Latest / The TalkBlock Show's Podcast / Why Socialism Fails: The Hidden Truths of Economic Control with Dr. Doug Cardell

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Why Socialism Fails: The Hidden Truths of Economic Control with Dr. Doug Cardell · The TalkBlock Show's Podcast

• 0:05
  SPEAKER_00: Welcome back to the show, everyone.
• 0:07
  SPEAKER_00: My name is Varim, and today we have a great guest.
• 0:10
  SPEAKER_00: His name is Dr.
• 0:11
  SPEAKER_00: Doc Cardell.
• 0:12
  SPEAKER_00: He is an economist and author.
• 0:15
  SPEAKER_00: He wrote the book Why Socialism Struggles.
• 0:18
  SPEAKER_00: He studies how money, markets, and governments work in real life.
• 0:22
  SPEAKER_00: Dr.
• 0:23
  SPEAKER_00: Cardell, welcome to the show.
• 0:25
  SPEAKER_04: I'm glad to be here.
• 0:28
  SPEAKER_00: My pleasure.
• 0:30
  SPEAKER_00: So and um to start, uh Doctor, please tell our audience a little bit about yourself, where you where are you from, where you live now, and uh do your uh researches and how you got your PhD.
• 0:44
  SPEAKER_04: Well, I I live in the between Tucson and Phoenix, Arizona.
• 0:52
  SPEAKER_01: Not in a town at all, out in the middle of nowhere.
• 0:56
  SPEAKER_01: Okay.
• 0:58
  SPEAKER_04: And we just love it out here.
• 1:00
  SPEAKER_04: We have horses and stuff like that.
• 1:03
  SPEAKER_00: So it's yeah, a nice quiet place.
• 1:04
  SPEAKER_00: Yeah, why not?
• 1:05
  SPEAKER_04: Yeah, yeah.
• 1:07
  SPEAKER_04: Yep.
• 1:08
  SPEAKER_04: And um I got my PhD largely because I wanted to be able to have the credentials to speak out against socialism.
• 1:21
  SPEAKER_04: Um that was actually my initial motivation was that um I I'm very, very concerned that we could stumble into socialism accidentally.
• 1:33
  SPEAKER_04: A lot of people think about socialism and they don't really know what it is.
• 1:38
  SPEAKER_04: They think it's one thing, um and we may find out too late that it's really something else.
• 1:47
  SPEAKER_04: And so my concern is that they'll vote for something um and before we know it, we we got a big problem.
• 1:54
  SPEAKER_04: Uh because socialism uh can't work.
• 1:58
  SPEAKER_04: It's it's a fa it's a failing system and it will never get the job done.
• 2:04
  SPEAKER_04: And so we we have to look for ways to fix things so that uh to inform people so that they know what we're really dealing with.
• 2:14
  SPEAKER_00: Yep, yeah.
• 2:16
  SPEAKER_04: So my PhD is in economics, economics policy.
• 2:20
  SPEAKER_04: And uh I've had a lot of experience as an educator.
• 2:25
  SPEAKER_04: I worked for a time for a member of Congress, I've been a CEO, uh had a lot of different career things going on.
• 2:33
  SPEAKER_04: College professor, and so uh uh I've got a pretty good background for being able to explain to people uh difficult things, but in very understandable language.
• 2:46
  SPEAKER_00: Yeah, yep, yep.
• 2:46
  SPEAKER_00: How long time ago you got a PhD?
• 2:48
  SPEAKER_00: A long time ago?
• 2:49
  SPEAKER_04: No, no, uh only about ten years ago.
• 2:51
  SPEAKER_01: Mm-hmm.
• 2:53
  SPEAKER_00: Good.
• 2:54
  SPEAKER_00: Good.
• 2:55
  SPEAKER_00: And uh a little bit about foundations of your work.
• 3:00
  SPEAKER_00: Uh what so uh as I haven't said uh uh the only talking about uh socialism made you two get PhD and uh go deep into into the studies, right?
• 3:12
  SPEAKER_00: Yes.
• 3:14
  SPEAKER_04: And the the study I did for my dissertation was to examine the personal consumption expenditures, um measure of what the Federal Reserve thinks people are gonna buy a year from now.
• 3:29
  SPEAKER_04: And so what I did was I looked at a 30-year history, I looked at what the Fed said would happen, and I looked to find out what actually happened, and I found out they were right 46% of the time.
• 3:41
  SPEAKER_04: You literally could have done better flipping a coin.
• 3:45
  SPEAKER_04: I'm not saying there's anything wrong with the people with the Fed, they're smart people.
• 3:49
  SPEAKER_04: The problem is that the job itself is an impossible job.
• 3:54
  SPEAKER_04: Um, and that's one of the first serious problems with socialism.
• 4:00
  SPEAKER_04: Um, socialism involves planning an economy.
• 4:05
  SPEAKER_04: The hard socialists expect the government to take over, hire somebody like me or a bunch of people like me to plan the economy.
• 4:15
  SPEAKER_04: Soft socialists think of the workers as planning the economy.
• 4:20
  SPEAKER_04: The reality is it doesn't matter whether a dictator does it, whether a committee does it, whether workers do it, or whether the tooth fairy does it.
• 4:29
  SPEAKER_04: The problem is you can't plan an economy.
• 4:32
  SPEAKER_04: And the reason you can't is because it requires you to know things you can't know.
• 4:38
  SPEAKER_04: Let's think for a minute about what it would take for me to plan an economy.
• 4:44
  SPEAKER_04: Well, I have to know what 9 billion people are planning to buy a year out.
• 4:52
  SPEAKER_04: Yeah.
• 4:53
  SPEAKER_04: You know, I don't know what I'm gonna buy next week.
• 4:56
  SPEAKER_04: I don't know what my wife is gonna buy tomorrow.
• 5:00
  SPEAKER_04: So how could we possibly ever do that?
• 5:03
  SPEAKER_04: And that's why every time it's been tried, it's failed.
• 5:07
  SPEAKER_04: In Russia and China, they tried five-year plans.
• 5:10
  SPEAKER_04: Now they're not looking out just a year, they're trying to look out five years and figure out what people are gonna need and want.
• 5:18
  SPEAKER_04: It's just a silly idea and absolutely hopeless as a thing to try.
• 5:24
  SPEAKER_04: And so when people do try it, they first of all start by getting stuff really wrong.
• 5:31
  SPEAKER_04: So they build too many of this and too few of that, or the wrong kind of this and the wrong kind of that.
• 5:38
  SPEAKER_04: And so the first thing that typically happens is a black market develops.
• 5:43
  SPEAKER_04: Now, even if it's in soft socialism where there's theoretically nice people running the system, yeah, what once they see that this black market is thriving, they have to go, well, if our plan is going to work, we have to stop this black market, which is why it begins to transfer to a dictatorship.
• 6:05
  SPEAKER_04: Yeah, yeah.
• 6:05
  SPEAKER_04: Well, mine's you have to take control of everything to take control of the economy.
• 6:12
  SPEAKER_04: And and and even that typically doesn't work.
• 6:15
  SPEAKER_04: In North Korea, if you buy a pair of Western jeans or a western C D, it's the death penalty.
• 6:21
  SPEAKER_00: Okay, well, my my parents lived in the Soviet Union for 40 years, so they know they know what he's talking about very well.
• 6:29
  SPEAKER_04: Yes, then you know for sure exactly what I'm talking about.
• 6:32
  SPEAKER_04: Exactly, yeah.
• 6:34
  SPEAKER_04: Yeah.
• 6:36
  SPEAKER_04: And yeah, it's it's inescapable.
• 6:39
  SPEAKER_04: It ultimately has to become a dictatorship, and and that's what concerns me, is that people think, well, we can we can do this nice soft socialism thing where the workers take over the the corporations and and so on, but and plan the economy.
• 6:58
  SPEAKER_04: But it they can't do it, it's just impossible.
• 7:01
  SPEAKER_04: And so when things start failing, the government has to start imposing controls, and pretty soon we don't have any freedom, as you well know.
• 7:14
  SPEAKER_00: Right.
• 7:15
  SPEAKER_00: And um uh one question, a little bit about uh uh capitalism and capitalists.
• 7:23
  SPEAKER_00: In your book, uh you talk about um what it means to be a capitalist and how how how do you explain capitalism in simple words and uh what do people often get wrong about it?
• 7:38
  SPEAKER_00: Because obviously there's a couple of things.
• 7:41
  SPEAKER_04: The first thing is that capitalism is basically the idea that everybody should go out and find out what they're good at, find their talents, then they should go out and find their bliss, find out what they really like to do.
• 7:59
  SPEAKER_04: And then here's the part about capitalism: they take those two things, put them together, and create value for other people.
• 8:07
  SPEAKER_04: That's really the name of the game.
• 8:10
  SPEAKER_04: And what people don't see is how that value is created.
• 8:15
  SPEAKER_04: Like they they they blast the rich.
• 8:18
  SPEAKER_04: But let's take a look at Jeff Bezos.
• 8:21
  SPEAKER_04: You may or may not like him personally, you may or may not like his politics, none of that matters.
• 8:27
  SPEAKER_04: He created Amazon.
• 8:29
  SPEAKER_04: And most people in the U.S.
• 8:32
  SPEAKER_04: use Amazon really often because it's valuable to them.
• 8:37
  SPEAKER_04: That's what that's what creating value means.
• 8:40
  SPEAKER_04: You create something that other people find valuable.
• 8:43
  SPEAKER_04: And Bezos got rich because he created something that was really, really valuable.
• 8:49
  SPEAKER_04: In fact, it's so valuable that the average American is two to three thousand dollars a year richer because he created Amazon.
• 8:59
  SPEAKER_04: Because we get products cheaper, we get them better, we get better delivery, we don't we save gas and time not having to go shopping.
• 9:08
  SPEAKER_04: That's a huge value creation.
• 9:11
  SPEAKER_04: Like I mentioned earlier, I live out here in the middle of nowhere.
• 9:14
  SPEAKER_04: I'm on a PC.
• 9:15
  SPEAKER_04: I don't know what you're on, but I'm on a PC.
• 9:18
  SPEAKER_04: I and since I'm out in the middle of nowhere, I'm in Starlink.
• 9:22
  SPEAKER_04: I couldn't be talking to you right now if it weren't from Bill Gates and um and now I'm blanking out his name.
• 9:41
  SPEAKER_01: Good for me.
• 9:41
  SPEAKER_04: Uh Elon Musk or Elon Musk is exactly right.
• 9:45
  SPEAKER_04: Yes.
• 9:46
  SPEAKER_04: Um yeah, so without Gates and Musk, I couldn't be talking to you.
• 9:53
  SPEAKER_04: And we couldn't be talking to our listeners.
• 9:55
  SPEAKER_04: And so that's a huge value that's created.
• 10:00
  SPEAKER_04: And why do I why would I care if Musk got rich by helping me?
• 10:06
  SPEAKER_04: It's it's it's it's warped thinking.
• 10:10
  SPEAKER_04: If you look at all the people, the top ten richest people in the world, they happen to be all Americans right now, every single one of them got rich by creating value for others.
• 10:21
  SPEAKER_04: Yeah.
• 10:22
  SPEAKER_04: None of them inherited it, none of them started out rich and exploited that.
• 10:28
  SPEAKER_04: They all started as normal people, some of them actually fairly not well off at all, and ended up rich because they created a huge amount of value for others.
• 10:39
  SPEAKER_04: That's the key to capitalism.
• 10:42
  SPEAKER_04: Now, what's what's wrong with capitalism, if you want to say that?
• 10:46
  SPEAKER_04: I would suggest there's nothing wrong with capitalism itself.
• 10:50
  SPEAKER_04: The problem is that government has twisted it.
• 10:54
  SPEAKER_04: We have this thing called crony capitalism, where politicians give favors to capitalists.
• 11:01
  SPEAKER_04: Now, in any walk of life you want to pick, there are bad people.
• 11:09
  SPEAKER_04: There are certainly bad capitalists.
• 11:11
  SPEAKER_04: There are people who will exploit the system if you give them a chance to.
• 11:16
  SPEAKER_04: It's government's job to stop them from getting that chance to.
• 11:21
  SPEAKER_04: And so, do one of the examples I use in my book is it's kind of like this.
• 11:26
  SPEAKER_04: If you see somebody breaking into your house and you call the police, and the police come, and then they help the burglar start loading stuff into his car, I'm I'm somewhat upset with the burglar, but I'm a lot more upset with the police.
• 11:42
  SPEAKER_00: Yeah.
• 11:42
  SPEAKER_04: The burglar was doing what burglars do.
• 11:45
  SPEAKER_04: It's not good, but it was the police's job to help me, not help the burglar.
• 11:50
  SPEAKER_04: And that's exactly the problem with government, is that too many times people blame the capitalists for what the government is doing wrong.
• 12:01
  SPEAKER_04: And that's the part that we need defense.
• 12:03
  SPEAKER_04: We need to get politicians in there that we have to do things to make the politicians do the right thing.
• 12:10
  SPEAKER_04: And I think there's a bunch of things we could do.
• 12:13
  SPEAKER_04: Um uh and most of them aren't too hard.
• 12:17
  SPEAKER_04: I mean, the first thing I always suggest is that every bill that goes through Congress has to have an expiration date.
• 12:25
  SPEAKER_04: Because too many times we pass laws, they become outdated, we find out they really don't work, they we find out there's loopholes, we find out this, we find out that, but the law is still the law and nobody bothers to fix it.
• 12:38
  SPEAKER_04: If the if, and we could just to toss out numbers, depending on the kind of bill, say five to twenty five years, the bill has to expire.
• 12:47
  SPEAKER_04: And if that happened, then Congress would be forced to take a look and say, is this really something we want, or do we need to reconsider this?
• 12:57
  SPEAKER_04: And they need to do that fairly regularly.
• 13:01
  SPEAKER_04: The next thing I would suggest is that every bill has to be a single issue.
• 13:06
  SPEAKER_04: That's another reason why bad stuff happens in legislation, is that bills contain two, three, four thousand pages.
• 13:17
  SPEAKER_04: Nancy Pelosi's famous remark about Obamacare, we have to pass the bill so we can find out what's in it.
• 13:26
  SPEAKER_04: In what realm of government is that any semblance of sanity?
• 13:32
  SPEAKER_04: You have to pass a bill to know what the bill you're passing actually says.
• 13:37
  SPEAKER_04: And it's because these bills have gotten so huge that we don't know what's in them.
• 13:42
  SPEAKER_04: Nobody knows what's in them.
• 13:44
  SPEAKER_04: Nobody's gonna sit down and read a 2,000-page bill, and so stuff gets slipped in.
• 13:48
  SPEAKER_04: All kinds of garbage gets slipped in.
• 13:50
  SPEAKER_04: And we can solve that really simply.
• 13:52
  SPEAKER_04: A bill can only have one issue.
• 13:55
  SPEAKER_04: If you want a bill on this, make it a bill on this.
• 13:57
  SPEAKER_04: Nothing else.
• 13:59
  SPEAKER_04: The next thing I would suggest is that a bill has has to have a two-thirds or three-fourths majority.
• 14:06
  SPEAKER_04: If we can't get two-thirds or three-fourths of the Congress to agree that something's a good idea, it's probably not a good idea.
• 14:13
  SPEAKER_04: I mean, you look at the things that the American people want, and most of them are big things.
• 14:18
  SPEAKER_04: They would easily pass with two-thirds or three-fourths.
• 14:22
  SPEAKER_04: Um it's the stuff that passes by 51% that gets pretty icky.
• 14:28
  SPEAKER_04: It's the stuff that people are sneaking by.
• 14:30
  SPEAKER_04: They just barely pass it.
• 14:32
  SPEAKER_04: And now it's a bill with 10,000 things in it that's gonna last forever.
• 14:38
  SPEAKER_04: That's just wrong.
• 14:40
  SPEAKER_04: It's bad government.
• 14:42
  SPEAKER_04: And and so that is is something we could fix.
• 14:47
  SPEAKER_04: Another thing I think we could do that would help is to fix redistricting.
• 14:55
  SPEAKER_04: I would suggest that we redistricting should match voter registration.
• 14:59
  SPEAKER_04: Registration.
• 15:01
  SPEAKER_04: That is, let's say your dis your state has 60% Democrats and 40% Republicans.
• 15:10
  SPEAKER_04: Then your representation in Congress should match that.
• 15:15
  SPEAKER_04: Right now there are states where it's 50-50, but the representation is 90-10.
• 15:23
  SPEAKER_04: That's wrong.
• 15:24
  SPEAKER_04: That's just wrong.
• 15:26
  SPEAKER_04: A large percentage of the voters are being cheated out of representation.
• 15:31
  SPEAKER_04: Yeah.
• 15:32
  SPEAKER_04: And finally, the thing that I think is really important is to curtail lobbying.
• 15:39
  SPEAKER_04: Um, many of our listeners might not know this, but most bills today are actually written by lobbyists, not legislators.
• 15:48
  SPEAKER_04: And so the lobbyists write the bill, and they write it to favor whatever it is they're lobbying for.
• 15:55
  SPEAKER_04: They slip in as much garbage as they can for stuff that they're lobbying for, and then they convince legislators to pass it.
• 16:03
  SPEAKER_04: When Supreme Court ruled on Citizens United, they said that money is speech, and so we couldn't curtail speech.
• 16:11
  SPEAKER_04: But I would suggest that we can curtail politicians acting, listening to that speech.
• 16:19
  SPEAKER_04: So I think we could pass a rule saying you can a politician can only accept so many dollars from some from this kind of people or this kind of, you know, whatever.
• 16:31
  SPEAKER_04: But because the politician taking the money is akin to listen, it's not akin to speech.
• 16:38
  SPEAKER_04: Trying to uh uh give the money can be construed as speech.
• 16:45
  SPEAKER_04: That's like if I start yelling at you, you're gonna mute my mic.
• 16:52
  SPEAKER_04: And that's exactly what we could do to politicians.
• 16:55
  SPEAKER_04: We can say, Okay, Ardell's free to say anything he wants, but Vadim doesn't does not have to listen.
• 17:03
  SPEAKER_04: And I think we can say exactly the same thing about politicians.
• 17:08
  SPEAKER_04: And I think if we introduce some of those things, we would find out we have a whole lot better government.
• 17:13
  SPEAKER_01: Yeah, yeah.
• 17:15
  SPEAKER_01: True, yeah.
• 17:18
  SPEAKER_00: Okay, Doctor, um you probably noticed that nowadays socialism is very popular among uh young people.
• 17:26
  SPEAKER_00: And in your opinion, uh what makes socialism so and so good for young people today?
• 17:32
  SPEAKER_01: Like well, it's it's actually several things.
• 17:36
  SPEAKER_01: Um I I guess for many people the underlying issue is envy.
• 17:47
  SPEAKER_04: Um they want stuff they don't have and want somebody else to give it to 'em.
• 17:54
  SPEAKER_01: Um and it's human nature.
• 18:00
  SPEAKER_04: I'm not saying that these are evil people or anything, but it is it it takes a lot of self-discipline to to train that out of yourself.
• 18:12
  SPEAKER_04: Um So I think that's certainly a part of it.
• 18:18
  SPEAKER_04: I think another thing is that people blame capitalism for things that are the fault of government.
• 18:26
  SPEAKER_04: And so they think, well, capitalism's a problem, so we have to find something else.
• 18:31
  SPEAKER_04: I think another reason is that they misunderstand socialism.
• 18:38
  SPEAKER_04: Probably 75 or 80 percent of the time when I talk to people who say they are socialists, what they imagine is the Nordic countries Sweden, Denmark, Norway, those countries are not socialist.
• 18:55
  SPEAKER_04: Um if our listeners want to check, they can look online, just look up speeches by the prime ministers of those countries, and you can find plenty of examples of those prime ministers saying, we are not socialist.
• 19:08
  SPEAKER_04: We are a capitalist country.
• 19:10
  SPEAKER_04: Yep.
• 19:11
  SPEAKER_04: Now, what's different about them?
• 19:13
  SPEAKER_04: Well, they're capitalist countries, but but they have a wide safety net wider than the U.S.
• 19:21
  SPEAKER_04: Now, that's a different discussion.
• 19:25
  SPEAKER_04: If you want a bigger safety net, if you wanted to model what they do there, uh, what you would do is raise almost everybody's income tax to 50%.
• 19:36
  SPEAKER_04: Everybody.
• 19:37
  SPEAKER_04: They don't have all the breakdowns, the taxes on the rich and stuff that we have.
• 19:42
  SPEAKER_04: They have virtually no corporate tax because they've learned that if you tax corporations, they move.
• 19:49
  SPEAKER_04: And they want corporations to provide good jobs for their citizens.
• 19:55
  SPEAKER_04: And so they want to keep the corporations there.
• 19:57
  SPEAKER_04: And finally, they have a 20%, 25% sometimes value-added tax.
• 20:03
  SPEAKER_04: So they have really, really high taxes on everybody, and in return, everybody gets free health care and free education.
• 20:11
  SPEAKER_04: That's basically it.
• 20:13
  SPEAKER_04: They don't get a lot of other goodies.
• 20:16
  SPEAKER_04: Free health care, three, no free housing, none of that kind of stuff exists at all.
• 20:21
  SPEAKER_04: Um and so when people think about what the Nordic countries give you, they aren't looking at what the Nordic countries charge you to pay for that.
• 20:36
  SPEAKER_04: Right.
• 20:37
  SPEAKER_04: And now, if people go into this knowing what they're doing, I personally am not crazy about the Nordic system.
• 20:47
  SPEAKER_04: But if that's what people really wanted to vote for, I support democracy.
• 20:53
  SPEAKER_04: If people really want to pay that kind of taxes to get what I consider fairly minimal benefits, great.
• 21:02
  SPEAKER_04: If that's what the majority of the people want, we should do it.
• 21:06
  SPEAKER_04: But I I think most of the people that are saying they want it don't know what the price is.
• 21:11
  SPEAKER_04: They they're imagining that we're going to tax the rich to get all that.
• 21:15
  SPEAKER_04: But the Nordic countries found out the hard way that that doesn't work.
• 21:19
  SPEAKER_04: And it it wouldn't work here.
• 21:22
  SPEAKER_04: The as we've already talked about a little bit, the capitalists are the value creators.
• 21:28
  SPEAKER_04: They're the ones that are making things good for all the rest of us.
• 21:32
  SPEAKER_04: You know, and I'm not putting down poor people, but show me something that's been invented by a poor person.
• 21:38
  SPEAKER_04: What have you got in your pocket?
• 21:40
  SPEAKER_04: Was your cell phone made by poor people?
• 21:43
  SPEAKER_04: No.
• 21:43
  SPEAKER_04: And I again, I'm I feel bad about poor people.
• 21:46
  SPEAKER_04: I'm not I'm not using that term disparagingly.
• 21:49
  SPEAKER_04: Yeah, but the stuff that we've got that we love was created by rich people.
• 21:53
  SPEAKER_04: That's how they got rich.
• 21:55
  SPEAKER_04: And and so we don't want to punish them.
• 22:02
  SPEAKER_04: When we t anything we tax, we are punishing the behavior that we're taxing.
• 22:08
  SPEAKER_04: And so do we really want to punish people for being better creators?
• 22:14
  SPEAKER_04: Again, makes no sense.
• 22:16
  SPEAKER_04: We want to reward people that are being a good thing.
• 22:19
  SPEAKER_00: It's supposed to be incentive.
• 22:20
  SPEAKER_00: Yeah.
• 22:21
  SPEAKER_04: Yeah, exactly.
• 22:22
  SPEAKER_04: Now, as far as what kind of taxation I think would be best, I sort of do support a value-added tax like they have in the Nordic countries.
• 22:34
  SPEAKER_04: Not the income tax, but the value added tax.
• 22:37
  SPEAKER_04: And so if we had a 15% flat tax, what would happen?
• 22:42
  SPEAKER_04: Well, first of all, the IRS would go away.
• 22:47
  SPEAKER_04: Nobody would have to ever file taxes because it would all be a sales tax.
• 22:53
  SPEAKER_04: And the mechanism was already in place.
• 22:56
  SPEAKER_04: Most states have sales taxes already.
• 22:59
  SPEAKER_04: So it would just be a matter of tweaking the system to add a federal tax.
• 23:05
  SPEAKER_04: And it's a much fairer system.
• 23:08
  SPEAKER_04: Everybody literally pays their fair share.
• 23:11
  SPEAKER_04: Now, in many respects, the rich would still pay more.
• 23:15
  SPEAKER_04: If they go out and buy a billion-dollar yacht or something, there's going to be a huge heavy sales tax on that.
• 23:21
  SPEAKER_04: And that's good.
• 23:22
  SPEAKER_04: That's as it should be.
• 23:24
  SPEAKER_04: But now you're taxing consumption, not production.
• 23:29
  SPEAKER_04: And it makes sense to tax consumption.
• 23:33
  SPEAKER_04: We don't necessarily want to reward people for being consumers.
• 23:37
  SPEAKER_04: We want them to consume wisely, and having a sales tax helps do that.
• 23:42
  SPEAKER_04: So that would be a good thing.
• 23:46
  SPEAKER_04: I think another reason why people are attracted to socialism is they don't understand a really fundamental part of how the world works.
• 23:58
  SPEAKER_04: And it's going to take me a couple of minutes or maybe a little longer to explain this.
• 24:03
  SPEAKER_04: Yes, please.
• 24:03
  SPEAKER_04: Yes, please.
• 24:11
  SPEAKER_04: Let's go run back the clock and start in year one and look at how the world was in year one and the year one was how the world was in the year 1500.
• 24:24
  SPEAKER_04: If we look at per capita GDP, gross domestic product per person, that's a measure of how much on average a person, every person creates, which is also typically on average, has some summons to what they consume, what they can buy, how well off they are.
• 24:47
  SPEAKER_04: From the year one to the year 1500, per capita GDP did not change at all.
• 24:55
  SPEAKER_04: Now think about that.
• 24:57
  SPEAKER_04: The world's progress for 1500 years did not exist.
• 25:03
  SPEAKER_04: There wasn't it.
• 25:04
  SPEAKER_04: The world got no better.
• 25:07
  SPEAKER_04: That's bad.
• 25:08
  SPEAKER_04: I mean, no good progress for 1500 years.
• 25:12
  SPEAKER_04: Now in 1500 years, uh in the year 1500, things began to change some.
• 25:24
  SPEAKER_04: Some countries started allowing a certain amount of capitalism.
• 25:29
  SPEAKER_04: Some kings and queens started allowing a certain amount of capitalism.
• 25:34
  SPEAKER_04: And between 1500 and 1800, per capita GDP increased 40%.
• 25:41
  SPEAKER_04: Now that's astonishing.
• 25:43
  SPEAKER_04: In only 300 years, the average person is 40% better off than they were for the previous century and a half.
• 25:54
  SPEAKER_01: That's huge.
• 25:56
  SPEAKER_01: But that's nothing.
• 25:58
  SPEAKER_04: In 1800, the world changed.
• 26:01
  SPEAKER_04: It was one of those pivotal min moments.
• 26:04
  SPEAKER_04: And what changed?
• 26:06
  SPEAKER_04: The United States.
• 26:09
  SPEAKER_04: The first country in the world to be actually built on capitalism.
• 26:15
  SPEAKER_04: We were the first country in the world to put patents in our constitution.
• 26:21
  SPEAKER_04: And patents is one of the things you have to have if you want to have growth.
• 26:27
  SPEAKER_04: Because who's going to go out and create value if somebody else can take that value from them?
• 26:33
  SPEAKER_04: That's what patents are designed to fix.
• 26:36
  SPEAKER_01: So if we want progress, we need three things.
• 26:41
  SPEAKER_01: We need patents, protection for your uh creative rights.
• 26:49
  SPEAKER_04: We need entrepreneurs, people like Elon Musk to go out there and try and invent stuff, or Bill Gates, or whomever.
• 26:58
  SPEAKER_04: And we need capitalists to fund those entrepreneurs.
• 27:04
  SPEAKER_04: See, I know I have, you probably have, and I'll bet every one of our listeners has at some point in their life said, you know, I've got this great idea for their invention.
• 27:15
  SPEAKER_04: What if we did this?
• 27:16
  SPEAKER_04: But nothing ever happened.
• 27:18
  SPEAKER_04: Why not?
• 27:20
  SPEAKER_04: They were doing the entrepreneur part, but they didn't have a capitalist to fund them actually going out and doing it.
• 27:28
  SPEAKER_04: Because it takes money to go out and do stuff.
• 27:31
  SPEAKER_04: And most of us don't have that kind of money.
• 27:33
  SPEAKER_04: We can't just go out and design a cell phone because it would take that takes you know huge amounts of money.
• 27:40
  SPEAKER_04: And in fact, around it in the late 1700s, actually, James Watt was one of the first people to do that with the steam engine.
• 27:48
  SPEAKER_04: He had this great idea for how to improve the steam engine, but he didn't have the money to do it.
• 27:54
  SPEAKER_04: So he went out and found venture capitalists to fund him to pay for him making prototypes and stuff like that.
• 28:02
  SPEAKER_04: And so from 1800 to today, things have changed dramatically.
• 28:08
  SPEAKER_04: World per capita GDP is 18 times greater than it was.
• 28:15
  SPEAKER_04: Not just 40%, 18 times greater.
• 28:20
  SPEAKER_04: And in the US and the developed world, it's more like 40 times better.
• 28:27
  SPEAKER_04: That's that's astonishing progress.
• 28:30
  SPEAKER_04: Oh, yeah.
• 28:31
  SPEAKER_04: And all of that progress was caused because of capitalism.
• 28:36
  SPEAKER_04: And even in recent history, people don't understand that how how how dramatically capitalism lifts people out of poverty.
• 28:45
  SPEAKER_04: As following the US, as countries began moving more and more toward capitalism, if you look at 1950 to today, in 1950, 36% of the world lived in extreme poverty.
• 29:03
  SPEAKER_04: More than a third.
• 29:04
  SPEAKER_04: Now it's down to 9%.
• 29:07
  SPEAKER_04: And the 9% that are in extreme poverty are in socialist countries, not capitalist countries.
• 29:17
  SPEAKER_01: In North Korea, the average person is living on$2 a day.
• 29:26
  SPEAKER_01: It's horrible.
• 29:27
  SPEAKER_01: Yeah, that's sad.
• 29:29
  SPEAKER_04: Yeah, if people understood that, who in their right mind would be advocating for the U.S.
• 29:36
  SPEAKER_04: to turn to assistance where people would end up making$2 a day?
• 29:40
  SPEAKER_04: Now, people like the Democratic Socialists of America have all kinds of crazy ideas about how they could make that work.
• 29:51
  SPEAKER_04: But they are literally crazy ideas.
• 29:53
  SPEAKER_04: First of all, they have the problem that you can't predict what people are going to want, so you can't plan an economy.
• 30:00
  SPEAKER_04: But beyond that, they've got a lot of other crazy ideas that you could put in place rent controls or build government housing.
• 30:14
  SPEAKER_04: Okay, rent controls, we've got plenty of evidence.
• 30:18
  SPEAKER_04: And as you know, I practice evidentiary economics.
• 30:22
  SPEAKER_04: That means I don't base my ideas on what I want to have happen.
• 30:26
  SPEAKER_04: I look for evidence and find out what happens.
• 30:30
  SPEAKER_04: And we've got tons of evidence that shows every time you put in uh rent controls, people get worse off.
• 30:39
  SPEAKER_04: Why?
• 30:40
  SPEAKER_04: Because let's imagine every one of our listeners goes out today and buys an apartment building.
• 30:47
  SPEAKER_04: Now, when they bought that building, they borrowed money to pay for.
• 30:52
  SPEAKER_04: And they were they put in place an idea in their mind, I'm gonna rent these 10 apartments for$1,000 a month each.
• 31:01
  SPEAKER_04: And so that means I'm gonna be taking in$10,000 a month.
• 31:05
  SPEAKER_04: I can use$5,000 of that to pay on my loan.
• 31:08
  SPEAKER_04: I can use$3,000 of it for uh repairs and stuff like that, and I can make a profit of, say, 10% on it.
• 31:17
  unknown: Okay.
• 31:17
  SPEAKER_04: Now, somebody comes along and puts in rent controls and says, okay, that$1,000 a month you're charging, you could never increase.
• 31:27
  SPEAKER_04: Now, over the next five years, inflation average goes up, say, 20%.
• 31:35
  SPEAKER_04: So now that$1,000 a month you were debting is really only$750 a month.
• 31:42
  SPEAKER_04: But your payments didn't go down, your cost of maintenance didn't go down, and now your profit is completely gone.
• 31:50
  SPEAKER_04: Now, if you were the person, if you were the landlord, what would you do?
• 31:55
  SPEAKER_04: Well, the first thing you have to start doing is cutting back on maintenance.
• 31:59
  SPEAKER_04: And that's what happens.
• 32:01
  SPEAKER_04: The next thing you would do is go, you know what?
• 32:04
  SPEAKER_04: I gotta get out of this deal.
• 32:07
  SPEAKER_04: I'm losing money hand over fist.
• 32:09
  SPEAKER_04: So what do I do?
• 32:10
  SPEAKER_04: Well, I think what I'll do is I'll turn them into condos and sell them.
• 32:16
  SPEAKER_04: And that's exactly what happens.
• 32:18
  SPEAKER_04: So they they take their apartment and sell it for a pretty good profit, typically, because now you're selling it to people that are buying the apartments, not renting them.
• 32:29
  SPEAKER_04: Now you've bypassed rent control, but you've sold the apartments typically to upper class people.
• 32:36
  SPEAKER_04: And what you've done is take away the lower income housing.
• 32:42
  SPEAKER_04: So rent controls always fail because of that.
• 32:46
  SPEAKER_04: It's just a dumb idea.
• 32:48
  SPEAKER_04: Any attempt to control prices, any attempt to control wages always fails.
• 32:54
  SPEAKER_04: Because the world changes.
• 32:58
  SPEAKER_04: And the economically less well-educated don't understand that the economy has to adapt to that.
• 33:09
  SPEAKER_04: And a government is very bad at adapting to stuff.
• 33:14
  SPEAKER_04: First of all, because of its size.
• 33:17
  SPEAKER_04: Imagine you're cruising along in an aircraft carrier at 30 knots, and you need to turn left.
• 33:26
  SPEAKER_04: Okay.
• 33:27
  SPEAKER_04: It's going to take you a couple of miles, literally, to turn that aircraft carrier left.
• 33:34
  SPEAKER_04: Now imagine the same mass as that aircraft carrier, but made up of speedboats.
• 33:41
  SPEAKER_04: They're going 30 knots and they have to turn left.
• 33:44
  unknown: Yeah.
• 33:44
  SPEAKER_04: They're just going to turn left.
• 33:45
  SPEAKER_04: Boom.
• 33:46
  SPEAKER_04: It's done.
• 33:47
  SPEAKER_04: Takes them a couple of seconds.
• 33:49
  SPEAKER_04: And that's the difference.
• 33:51
  SPEAKER_04: Government is too big.
• 33:53
  SPEAKER_04: It's too unified.
• 33:56
  SPEAKER_04: The reason capitalism works is because companies go out of business.
• 34:02
  SPEAKER_04: Because companies change.
• 34:04
  SPEAKER_04: Because companies start.
• 34:06
  SPEAKER_04: Because companies grow.
• 34:07
  SPEAKER_04: It's like the speedboats.
• 34:10
  SPEAKER_04: There's so many of them that they can adapt.
• 34:13
  SPEAKER_01: And so they can look for niches.
• 34:19
  SPEAKER_04: For example, I like to wear really short shorts.
• 34:22
  SPEAKER_04: Just me.
• 34:23
  SPEAKER_04: I don't like those board shorts that hang down to my knee.
• 34:28
  SPEAKER_04: For a while there, I had trouble finding them.
• 34:31
  SPEAKER_04: But it didn't take the capitalists long to figure out that there are enough people out there that like shorts the length I like them that we'll start making those.
• 34:44
  SPEAKER_04: And in my case, I found three companies, but all of them were new startups just to target that market.
• 34:52
  SPEAKER_04: See, government could never do that.
• 34:54
  SPEAKER_04: Government's not going to go, well, yeah, Cardell's over there, he liked all tough.
• 34:58
  SPEAKER_04: You think people should have board shorts, that's what we'll do.
• 35:01
  SPEAKER_04: And that's the problem.
• 35:03
  SPEAKER_04: Government is nowhere nimble enough to address the kinds of issues that capitalism can.
• 35:10
  SPEAKER_04: Now, the downside is companies do go out of business.
• 35:16
  SPEAKER_04: If you can't create value for your customers, you're going to have to close.
• 35:20
  SPEAKER_04: It's just the way, and that's a good thing.
• 35:23
  SPEAKER_04: In fact, one of the big problems with government is bailouts.
• 35:28
  SPEAKER_04: If a comp if a there should be no such thing as too big to fail.
• 35:33
  SPEAKER_04: If you're busy and you're failing, you're that's just life.
• 35:37
  SPEAKER_04: Figure it out, or you're out of business.
• 35:40
  SPEAKER_04: And that's what has always happened.
• 35:43
  SPEAKER_04: If you look from the Dow Jones Industrial Average started to now, none of the companies of the Dow 30 are the same.
• 35:52
  SPEAKER_04: Those original 30 are all gone.
• 35:55
  SPEAKER_04: A few of them aren't gone, but there's a few of them are no longer in the Dow 30, but many of them are actually gone.
• 36:00
  SPEAKER_04: They're completely out of business.
• 36:03
  SPEAKER_04: And it's because they couldn't adapt.
• 36:06
  SPEAKER_04: Um and that's a good thing.
• 36:09
  SPEAKER_04: That's that that's what we want is now that was the part of a lot of what Marx didn't like about capitalism.
• 36:17
  SPEAKER_04: Part of why he created socialism, communism, whichever you want to label it.
• 36:21
  SPEAKER_04: They're basically the same.
• 36:23
  SPEAKER_04: Um Marx didn't like the churning.
• 36:29
  SPEAKER_04: He thought all that change was a really bad thing.
• 36:33
  SPEAKER_04: He thought things should stay the same.
• 36:36
  SPEAKER_04: And he thought the growth that capitalism produced was actually good, but he never got the idea that part and parcel of that growth is the fact that things are constantly churning.
• 36:49
  SPEAKER_04: That people go companies go out of business, people stay, blah, blah, blah.
• 36:53
  SPEAKER_04: And and yes, that has an impact on workers, and that's sad for those workers.
• 36:59
  SPEAKER_01: I feel bad for them, but that's life always.
• 37:05
  SPEAKER_01: You know.
• 37:08
  SPEAKER_01: Yeah.
• 37:09
  SPEAKER_04: Oh, I mean, I guess there might I don't think it's even true for bacteria that they can they could they can start a plan and just stay with it throughout their little life.
• 37:21
  SPEAKER_04: They have to adapt to what happens around them.
• 37:24
  SPEAKER_04: Animals.
• 37:25
  SPEAKER_00: Absolutely.
• 37:26
  SPEAKER_04: Yeah, everything wolves, yeah.
• 37:28
  SPEAKER_04: And and it's true of people too.
• 37:31
  SPEAKER_04: And so um, like a good example is the is a push to increase minimum wage.
• 37:40
  SPEAKER_04: That's always a bad idea.
• 37:42
  SPEAKER_04: If you tamper with wages or prices, you're gonna make trouble.
• 37:46
  SPEAKER_04: So what happened?
• 37:47
  SPEAKER_04: Well, they put in a$15 minimum wage.
• 37:50
  SPEAKER_04: What does that mean to a company?
• 37:52
  SPEAKER_04: Well, typically a grocery store, for example, is working on a two, three, four percent margin.
• 37:57
  SPEAKER_04: Most people don't get that.
• 37:59
  SPEAKER_04: They think grocery stores are making money hand over fist.
• 38:02
  SPEAKER_04: They have some of the smallest margins of any business.
• 38:07
  SPEAKER_04: And so, what did what could they do?
• 38:10
  SPEAKER_04: Now they've got to pay their cashiers a whole lot more money.
• 38:14
  SPEAKER_04: Where do they get the money from?
• 38:16
  SPEAKER_04: They either have to raise prices or eliminate their profits completely.
• 38:21
  SPEAKER_04: Well, obviously they can't do that, they'll go out of business.
• 38:24
  SPEAKER_04: So, what do they do?
• 38:25
  SPEAKER_04: They put in automatic checkout.
• 38:28
  SPEAKER_04: And so what happens is the checkers, instead of getting a raise to$15 an hour, half of them get put out of work.
• 38:36
  SPEAKER_00: Yeah.
• 38:38
  SPEAKER_04: And again, that's I'm I feel bad for those people.
• 38:42
  SPEAKER_01: But part of life, I mean, it was certainly true when I was a kid that many, many people could get a job with some company and stay there their whole life.
• 39:00
  SPEAKER_01: Those days are gone.
• 39:04
  SPEAKER_04: That's and it unless you're working for the state or the federal government or a county or something like that, it's probably not going to happen.
• 39:12
  SPEAKER_04: And even then, it might not.
• 39:14
  SPEAKER_04: Because things change.
• 39:16
  SPEAKER_04: Um, it used to be that teaching was a a career where you could get into it and be sure that you could do that for the rest of your life.
• 39:26
  SPEAKER_04: In Chicago right now, some of their schools are at 3% occupancy.
• 39:35
  SPEAKER_04: Wow.
• 39:36
  SPEAKER_04: Yeah, I mean, they've got a school built for 1,800 people, and there's 27 students there.
• 39:43
  SPEAKER_04: And on average, they're at 46%.
• 39:48
  SPEAKER_04: 46% of their building capacity is actually occupied.
• 39:52
  SPEAKER_04: So what's going to happen?
• 39:53
  SPEAKER_04: The teachers are going to start, are going to be fired or laid off, or however you want to put it, because you can't have five teachers for every student and expect things to work out right.
• 40:04
  SPEAKER_04: Um, of course, the unions are fighting that really hard in Chicago.
• 40:09
  SPEAKER_04: Um, although I should point out that the head of the teachers' union in Chicago doesn't didn't send her own kids to public school.
• 40:18
  SPEAKER_04: She sent them to private school.
• 40:21
  SPEAKER_01: Um, that's right.
• 40:22
  SPEAKER_01: Yeah.
• 40:23
  SPEAKER_01: Yeah.
• 40:24
  SPEAKER_04: Yeah, we're talking about, yeah, just so what would I how would I advise people to avoid all this?
• 40:34
  SPEAKER_04: Well, I I think the first thing is you have to plan to be nimble.
• 40:40
  SPEAKER_04: Like I said, you want to first first of all find out what your talents are.
• 40:44
  SPEAKER_04: And sadly, that's something we never teach in school.
• 40:48
  SPEAKER_04: In fact, we do the opposite in school.
• 40:51
  SPEAKER_04: We don't fail people enough anymore.
• 40:55
  SPEAKER_04: Failure is a really, really good thing.
• 40:57
  SPEAKER_04: Failure, one of my students had a saying, failure is the first step in success.
• 41:03
  SPEAKER_04: And I think that's absolutely true.
• 41:06
  SPEAKER_04: Until you know what you're not good at, you're never going to find out what you are good at.
• 41:10
  SPEAKER_04: Yeah.
• 41:11
  SPEAKER_04: And so if if if I'm in school and I'm getting F's in art and A's in math, that that's important information.
• 41:22
  SPEAKER_04: It's telling me, you know what, maybe you shouldn't think about being an artist.
• 41:25
  SPEAKER_04: Maybe you should look into doing something with mathematics.
• 41:30
  SPEAKER_04: Um so that's the first thing.
• 41:32
  SPEAKER_04: We we have to help people find out what they're good at.
• 41:36
  SPEAKER_04: And then the next thing we don't typically do is try and help people find out what they love.
• 41:43
  SPEAKER_04: And we can do that in schools.
• 41:45
  SPEAKER_04: We do, it's very, I actually taught, created, and taught in a program that did that.
• 41:50
  SPEAKER_04: I mean, we we would have kids write big term papers and stuff, but they could write them on almost anything.
• 41:57
  SPEAKER_04: We encourage them to find out what they really love, and then we would find ways to get the academics in there.
• 42:04
  SPEAKER_04: And so, like, for example, I had a student that loved professional wrestling.
• 42:08
  SPEAKER_04: I said, okay, sure, we can work with that.
• 42:10
  SPEAKER_04: And I had them look at the physics of it.
• 42:12
  SPEAKER_04: You know, how do you build a mat so that you can slam somebody down, a 200-pound guy down on it and not kill them?
• 42:18
  SPEAKER_04: And so he had to he had to study the physics of how they made the mats so they sort of floated.
• 42:24
  SPEAKER_04: So the impact was dramatically absorbed.
• 42:27
  SPEAKER_04: And, you know, how is it you can break a chair over somebody's head and not kill them?
• 42:32
  SPEAKER_04: Well, he had he had to study and find out the physics of breakaway chairs.
• 42:37
  SPEAKER_04: And and all of that was he loved it.
• 42:41
  SPEAKER_04: He was finding his bliss, but actually learning stuff at the same time.
• 42:46
  SPEAKER_04: And so it's it's a very doable thing.
• 42:49
  SPEAKER_04: Um, and then finally, we want to help encourage people to take those things and find ways to create value.
• 42:59
  SPEAKER_04: And I I definitely mean it when I say ways, not a way, because you're likely to have to change.
• 43:08
  SPEAKER_04: I mean, as I told you, I I got a PhD when I was 68 years old.
• 43:15
  SPEAKER_01: I'm 78 now.
• 43:18
  SPEAKER_04: You can change, you can be nimble, you can go, you know what?
• 43:22
  SPEAKER_04: I want to do something else.
• 43:24
  SPEAKER_04: But you have to be able to, you have to have a background that allows you to do that.
• 43:28
  SPEAKER_04: You have to be constantly keeping your eyes open and saying, what could be next?
• 43:32
  SPEAKER_04: What could be happening?
• 43:33
  SPEAKER_04: I know for sure you were a podcast, you were not a podcast host 20 years ago, because there wasn't any such thing 20 years ago.
• 43:41
  SPEAKER_04: So I I don't know what you did before, but I know you recreated yourself to do this.
• 43:46
  SPEAKER_04: True.
• 43:47
  SPEAKER_04: And that's what that's the way life has to be today.
• 43:52
  SPEAKER_04: And I've got another former student, an influencer, you know, and she posts videos every day of her.
• 44:00
  SPEAKER_04: Doing various things.
• 44:01
  SPEAKER_04: And that again, same thing.
• 44:03
  SPEAKER_04: Five years ago, there was no such job.
• 44:06
  SPEAKER_04: But she's doing well doing that now.
• 44:08
  SPEAKER_04: And that we have to constantly be looking at what can I do that I am good at, that I love to do, that will give value to other people.
• 44:20
  SPEAKER_04: And, you know, I can say something else about that that I think is really important.
• 44:25
  SPEAKER_04: And that is, it isn't just about money, folks.
• 44:31
  SPEAKER_04: When I got up this morning, I didn't go, you know, oh darn, I've got to go to work.
• 44:35
  SPEAKER_04: I've got to do this podcast today.
• 44:37
  SPEAKER_04: And I'm betting you didn't get up this morning and go, oh darn, I've got to do a podcast today.
• 44:42
  SPEAKER_04: I got up this morning wired, excited.
• 44:46
  SPEAKER_04: I want to do this podcast.
• 44:47
  SPEAKER_04: I love doing this.
• 44:48
  SPEAKER_04: And I'll bet you do too.
• 44:50
  SPEAKER_04: That's why we're doing it.
• 44:51
  SPEAKER_04: And I'm doing it not only because I love doing it, but because I love creating value for other people.
• 44:59
  SPEAKER_04: I love that you and I are helping our listeners learn about socialism and maybe be able to change their lives.
• 45:09
  SPEAKER_04: And if we can just take change two or three people and make them happy or make them go out there and find their bliss and their talent and create values for others and make money doing that, wow, we've changed the world.
• 45:23
  SPEAKER_04: And and how can you not be excited about that?
• 45:28
  SPEAKER_04: And that's true everywhere.
• 45:31
  SPEAKER_04: That isn't just a podcast guy or an economist guy thing.
• 45:37
  SPEAKER_04: If you're working in a fast food joint and you're sitting there flipping burgers, going, you know, I hate this.
• 45:44
  SPEAKER_04: It's just boring and it's a drag, and it's no fun at all.
• 45:49
  SPEAKER_04: But what if you started looking at that job differently?
• 45:53
  SPEAKER_04: What if you started thinking about the consumer and said, there's a guy coming up to that drive-in window that is either too busy to cook, doesn't know how to cook, doesn't have time to cook, whatever, and they want to get a meal.
• 46:10
  SPEAKER_04: I'm going to make that person the very best meal I can make them.
• 46:16
  SPEAKER_04: My goal today is to make that person's day.
• 46:20
  SPEAKER_04: Well, he bites into that burger.
• 46:22
  SPEAKER_04: I want him to go, oh wow, this is great.
• 46:26
  SPEAKER_04: Yeah.
• 46:27
  SPEAKER_04: If you start looking at the world that way, I guarantee in a week, you're going to feel a whole lot better about your job.
• 46:34
  SPEAKER_00: True, true, yeah.
• 46:35
  SPEAKER_04: If you do it for a month, you're probably going to start getting a promotion.
• 46:41
  SPEAKER_04: Because your boss is going to notice that your customers are a lot happier than everybody else's.
• 47:06
  SPEAKER_01: You're exactly right.
• 47:08
  SPEAKER_01: That's a huge issue.
• 47:11
  SPEAKER_01: Um value only exists in the mind of the consumer.
• 47:21
  SPEAKER_04: Nothing, absolutely nothing, has intrinsic value.
• 47:28
  SPEAKER_04: When I say that, people, what about gold?
• 47:31
  SPEAKER_04: Gold has no intrinsic value.
• 47:34
  SPEAKER_04: Gold has value because we like it, we like it a lot, and there's not much of it.
• 47:41
  SPEAKER_04: All the gold in the world could fit in a building 70 by 70 by 70 feet.
• 47:48
  SPEAKER_04: That's not a very big building.
• 47:51
  SPEAKER_04: Now, can I, how can I, what's my evidence for that?
• 47:55
  SPEAKER_04: Well, I saw a headline not too long ago that said the astronaut Psyche had enough minerals in it that if we were to go there and get it, we could make everybody in the world a billionaire.
• 48:08
  SPEAKER_04: Complete nonsense.
• 48:10
  SPEAKER_04: Let's pretend we did that.
• 48:11
  SPEAKER_04: Let's let's pretend Psyche falls out of its orbit in the asteroid belt, comes into the Earth's atmosphere, breaks up in the atmosphere as comets and meteorites do, and showers the earth with gold.
• 48:30
  SPEAKER_04: So now we've got everybody, we've got three inches of gold everywhere on the earth.
• 48:35
  SPEAKER_04: And psyche has that much.
• 48:38
  SPEAKER_04: Okay, all right.
• 48:39
  SPEAKER_04: Now what's gonna happen?
• 48:41
  SPEAKER_04: I know the first thing I would do, I would hire somebody to come shovel it out of my yard.
• 48:48
  SPEAKER_04: Because now gold would have negative value.
• 48:52
  SPEAKER_04: Who wants three inches of gold in their yard?
• 48:55
  SPEAKER_04: Because the reason gold is valuable is largely because it's so rare.
• 49:00
  SPEAKER_04: So rare, yeah.
• 49:01
  SPEAKER_04: If if if gold is so easy, you just go out in your yard and pick up some, who's gonna buy it from you?
• 49:07
  SPEAKER_04: They can go out in their yard and pick up some too.
• 49:12
  SPEAKER_04: It ceases to have any meaning.
• 49:14
  SPEAKER_04: And and so the value things have are the value we give them.
• 49:22
  SPEAKER_04: And by the way, that's the problem with the minimum wage.
• 49:26
  SPEAKER_04: Because that includes labor.
• 49:30
  SPEAKER_04: If I'm gonna hire, in fact, I I've got somebody working in my house right now.
• 49:36
  SPEAKER_04: If they decide they want a minimum wage of$50 an hour, I'm gonna say, sorry, I'm gonna do it myself.
• 49:43
  SPEAKER_04: Because it isn't worth it to me to pay that much.
• 49:47
  SPEAKER_04: I have to decide what this, and right now he's plastering a wall.
• 49:51
  SPEAKER_04: I have to decide what is it worth to me to have somebody else plaster that wall.
• 49:57
  SPEAKER_04: And that's the only value that job has.
• 50:01
  SPEAKER_04: How many years it took him to learn the skill, how hard it is for him, none of that makes any difference.
• 50:11
  SPEAKER_04: If the thing he has chosen to do is so hard and so requires so much training to do that you have to charge too much for it, you better go find another career.
• 50:24
  SPEAKER_04: I it's sad to say that, but it's reality.
• 50:27
  SPEAKER_04: You know, and that's why minimum wages don't work.
• 50:31
  SPEAKER_04: That's why they replaced checkers with automatic checker machines.
• 50:35
  SPEAKER_04: Because somebody went, you know what?
• 50:38
  SPEAKER_04: I can't afford to pay that much for somebody to check my to for check groceries in my store.
• 50:44
  SPEAKER_04: And in fact, probably the biggest story like that was the women's garment union.
• 50:51
  SPEAKER_04: Back in the 70s, the women's garment union had a series of strikes that were some of the most successful strikes ever.
• 51:01
  SPEAKER_01: The wages went up dramatically.
• 51:06
  SPEAKER_04: And they noticed, though, that people started buying stuff from either non-union states or foreign countries.
• 51:15
  SPEAKER_04: And some of some of our listeners, as old as I am at least, may remember that they started putting these commercials on TV.
• 51:23
  SPEAKER_04: Always look for the union label when you're buying that blouse dresser hat or whatever the.
• 51:32
  SPEAKER_04: And people did look at the label.
• 51:34
  SPEAKER_04: And what they saw was the price.
• 51:37
  SPEAKER_04: And they said, it's not worth it to me.
• 51:40
  SPEAKER_04: I would rather buy something made in Texas, a non-union state, than to buy something made in Massachusetts.
• 51:48
  SPEAKER_04: And then eventually it started looking overseas and saying, I'd rather buy something from Germany, where they don't have unions, than buying something from a union state.
• 52:00
  SPEAKER_04: And what ended up happening?
• 52:03
  SPEAKER_04: In 20 years, there was no longer a women's garment union.
• 52:07
  SPEAKER_04: The whole union collapsed.
• 52:10
  SPEAKER_04: And nowadays, almost no women's garments are made in the U.S.
• 52:16
  SPEAKER_04: That's sad.
• 52:18
  SPEAKER_04: And so when people say, let's fight for high minimum wage, that may work for the time being, but then your grandkids or kids can't find a job.
• 52:29
  SPEAKER_04: And so you've got to, again, I'm not arguing against unions.
• 52:34
  SPEAKER_04: If that's the trade-off you want, if you're willing to take a short-term pay increase to end up getting laid off yourself and your kids not being able to find a job at all, if that's the trade you want to make, fine.
• 52:46
  SPEAKER_04: It's your yeah, that's up to you.
• 52:49
  SPEAKER_01: But it's a losing proposition.
• 52:53
  SPEAKER_01: And so I guess I would one way one way to look at it well, let's do something else first.
• 53:04
  SPEAKER_01: Um people tend to think that that that everybody's contributions should have the same value.
• 53:17
  SPEAKER_01: And that's also false.
• 53:21
  SPEAKER_04: And and that's not necessarily a bad thing.
• 53:25
  SPEAKER_04: In fact, it isn't a bad thing.
• 53:27
  SPEAKER_04: Um I spent a lot of today working on guitar parts for a I'm a musician for a gig we've got coming up, and I've got a lot of friends that are musicians.
• 53:38
  SPEAKER_04: And a lot of them don't do well without a part-time gig on the side.
• 53:45
  SPEAKER_04: And the ones that try and do it without a part-time gig typically don't make a whole lot of money.
• 53:54
  SPEAKER_01: Why not?
• 53:55
  SPEAKER_04: Well, it's a tough business, and too many people don't understand value.
• 54:03
  SPEAKER_01: A lot of my friends that are musicians.
• 54:09
  SPEAKER_01: But the value is so good.
• 54:12
  SPEAKER_04: They pick their s they pick the they choose the songs based on what they really like.
• 54:20
  SPEAKER_04: And if you want to make money doing music, you gotta pick songs that the listeners watch.
• 54:26
  SPEAKER_00: Yeah, what listeners like, yeah, right.