Transcription
The new book, "It's Okay to Be Angry About Capitalism."
People eagerly find fault with capitalism. If capitalism works, if this is the best we've got, why does it seem to give such a raw deal? A raw deal. Is that what we get? I hear that often in capitalist society. The people who work the hardest make the least amount of money.
We can either have extreme wealth inequality or we can have a fair economy. Many people are upset about America's big differences in wealth and they say socialism would just be better. Socialism is the way forward.
It's time to take a closer look at the socialism these people want. "THIS IS WAR. WE ARE COMMITTED TO transforming our society into one based on freedom, equality, and solidarity." The belief that socialism will bring that is why it's now as popular as capitalism among young people. Another big reason is oddly this 90-year-old linguist, Noam Chomsky. Students study his work in class and colleges pay him up to $30,000 to speak.
"Thanks very much." Yet for generations, Chomsky misled students by calling capitalism a grotesque catastrophe.
[cheering] I thought the fall of Soviet communism would put an end to such nonsense. Surely everyone would now see the catastrophe is socialism.
[cheering] But no, socialism has come back strong. So in this video, we'll bust five myths about socialism and even more myths about capitalism. We start with socialism and the claim that "that wasn't real socialism." The Soviet Union. This was about as remote from socialism as you can imagine.
"It's absurd to say that the Soviet Union was remote from socialism." Economist Ben Powell reminds us that when the Soviets made private business illegal, "that's about as close as the world ever saw to the pure socialist end of the spectrum."
But whenever socialism fails, people always say that wasn't real socialism. It doesn't prove anything about socialism in other countries. Working people have to be in control of production. The Soviet Union is the exact opposite of that. Working people had no control over anything.
"But that's the problem. That is what socialism inevitably delivers." Socialism means abolishing private property in the major things that go into production and replacing it with some form of collective ownership. In practice, this means state ownership and control. And the Soviet Union had an abundance of that.
Of course, the Soviet Union is now gone. So, some say there is no true socialist country that exists today. But there is. Look at Venezuela. "Just eating is a luxury."
When I say socialism created hardship there, people trash me in my own social media. Read a book. Venezuela is not socialist. Think a bit. I'll do better than that. I'll listen to the politician who wrecked Venezuela. Because capitalism is tyranny, Hugo Chavez said his government must take over businesses.
"That's socialism." The socialists turned the richest country in Latin America, the nation with the biggest oil reserves in the world, into the poorest country.
"But it's not clear that that crisis has anything to do with their socialist policies." That's myth two. Venezuela's failure has little to do with socialism and a lot to do with poor governance. Some of Chavez's programs could have been sustainable if he pursued a sound economic policy.
"Yeah, some of his policies could be sustainable if he had a sound economic policy called capitalism." Why does it have to be capitalism? Oliver is saying if he just managed it better. It's a story about epic mismanagement. Or here's how Al Jazeera puts it: "Economic policies have failed to adjust to reality." That's the nature of socialism is for their economic policies to fail to adjust to reality because economic reality is evolving every day. It's millions of decentralized entrepreneurs and consumers who are making fine-tuning adjustments to this.
In our capitalist society, when COVID hit, what did we start seeing? Millions of entrepreneurs adjusting without government orders of how to deliver their products and services. Servers have switched roles to delivery drivers while bartenders have turned into sales reps. Restaurants installed heat lamps, expanded patios, did delivery.
Although reporters complained about the absence of federal direction, no central authority could possibly direct all these individual adjustments in thousands of different places. In fact, federal direction would have prevented all that.
In a market economy, the great thing is everybody's little adjustments gets tested and we get to see what works. Blockbuster video.
Blockbuster was great, but then people were offered something better: TV shows and movies at your command. By contrast, in a socialist economy, you get a one-size-fits-all adjustment, and you miss out on this learning process where some entrepreneurs copy others when they see things successful, and they stop doing it when it's not.
For example, East Germany's socialist planners pushed these Trabants. They said the cars were great. But it was a terrible car, hard to drive and it spewed pollution. Even when West Germans were building Volkswagens, BMWs and Porsches, East Germans were stuck with Trabants.
In a socialist economy, every one of the minor adjustments needs to be commanded. One mind who has to know all of those teeny adjustments, communicate it down, and get everybody to do the right thing. That's impossible. No government department can manage millions of individual decisions in prices. When they try, shortages occur and money loses value.
"If you work the whole month, you can buy one a hamburger." Here's another excuse for Venezuela's failure. Oil prices plummeted in 2014 and Maduro failed to adjust. Vox made this video called "The Collapse of Venezuela Explained." In the whole video, they never mention socialism once. They blame falling oil prices.
"The oil price is a complete distraction." There's plenty of countries around the world that depend on oil revenue. When oil prices went down, the people there didn't start losing weight. That just happened in Venezuela.
Some people respond to my videos by saying, "People in Venezuela and Cuba struggle not because of socialism, but because of our sanctions and embargo." They certainly don't help the people, but it's an afterthought as a reason for their suffering.
In Cuba, they drive around 1950s U.S. cars, but we don't have a blockade on them. There's no U.S. Navy destroyers preventing Kia, Fiat, or whoever else around the world from sending them cars. The reason for their suffering is they have an economic system that can't deliver.
Here's myth number three. Socialism does bring good things if it's democratic socialism. The examples of failed socialism that critics use are not socialist democracies but authoritarian states. Democratic socialists denounce all that. The key word for them: democratic. They believe that both the government and the economy should be run by the people by way of the ballot box.
[screaming] But Venezuela's socialist was elected. They can start off democratically elected and then once they centralize control over the economy, it becomes impossible to democratically unelect them. Now Maduro rules while ordering state employees to vote for him or they lose their job.
"Maduro blatantly buying votes." They put food aid stations next to polling places and you get rewarded with rations if you vote correctly. Now democracy there is a sham. It always becomes authoritarian. Always. Everywhere you try socialism, that's what you get.
Why? It's hard to exercise political freedom if you don't have economic freedoms. If you're dependent upon the state for your livelihood, you lose your ability to use your voice to oppose them because you can be punished. But unfortunately, people don't realize that when they're promoting democratic socialism.
Democratic socialism is your kids' public school. It's the researchers and scientists paid with our taxes. It's our interstate highway system. We're not purely capitalist. There are some industries that are government-owned, operated, and controlled, socialized, if you will. It's no accident that when you look at these and think about things that are inefficiently done and underperforming, our public education, our congested streets, these socialized industries don't work well.
But what about Norway? It's as socialist as they come. Instead of Cuba or China, think Sweden.
Myth four: Socialism does work well in Scandinavia. But Scandinavian countries are not socialist. Sweden isn't socialist. Volvo is a private company. Go to restaurants, hotels. They're privately owned. Markets organize the vast majority of Swedish economic activity.
But Sweden did have a period in the 1970s and 1980s when we had something that resembled socialism, a big government that taxed and spent heavily. There were waiting lines to get healthcare. People couldn't get the pension that they depended on for the future. At that point, the Swedish population just said, "Enough. We can't do this."
So Sweden cut taxes and cut government spending. They privatized trains, sold state-owned businesses. When I talk about democratic socialism, I'm looking at countries like Denmark.
When American politicians wrongly called Scandinavia socialists, Denmark's prime minister came to America to refute them. Denmark is far from a socialist planned economy. Denmark is a market economy. In fact, Denmark today ranks higher in economic freedom than the U.S. with much freedom to pursue your dreams and live your life.
Finally, myth five: Socialism is completely different from fascism. When a congressman said, "The potential is out there for another Hitler, a socialist like Hitler, to come along." Another congressman said, "He was wrong. It's the Nazis that's terrible, not the socialists. They were Nazis who killed Jews. And I get offended when you compare socialists to Nazis. They were fascists."
It's true that fascism and socialism aren't exactly the same, but they do have a lot in common. They both replace market decision-making with command and control. While socialism abolishes private property and replaces it with state ownership, fascism leaves private ownership in nominal terms, at least, but replaces decision-making with state control and orders. As an average person living your life, whether under socialism or fascism, you lose your autonomy, your control over your own future. Only under capitalism do you have the freedom to say no. Entrepreneurs offer you their services. They offer you employment. You can say no and choose a better path for yourself. You don't get that same type of choice when someone else is planning the economy.
Powell and another economist wrote a book about socialist countries. We went to Socialism 2018, the biggest gathering of young socialists, and they pointed out lots of problems in the United States. Problems with migration, with war, with policing. The problems they were identifying were the product of bad government that the U.S. is giving them, not capitalism.
Socialism appeals because it promises fairness and equality. Resources should be allocated to those who need them. They hear the preaching of socialism about equality, but they don't look on what it actually delivers. The history of humanity is of poverty, starvation, early death. This was true throughout our history until very recently. In the last 20 years, we've seen more humans escape extreme poverty than any other time in human history. And that's because of markets, right? Free markets, capitalism, that's what makes us richer. But everywhere people trash capitalism.
"No system has redistributed wealth from the poor to the rich as effectively as our own." I call it slavery by another name.
We covered the biggest myths about socialism. Now we'll bust seven myths about capitalism.
"No one ever makes a billion dollars. You take a billion dollars." That's myth one. Capitalists get rich by taking money from others. Jeff Bezos has what? $100 billion. Yeah, his wealth is making a lot of people poor.
People assume that because they think we have a finite amount of money, a finite amount. So when they win, you lose. But that's not true because entrepreneurs create new wealth. Research shows that when they got rich, they only kept 2.2% of the additional wealth they generated for the economy.
Economist Dan Mitchell: "In other words, the rest of us captured almost 98% of the benefits." Today, Apple is going to reinvent the phone. Yes, Steve Jobs kept billions. But by creating Apple, he gave us more. So many new jobs. And he added billions to our economy. All by creating tech that makes our lives better. I hope that we get a hundred new super billionaires because that means that there's a hundred new people who have figured out ways to make the rest of our lives better off.
"Let's abolish billionaires." This former labor secretary says entrepreneurs like Jeff Bezos would be just as motivated by say a hundred million or even $50 million. Oo, but he misses the most important fact about capitalism. I'm not giving Jeff Bezos any money unless he's selling me something that I value more than that money.
"Billionaires." "No one deserves to have that much money." "None of these zillionaires needs that much money." If you put a cap on how much money someone can make, are they going to continue innovating? No. Maybe you just decide to take it easy. You retire, you sell a yacht around the world, you're going to start consuming instead of saving and producing. When I say things like that, people call me a complete [ __ ] and tweet, "More money in the richest hands means money sitting in the bank doing nothing." But that's an ignorant view of banks. In reality, that money gets lent out, which allows other people to build businesses, buy homes, get educated, new machinery, tools, factories, equipment, technology.
Still, we hear, "The rich getting richer and the poor getting poorer." That's myth, too. The truth is that the poor and middle class are getting richer, too. The economic pie grows. We are much richer than our grandparents and our grandparents were much richer than their grandparents.
For thousands of years, the world had almost no wealth creation. Then some countries tried capitalism. You can see that per capita GDP is climbing and climbing and climbing. Capitalists helped everyone, including the poor. They do by bringing cheaper and better food to my supermarket. They do it by providing better goods and services.
So high-tech, it could only come from Motorola. Look how communications changed. 25 years ago, phones looked like this. Then we got the Blackberry, the iPhone. "Way smarter than any mobile device has ever been." Now we have cheap smartphones.
When the media say, "The middle class is in decline. America's middle class is in decline." Well, they're right. But they miss why it's shrinking because more and more people are moving into those upper income quantiles. The rich get richer in a capitalist society. But guess what? The rest of us get richer as well. The average family today is almost a third richer than 40 years ago because capitalists compete to get our dollars.
Of course, this assumes there's competition. But I'm told that's no longer true. In fact, I'm a miserable, selfish pig for not saying that monopolies destroyed the free market. Some Republicans and Democrats say that's why tech companies must be broken up. Calling Facebook, Amazon, and Apple all monopolies.
But are they really monopolies? We do have monopolies. The government school system, the postal service. Monopolies are almost always a creation of government intervention, blocking competition, for example. Keeping your phone system the best in the world. Government granted Ma Bell a monopoly on phone calls. And in 30 years, their phones went from this to well, just this. Always improving. That's the Bell system for you. A short phone call cost $17. Ma Bell got away with that because government banned competition.
In a free market economy, it's impossible to have a monopoly because if somebody manages to get a lot of market share and they try to raise prices, new competitors are going to spring up and they're going to draw away the customers.
That happened to Blockbuster. It charged late fees. Netflix promised no late fees. Blockbuster soon went out of business. But people say today's tech companies are uniquely powerful. No one can compete with them. I use Duck.Go as my search engine. I don't use Google. But guess what? Even if I used Google and Facebook for 10 hours a day, no one's holding a gun to my head. They're obviously providing something of value. Heck, they're providing free search engines, free social media. Just 14 years ago, people called MySpace a monopoly. Then Facebook proved them wrong. Our government once called U.S. Steel, Panama, IBM, Internet Explorer, and Kodak monopolies. That's something to consider next time you hear big tech are the robber barons of the 21st century.
Robber barons like Rockefeller and Vanderbilt. And we'll get to them shortly. But first, myth four. Free markets create unsafe workplaces. Only government through agencies like OSHA can stop that. I've had some show me charts showing, oh, look at how workplace fatalities have come down ever since OSHA was created. Well, I actually went to that same data source and I looked at the decades before OSHA was created.
No wonder the bureaucrats don't show us that. Fatality rates were already going down just as fast. Why? As we become richer, we become safer. The wealth capitalism creates lets us afford safety devices and build machines to do the most dangerous work. In capitalist societies, we have cleaner water, cleaner air, better lifestyles. We need more capitalism because when people get rich, they can afford more safety.
But before government protected us, I'm told unfettered capitalism created evil robber barons. Collecting great riches at the expense of workers who toiled often in dangerous conditions for little pay. But little pay compared to what? When we look back upon factory life 100 years ago, we think, "Oh my god, that's terrible." Because by our standards today, it is terrible. But compared to toiling for 14 hours a day on a farm for half as much money, that stage of our economic development was practically nirvana.
Still, most people were poor while the robber barons amassed a huge amount of wealth. Folks like John D. Rockefeller, who created the oil industry. People still call Rockefeller a robber baron, but he wasn't born rich, and he didn't rob. Rockefeller got rich by inventing ways to deliver oil for less.
John D. Rockefeller kept lowering the price. That's why he got more market share. No one was forced to buy his oil. And although the media implied that people suffered to support the fat cats, the entrepreneur's innovations actually made almost everyone better off. In the 1800s, the era of the so-called robber barons, we went from agricultural poverty to a country characterized by middle-class prosperity.
Cornelius Vanderbilt was another tycoon. The anti-capitalist media called him a robber baron. But he too was no baron. He was born poor. At age 11, he quit school to work on boats. Then he invented ways to make travel cheaper. He cut the New York-Hartford fare from $5 to $1. His competitors didn't bother because they were used to friendly politicians giving them subsidies. That's not capitalism. That's corporatism. Only when politicians leave capitalism largely alone does it create wealth.
Still, I hear that capitalism just isn't good for us. "Capitalism is not designed to optimize our well-being." Does anyone still believe that cheaper iPhones or more Amazon deliveries of plastic garbage from China are going to make us happy? We're not buying iPhones and plastic garbage unless we think it's better for us than the dollars that we have in our bank accounts. Capitalism is the only system that gives people the liberty to make their own choices. I want liberty.
However, now I'm told, "A robot is probably going to take your job." That's our last myth. Capitalism will take away everyone's job. 50% of the workforce being completely eliminated, as in no more jobs for them. For years, experts predicted employment will decline, but so far it's never happened. When markets are free, some people do lose jobs, and that's hard on them and their families.
If I was a typewriter builder 30 years ago, the personal computer probably destroyed my job. If I was a candle maker, electricity destroyed my job. It's upsetting when any person loses a job. But overall, capitalism creates millions more jobs. When America began, 90% of workers worked on farms. Now fewer than 2% do. Farm workers found better jobs. As long as our economy has the dynamism that free markets allow, we're going to see more job creation and higher income levels. And that's what makes the children and grandchildren of typewriter makers so much better off.
And steering on its own. Now truck drivers rightly fear self-driving trucks. "Would you, Tucker Carlson, be in favor of restrictions to use this sort of technology?" "Are you joking? In a second. In a second. In other words, if I were president, we're not letting driverless trucks on the road. Period." Support the coalition of obsolete industries.
But what would happen if politicians did block innovation? This parody lays it out pretty well. "I used to have to clean people's toilets, empty them from the alleyway behind the house, and now flushing toilets and plumbing has taken away my job. Electricity has taken over my profession." Well, that sounds like Tucker being worried about driverless trucks. If we don't stop progress, how will anyone ever have jobs?
Creative destruction does destroy, but what it creates is so much bigger, so much richer, and so much better for us. Better for most everyone, rich and poor. That's capitalism. That's something that we should be celebrating. No other system anywhere in the world has ever come close to capitalism's ability to generate mass prosperity. Thanks for watching. To help us defend free markets, please click that button.