the competition of the market and the capital and all this kind of stuff.
Free market. Beautiful. A million ideas out there.
Which one is the best? Let's let the market decide which 10 or 20 or 50 are the best, which is going to change over time.
So they're going to say, we can start by changing how we understand and measure progress.
As Robert Kennedy famously said, GDP, quote, does not allow for the health of our children, the quality of their education, or the joy of their play.
It measures everything in short, except that which makes life worthwhile.
Huh. I wonder if he talked enough about really crappy government schools, or national debts enslaving the next generation, or 10 generations.
They're going to say, we can change that.
People want healthcare and education to be social goods, not market commodities.
Social goods. So you want governments and bureaucrats and politicians to use coercion to organize this stuff.
Force and top-down bureaucracy.
And vote-buying and indebting and all of that kind of stuff.
That's how you want these things to be solved.
Not market commodities.
You see, commodities, what does that mean?
Wait a minute. You want an educational system that actually serves the needs and preferences of parents and children?
Because they can voluntarily choose to pay for the school or not, and therefore the school has to appeal to what it is that they actually want and what's best for their children in the long run?
Wait, you want an educational system responsive to the needs and preferences of parents?
You monster! You want an educational system that's going to help children learn better?
You monster! We need to put it back into the control of unaccountable politicians and unions and government bureaucrats.
That's how you get wonderful stuff is handing it over to the coercive, might-and-fist-and-blood-soaked, death-soaked, child-baby-selling crap of the state.
That's how you get quality.
Don't you remember how great cars were that came out of the Soviet Union?
Don't you like lining up for five hours a day just to get half a slice of moldy bread?
What's the matter with you? Don't you love Venezuela?
Anyway, they go on to say, so we can choose to put public goods back in public hands.
Now, see, public means fists and guns and debt.
That's all public means. Government is force.
That's all you need to understand.
They go on to say, people want the fruits of production and the yields of our generous planet to benefit everyone rather than being ciphered up by the super rich so we can change tax laws and introduce potentially transformative measures like a universal basic income.
See, here's the thing. If you really care about the poor, go hire them.
Go sit with them. Go help them improve their human capital.
Go talk them out of their bad habits.
And the poor do have a lot of bad habits.
The rich do too, but the poor quite significantly.
Go get them to work more.
In America, the average two-person household that's below the, quote, poverty line, which was fantastically rich even 50 years ago, but the average two-parent or two-adult household that's below the poverty line...
The parents or the adults, two of them, combined work an average of 15 hours a week.
So go hire them and go convince them to work more.
Go sit down with them more, figure out what's interfering with them.
But people don't want to get their, you know, the elites, they don't want to get their hands dirty, right?
I talk to people three, four hours a week and call in shows plus.
And that's just, you know, regular old people.
And of course, I interview the academics and all of that as well.
But Talk to people.
Hire people. Go sit down with the poor.
Figure out how to help them. Figure out what's blocking them from their potential.
Figure out if they even have any potential.
So, but the idea, well, I'm just going to write erudite articles and I'm going to get the government to strip money from one group of people and give it to the other group of people by force.
And that kind of power is never going to corrupt anyone.
Boy, you know, somebody in the free market can't force anyone to do anything.
But that's just corruption and power.
But the government can force everyone to do everything.
But boy, that kind of power is never going to be misused.
It's never going to go to anyone's head.
Nothing bad could ever come out of it.
Power corrupts! And the only power that matters is the power of force.
Economic power is voluntary.
They say people want to live in balance with the environment on which we all depend for our survival so we can adopt regenerative agricultural solutions and even choose, as Ecuador did in 2008, to recognize in law, at the level of the nation's constitution, that nature has, quote, the right to exist, persist, maintain, and regenerate its vital cycles.
Sure, because laws just change reality, right?
They say measures like these could dethrone capitalism's prime directive and replace it with a more balanced logic that recognizes the many factors required for a healthy and thriving civilization.
If done systematically enough, they could consign one-dimensional capitalism to the dustbin of history.
None of this is actually radical.
Radical, no. Violent and coercive, yes.
Handing things over to the blood weapons of the state in order to force people to obey your vision of the good, yeah, that's coercive.
So I don't care about radical.
I do care about violence and the initiation of the use of force, which is what government does and all it does fundamentally.
So they say, none of this is actually radical.
Our leaders will tell us that the ideas are not feasible.
But what is not feasible is the assumption that we can carry on with the status quo.
If we keep pounding on the wedge of inequality and chewing through our living planet, the whole thing is going to implode.
The choice is stark, and it seems people are waking up to it in large numbers.
Either we evolve into a future beyond capitalism, or we won't have a future at all.
Well, you know, as the occasional purveyor of doom porn myself, I understand the urgency, and I agree with them.
Of course the current system is not sustainable.
Of course, that which mathematically cannot continue will not continue.
It's not at all sustainable. The question is, what did we replace it with?
What has been happening is coercion has been growing and swelling like a tumor, eclipsing the healthy muscles of a voluntary society.
These people want more coercion.
I want more freedom.
And the battle at the end of the system is between these two visions.
The boot stamping on the human face or a free and clear plane of voluntary interaction.
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