https://youtubetranscript.com/?v=xi-vnOq66pQ
We pay 65% of our income at, say, upper middle class, middle class to upper middle class level in Canada. It isn’t obvious to me at all that that money is well used. In fact, quite the contrary. In my country now, our citizens make 60% of, they produce 60% of what you produce in the US. That’s plummeted over the last 20 years as state intervention has increased. I’m not convinced that the claim that the interests of people who lack opportunity are best served by state intervention. And there’s a couple of reasons for that. I mean, first of all, I’m aware of the relationship between inequality and social problem. There’s a very well-developed literature on that, and it essentially shows that the more arbitrary, the broader the reach of inequality in a political institution of any given size, the more social unrest. So where all people are poor, there isn’t much social unrest, and where all people are rich, there isn’t much social unrest. But when there’s a big gap between the two, there’s plenty, and that’s mostly driven by disaffected young men who aren’t very happy that they can’t climb the hierarchy, there are barriers in their way. And so there is reason to ameliorate relative poverty. The problem with that to some degree is that most attempts to ameliorate relative poverty tend to increase absolute poverty, and they do it dramatically. And the only solution that we’ve ever been able to develop to that is something approximating a free market system. I wouldn’t call it a capitalist system because I think that’s capture of the terminology by the radical leftists. It’s a free exchange system, and the price you pay for a free exchange system is you still have inequality, but the advantage you gain is that the absolute levels of privation plummet. And I think the data on that are, I think they’re absolutely conclusive, especially, and that’s been especially demonstrated in the radical decrease in rates of poverty since the collapse of the Soviet Union in 1989, because we’d lifted more people out of poverty in the last four decades than we had in the entire course of human history up to that date. And that’s not least because the statist interventionist types who argued for a radical state-sponsored redistribution lost the Cold War. And that freed up Africa to some degree, and certainly the Southeast Asian countries, to pursue something like a free trade economy. And that instantly made them rich, even China. So, well, so that’s an argument, let’s say, on the side of free exchange, but it’s also an argument, a twofold argument, pointing out how we ameliorate absolute poverty, which should be a concern for leftists, but doesn’t seem to be anymore, by the way, and also an argument for the maintenance of a necessary inequality. Like, I’m not sure that inequality can be decreased beyond a certain degree without that decrease causing other serious problems. And we can talk about that, but it’s a complicated problem. Yeah, but for one point of clarification, when you say leftist, what do you mean by that? Well, I was going with your definition, like, essentially, the core idea being something like the central problem being one of relative inequality and distribution of resources, and the central solution to that being something like state-sponsored economic intervention. I mean, there’s other ways we could define left and right, and we can do that, but I’ll stick with the one that you brought forward to begin with. Gotcha, gotcha, okay. I only want to be clear on that because people get mad if I call myself a leftist. Oftentimes, online or especially in Europe or worldwide, leftists will refer exclusively to socialists or communists, and anybody to the right of that would be considered a liberal, if you would like to call it that. No, usually a fascist. Very rapidly. Yeah, I just wanted to be clear on that. So I’m absolutely a pro-capitalist, pro-free-market guy. I’m never going to… Okay, okay, okay. Well, that’s good to get that clear. Why? Yeah, because I would argue that when you look at the fall of the Soviet Union or you look at the failure of socialist or communist regimes, I don’t know if the issue there was so much redistribution. I think the problem… That was one of many issues. I don’t think it was an issue at all, actually, I would say. I think the issue was command and… Wait a minute. What do you mean redistribution wasn’t an issue? What the hell do you think they did to the Kulaks? That was forced redistribution. It resulted in the death of six million people. So maybe I’m not understanding what you mean, but that was redistribution at its pinnacle and forced redistribution. It was brutal. When I think of the strengths of capitalism, the ability for markets to dynamically respond to shifting consumer demand is like the reason why capitalism and free market economies dominate the world. When you’ve got socialist or communist systems, command economies where a government is trying to say, this is how much this is going to cost, this is how much you’re going to produce and make, this is a failed way of managing a state economy. Even in places where they still do it, there are always shadow economies and stuff that were in the Soviet Union that prop up where people try to basically ameliorate the conditions that are resulting from said horrible command economy practices. So I guess in a way you could argue a command economy is kind of like redistribution. It’s a form of it. No, it’s a worse problem. If you’re pointing to the fact that that’s a worse problem, I’m with you. I would say that’s definitely the reason why these places failed because they just weren’t able to respond to changing conditions. So what’s the difference between a state that attempts to redistribute to foster equality of opportunity and a command economy? Is it a difference of a degree? Are you looking at models, let’s say like the Scandinavian countries? I wouldn’t use Canada, by the way, because Canada is now, what would you call, predicted by economic analysis analysts to have the worst performing economy for the next four decades of all the developed world. So maybe we’ll just leave the example of Canada off the table. Scandinavian countries are often the polities that are pointed to by, I would say, by people who, at least in part, are putting forward a view of redistribution for purposes of equality of opportunity like you are. But they’re a strange analogy because they’re very small countries and up till now they were very ethnically homogenous. Exactly. And that makes a big difference when you’re trying to flatten out the redistribution. Plus they are also incredibly wealthy, which makes redistribution, let’s say, a lot of money. So why doesn’t the government that’s bent on redistribution fall prey to the pitfalls of command economy and forced redistribution for that matter? How do you protect against that? I think what you have to do, it’s very, very, very difficult, is people get very ideologically captured by both ends and they feel very, I guess, committed or they feel very allegiant to pushing certain forms of economic organization. And I think sometimes it blinds them to some of the benefits of what exists when you incorporate multiple models or, I mean, you’d call them mixed economies, which is really what every capitalist economy today is. Some form of free market capitalism combined with some form of government intervention to control for negative externalities. These are the ways that all economies, even in Scandinavia and the world, work. And I think that recognizing the benefits of both systems are the best way to make things work. Fair enough. And the Scandinavian countries seem to have done a pretty good job of that. But like I said, they have a simpler problem to solve, let’s say, than the Americans have. Negative externalities. That’s an interesting rabbit hole to wander down because the problem I have with negative externalities, you made a case already that, and again, correct me if I’ve got this wrong, but I think that I understood what you said. A free market, free exchange economy is a gigantic distributed computational device. Basically, yeah. Right. Exactly. Which funnily enough, one of the big problems for our command economies is called the computation problem because no central body can actually compute the ins and outs of. Right, exactly. Right. That’s a fatal problem, right? Because it doesn’t have the computational power. It certainly doesn’t have the speed of data recognition. It doesn’t have the on-the-ground agents if all of the perception and decision-making is centralized. Right? It’s way too low resolution. It’s going to crash. Okay. So, and I think that that’s comprehensible technically as well as ideologically. All right. So, but having said that, with regards to externalities, all the externalities that a market economy can’t compute are so complex that they can’t be determined centrally by the same argument. And so… There are ways to account for them though. Really? That work with… Tell me how. Yeah. Because I can’t see that. Because I can’t see how that they can be accounted for without the same computational problem immediately arising.