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Anne Bradley on the Economics Behind Terrorism · Liberty + Leadership

• 0:00
  Hello and welcome.
• 0:01
  I'm Roger Ream and this is the Liberty + Leadership Podcast, a conversation with TFAS alumni, supporters, faculty and friends who are making a real impact in public policy, business, philanthropy, law and journalism.
• 0:20
  Today, I'm excited to be joined by Professor Anne Bradley, the Vice President of Academic Affairs at TFAS, where she is also the George and Sally Mayer Fellow for Economic Education. Anne Recently co-authored "The Political Economy of Terrorism, Counterterrorism and the War on Terror." One of her co-authors was TFAS Professor Chris Coyne, who has also been a guest on this podcast.
• 0:46
  The other co-author is Abigail Hall.
• 0:49
  I want to mention that Anne is my first repeat guest.
• 0:53
  It's such a pleasure to have you back, Anne, for what I'm certain will be a fascinating discussion of how the tools of economics can be used to understand and respond to terrorism, as well as a few other topics we'll probably discuss. Welcome, Anne.
• 1:07
  Thank you, Roger. Thanks for having me back.
• 1:10
  Well, your new book on terrorism is fascinating.
• 1:13
  It's a subject I've heard you speak on as well.
• 1:17
  I know the book was published by Cambridge University Press as part of their element series on Austrian economics.
• 1:25
  First, could you give a short answer to a very broad question?
• 1:28
  What is the Austrian School of Economics?
• 1:32
  Sure.
• 1:34
  I love this first question because this is why we wrote the book to provide a new perspective.
• 1:39
  There's been thousands of articles written on terrorism in the wake of 911, I mean, thousands.
• 1:45
  So, to wade through all that, we thought, what could we contribute? So, we thought an Austrian approach is what we can contribute and we hope it provides a new way to think about terrorism.
• 1:55
  Austrian economics, I think, is a broad set of propositions that really helps us understand human behavior, and it really gets its start in 1871 with the publication of Karl Mengers book "Principles of Economics," and then, of course, you can see the descendants and the evolution of the school over time, two big proponents who are Austrians that really worked very hard for kind of fighting for freedom in
• 2:23
  the 20th century: RFA Hayek and his teacher, Ludwig von Mises. And so what were they trying to bring to the table in terms of economic analysis that was new? I think, again, it's a couple of ideas that are universal.
• 2:38
  the 20th century: So, the the first idea here is that the human person is at the core of our analysis always.
• 2:46
  the 20th century: So, we're not dealing with robotic kind of homo economicus some person who has an Excel spreadsheet, kind of always in their head and they're always, kind of hyper rational in the way that we had historically thought about that.
• 3:00
  the 20th century: But rather only individuals make choices.
• 3:03
  the 20th century: Individuals are flawed.
• 3:05
  the 20th century: They don't have all the knowledge they need, and the facts of the world are the facts as they interpret them, as they see them.
• 3:13
  the 20th century: So, our context matters a lot for how we're going to behave. So, the rules that people face, both formal rules and informal rules certainly matter for our behavior. I would say they govern our behavior. So, we look at the marginal ways of thinking about choice, and we looked at the subjectivity of costs and utility.
• 3:38
  the 20th century: So, I think this makes it very different, but also incredibly useful to understand something as hard to wrap our heads around this terrorism, but it can really be used to help us understand any human behavior.
• 3:52
  the 20th century: You mentioned 1871 Karl Munger's "Principles of Economics," and it brought to mind years ago when a new edition of that book was published, I've forgotten who published it in the early 1980s, I reviewed it for the Freeman, and it surprised me how readable it is.
• 4:13
  the 20th century: It's a great introduction to the Austrian school or just economics.
• 4:19
  the 20th century: I love this book because it does very much show that the principles of economics, the economic way of thinking can be applied to a subject like terrorism.
• 4:29
  the 20th century: And that's, you know, something we try to teach in our programs, particularly with our high school programs, is how economics and the understanding of economic principles really explain so much in life.
• 4:42
  the 20th century: It's not something you just think about when you go to the grocery store or the marketplace.
• 4:46
  the 20th century: It's about all these kinds of decisions you make in life.
• 4:49
  the 20th century: So, let's start by understanding how you've applied it to the subject of terrorism.
• 4:56
  the 20th century: The question I would ask is, are terrorists simply bad actors, as obviously they are, but are they just that are they crazed people or do factors such as, you know, supply and demand and cost benefit analysis and opportunity costs provide a framework to look at terrorism?
• 5:19
  the 20th century: I do and we do.
• 5:21
  the 20th century: We think that they very much are important for our analysis.
• 5:24
  the 20th century: And so I want to go back to where this intellectual journey began for me, which was in graduate school, as 911 was unfolding.
• 5:33
  the 20th century: I just remember at that time, I think, very relevant now when you hear kind of political rhetoric around terrorism, but certainly in the wake of 911, when everybody was just absolutely, jaws were on the floor, we didn't know not only what had just happened to us, but really in those early weeks, we didn't know if it was going to happen again.
• 5:55
  the 20th century: So, people were truly paralyzed and terrified.
• 5:59
  the 20th century: When you when you listen to politicians talking at the time, they were reading a narrative that just even as a young graduate student didn't resonate
• 6:10
  with me. The narrative was: "These are just horrible, evil people and we are not going to stop until the horrible evil people are gone." So, we hear the president saying that, we hear other politicians saying that.
• 6:26
  with me. The narrative was: They say it today.
• 6:28
  with me. The narrative was: I think this has unleashed what we now call the war on terror, which has been two decades in the making.
• 6:35
  with me. The narrative was: What economics
• 6:37
  forces us to do is to say: "Is that the right set of assumptions?
• 6:41
  forces us to do is to say: Because our set of assumptions that we begin with informed the kind of the actions that we're going to undertake." And so, I think, we're pretty critical in places in the book about the policies, because I don't think they have started with the right assumptions, which is "these are human beings. Yes, what they're doing is evil.
• 7:00
  forces us to do is to say: We in no way sanction it."
• 7:02
  But we have to say: "Okay, terrorism, has a downward sloping demand curve and it has an upward sloping supply curve," and as the late great Steve Horowitz always said when thinking about economics, he
• 7:16
  said: "Supply is demand in disguise." If that's true, then to fight terrorism in the way we would kind of want to deal with anything else,
• 7:26
  we have to say: "Well, then what is the demand about?
• 7:29
  we have to say: Why do people wake up in the morning
• 7:31
  and say: I'm going to fund terrorism, join terrorism, I'm going to wave their flag, I'm going to support it." And so I think a lot of what we do when we're afraid, we kind of forget about asking those questions and we just do things right to feel better.
• 7:46
  and say: Some of that is understandable, but, this book and really 20 years of me thinking about this is trying to get us to kind of start with those first principles so that we can really craft policy, but it's not even just about policy, right?
• 8:01
  and say: It's about how do you think about a changed world where terrorism is so expensive to undertake as a mechanism for social change or economic change or religious change that the people don't do it?
• 8:13
  and say: They find another way, right?
• 8:14
  and say: That what we're really after here.
• 8:16
  and say: So, these primary assumptions about human beings and their context and their environment, I think are really important when we talk about terrorism.
• 8:25
  and say: Well, it seems like most terrorism seems to emerge in particular parts of the world.
• 8:33
  and say: They tend to be poor and in dysfunctional places.
• 8:39
  and say: There seems to be a religious element to it, but not entirely.
• 8:43
  and say: We've seen terrorism in other religious and non-religious areas.
• 8:50
  and say: How do you explain that?
• 8:51
  and say: Is that relate somehow to what you said about somehow trying to reduce the demand?
• 8:57
  and say: I think it does.
• 8:59
  and say: Right after 911, I think there was a lot of work to try to figure out what causes a terrorist.
• 9:06
  and say: Is there, in fact, really important paper or is there a profile for a terrorist, because what we can
• 9:11
  profile, we can say: "Okay, they're a member of this religion and they come from this country and they have this level of education or lack thereof, they live in poverty." If there's these things that we can put together and create this kind of composite of what a terrorist is, then we can preempt terrorism.
• 9:30
  profile, we can say: What research has helped us understand is we can't do that.
• 9:35
  profile, we can say: It's not just that you don't have an education, it's not that just that you're poor, but what your point, I think, is there are certain areas of the world that are more likely right now to be kind of hotbeds of terrorism, and those places have really broken economic and political institutions.
• 9:53
  profile, we can say: So, if we think about terrorism as a mechanism for social change of some kind.
• 10:01
  profile, we can say: So, that's broad, right?
• 10:02
  profile, we can say: Social change could be religious change and it could be political legitimacy.
• 10:07
  profile, we can say: It could be whatever they're striving for, broadly kind of under that umbrella of social change, that kind of just ruthless violence, if that's the way they believe that they're going to get change, it means they don't have productive institutions to get them that change or to give them a voice in the process for how we think as Americans in particular.
• 10:30
  profile, we can say: If we're upset about a policy, then we have kind of legal and peaceful ways to voice our opinion, both grassroots efforts, but through the political process itself.
• 10:41
  profile, we can say: So, in these countries that don't have that, terrorism is a perhaps viewed as a more likely way to get you what you want.
• 10:50
  profile, we can say: So, we kind of focus on let's look at economic freedom and let's look at because economic freedom helps us understand the institutional environment in which people live.
• 11:02
  profile, we can say: So, it's an easy thing to say these countries need more economic freedom.
• 11:07
  profile, we can say: It's a hard thing to understand how they're going to get it.
• 11:10
  profile, we can say: That's a bigger, longer question, but I think that's where we need to put a lot of our efforts.
• 11:17
  profile, we can say: Well, you note that terrorism is what you call it, an emergent phenomena.
• 11:22
  profile, we can say: Can you explain that?
• 11:24
  profile, we can say: Sure. I think this really stems back from, kind of our thinking as Austrian economists, which is, it is emergent, and what we mean by that is that it evolves out of the environment that these kind of groups and people find themselves in.
• 11:40
  profile, we can say: So, it's a confluence of factors that are coming together that lead to this kind of outcome, which would be, and of course, terrorist groups have different goals, but they obviously share similar modes of operation and kind of things like this.
• 11:57
  profile, we can say: And so, it's emergent over time, which means that it can change, right?
• 12:03
  profile, we can say: So, we're always thinking about incentives.
• 12:06
  profile, we can say: What are the incentives for people to start a terrorist group, join a terrorist group, fund a terrorist group, and what would the world have to look like in that society for those incentives to change such that, again, this becomes a bad idea, It becomes too expensive, right? It's not a good use of your time. And so, it's emergent because of the institutional context.
• 12:32
  profile, we can say: I really think that when you look at terrorism this way, it gives us hope because it means that it doesn't always have to look like it does right now.
• 12:41
  profile, we can say: That said, one of the problems I also have with the way we talk about terrorism is to say that we're going to get it to go to zero, right.
• 12:50
  profile, we can say: With all the right policy uppers, with the right amount of military, with the right amount of money, that we can get zero terrorism.
• 12:57
  profile, we can say: This is just not true, and it's never been true.
• 13:00
  profile, we can say: There's always been terrorism.
• 13:02
  profile, we can say: As long as human beings exist, there will be terrorism.
• 13:05
  profile, we can say: I think 911 was an innovation in the way terrorists were behaving, and that's a bad thing.
• 13:12
  profile, we can say: We don't want them to innovate.
• 13:13
  profile, we can say: We certainly don't want them to get more productive.
• 13:16
  profile, we can say: But it does mean that when we think about incentives changing, we can ask real questions
• 13:22
  like: "Okay, we could have a world with less terrorism," and I think our policies need to be directed towards that question, not how do we get zero because I also think this opens the door for endless wars on terrorism, and that creates other types of unintended consequences that we really want to try to avoid.
• 13:43
  like: Yeah. In your book you open by tracing kind of the emergence of terrorism to, I think, Robespierre and the reign of terror and revolutionary France in the 18th century and you have people like Osama bin Laden.
• 13:59
  like: Now, you wrote your thesis, I think, on al Qaeda, as I recall. He and some of the other leaders of Al Qaida were extremely wealthy people, billionaires, perhaps? I don't know.
• 14:12
  like: From what you just said in responding to that last question, do you see ways that you can change the underlying conditions in a way that Osama bin Laden would not have emerged and become a terrorist?
• 14:25
  like: Can you comment on that perhaps?
• 14:30
  like: Is it required the U.S.
• 14:32
  like: to have been less involved in the Middle East and Saudi Arabia?
• 14:35
  like: Was that his gripe, a different kind of governance in Saudi Arabia, or how would you look at that issue of Al Qaida?
• 14:43
  like: So, you're right.
• 14:45
  like: I mean, if you look at the three leaders of Al Qaida, these were people of high education, a surgeon among them.
• 14:56
  like: Osama bin Laden, was the son of a billionaire family, which is really remarkable to me to this day when I think about that, because he could have had a very different life, but he he chose the path that he that he chose.
• 15:13
  like: Bin Laden himself was very vocal, and so some of that, if we if we pay attention to what he says, at least nominally, we can try to understand kind of the things that motivated him to form Al Qaida, and certainly some of the things you mentioned are relevant.
• 15:31
  like: He was very upset about the direction of the Saudi government, which he viewed was becoming Westernized.
• 15:39
  like: This all happens in the wake of World War II.
• 15:42
  like: In the wake of World War Two, a lot of things are happening, and then many of them are good.
• 15:46
  like: First of all, the world is starting to get richer, the world is starting to get more populous.
• 15:51
  like: There is a demand for oil, with all of that it comes an increased demand push for oil.
• 15:57
  like: So, that's good stuff.
• 16:01
  like: I think the problem is that oil in the post-World War II era has been highly politicized as a commodity.
• 16:07
  like: And so, governments clamor to control oil reserves, and Saudi Arabia, of course, was involved in all of that.
• 16:14
  like: The United States has made alliances with countries based on oil and oil interests. So, it's the politicization of this commodity that I think has led to different types of problems in our international relations.
• 16:30
  like: So, I mean, this is his complaint, that does not justify what he tried to do. The other thing that's going on for Bin Laden, it's really important for the context for him is that he's becoming a man, if you will, I guess, you know, during the Soviet invasion of Afghanistan.
• 16:50
  like: And so, he's boots on the ground fighting that.
• 16:53
  like: And so, he kind of sees, I think, his country being attacked by capitalism on the one hand, and by Soviet Marxism on the other hand.
• 17:03
  like: And so, this radicalizes him.
• 17:06
  like: And so, his response is Al Qaida, which of course, he funds a he develops in the late eighties, and then kind of launches the 911 attacks later.
• 17:19
  like: And in that time, he's practicing, they're learning, they're recruiting, they're raising money.
• 17:25
  like: One of the most remarkable things about the 911 attacks, by the way, is that, you know, this is not kind of high finance.
• 17:32
  like: From what we know, and a lot of the research that was available to me when I was writing my dissertation was in the 911 Commission report, about $300,000 to $500,000 to execute this attack.
• 17:43
  like: They had access at one point to billions al Qaeda.
• 17:47
  like: So, it's not really a money issue, right?
• 17:50
  like: It's a strategy issue.
• 17:51
  like: It's a being very kind of organized training and being very tactical and successful in that, which they, of course, were.
• 17:58
  like: They're not as much anymore the same organization.
• 18:03
  like: I do think that can help us understand why people again, choose to do this versus doing something else.
• 18:10
  like: Well, how about the interplay of economics and economic factors with the religious belief of, I Bin Laden or many of his followers.
• 18:21
  like: Do these work together?
• 18:24
  like: Do they work in conflict with each other? Did you look at all kind of the religious aspects of terrorism?
• 18:32
  like: Sure.
• 18:32
  like: So, for the for the leadership of Al Qaida, this is very important.
• 18:38
  like: Bin Laden himself was very much radicalized as he was forming Al Qaida.
• 18:43
  like: But you have to kind of think and my own dissertation on this, I really spent some time kind of looking at how Al Qaida is organized as a group, just because the leaders are very committed to a certain religious ideology and want to form a group around it, doesn't mean that everybody they're attracting to the group is going to hold those same sympathies.
• 19:04
  like: So, they have to kind of figure out right, how to kind of get people to commit to the group and to fulfill this obligation.
• 19:16
  like: So, I think about it as kind of a militaristic bureau.
• 19:21
  like: So, they operated in a very top down mannerism, right?
• 19:25
  like: So, the leadership knew what was going on.
• 19:27
  like: They control the flow of information.
• 19:29
  like: They also isolated people from their families once they joined Al Qaida, and that's very necessary to get the mission accomplished.
• 19:37
  like: And so, but from that, we shouldn't assume that kind of ground recruits that were hired by Al Qaida have the same religious commitments.
• 19:50
  like: And so, religiosity within a terrorist organization can be very important, but it's not necessarily equally shared.
• 19:58
  like: And so, group isolation within the terror organization allows them to radicalize, because you take them away from other influences and you have a place to foster that commitment.
• 20:14
  like: The corollary in the market economy maybe of a firm.
• 20:18
  like: So, think about the CEO of a firm cares a lot more about the firm and the brand than the secretary.
• 20:29
  like: So, how do you get the secretary to care? Well, you pay them well.
• 20:32
  like: You create a culture in the firm.
• 20:34
  like: You do all these things that are good, right?
• 20:36
  like: Because it gets the people that you're hiring to have a higher level of a commitment than they would otherwise, and that helps the firm be productive.
• 20:44
  like: So, terrorist organizations, military organizations, they're going to do the same things.
• 20:49
  like: So, I did look at kind of the level of religion, but I think it's important to understand that they're not necessarily only trying to get religious goals.
• 20:58
  like: I think in many cases they're using religion as an excuse to be able to do what they want to do, and they're controlling the narrative about what that is.
• 21:09
  like: It's interesting to look at a terrorist organization like a firm.
• 21:11
  like: The actual young men who hijacked the airplanes and crash the airplanes on 911.
• 21:21
  like: Did they have any particular approach to that, to controlling them so that you send these young men into the United States and you want them to stick to their assignments?
• 21:32
  like: How they deal with that?
• 21:35
  like: Yes. This is probably the riskiest part of what they were doing, because then you lose control.
• 21:41
  like: The monitoring costs, that's kind of the economic language we would use there are very high, once they're out of your sight.
• 21:49
  like: So, you've trained them on the ground.
• 21:52
  like: Now you give them plane tickets and you send them to United States.
• 21:55
  like: What I found fascinating about this is that there's a paradox here, because they were told to blend in. You need to look you need to look like you belong in Florida.
• 22:05
  like: So, they were told to get jobs and get gym memberships and have girlfriend and go to the bar after work, go to a happy hour.
• 22:13
  like: This is what Americans do.
• 22:15
  like: But in doing all of those
• 22:17
  things, you might say: "Hey, this is this is pretty good.
• 22:20
  things, you might say: I like to have a job.
• 22:21
  things, you might say: I like going to the gym.
• 22:22
  things, you might say: I don't want to be the the muscle man on the airplane or the pilot who is doomed to death if we're successful." So really, the leadership thought about it, and probably had to make very careful decisions about how long to let them be there, because if it's too long, if they're there for two or three years or something like this, you might just abort the mission. And of course, this hurts the goals of Al Qaida.
• 22:46
  things, you might say: And so, the monitoring costs of the participants of the organization become really problematic. So, you really have to get them bought in way before that happens, and then you let them go.
• 22:59
  things, you might say: And then with any kind of mission like this, it could fail, but you don't want them to fail because they fell in love with life in America, which is, of course, a real possibility.
• 23:08
  things, you might say: Does your analysis in this book help us at all in looking at the horrendous attack of October 7th in Israel by Hamas? Is there a way that we should be responding to it or I don't know if you've had time to kind of use that framework and looking at what happened in Israel?
• 23:31
  things, you might say: Oh, we haven't. I haven't written anything on it at this point.
• 23:34
  things, you might say: But here's what I think is the most important.
• 23:38
  things, you might say: When something so vile and so horrific happens to innocent people, which is exactly what terrorists do.
• 23:49
  things, you might say: That's their intention.
• 23:50
  things, you might say: That's their goal.
• 23:51
  things, you might say: In fact, that's how we define what it is. Noncombatant targets.
• 23:56
  things, you might say: So, surprise attacks that are vicious and ruthless and evil.
• 24:02
  things, you might say: That's their whole point of existence. And so, I think when we watch something like this, it is impossible to respond.
• 24:12
  things, you might say: What do we do?
• 24:14
  things, you might say: How do we respond?
• 24:15
  things, you might say: Think about the United States after 911.
• 24:19
  things, you might say: It's hard to kind of even know how to take the next steps.
• 24:22
  things, you might say: I do think we should use the kind of economic way of thinking
• 24:29
  to say: "Well, what do we do next?" I think that's important.
• 24:34
  to say: How should Israel respond?
• 24:36
  to say: Thinking about incentives.
• 24:38
  to say: Thinking about not just the short run, but also the long run, because the goal is to, not just stop Hamas now, but how do you kind of dismantle it entirely for the future?
• 24:53
  to say: It is a terrorist organization.
• 24:55
  to say: So, that's how we need to think about it.
• 24:57
  to say: What I like about the economic way of thinking, too, is it allows us to kind of ask a series of questions, and it's not that we shouldn't be emotional.
• 25:09
  to say: I think there's a place for that, of course, but it allows us to kind of reason through these questions to
• 25:13
  say, okay: "What should we do?" I think we're going to navigate really tough waters in the next couple of years potentially.
• 25:23
  say, okay: And so, I don't have all the answers of what we should do, but I really do think, kind of Hamas is still kind of a group of people that are behaving in a certain way, and those group of people respond to incentives.
• 25:39
  say, okay: So, that's how we have to think about the future.
• 25:43
  say, okay: I think it's really important for us to do that, because I think if we just kind of throw reason out
• 25:48
  the window and say: "Well, it doesn't matter, we just have to try a lot of policies and see what works." That's how we actually get lots of unintended consequences.
• 25:56
  the window and say: We don't want, you know, kind of to throw kindling on the fire.
• 26:01
  the window and say: So, yeah, I absolutely do think it's important for us to think this way, and I think we need to just be very cautious about kind of proclaiming what the right answer is.
• 26:11
  the window and say: It's very hard to do that in these in this moment.
• 26:15
  the window and say: Even after Israel has gone after a lot of the terrorists responsible for the attack on October 7th, and it's destroyed some of them, some of the capacity there and some of the leadership and is hoping to get the rest of the leadership, then perhaps we need to figure out how do you bring about a situation, institutions and ways to prevent others from coming up and creating an organization that will continue to engage in such acts.
• 26:49
  the window and say: I agree with that.
• 26:52
  the window and say: When I talk about terrorism in general, the analogy in my mind is the arcade game, Whac-A-Mole.
• 27:00
  the window and say: So, you whack the mole and you feel successful, and then the mole comes back up later in a different way, in a different shape and a different form with a different strategy.
• 27:11
  the window and say: In the last 20 years, in the post-9-11 era, that's what we've seen. We've had some victories, but we really haven't gotten less overall terrorism.
• 27:22
  the window and say: So, what economics says is we have to do it differently.
• 27:26
  It doesn't say: forget about it, don't do anything, but I also think, kind of to a point that you were just making, we have to also understand the limits of U.S. foreign policy.
• 27:37
  It doesn't say: It is not magic.
• 27:38
  It doesn't say: It's not a magic wand.
• 27:40
  It doesn't say: If we could just kind of wave a wand, if, for example, if we think about Al Qaida and the Taliban
• 27:44
  and Afghanistan and just say: "Well, we know economic and political freedom are good, so let's make Afghanistan have both of those things." Of course, that's if they have both of those things, we'll probably have much less of a problem with terrorism, but U.S.
• 27:59
  and Afghanistan and just say: policy cannot make Afghanistan rich and free.
• 28:02
  and Afghanistan and just say: Now, there are certain things that we can probably do to help that are diplomatic, that happen through trade. I think there are avenues we can pursue, but I think and we really talk about this in the book, that the policymakers have a knowledge problem.
• 28:16
  and Afghanistan and just say: And so, Hayek and Misos use this to argue against socialism, and we use it to argue against kind of top-down anti-terrorism or counterterrorism planning. We don't know all the right things to do.
• 28:31
  and Afghanistan and just say: We know where we want to be, but we don't know how to get there.
• 28:33
  and Afghanistan and just say: So, humility is the biggest lesson in the economic way of thinking. We need to use it now more than ever, probably.
• 28:41
  and Afghanistan and just say: That's a good summation there, I think. It's just like we can centrally plan and manage domestic policy and the economy internally through mercantilism and protectionism and all sorts of industrial policy.
• 28:55
  and Afghanistan and just say: We can't just put in smarter people or our people in charge of foreign policy and expect to solve these problems and eliminate terrorism.
• 29:06
  and Afghanistan and just say: We can't like hire McKenzie or something, I mean, they're great, but we can't it's not that kind of a problem. It's a complex phenomenon.
• 29:14
  and Afghanistan and just say: And so, it requires different ways to think about it.
• 29:18
  and Afghanistan and just say: Well, shifting a little.
• 29:19
  and Afghanistan and just say: Last time you were on the podcast, we talked about grocery stores, which is one of your favorite teaching tools and a very effective one at that.
• 29:30
  and Afghanistan and just say: Well, two months ago, Chicago's mayor proposed the whacko idea of a city run grocery store because Walmarts were pulling out due to all the theft and shoplifting that Chicago wasn't trying to deter.
• 29:44
  and Afghanistan and just say: You wrote a piece on it for the Acton Institute.
• 29:46
  and Afghanistan and just say: You want to talk about that topic for a minute, so we can cover some other ground before it's time to end the podcast?
• 29:53
  and Afghanistan and just say: Sure.
• 29:54
  and Afghanistan and just say: I have to say, I saw this article in the paper about Mayor Johnson wanting to do this,
• 30:00
  and I wrote to my editor and I said: "This is a really stupid idea.
• 30:03
  and I wrote to my editor and I said: Can I please write about it?
• 30:04
  and I wrote to my editor and I said: I'll be nice." So, he
• 30:06
  said: "Sure, that will be fun." So, I did it, and it's just unbelievable, right?
• 30:14
  said: This idea is unbelievable that the problem, one of the biggest problems in Chicago is that it really goes back to, three years to the pandemic, is that there's a looting and rioting and retail.
• 30:27
  said: There's kind of this lack of law and order to deal with it.
• 30:31
  said: And so, retail stores are closing and Walmart is the world's biggest grocer.
• 30:36
  said: There were eight Walmarts in the city of Chicago and four had closed. After the fourth has closed, also kind of unbelievable, the mayor and community leaders came and they kind of sat outside
• 30:50
  a Walmart and they said: "If you don't open the stores, we're going to boycott them." Talk about cutting off your nose to spite your face. So, it's like you actually need more Walmart.
• 31:00
  a Walmart and they said: So, I don't know how you're going to get people to boycott the few that remain.
• 31:04
  a Walmart and they said: He offered to let's just open a municipal grocery store, basically a city run grocery store. So, it doesn't take a lot of economics to understand that this is a bad idea and it's not a good idea because he has bad intentions, perhaps.
• 31:20
  a Walmart and they said: It's a bad idea because again, back to,nthe insights of Austrian economics is that, how do they know? How do they know what to stop? I'm always mesmerized when I walk into a grocery store in my neighborhood or my community.
• 31:36
  a Walmart and they said: Just think about how many varieties of potatoes are there and how do they know that's the right amount, right? If there's different potatoes in a couple of years, how do we shuffle those quantities?
• 31:47
  a Walmart and they said: Nobody knows.
• 31:49
  a Walmart and they said: It's learned through the process of exchange that's back to that emergent phenomenon.
• 31:55
  a Walmart and they said: And so, I think the best situation that will happen if this happens in Chicago is that you'll have a government run grocery store that will behave something like the post office or the DMV, which is basically long lines, it won't be beautifully stocked all the time because the economy in a store is not the product of someone's imagination.
• 32:19
  a Walmart and they said: Now, we're not dealing with a fully socialized economy, so I don't think it's necessarily going to look like something you saw in Soviet Union.
• 32:26
  a Walmart and they said: One shoe size for everybody or something like this, but it's just a really bad idea.
• 32:30
  a Walmart and they said: It also opens the government to running more commerce, which is the opposite of what we want, and it's the opposite of what Chicago needs.
• 32:38
  a Walmart and they said: So, it just presented itself as a great opportunity for me to
• 32:42
  say: "Look, economics, economics, economics." That's how we kind of walk through these problems and they face real problems. But I think there's easy answers, certainly easier than running a government owned grocery store.
• 32:55
  say: Well, you've studied and you teach the benefits of economic freedom.
• 33:02
  say: You love to do it through stories, which is great.
• 33:04
  say: I think that's gives a stickiness to the principles and helps students understand them, in our courses that you teach in and the lectures you give.
• 33:15
  say: You've also talked about how entrepreneurship and innovation and invention in a free society has helped you personally and your family and your children.
• 33:25
  say: Would you mind sharing one of those personal stories?
• 33:28
  say: Oh, sure, I would love to.
• 33:30
  say: So, kind of the short version of the story, is that my son, who's 14, his name is Parker, he was diagnosed with type I diabetes about seven months ago.
• 33:41
  say: So, earlier this year.
• 33:43
  say: It has been absolutely, I don't know what the word is, but it's very overwhelming for our family.
• 33:50
  say: There's a grief associated with it even though he lives a normal life, he just has to think about kind of everything he puts in his mouth.
• 33:59
  say: He just he has a lifelong dependency on insulin now. So, I've learned a lot about diabetes.
• 34:06
  say: I've learned a lot about insulin, things I was able to just be purely ignorant of before.
• 34:12
  say: As I started thinking, I kind of can't help myself
• 34:15
  sometimes I thought: "Well, what was it like before?" When we found out that he had diabetes, he was asked to go to the hospital, and you basically have to stay in the hospital until they're pretty sure you can become you can be insulin dependent on your own. So, he has to take his own shots and read his own sugars and things like that. So, we did that.
• 34:38
  sometimes I thought: Just a few weeks ago, two weeks ago now, he got fitted for what's called an omni pod, which is basically a pump that gives him insulin and he has a glucose monitor on his arm and those devices talk to each other.
• 34:51
  sometimes I thought: So, if his sugar is very high, he gets some insulin.
• 34:58
  sometimes I thought: It's amazing, and all of this is innovation, again, that I was just completely ignorant of just a year ago.
• 35:05
  sometimes I thought: I did a little research and this is one of the stories I tell, but in 1918, children who had pediatric type I diabetes were kept in what they called death wards in hospitals, because if you had type one diabetes, all you could do was eat a high fat, high protein diet.
• 35:26
  sometimes I thought: And they say it might extend your life up to a year, but it was it was a death sentence just a hundred years ago until the invention of insulin, which was invented by doctors who had kind of diagnosed that the pancreas was the problem, but they were trying to figure out what to do.
• 35:42
  sometimes I thought: And so, today, 24 countries have no insulin access.
• 35:47
  sometimes I thought: So, if you are a child or an adult and you live in those countries, you're living at least 100 years behind.
• 35:57
  So, I always say to my child: "I hate that you have this, but I'm so glad if you're going to have it, we live in the United States, we live in a lot of economic freedom." It is not very cheap to have these devices that he has, but he gets he gets a shot at a pretty normal life.
• 36:15
  So, I always say to my child: That's not because we're better or smarter or more deserving, it's because we live in a lot of economic freedom, and thank God for that.
• 36:22
  So, I always say to my child: So, I think those stories and we all have them.
• 36:27
  So, I always say to my child: Seatbelts save our lives.
• 36:28
  So, I always say to my child: Fluoride toothpaste saves your life, right?
• 36:31
  So, I always say to my child: A root canal saves your life.
• 36:33
  So, I always say to my child: So, we just think of those things as kind of ordinary.
• 36:36
  So, I always say to my child: I think we should think about them as extraordinary, and we need to remember that there are people today alive that don't get some of these things and we want to extend that to them. So, I try to use the stories to help my students understand that this is not just a trade deficit, GDP stuff they think is boring, right? But this is humanitarian and the way to kind of contribute to human flourishing for their children and later their grandchildren is to advance economic freedom.
• 37:05
  So, I always say to my child: So, I think stories are a really helpful tool for us to do that.
• 37:09
  So, I always say to my child: I saw something in Johan Nordberg work recently
• 37:13
  that said: Today your odds of living to retirement age are greater than your odds of living to be one year old, and that's this is the first era where that's true.
• 37:27
  that said: Of course, in the past, until 100 years ago, the number the amount of time you spent in retirement was zero.
• 37:34
  that said: You worked until you died.
• 37:35
  that said: You worked, and you might have died at work.
• 37:38
  that said: Now, the average person spends six years in retirement, but it used to be more likely to die before you turn one than that you got to retirement. I mean, it's incredible.
• 37:47
  that said: It's remarkable.
• 37:48
  that said: Maternity was the leading cause of death for women. So, we've come a long way, in 100 years or 100 years, in the case of insulin and your son.
• 37:58
  that said: The stories you tell are great.
• 38:01
  that said: Well, Anne, one last question.
• 38:03
  that said: You've hit the road this fall and this year really extensively to go out to college campuses to talk about the connections between capitalism and human flourishing, economic freedom and human flourishing. You've talked about the economics of terrorism.
• 38:18
  that said: We see all these depressing surveys about support for socialism among young people, even though they don't really know what it is in many cases.
• 38:27
  that said: But what kind of response do you find on campus?
• 38:29
  that said: Maybe you're speaking to mostly friendly audiences, I don't know.
• 38:32
  that said: Are you getting the message across to young people?
• 38:36
  that said: Are you seeing receptive young people listening to you?
• 38:41
  that said: I think that there is some reception.
• 38:45
  that said: I think there are mixed crowds.
• 38:46
  that said: I think some are sympathetic and sometimes maybe not.
• 38:50
  that said: So, I think it's not too hard to kind of disabuse people of the romanticism about socialism once you start to explain what that entails, both, kind of what you have to put into it and what you get out of it, which is of course, not much.
• 39:11
  that said: I think where people have a lot of questions right now, where they're wrestling young people is about kind of thinking about equity, thinking about inequality, thinking about is there too much, right?
• 39:26
  that said: Can I be too rich?
• 39:27
  that said: Can I have too much stuff?
• 39:28
  that said: Do the rich have a different type of responsibility to the rest of us because they're so rich? And so, again, I think that opens an amazing opportunity for us to talk about the benefits, the egalitarian benefits of innovation.
• 39:45
  that said: So, you know, Jeff Bezos is pretty rich because of his idea, but we are, too.
• 39:52
  that said: We're a lot richer collectively than he is because of his idea.
• 39:55
  that said: So, we just have to kind of walk through those, but I think that there are concerns about, thinking about the rich and what they should get, and I think that also allows us to talk about the problems of corporate welfare and really having the rule of law in our society where the rich don't kind of write the rules. And so, I do think that there's points of agreement I have with that, and that allows me to speak into that with them and open a conversation.
• 40:22
  that said: I had lunch with a friend in New York two weeks ago and
• 40:25
  he said to me: "You know, I'm a socialist.
• 40:29
  Did you know that?" I said: "Well,
• 40:30
  no, I didn't." He said: "Well, I'm a socialist because I I want everyone to have an opportunity to get a good education.
• 40:36
  no, I didn't." He said: I want people to have good health care, and I want people to be secure if they lose a job or can't work."
• 40:44
  And I said: "Well, I want all those things too, and that's why I'm not a socialist. That's what I like freedom." It was an interesting conversation because he had never looked at it that way, that you need free markets and economic freedom to have enough wealth in the society that you can provide those things.
• 41:01
  And I said: So, even if you're a socialist, you need capitalism.
• 41:05
  And I said: Otherwise you're Venezuela or Cuba or country can't provide good health care and education to people.
• 41:11
  And I said: And fortunately, in a free society with economic freedom, those things become available at the rate at which they become available has accelerated so much.
• 41:20
  And I said: It used to be 20 years when a new product came along before it penetrated the population, widely. Now, it's a matter of months usually when that first technolog, technological innovation becoming better and cheaper and available to so many people.
• 41:36
  And I said: Yeah. TVs are something like 98% cheaper than they were in 20 years ago.
• 41:42
  And I said: And they're bigger and better.
• 41:44
  And I said: Bigger and better. So, we need that for medicine. We need that for education.
• 41:48
  And I said: So, I agree with you. I think that is important is we meet people where they are and we find points of agreement.
• 41:54
  And I said: So, I would say I agree with you too, but kind of does socialism get you solutions to those problems.
• 42:03
  And I said: That's what we have to walk people through. Is it good intentions aren't enough that our intentions have to be aligned with the outcomes and what economic systems foster those outcomes?
• 42:13
  And I said: Well, thank you, Anne. It's been wonderful. Thank you for the work you do at TFAS, through our high school and university programs and our professional programs.
• 42:22
  And I said: You really make a difference and we're grateful for it.
• 42:26
  And I said: Oh, thanks, Roger.
• 42:27
  And I said: I love doing it.
• 42:28
  And I said: So, thank you for letting me.
• 42:29
  And I said: Well, it's wonderful to have you as my first repeat guest.
• 42:32
  And I said: So, we'll do it again.
• 42:32
  And I said: Yes, thank you for that.
• 42:33
  And I said: Hopefully I'll earn a spot back in the future.
• 42:35
  And I said: That's right.
• 42:36
  And I said: Thank you.
• 42:39
  And I said: Thank you for listening to the Liberty + Leadership Podcast.
• 42:42
  And I said: Please don't forget to subscribe, download, like or share the show on Apple, Spotify or YouTube or wherever you listen to your podcasts.
• 42:52
  And I said: If you like this episode, I ask you to rate and review it.
• 42:56
  And I said: And if you have a comment or question for the show, please drop us an email at podcast@TFAS.org.
• 43:00
  And I said: The Liberty + Leadership Podcast is produced at kglobal studios in Washington, D.C.
• 43:09
  And I said: I'm your host, Roger Ream, and until next time, show courage in things large and small.