– [Moderator] Good afternoon, welcome. My name’s Doug Irwin. I’m a– – [Man In Audience] I
don’t think the mic’s on. – Mic, can you hear me? – [Man In Audience] No. – Can you hear me now? – [Man In Audience] No. – I’ll have to shout. Good afternoon, thank
you very much for coming. My name is Doug Irwin. I’m a professor in the
economics department and Co-Director of the Political Economy Project here at Dartmouth. I’m here with my
Co-Director, Russ Muirhead from the government department
for this afternoon’s event. Because he won’t say so, I will say so. Today’s a very special day, because his new book
has just been published, A Lot of People Are
Saying, A New Conspiracism and the Assault on Democracy, available from Princeton University
Press, Amazon.com. – [Woman On Panel] Here, here. (audience applauds) – It’s been featured in Vox, The Atlantic, the New Yorker just this week. So I’m sure it will
get a lot of attention. A lot of people are
saying it’s pretty good. I can’t vouch for that myself,
but that’s what’s going on. I also want to thank
the Rockefeller Center, in particular the Director Andrew Samwick and a very special person
who’s really responsible for this event Joanna Needham. Please, she’s up there in the back. (audience applauds) And she is the maestro of this whole event and so much that Rockefeller does. And we’re deeply grateful for everything she does in her support. Last fall The Economist
Magazine ran a debate on the issue of is capitalism rigged. And there were two participants in that debate Deirdre
McCloskey and Jason Furman. So we thought it would be a good idea to take their short excerpts from what they had done
and have this debate here at Dartmouth where they could engage with one another and explore
the issue in greater detail. Now this is a topic I think
that, no, needs no introduction, because obviously a rising concern about inequality, rising concern about the power of big business and concentration, increasing concern about an urban, rural divide and have and have-nots in the
United States and elsewhere. So, obviously it’s a very important topic. Unfortunately, Jason Furman
who is now Professor of the Practice at the Kennedy
School of Government at Harvard could not come
at the very last minute due to a family and medical emergency. But he’s going to be
coming in the fall we hope. But we do have Deirdre McCloskey from the University of Illinois here with us today for this conversation. Let me introduce her. She has since the year
2000 been Distinguished Professor of Economics, History, English, and Communication at the
University of Illinois at Chicago. She got her PhD in economics
at Harvard University. And then went out and served on the faculty of the
University of Chicago for more than 10 years. She is a prodigious, in terms
of her scholarly output. She has published 16 books. She’s edited seven more. She’s published over 300 articles on economic history,
economic theory, philosophy, rhetoric, feminism, ethics, and the law. – And statistics. – And statistics. She describes herself as
a literary quantitative post-modern, free market,
progressive, Evangelical Mid-Westerner, formerly
from New England, woman, formerly a man, Christian, libertarian, not a conservative humanist. (audience applauds) And I think that self-description
gives you a sense for the range of her scholarly interests, her personal interests and what have you. She’s written so many works you ought to go to her website where
there are many articles, interviews, and mentions
of her past books. But she’s most noted for
what she’s been doing over the past decade or
so, the bourgeois trilogy, starting with Bourgeois Virtues, Ethics for an Age of Commerce, Bourgeois Dignity, Why Economics Can’t
Explain the Modern World, and Bourgeois Equality,
How Ideas, not Capital or Institutions Enrich the World. This is a mammoth undertaking, and I highly recommend the trilogy to you. But she also, that not being
enough, has a book coming out this October from Yale
University Press entitled Why Liberalism Works, How
True Liberal Values Produce a Freer, More Equal,
Prosperous World for All. So what we’re going to be doing this afternoon
is Professor Muirhead and I will be engaging in a discussion with her on these issues
for about a half an hour. Then we’ll open it up to
Q and A from the audience. And we’ll interrogate her on her views and play Jason Furman in terms of what he would’ve said perhaps, how she would respond
to some of the concerns about whether capitalism is rigged today. So, join me in welcoming
Deirdre McCloskey. – Thank you. (audience applauds) Thank you very much. I’ll stand for my open. But by the way I’m not Evangelical. That has a special meaning. – Did I say?
– I’m an Episcopalian. The frozen chosen. (audience laughs) I’ll stand for and in initial statement. I have a speech. And a defect I’ve always stuttered. As I get older, it gets less prominent. And I’m in an occupation where you have to speak all day. So, I haven’t stopped… I, it improves as you’ll see. So, the question is,
isn’t capitalism rigged. I got a lot of objections to the question. That’s always a good
academic trick, gamesmanship. Attack the questioner. (audience laughs) For example, I don’t think the word capitalism is appropriate. As you can tell from the
title of my last book, capital accumulation is
not what made us rich. And yet even my hero, the
blessed Adam Smith introduced, he’s the one who
introduced this idea, that capital is essential,
that how the highlands of Scotland become closer
to the model of economic success in the 18th
century, namely Holland. And he said, well, if
there was more capital and that was, it was correctly allocated, then even the wild Highlanders,
of which he was not an example, would be as
prosperous as the Dutch, which was not terribly
prosperous by modern terms. The Dutch at the time in modern prices, prices you’d face at Hanover,
earned, now hear this, about $6 a day per person. Imagine trying to get along
in Hanover, especially in January on $6 a day. And that was the condition
of the most advanced economy in the world in 1800. So what happened? Well what happened is an amazing increase which I call the Great
Enrichment that brought, say, the US economy which
was little bit poorer than the Dutch in 1800
to $130 a day per person in the United States. England, again approximately
the same as the Dutch in 1800, to $110 a day. Unspeakably poorer countries like Finland and Japan in 1800 are
now at the $100 day a day or a $110 a day level. My ancestors in Norway,
I’ve got a Irish name, but I’m 1/4 Norwegian, the, were again unspeakably poor in 1800. And now because of the
oil, not just the oil, but because there a
modern well functioning capitalist economy, they
are at about $140 a day. This annoys the Swedes very
much who have been accustomed for many centuries to viewing the Norwegians as their country cousins. So, the there’s an amazing
event that just happened and is continuing to happen
and will continue to happen. My books are in the end optimistic about the future of what I would rather call instead
of capitalism, innovism. I have a longer much
clumsier phrase explaining it, commercially tested betterment. It’s betterment. It makes people better off. It’s commercially tested
in the sense that it, these improvements,
electric lights, carpet, and this projection
system, and so forth, have to face a commercial test. They have to, people have to
be prepared to pay for them or they’re not gonna happen. And so, there’s this
amazing event that I’m old. Don’t guess how old I am. But I’m old. I was born in, well no I shouldn’t say. (audience laughs) I’m very old. I was born at the height of
the Battle of Stalingrad if to give you an idea. Those of you who are sophisticated
in history will know how. And in my lifetime, country
like the United States which encourages commercially
tested betterment has its life has been transformed. In the early ’40s income per
head in the United States was about what it is now, today, in Brazil. And the older people among
us can remember not having air conditioning, not having
the internet, not having 400 channels of rubbish on your cable TV. So, it’s not capitalism. It’s innovism. And here’s a terribly important point. If we’re gonna talk about
the system, this innovism, these markets, yes the
government has a role. I’m not an anarchist, but it should have in my opinion, a much smaller
role than it does now. But in any case, if we’re gonna talk about this system and criticize it and say well, it’s rigged,
and geeze the poor are poor and this is very bad, we have
to think of the alternatives. And the adults here,
and I take it everyone in this room is an adult knows that there’s no free lunch,
that there’s no, there, and especially there’s no fairy dust. You can’t take the fairy dust and sprinkle it on the society and get things that are impossible. For instance, a perfectly
egalitarian society, judging by results, say, income, and yet a society in which people’s
particular gifts are evoked in a way that makes us all better off. Take the case of baseball players. I’m a Cubs fan, as you might expect. I was once a Red Sox fan. I was a Red Sox fan until
September or October 1967 when they were beaten by
those monsters from St. Louis and then I just gave it up.
I couldn’t stand it anymore. I was raised in Boston. So, I’m a Cubs fan. And baseball players these
days are paid these astonishing sums, $10 million for a
relief pitcher who comes in 15 times in the season. And would we want it any other way? Well you have to ask
what the alternative is. The alternative is that the
owners take all the gains of this officially sponsored,
government sponsored monopoly called major league baseball. And that’s how it was
in the old days, 1930. Babe Ruth was asked, this is
the, Hoover had just started to experience the horrors of the Great Depression, President Hoover. He was asked aren’t you ashamed Babe that you earn more than the
President of the United States. And his reply was I had a better year. (audience laughs) But even Babe Ruth
didn’t make anything like what he earned for the Red, not the Red Sox, darn it, for the Yankees. So, I don’t like the word capitalism. Ca, piling up bricks or
BAs without new ideas, without the innovation that’s evoked by the word innovism is pointless. If we wanted to, Dartmouth College which of course is rolling
in dough, could make another room like this, put it right next door. And then make another one and
another one and another one. Obviously that would be stupid. It wouldn’t raise the educational productivity of Dartmouth College, right. There would be diminishing
returns as economists say, which is, yeah that’s right. That’s the adult reality that piling up money, bricks, even
Dartmouth BAs is not the way to a factor of 30, 3,000% represented by the increase since 1800,
3,000%, not a doubling, not even a tripling, but a factor of 30. I presented this argument to the great Cambridge University department of cultural
anthropology last fall. And a great anthropologist
whom I admire very much got up and said at the end of
me saying factor of 30. That is about 3,000%. He got up and said, well I agree with you on the factor of 30. I’ve studied economic history, and I know what you’re talking about. I think you’re right. But 3,000 is much too much. Go back to the fourth grade kids. I didn’t say that to him, but I passed very quickly
to another subject. So it’s 3,000%, on the order of 3,000%. And it’s completely
unprecedented in human history. And so, if it’s rigged,
it’s pretty good rigging. It’s been good for ordinary people. I look around this room. I don’t see any crowned
descendants of crowned heads of Europe or Asia or Africa. I don’t see any Hapsburg chins. I don’t. I take it that everyone in this room is the descendant of unspeakably
poor peasants, right. I mean I’m speak for myself. I am. And yet here we are on a
Tuesday afternoon waxing philosophical about something
called capitalism and so on. So there, there’s this enormous change, and it’s been good for poor people. It’s been good for poor people. If you try something else,
people say the system, it’s against the poor. Let’s have socialism. That’s the new cry from the
left of the Democratic party. Let’s try socialism. Well, I have, am very puzzled by that, because has socialism been tried? In 1917 in Russia, in Cuba, 1959, in Venezuela as we speak. Now, part of the economy can be socialist without any trouble at all. There elements of socialism
that I think we should have in our economy, in our polity. I’m a Christian liberal
in the John Stuart Mill or Adam Smith sense of liberal. Adam Smith talked of the liberal plan of equality, liberty, and justice. By equality, he didn’t mean
French equality of result. He meant equality of social standing. By liberty he meant
economic rights, the right to open a hairdressing salon which I desperately need
in the neighborhood. By justice he meant
equality before the law. So this liberal movement, it
begins in the 18th century in Europe, especially in
northwestern Europe is I think the spring of the modern world. There are lots of other gear, there gears, property rights, peace, and so forth. But the gears were very common. You had them in China. You had them in South Asia, had them in the Ottoman Empire. But the spring was freedom,
was the end of slavery, the end of various kinds of slavery, of women enslaved by men, slaves enslaved by masters, ordinary citizens
enslaved by their government. So, that’s my story, and my story, and this took me a while to figure out in these three volumes. I didn’t have this, I wasn’t
clear on it when I started out. But, freedom made us rich. It didn’t corrupt us either. If getting rich meant you
lost your immortal soul, sorry I’m not interested in being rich. And I’ve succeeded very
well in not being rich. But it, so, you see what I’m saying. The modern world is not corrupted by its, you could call
it financial enrichments, kind of a crude way of talking. What happened was innovation, invention, institutional, such as
the modern university which Dartmouth exemplifies,
the research university, which teaches but also does
research, advances knowledge. That’s a new idea. And so, it’s not just mechanical and electronic and biological inventions. Those are very important but also institutional
inventions that made the modern world and made
us rich and is making India and China rich right now. In a couple of generations surely in China, Chinese income will be equal to that of the United States per capita. In maybe a little bit longer
India, income per head, if they keep a liberal economy going, with all the craziness of
Indian politics, if they keep it going, they too will get rich. The whole world will become rich. The wretched of the earth
will be wretched no more. So I have an optimistic message that this, I don’t wanna call it a
machine, because it’s not. It’s this capital accumulation
idea that’s the machine. No, it’s not a machine. It’s human creativity brought
into the open, allowed. Whereas it was crushed
systematically before 1800 by guilds, by princes, by husbands, crushed,
crushed, crushed by masters. And now slowly, gradually
imperfectly we become free. One more analytic point that I wanna make before we get going here. Freedom or liberty, you can use the Anglo Saxon or the Latin, I don’t care which one you use is not the same thing as wealth. My friend, my friends Martha Nussbaum and Amartya Sen talk about, well Amartya does
development as freedom. And that’s a mistake. We should have a distinction between freedom which is
freedom from human coercion. Your husband, and the
older women here know, that in the 1950s in the United
States you couldn’t get a bank account as a married woman without the signature of your husband. The, we should have a word for freedom, for the absence of tyranny, for the absence of physical
coercion of one person by another, whether the person is your husband or the police
distinct from wealth. People get this all confused
because they think of freedom. Well freedom means I’m rich,
and so I can do anything. I can go to Hanover when I want. By the way I met my wife of 30 years on the porch of Alpha Theta in 1962. And she was a nurse, student
nurse at Mary Hitchcock. Freedom means being rich, ’cause then you can have
a second home in Hanover and come and you can go to
Alpha Theta when you want. And you can have more ice cream, and freedom is being rich. Freedom is being able to
pay Dartmouth tuitions. No it’s not. That’s richness, and that’s
distinct from freedom. It’s as though people think
that freedom is being able to fly, that freedom. No, freedom is freedom from
human coercion, human coercion, because we need a word for that. We need a word for tyranny and its absence, tyranny and freedom. So, all this is at a somewhat
high level of abstraction. In the discussion we’ll get
into some of the details. But, the ordinary people have been greatly enriched by innovism. And they continue to be. It is incorrect. It is a mistake, although
a very common one to think that income per head in the United States is not
increasing for ordinary people. You see it on TV all the
time, a flat line of wages. That is a mistake. I’ve spoken to the head of
the Consumer Price Index a couple of times about
this, not at length, but sort of just, I’ve had a
little conversation with her. And she agrees as any
competent economist does that the quality of goods can’t
be correctly measured. And the quality of goods has increased. Any, everyone here of a
certain age knows that tires have improved radically. I don’t know how many
tires I fixed as Donald. I had to fix them all the time. I got to be really good at fixing tires. And now I don’t need to use it or I get some guy to do
it which is even better. So, ordinary people have gotten better. And in the world they’re
getting radically better. Let me conclude with inequality. This isn’t the whole story. We’ll get into it. In the world, if you correctly measure the so-called Gini coefficient or any other measure you want of equality. Equality has increased in the
last 30 or 40 years radically. It’s not true that the world
is becoming more unequal. Au contraire as they say in France. It’s, then this is, in a way this is completely unsurprising, because in the meantime,
in the last 30 years, China and India have rapidly developed. They’re still very poor, both of them are. But they’re much better off than they were under what the Indians called the License Raj of the Ghandis and what the Chinese
experienced under Mao. So that group of poor people
has gotten much better off. And so, and it’s not just
because of India and China. There’s a marvelous
man who died last year, Hans Rosling, who you must inquire into, Rosling, R-o-s-l-i-n-g. He’s got these wonderful
videos making the point that he and I make, namely, that
the world is getting better. He’s got a book badly printed, but a very good book called Factfulness, a terrific book which was
published after he died. And, I know that the pessimistic
story is more interesting. If you want to write a best selling book, and I take it that’s not your book or actually his, his is bestselling, his great book on American trade policy. If you want to write a bestseller, it’s gotta say the sky is
falling, the sky is falling. No, the sky is falling, but
I don’t believe that’s true. I believe we’ve got a pretty good system. As my friend John Mueller from Ohio State puts it,
a pretty good system. And running off to find
something even better by throwing the fairy dust on it to make impossible societies that can’t possibly exist is not going to make our poor people better off. I accept John Rawls’
philosophical point that the enrichment of the rich is justified, if it is, by the improvement
of the least among us. And it is. Contrary to what you might have heard, the poor are not getting poorer. So, I want you to all join me in a great celebration of innovism. I want you to have the
kind of optimism that Walt Whitman had about his
country, even in the Civil War. We’re doing pretty well. We’ve made terrible mistakes. But we’re getting better
and the poor along with us. Thank you very much. (audience applauds) – So I’ll start with
first question which is a statement that Jason Furman made in his debate with you on this. It’ll bring it down a little bit I think to the current. – Have you got, you have
got your microphone. – Yeah, to the current,
some of the current debates. I think I neglected to
mention that Jason Furman was Chair of the Council of Economic Advisors under, in the Obama administration on and is sort of grow on
public policy for some years. So this is what he said, “Capitalism does not exist in a vacuum. “It requires laws that establish
property rights, adjudicate “disputes, fund public infrastructure “and finance all of these inputs. “If you look at how elites currently shape “the operational rules of capitalism, “the outcome of these rules, “in terms of inequality “and low levels of
inter-generational mobility “or observe the many specific
policies that establish “and perpetuate inequality,
it is clear that capitalism “today could be fairly described as rigged “in favor of the elites.” – He says that’s an excellent statement of a very common view that
I’m sure lots of you have. As a famous law professor
said, you didn’t make that. You may recall who said
that, that there was made by the public expenditure on schools and roads and health care and so forth. That’s his first point,
that we need government. Government has a role, as my friends on both the
left and the right say. Now look, I’m not a conservative. Do I look like a
conservative, I’m telling? And I’m not a conservative. I’m a liberal in the correct sense. The left, right spectrum
which apparently is all that we can hold in our mind is not adequate description of my politics at least. I’m a, I’m up above this spectrum, which is a spectrum, which is a debate about the use of the
instruments of violence, the use of the instruments of coercion. And both the right and
the left are very happy with large amounts of coercion. We liberals, John Stuart
Mill and Adam Smith and so on and so forth,
Mary Wollstonecraft and so. But we’re not, we’re against all that. So, the… Look, the poor are always
with us and so are the rich. When has it not been the case
that the rich ran things. That’s kind of an
entailment of being rich. Mark Twain said I think it could be proven by facts and figures that the
only native class of criminals in the United States is congress. (audience chuckles) Being rich is, makes you powerful. It’s one of the reasons
people wanna be rich. But it doesn’t mean it’s, it, look, it’s not worse than it once was. Let’s say that. Now I say this to my 96 year old mom, and she says shut up, I don’t
wanna hear about the past. And I understand that impulse. But, it really is true that the United States has always been corrupt. I come from Chicago after all. Come on, let’s get serious about this. And Chicago in the late 19th century was one of the most, it was
appallingly corrupt. The police, the judges, the
politicians were all for sale. Yet, it was the fastest
growing city in the world. It was the Shanghai of
the late 19th century. And ordinary people
were flocking to Chicago to work in appalling
conditions in the mills and slaughterhouses, because
it was worse back home. They weren’t forced there. They came voluntarily. And so, I would join Jason
in trying to stop the rich from monopolizing political power. I, let me give one
example of how this works. 1998, the Walt Disney
Corporation noticed that the copyright on Mickey Mouse was about to expire 50 years after the death of the
creator Walt Disney. We gotta do something about this, because that’s a very valuable image. So, they went to Congress and purchased it for a surprisingly low sum and got what economists call the Mickey Mouse Protection Act of 1998 which increased
unconscionably the copyright from its absurd 50 years to
an even more absurd 70 years after the death of the creator. So, I can join with my friends on the left and Jason’s quite moderate left
in being disgusted by this. But that doesn’t mean the
system is somehow tilted anymore than its always been or that it’s simple to untilt it. – I appreciate your, I
appreciate a lot of things about your presentation and mostly just appreciate your presence. And it’s really. – This is the real presence
as we say in theology. – And I appreciate that you
take a long historical view when you talk about commercial society and you compare things to
the way they were in 1800 and say that we’re looking at like a 30 X factor of
increase in prosperity. I think that’s often overlooked. I also appreciate you
take a global perspective and really look at what’s happened to the poorest people in the world. And I’m always, I was stunned basically to find out, as a tenured professor, to, I went looking for a fact which
is always a dangerous thing to present in a lecture
about the number of people in the world living on
less than a dollar a day. And when I was a graduate student another professor of philosophy who was making a very good living at
Princeton, arguing that people should give away
everything they had to the poorest people in
the world, Peter Singer. – Peter Singer, the utilitarian. – Making hundreds of thousands
of dollars on this argument. And.
– Which he didn’t give away. – Which he didn’t give away. So I thought wow that’s a great gig, man. But that was the answer to glo, he was, called the Singer
Solution to global poverty. And then I went ahead with my work and 20 years later went to look to see how many people were living on less than a dollar
a day, was astonished to discover that more
people had been, risen out of abject poverty in the world, since I got
my PhD than had happened in all of human history. – And it existed.
– Yeah. And so this was through trade, your thing. And I would never have thought that in grad school, the trade. I mean, I really, I would’ve
been with Singer probably. We should give it away. – [Doug] I feel a but is coming. – No, not really. I mean, I really appreciate
the global perspective and also the historical perspective. And I think those are really
important if we wanna think about the virtues and defects
of commercial society. – On the other hand, I’ll
argue on the other side against myself, I’ll say what matters in politics is how people feel about it. – That’s right, that’s right. And when I, one of the things I– – Even if it’s good, they, if
they think the sky is falling. – So here’s the question. Sorry for the long windup, but one of the things I feel, and I notice a lot of
people feeling is that the middle class, we don’t have as much of a middle class democracy
as we had in the 1970s. The middle class is kind of hollowing out. Maybe there are, there’s
a larger affluent class. It sorta looks like that to me. Maybe there’s a larger working poor that they can’t ascend into the middle class. And I think there’s a lot of anxiety and even lamentation about
the decline of middle class democracy in the United States. And that can invite people to think that the system
is somehow broken. And I would just invite
you to comment on that. – Well, in the first place the hollowing out of the middle class it didn’t happen. What happened is that the people in the middle class moved up
into the upper middle class or the upper, upper middle class. That’s what happened,
statistically speaking. The correct way to do
this is to follow people over their lives, to look
at their life history. And, in the 1950’s of nostalgic
memory when people were in the working class
they stayed there mostly, most of them did. And when they were in the middle class,
they just stayed there. So, I’m doubtful, I’m by
no means an expert in this. I should be talking to
sociologists and so on about this in a more serious way than I do. But, to come to the
other point, how we talk about it matters. And if Donald Trump gives
an inaugural address, what was the word he used, talked about the carnage in the United States and plays it up all the time. It’s just populous fascism
that he’s indulging in. And it’s very dangerous. And it arouses people. This is what, as you, we all
know, is happening worldwide. I was in Hungary two weeks
before the last election and Orban was using explicitly
anti-Semitic arguments. And he was saying the Muslims are coming, the Muslims are coming,
the sky is falling, the sky is falling. The Muslims are coming,
Muslims are coming. The premise of his argument if that you wanna call it
was that Muslims are coming to live in Hungary. Now think about that. Learning Hungarian. (audience laughs) Wait a second. They were on their way to Germany. German is hard enough, but
Hungarian is impossible. – [Russ] Nobody’s coming to Hungary. – Nobody’s coming to Hungary
to become a Hungarian. You have to be, I mean I’d, the highest opinions of Hungarians. I’ve had, some of my best
friends are Hungarians, but their language is impossible. – Well if I were to just follow up and say wouldn’t, would the kind of, you said that a firm and type economist that’s
sort of left of center, moderate, left of center. But that type, I mean, I think
there’s a sense that maybe the government is, government
something, some action by the government is necessary to invigorate the middle class and that the engine of
mobility, the access to education, health care and housing. – Look, I’m all onboard
with that in Denmark or New Zealand with insanely honest and earnest and intelligent politic, now politicians sometimes
not, but administrators. They’re very serious. I’ve taught in Sweden quite a lot. And they’re boringly serious. – They bury in bureaucrats. – They’re absolutely. They’re Bavarian bureaucrats, not an ounce of inspiration in them. But, I’m talking as a
Norwegian you understand. But, I don’t wanna do it in Italy. There are rankings of,
as you well know, of the honest and competence of governments. Transparency International
does this for example. And of the 190 odd countries
in the world, Italy ranks 89th in between Romania and Saudi Arabia. And no rational Italian wants to give the government more power and yet they keep doing it,
(speaking a foreign language). This is insane. So, I have doubts about
the American government. I mean, it would be nice
to help the working class. Wouldn’t it, I mean the working class? The working class especially,
but the middle class too. – Well, and then this
is the last follow up. – No you can follow up
as much as you want. – But, one policy that the
left of the Democratic Party, people like Bernie suggest is, I would, either free higher
education or let’s just say a vastly more affordable higher education. – I’m all for it. I think we should have
a government program to pay Dartmouth tuitions for everybody. – [Man In Audience] All right. – That would absorb the
entire national income of the United States if we did this. It’s profoundly impractical. It’s also highly inegalitarian. As the experienced international
professors here know, foreign educationals,
higher educational systems, as little they are in
Denmark where I’ve lived, not Denmark, Holland where
I’ve lived for three years or even in Britain, are enormous subsidies to the upper middle class, low tuitions, free college, hey, great. What social class is most
prepared for college? The poor, African-American kid who’s been in lousy public schools for a long time and his father’s unemployed
because of the minimum wage. And his mo, blah, blah, blah. Is that person likely to
be prepared for Dartmouth or for that matter my university UIC which has very large numbers
of first time college people or is it the son or
daughter of the Manhattan lawyer whose house is filled with books and who takes his kid to opera at the Met? I mean, and this is
what happens in France. The elites, the, those who
attend Le Grande Ecole, not so much the universities. It’s these somewhat strange and idiosyncratic French institutions. They’re the rich. – I know that you have
a lot of questions Doug, but why don’t we invite our students to ask the question or two before we– – So we have two roving
mics on either side. Please raise your hand. – If you have a question, just
signal any of our students. You right back here. – This one right here. – John, you have a question. You’re up front you get to. – Is it, okay. Well just with that. (faintly speaking) Just with that last point then. With the example of two social groups and higher education, then where in the system is the mobility
for those people who are in that lower group who you say wouldn’t be
prepared for Dartmouth? (faintly speaking) – But yeah, I mean, look here’s what I wanna do in higher education as far as financing is concerned. I want poor people to
go to Dartmouth free. But you know they do right now. And these so-called
scholarships are actually, we call it in economics price… Price discrimination
sounds like a bad thing. But we let poor kids come
at very at zero price. And that strikes me as appropriate. We oughta aim welfare not at
the rich, but at the poor. Does that sound plausible to you? We get a lot of the
activities of the government. It’s like the old interpretation of the of the golden rule, the
cynical interpretation. The golden rule is that
those who have the gold rule. (audience laughs) (mumbles) – If you had legislative power, and you could make one reform to American so-called
capitalism, forgive me the use of the term, what would it be? What reform would you make? – Well, I got a long list. – Okay, I’m not gonna limit
you to one, one of the, what should we be reform? – Abolish the Food and Drug
Administration tomorrow. I would let Americans buy drugs
in Canada, where they sell for a quarter of what they are now. This is truly outrageous, and this is something that
Trump himself has said he’s gonna do, but he didn’t do it. I don’t know why not. I would abolish these crazy tariffs that Trump has introduced. I would move towards free trade. What else would I do? I would abolish, and this you
can’t do at the federal level. It has to be state by state,
which makes it much harder. I would abolish licenses. You have to have a license
these days, now hear this, in many states to be
an interior decorator. Now that is insane. I can just barely see why you’d
want doctors to be licensed. I don’t think we should, but I can see why people would
think of it as a fine idea. Hair braiding, you need a license. This is a big deal in the
African-American community. In Italy, a couple of
years ago, it was proposed to have government licenses for the Italian men who hold the nation in their hands, the pizza cooks. I’m not making it up. It was a proposal that
didn’t pass amazingly. So that’s what I’d do. – Thank you. If you have a question, raise your hand. Doug. – Got a hand up here. Sorry, and then we’ll go back here. – [Woman In Audience]
So we only have one mic. – One mic, okay, so. – [Woman Standing] Give me a minute. – And if you need to ask a question. – Sure. – New data suggests
that among my generation people are increasingly
skeptical of democracy, democratic institutions and are prone to be supportive of terms like socialism, even though it’s hard to describe what particularly
people are advocating for. So my question is is this a
sort of cultural complacency or what is it that is
driving generation Z sort of away from this liberal tradition coming out of the names that you mentioned and towards this new idea. – Well, I, and it’s because
they haven’t read my books. (audience laughs) – 2,000 words away. – 2,000 words away.
– Understanding things. – But you’re absolutely right,
and it’s very dangerous. It’s what populism is, whether it’s on the left or the right. It’s, get the man on
the white horse, rarely the woman on the right,
white horse by the way, and everything will be all right. And we need national service. And we need compulsion. We need more of that
coalition that’s worked out so well in the past. And, tyranny has not worked out. People speak of the Chinese model. Well, it’s only the voluntary parts of the Chinese economy that are doing well. The involuntary parts, of which
there’s still a considerable amount are doing, make
Chinese income per head lower. So, I’m desperate to find some
way to get to generation Z. And if you’ve got any
suggestions besides me scribbling away on my books, and we’re all
doing this, all three of us, I’m, I wanna hear it. I can’t tweet. I don’t know how. I don’t know what to do. I’m rather desperate about this, because as you say the liberal values which I actually share
with many of my friends on the left, though I’m a liberal in the classical sense, are under attack worldwide, not
just in the United States but in the Philippines,
Turkey, Russia, Poland. I was just in Poland, in Italy, they’ve, a crazy populist in charge,
which the Italians voted in. It tires me out. Since, as the blessed Smith
said, the liberal plan of equality, liberty, and justice worked. It worked, and it’s going on working. And if it does work, we’ll
all be rich, very rich, and reasonably virtuous. – Which is about as
virtuous as you wanna be. – You can’t get too virtuous. Like St. Augustine tells in his autobiography
tells how he would pray to God, God make me pure but not yet. (audience laughs) – Doug it’s your turn,
but I do wanna thank– – Okay, yes, question,
okay there’s another. We got a question right here.
We’ll wait for there’s a gap. – Who might think that
the economy’s great. This is a chance to test out your ideas with Professor McCloskey. – Hi, thank you so much for coming. I was curious about your fondness for deregulation that you said at the end. And I’m curious or I’d
like to bring it back to your comparison between
the poor African-American and the son or daughter
of Manhattan lawyers. If you were to take away
the FDA for example, would it not be that the son or daughter of the Manhattan
lawyers is more prepared to see if food is safe,
because they know more or if you take it on a separate plain, the
plain of wealth, wouldn’t the less safe food just be cheaper, and the poor African-American
would just end up with less safe food and just die or because they’re more
uneducated they might not know which food is safer? – This is a very interesting
point that you’re making. And it sound so far as it goes, because I’ve come to the
conclusion that liberalism works very well when people are rich. I don’t mean just individuals
but when the society is rich, and it, the tyranny of coercion is at least is plausible when ordinary people are ignorant, right. The ignorant Irish peasants
of my ancestry weren’t part of my ancestry. The, having the British in charge was, maybe that was a good idea. They were so stupid or the argument that
Carlyle, Thomas Carlyle made. I think it’s a terrible
argument, but he made it in the 1830s and ’40s,
that emancipation of slaves in the British empire was
a terrible idea said he, because we gotta keep
these darkies working. And they’ll fall into, and it’s the argument of the aristocracy that we
need coercion by the rich. But its, it gets less and less plausible in an era of widespread ability to read, very widespread ability to read the internet and so forth. But I accept what you’re
saying a little bit. It’s just that I don’t think
that the FDA is an improvement over even quite ordinary people finding out for themselves through a free press. You gotta have a free press. If you don’t have a free press, my argument doesn’t work at all. But if you have a free press and people can, look think of Chipotle. Is that how you pronounce it? And they got into this terrible trouble, because they started
making people sick, okay. That didn’t depend on the
government inspectors. That wasn’t, didn’t come to light, because of the Food and
Drug Administration. That came to light,
because people got sick. And the newspapers reported it. And their stock went like that. So I think the market,
that is actual markets where people can enter and exit, and exit if they’re misbehaving is, and publicity and the press
works better to a public now, to come back to your
point, that is literate. I agree, being rich and
educated at Dartmouth and so on makes you maybe better able to make these decisions. But then I don’t hear, hears
an amendment to my statement. I don’t mind the government
educating people, telling people firmly that smoking kills. It does. It killed my father at age 53. So I got no problem with that. But, that’s all I want them to do. I don’t want them to
engage in prohibition. I don’t want them to engage in preventing treatments that
work in Germany for cancer or whatever it is from being
used in the United States. I don’t want the FDA running
1/5th of the American economy which is what it does now. – [Russ] If you have a
question, raise your hand. Right down here is.
– Right down here. – By the way, why bourgeois? Why not middle class? – Well because I’m so sick of this reflexive attack on the bourgeoisie. I mean, a, speaking of
the daughter of that Manhattan lawyer we were
imagining, she’s 12, and she wants to go to sleep over with her questionable
friend up the street. And her father says no you can’t dear. She says, daddy you’re so bourgeois. It’s become a term of contempt from both the left and the right. And I think it’s silly. This is the urban middle
class that we’re talking about, and they’re okay. They’re not perfect. They’re okay, and it’s our attitudes towards them that’s the danger. Hold it close like rock music. – [Woman In Audience] My
question is sometimes when I talk with friends about capitalism
and its virtues, they respond to me with real world scenarios where big companies are
working with the government to maintain a monopoly in whatever. And I think, my question I
guess is, do you think that true innovatism, capitalism exists, but like you just said
1/5th of the government, FDR now, it’s still the same. How, first do you think that cap, true capitalism is still running and how do you suggest us respond to our peers when they come up with cases of crony capitalism and reject to the true capitalism and? – Well, because, crony
capitalism when conjoined with (mumbles) in opposing. I agree with that. But it’s not, and it’s big. And the problem is that the government’s so big that it’s worth capturing. If the government were
to kind of restrained but competent government that I would want, that’s
protecting us for example from the imminent
invasion by the Canadians. I suppose you’re aware that
they’re, this is one of our main national defense problems. And we should have an army large enough to fend off the Canadians or the Mexicans. If we had a small government, it wouldn’t be worth capturing, A. If we didn’t have the FDA, it wouldn’t be worth getting around the FDA or indeed in some countries having it actually be bought by big business. But, that’s a rather minor problem. The problem is not monopoly. It actually government sponsored
monopoly is a big problem. Before cell phones, you had land lines. I’m still old enough that
I still have a landline. I know it’s disgraceful. But the landlines in
many countries were run by the government. And it took years or
months to get a telephone. Now we leap over it with this
innovation of the cell phones. So, there’s a tremendous
exaggeration of how important the problem of monopoly is. In fact, I’ve got a paper that chronicles all of the developments in the economy that make monopoly less and less and smaller and smaller. The internet itself, in the old days for phone books you’d say let
your fingers do the walking. Now, your fingers do the
walking through the internet. You get, what is it, the
various evaluations from people, and you go to those. It, it’s so much harder to
be a monopoly these days and to keep control of the market. In the old days you couldn’t
go anywhere to speak of. You’d have to walk everywhere, and then you got the
railway, then the bicycle, then the automobile, the airplane. These all make monopolies
less and less plausible, less and less of a problem. – [Doug] There’s a question right here. Sorry and then we’ll go right back there. Yeah, Dennis. – Deirdre, thank you very, very much for your eloquent
description of your views. I much appreciate it. And I’m wondering, despite the fact that the sky is not falling, is
it the case that there’s some coming challenges,
be they aging population or population growth or
environmental degradation or even climate change? Are those challenges to the system? – Yeah, those are challenges
which we’ve often met before. I mean, climate change, for
example, is, you’re old enough to remember, I know you are. Don’t lie about it. When I was a child in
Cambridge, Massachusetts, my mother who was a very
rigorous housekeeper would wipe the sill in the morning,
dust the sill of the window. And by nightfall you could
run your finger along, and it would come up black, because in 1948 we were burning
soft coal to heat houses. So that’s a big improvement. In England, first time I
was in England was in 1959. I went out one day in the fog. It had improved from 1953
on, but went out in a fog, and I couldn’t see my feet. This is not wise to walk around where you can’t see your feet. And that’s gone. The hole in the ozone
layer was getting worse. It was caused mainly by air conditioning
fluid, as I understand it but also hairspray. And Margaret Thatcher of all people, a big user of hairspray, maybe she alone was the cause of the hole in the ozone layer, but she led the charge for very appropriate
international regulation that, now the hole in the
ozone layer is closing. Now see I’ve kind of lost
track of your question. What was it again? – [Man In Audience] (faintly
speaking) environmental degradation that you talked about, but the climate change is that something– – Climate change I’m worried about. I’m not go with the Trump
administration’s I doubt it which is about the level
of their argumentation. No, I, but I go with
this character Lonberg, a Danish engineer who says well yeah, it’s caused by humans. It caused by carbon. We get it, yeah. And okay, now what to do about it. And we don’t need to close
down industrial civilization for it to take care of climate change. In fact, on the contrary,
we wanna let industrial or not industrial so
much but economic growth. There’s great enrichment
take place in India and China and sub-Saharan
Africa and blah, blah, blah. So we get more entrepreneurs and more engineers who
can solve the problem, as they’ve solved these
problems in the past. So, I, that’s one of the
sources of my optimism. – [Russ] That there will
be a technological fix. – There’ll be a technological fix. And you say, well it’s technological fix, the very terminology sort of
says well that’s unlikely. How do you know? – I didn’t mean to convey that. – No, no I understand that. I understand you didn’t,
but some people do mean it. So it’s a fix. You’re just making it. The same people who say that the invisible hand is just theology. There’s no basis for it. Well, there is a basis for it. And there’s a basis for
optimism about technology, ’cause over and over again. There was a famous economist, very famous, Stanley Jevons who wrote a
book called The Coal Question in 1868 which said that
Britain would run out of coal and industrial civilization
would collapse. And when people asked him well how soon is this gonna happen. He said, it’s terrible. It’s gonna happen in 400 years. This is crazy. There was this oil stuff. People said we can’t use oil stuff. It’ll leak out of the barrels. Oil is not the solution. It, when we started to run out
of whale oil we got kerosene. Now this isn’t even, this isn’t magic. This is economic incentives. When whale oil got more
and more expensive, because the whales got
further and further away from Nantucket, the price of whale oil for lamps went up and up and up. People said now, how
’bout this black stuff from Pennsylvania that
comes out of the ground. Maybe we could use that. Actually the Turks had
long ago invented it. But the kerosene. – We’re running out of time, so we’re gonna try to collect
as many questions as we can, maybe one here, here, and
then in the back there’s, and then we’ll get
quick answers and we’ll. – Okay, sorry, I’ve written 1,700 pages, actually more than that, more
like 2,000 pages on this, so I tend to lean towards
2,000 page answers. – [Man In Audience] I’ll make
this as quick as possible. I’m really intrigued. When you start with the
premise that freedom from human toors and the
absence of tyranny is really a fundamental
concern you seem to have. And I would think you’d
build out of that a kind of a system of some form of anarchism
where you are concerned about power, institutionalized power, whether it’s unions or
corporations or government. And you would be sort of
have a stance that let’s say, let’s move towards a society which more decentralizing
of power, using your market, free markets and so forth and maybe follow that route. – I agree with. I’m in favor. – Collect a couple of
questions. This one right here. – I’m in favor, in short
I’m in favor of them. In Catholic social
teaching as you may know it’s called obsidiary, put things down at the lowest level that can do them. – I had a question about your distinction between richness and freedom. I’m wondering how you
view what might be called an effective freedom where
if you’re not rich enough to have a day off to vote,
you don’t have essentially the freedom to vote or
if you’re not rich enough to associate with your co-workers, because you’re forced
by necessity to live. – That’s a slippery slope to
massive social redistribution. There’s no coherent way
to stop that argument. If you’re gonna call
freedom which we all admire the ability to do stuff,
then we’ve gotta go with Singer, equalize all incomes which would be a complete disaster. No, I want there to be a word, don’t you, for people putting hands
on each other, saying, you’re a slave, you
move I’m gonna beat you. You’re my wife, shut
up, I’m gonna beat you which was the common experience
of humans since the caves. – And we have one more question. – Hello, thanks for coming. The editors of The
Economist who also pride themselves on being about a liberals in the classical sense, particularly recently
they’ve argued strongly for a stronger role from
government in terms of anti-trust. – That’s how liberal they are. – Pardon me. – That’s how liberal they are. – And so I gue, so
they’re argument is that by actually breaking up companies that get to large that it would
actually make it easier for innovation to thrive. So do you see any role for anti-trust? – No, and breathe. Look. – Maybe get a clear
answer once in a while. – Anti-trust is putting the
fox in charge of the hen house. It results in, actually I have a friend in Russia who’s a specialist on this. And the Russian Federation’s
anti-trust office prosecutes, now hear this 3,000 cases a year. The anti-trust division of
the Department of Justice and even under Obama can’t do
more than a handful a year, because it’s expensive. These companies don’t stand still for it. They hire a bunch of lawyers. And you look at him, my
friend says the reason they do it is that the anti-trust law is used by the big companies to
suppress little companies. You put Mr. Fox is not a
good and loyal bureaucrat. He’s a fox, and he’s
gonna eat the chickens. I mean, I feel the same way about, well, all kinds of protections that the government’s supposed to give us. Governments on the whole,
now I accept these, a few governments like
Denmark and New Zealand, on the whole are rapacious. Most governments, hey, look around. I made a calculation that
90% of the population of the world is governed by governments, less reputable,
portrait (mumbles) margin than the top 30. The United States is in the top 30, France, Britain, the ones you’d expect. But, I told you Italy is 89th. 90% of the world’s population are governed by this kind of government. Government traditionally,
everyone knew until this funny new liberalism
of the 1880s in Britain and socialism too, came to the conclusion that we
needed more government, and it had to be bigger and bigger. Everyone knew that the King was a thief. Everyone knew that the
government was a band of robbers into his clutches would fall. My friend Mancur Olson called
lords stationary bandits. That’s right. That’s the source of all the aristocracies in the world, including the
Communist Party of China. So, put not your faith in coercion. I think we all need to ask
ourselves is it a good idea to push people around. And I think, we gotta have police to protect us from the bad people and yes. But we don’t need to push people around in their employment or business. – And on that note, if you have further questions,
please come up and pose them. Otherwise, thank you very much
for coming this afternoon. (audience applauds)

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4 thoughts on “A Political Economy Project Event: “Is Capitalism Rigged?””

  1. This is dope my guy. Keep making heat! You should use smzeus[dot]com a lot of channels are using it to promote their videos.

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