The Ethical Root of Hatred for Profit with Richard Salsman

[00:00:00] Speaker A: Scott I'm Scott Schiff with the Atlas Society. We're very pleased to have Atlas Society senior scholar Richard Salzman here today discussing the ethical root of hatred for profit. After Richard's opening remarks, we'll take questions from you so you can request to speak if you have a question, and we'll try to get to as many of you as possible. Richard, great topic. [00:00:22] Speaker B: Thanks, Scott. Thanks for hosting this and welcome, everyone. I want to describe briefly the title is the ethical root of hatred for profit, and the description on the website. It's always worth summarizing. Polls show that most people distrust and despise profit, while economists insist that, quote, perfect competition entails. It's not my language, this is theirs. Quote, a zero profit condition, unquote. Did you hear that? Zero profit condition. Anti profit biases arise in my view. I'm still summarizing here from a distrust of egoism, from a belief also in the zero sum premise versus the traitor principle. That's what I'm going to discuss tonight. Scott will later in the show have a link to something I did almost three years ago, I guess two and a half years ago. So my first clubhouse appearance now, x spaces for the Atlas Society was something called profit theory. Some good news. So that one's from November 18, 2021. So when, I don't want you to look at that now, but that is a similar session we had that one. It goes through, much more the history, which I won't do tonight, much more the history from Adam Smith to Karl Marx to the Chicago School of Economics to mises Hayek and other, their view of Kirzner, their view and theory of profit. And I do mention in there both the economic attitude toward the economic theories of profit, lame as they've been, but also the ethical aspects of profit. But tonight I do want to focus on, since it's my topic, the ethical root of the hatred of profit. That'll be my focus tonight. But to get better background, if you want two good profit sessions, it'll be that 2021 session. Don't want to lose track of that. And tonight's now, it's, I think, helpful to say right up front what my view is, the ethical root of the hatred of profit is the hatred of egoism. What do I mean by that? The hatred of self interest. What do I mean by that? The hatred of pursuing gain. Profit is gain. G a I n. It's the business version of gain. Now, on the surface, this will sound crazy. Who could be against gain? Who could be against gaining things? What do you gain in life, wealth, health, friends, lovers, liberty. I mean. I mean, if you lose those things, you're in despair, you're unhappy. So it does, on the surface, seems very paradoxical. Why would anyone, why would any group of economists, even, not just political egalitarians, say, be suspicious of gaining? My theory tonight will be because they think it involves the loss of others. In the literature, it's called zero sum. What is zero sum sum? Means add up to and, you know, add up to cases. The zero sum premise means if I gain, you lose. If I win, you lose. It's like a sports game. Everyone sees sports games all the time. Of course, the Yankees can't win without the Red Sox losing. So don't tell me that in the private sector there's gain gain. And yet that's actually true. There's gain gain. There's not win lose. Now, I'm talking here about voluntary exchange, but I'm talking about robbing people. That'll be relevant because some people think profit is robbery, but gain gain, I don't know. I think it was John Stossel or someone years ago came up with this great concept of have you ever noticed? Thank you. Thank you. The mutual thanking phenomenon. And what does that mean? You go to the grocery store, you buy stuff, they say thank you because they got your business, and you say thank you because. Why do you say thank you? You're not doing them a favor. You shopped for the things you wanted. You had a net gain. They had a net gain. Oh, my gosh. Look at that. Gain gain, not safeway. Got $6 and you lost $6. Now you mutually gained. So one, I'm looking at an article here from the journal of Personality and Social Psychology. There's so many. There's so many silly academic journals. But this one I had to look at and researched years ago, anti prophet beliefs. That's the title of the article. How people neglect the societal benefits of profits, unquote. Now, there's two things worth pointing out here. There are anti profit beliefs, and the question is why? I just suggested one of them. That it's seen as a zero sum game. That it's theft. That if I gain, you lose. But notice also the way these academics position it, people are neglecting the societal benefits of profit. Now, why do they go there? Here's the ethical point I want to make. They don't like egoism. They don't like self interest. They feel the need to justify even profits where there's gain gain as having a societal benefit. Do you get that? So their view is, first of all, other oriented is more moral than egoistic. If you're helping the customer, if you're helping the worker, if you're helping fill in the blanken, then it's moral. But if you're helping yourself, it's immoral. And the idea of the societal benefits of profit, they're looking for a collectivist justification for profit. In other words, they're resisting an egoistic argument for profit. And that brings me to my second point. The hatred for profit is not only the idea that it's a zero sum game, which is not true. People create things, then they trade things, and they mutually benefit. So there's mutual egoism. There's not win lose, there's win win. But the second one is even people who see or glimpse win win will have two objections. One will be, it's still selfish. These two selfish people are trading, and I've been told that self interest is evil. So the whole thing is just. It's just, it's materialistic, it's selfish, it's base, it's immoral. I don't need to tell you where that comes from. It's a medieval religious view of ethics, but the other one is more modern and more egalitarian, which goes something like this. I think I recognize that there's mutual benefit, but there's unequal benefit. Do you get that? There's mutual benefit. There's no exploitation. But someone, see, I don't know, someone seems to be gaining more than the other person. So I envy that. I don't like inequality of wealth. I don't like inequality of result, profitability, that kind of thing. So those are just, I'm just hinting here some of the beginnings of my answer as to why there's ethical. The root of the hatred of profit is more ethical than it is economic. But let me back up a little bit and just give you three things that might help. I'm going to start with what profit actually is, what causes it, and then what's the root of it. Now, if you. I love etymology. That's not the study of insects, it's the study of word origins. So if you go, there's a great site called online etymology dictionary. You go to online etymology dictionary and punch in profit. What do you find? I'm not going to read all the entry here, but one of them says, mid 13th century. Wow. Quote, income derived income derived from an office, property or transaction, et cetera, et cetera, quote unquote benefit, quote unquote growth, quote unquote advance. I'm just quoting them. Advanced, increase, success. Progress, gain, useful, do good, forward. Usefulness, gain prop. They're using old English. They're finding friends. This is a dictionary. Looking for the origin. Did anything I just say to you sound nasty or wrong or immoral? They're wonderful. It's so interesting. Benefit, growth, advance, gain. Usefulness, not destruction, not. You're useless, not so. How interesting is that? Why is there a hatred for profit when the origin of the word is so benevolent? Other than a philosophy that says if your gain and your benefit is at the expense of others? Well, of course we would oppose that as well. But what if it's nothing? Two aspects, economic and ethical. Let me just give you. I don't want to focus most on the economic. That's my specialty. But let me just give it to you quick and straight and we'll move on. Profits are the net creation of wealth. Let me repeat that. Profit is the net creation of wealth. Sometimes in business school you hear the word value added. What does that mean? First of all, it's value. What do you mean, added? All right, here's the idea. If you're an accountant, you know very well it's kind of boring. Here. The accountant will say, profits are just revenues minus expenses. What does that mean? Revenues, stuff you sell to people. Those are customers. At a price, of course. You get revenues, but you didn't get those revenues out of thin air. You had to make stuff. You had to create stuff to sell. Could be goods or services, but you get the idea. You have to make stuff, and making stuff costs resources. That's the cost of doing business. You don't want your cost to be more than your revenues, that's a loss. You want your revenues to be more than your costs, that's a profit. Why would that be a bad thing? That's a net creation of wealth. You're selling stuff that people voluntarily buy, which in total exceeds the amount of resources you used up in the process of producing those things. Why? Not only is that a good thing, if it was bigger, it would be better. The bigger the profits, the better it means the more net wealth you're creating. So the first thing to keep in mind is this is not a technical issue at all. Profit is the difference between your revenues and your costs as a business. I'm going to make it personal soon. This sounds like that business school, but I'm going to personalize it very soon. And the wider, the better, the more you can create value relative to how much it costs to make value, the better and by the way, you can't just charge customers anything. They have options. Businesses are very good at reducing minimizing costs. If you minimize costs, you maximize profits. So they're into a resource conservation in a way that no environmentalist could ever compete with. Now, let me just say, I think at this point it might be helpful to just say, what are all this? To give it context, what are the incomes in a free market capitalist society? Because profit is one of them. But what's the context here? I just told you kind of what it is, that it's a manifestation of the, it's a manifestation, actually of rational self interest. You want of egoism, you want to gain a, and you need to do rational calculations to do so. You don't want to lose. Who wants to lose? Who wants to sacrifice them? People want gain if they love life, if they want to flourish. But just in the context of the normal phrases we hear, wages, interest, rent, profit, salaries. Those are the five main incomes of a capitalist society. Now let's go through this. Now, wages are the most well known in common, earned by whom? We typically say laborers. I don't like saying that because it suggests that everyone else isn't laboring, isn't working, isn't doing something. It's a total bias in the literature from, by the way, free market in marxist economists. So they'll say wages are earned by laborers. I'm going to use the word helpers. Wages are earned, but they're earned by people who help the owners of the means of production. What are salaries? Salaries are earned by entrepreneurs, people who start businesses, people who run businesses. Salaries are earned by CEO's, the top of the pyramid of ability, as Ayn Rand called it. The brainiacs who were run the white collar workers, if you will. They're not on the assembly line. They're not blue collar. They're not getting their hands dirty. They're at the top of the, and they're contributing the most. Not the least. They're not parasitical. They're contributing the most, and they're being helped by hordes of laborers, by many more people called helpers. Interest. What is interest? Interest is earned by people who lend money. Interest is a kind of income earned by bankers. What is rent? Rent is a kind of income earned by what? Landlords? Real estate owners? Okay, now here's the point of tonight's what is profit? Who gets profit? Who earns profit? Answer capitalists. What are capitalists? They own the means of production. They're not CEO's, they're not entrepreneurs. They own stuff. They own the means of production. They are shareholders. It's called under capitalism. That sounds crazy. Sounds crazy to most people because most people think, the hell are they doing? Who are these people? Who are these people? They actually own the business. If you want to get down to the nitty gritty, their shareholders say in Microsoft, and they get dividends paid to them. They own the means of production. They must have saved money at some point, which means they must have previously created wealth, and then they invent while they invest it in assets and the means of production and companies and capital equipment and all the things. And by the way, they hire through a board of directors, they hire CEO's and entrepreneurs to run their enterprises. It's totally earned. In the history of economics, however, it's often been seen as, no, they don't earn that at all. Why? Cause they look like they're just sitting behind a desk. They're not sweating, they're not physicalist. You see the marxist view, this is a marxist view that only physical labor, only sweating, only muscles, create wealth. It's not true. Intelligence is a source of wealth, and especially in the area of profit, it's the most intelligent, brainiac people who create profits. But if you don't get this, if you think, no, it's only physical labor, then you're going to be very distrustful of non physical labor. And you're going to be doubly distrustful, if you notice, as is common, my gosh, the non physical laborers earn more money. They get bigger paychecks. Wall street is way wealthier than main street. Well, in the capitalist system, that is totally justified on the grounds that they are the brainiacs of the system. They are the ones who discern new businesses, new products, new enterprises. They're the ones judging all the time where to send capital saved money. You know how hard that is? That is enormously difficult. A lot of them don't succeed. A lot of them go by the wayside and they're few and far between. Yeah, so they're definitely a minority. They're a completely disgrace, hated minority, because they're not understood for what they're doing. Okay, now more to a couple more minutes on this, and then we'll open up to questions more on the ethics of this. Ayn Rand is one of the few philosophers in history who explicated and defended the ethical code called rational egoism. Rational the idea that the essence of humanity is we have a rational faculty. But then the ethics of this is we must be the primary beneficiary of our own thought and actions, that the immoral thing to do would be to sacrifice ourselves, at root, really become irrational. But even otherwise, to sacrifice meaning to lose, not to gain. To lose, and deliberately to lose, not because we made the wrong judgment or something like that. And it's, if you know the history of ethical theory, it's very rare. It's very rare for someone to advocate the idea that you should be self interested, that you should be egoistic, that you should do it rationally, that it takes a lot of work to figure out what your rational self interest is. That to do so means to engage in trade with others, not to exploit others, but to induce others to trade with you. And these trades can be either commercial or romantic or friendship or familial. The point is, if life is worth living, surviving, not just surviving, but flourishing, what Aristotle and others called eudaimonia, that is the way to live your life. Medievalist views, even some ancient views, said, no, that's evil. It's evil to benefit yourself. We'll presume that benefiting yourself means harming others. But they would even say, even if there's mutual benefit, there's too much selfishness going on here. There's too much material enjoyment going on. This is the more puritanical view that might even recognize there's mutual gain. But they just don't like gain. They just don't like the idea of an earthly, happy, pleasurable, mutually gaining society. But that's what capitalism is. I want to say something quickly about the personal, because I focus much on the commercial. If you ask someone, when you go shopping, do you want to gain? And they would, they probably say, what are you talking about? You have money to spend. You have goods you're buying. Are you putting things in your basket and checking out at the register with the hope of gaining more than you lose? Because you're going to lose some money out of your wallet. So why do you do it? Because you've picked things that are a net value to you, above and beyond the resources expended in getting them. Does that sound like profit? It's totally profit. It's a profit. It's, I gain more than I give up. I've got a net. The bigger, the bigger the gain, the better. No guilt. When you check out of the grocery store, is there any guilt that you have gained? And if you come away with, you say to your friend, oh, my gosh, I just got a bargain. I'm so happy. I got a bar. What is a bargain? I paid for something way less than what it is worth to me. People are happy about this. No one's resenting people about this. It's a net gain that's bigger than you expected. Okay, that's just shopping. But when you interact with friends, when you interact with family, when you interact with lovers, when you decide should you go to school or not, how many years should you go to school, what should you spend? For what kind of time, energy and money should you expend on anything in life? I mean, economists and accountants call this cost benefit analysis. You can do, you can do that in business. That's what the profit motive is. That's what the profit margin is. But it happens in everyday life for people who are enlightened, for people who want to be happy, who aren't guilty about being happy, every calculation they make, as best as they can. No one's omniscient, no business is an omniscient. Of course, you might have losses, you might make mistakes, you might pick the wrong lover or the wrong friend. But the point is, if your goal is I want to be happy, I want to gain, not lose, that's profit seeking. And rational people do it all the time. The mystery might be why, when they look at businesses, they say, evil, evil, dear business, that you're trying to benefit. Why? Why personally, you're trying to benefit. The profit motive is, in a rational, enlightened capitalist society, ubiquitous. It's all over the place, and yet in the commercial realm, it's hated. And my theory tonight is, well, not my theory tonight. My theme tonight is it's being, because the underlying ethic is distrusted. People still have a medieval, I don't want to put any particular religion on it, because all religions basically feel this way. They have a distrust of the pursuit of self interest. They have a fundamental distrust of egoism. They believe it's immoral, they believe it's vicious. They're not willing to say it's the moral thing to do. So unfortunately, what's very odd is this is true in economics. Most people think that economists are super attendant to the value and purpose and virtue of profit. They're not. They're not. Even Adam Smith, who launched the field with the wealth of nations, 1776, one of his great insights was people in the marketplace are motivated by self interest, and that's what creates the wealth of nations. Isn't that amazing? He wrote a book called the wealth of Nations. And his theme was, it's caused by self interest. But he did not think self interest is moral. He thought it was practical. He thought it delivered the goods, so to speak, and not to condemn Adam Smith, because he was really a wonderful thinker and enlightened. But, you know, he was followed by people like Marx and others who said, well, according to Adam Smith, wealth is created by physical labor, not created by intelligence. Therefore, the intelligent among us are exploiting the labor. They're thieves. They're robber barons. And so starting with Karl Marx, like in the 1840s, and following, we got this very nasty view of prophets as theft. Now, if you fast forward to those who overthrew Marx, this is in my earlier 2021 presentation, so you can go there for that. Their view was, it's not really stolen from labor, but it might be that we're price gouging customers. I mean, how pathetic is that? You see, with the difference between revenues and costs, if you say, well, where's profit coming from? It's not earned, say the critics. So where is it coming from? It clearly exists. It's persistent. And the most successful companies are the most profitable. So by this standard, they're the most evil. By my standard, they're the most moral, they're the most incredibly productive ventures everywhere, anywhere. But the revenue cost differential will lead people to say, listen, the only reason you're profiting is because you're overcharging customers. That's the revenue side. And or underpaying workers. That's the cost side. See how they argue it? That's why you say. That's why you see repeatedly whether the economists are marxist or whether they are semi friendly to markets, they're both coming up with the idea that profits are unearned, that someone's being exploited, that either the customer who pays is being exploited, charge them too much price gouging. You've heard this. Or the laborers being underpaid, exploited. In a free market, no such thing happens. Prices are determined objectively by free exchange. And if prices are objective, it's a big argument, requires a completely different session. I understand. But if prices are objective, not arbitrary, then profits are, because profits are just the difference between the price you sell at and the price you pay labor and other costs of production. There's much more to say. I'll leave it at that. But I think I would summarize it this way. One of the great defects, even of modern economics is they have no theory of profit. I wrote in 2005, I wrote an essay on this, and I think the opening line from memory, I said something like, for two centuries, economists have been at a loss to explain profit. It's so sad because that's still true. It's true, by the way, it's true of the austrian economy. Even the free market economists don't get it. We can talk about that in the Q and A. Mises didn't get it. It's so tragic because a great economist, Kirzner, didn't get it, and certainly Marx and the others didn't get it. But it's, I think, one of the most important concepts in all of economics, the concept of profit. And we're sitting here in 2024, and we still do not have a valid theory of profit, which is it's created by intelligent business people who organize mentally. There's almost no physical mentally, the organization of production, and find ways to create more value than they use up in the process of creating value. This is one of the most moral things business people do and finance people do as well. They're even more astute and more intelligent and more prescient even than manufacturing or agriculture. Not to stack up the industries that way, but the most reviled people are financiers, and that certainly no one understands how they make a any money without bleeding and blood sucking everyone else. They're actually the most productive. That was kind of a controversial view there. So, Scott, I'll stop there at 30 minutes after the hour and take comments and questions. [00:30:39] Speaker A: Great. We'll get to Lawrence here. If you'd like to join us, you can request to speak. I know you're not a big fan of the expanding pie, but, I mean, to the extent that's valid, you're saying that the message should be that it comes from creativity and thinking and that we need to show people that I don't have to lose for you to win. [00:31:05] Speaker B: What part of the pie? There's two aspects. One is the analogy is not so bad, but baking a pie, the idea is there's a piece, and if you go at it in a rational way, you might ask, who baked the pie? What are the ingredients of the pie? I mean, it's not a bad metaphor in the sense of there are ingredients. There's a recipe. Some pies are well baked and some are terrible. In other words, you have to care about the customer enjoying the taste of the pie or not. So I kind of. I don't mind, actually, what I call pie economics, because it does have, in a way, all the elements of creation and enjoyment. But think of this. If you take that metaphor, and I'll take it and run with it, what's a recipe? A recipe is. Wait a minute. That's intelligence. Someone figured out the chemistry and the allocation of research required to make a good piece. And not just that. Not just the reason. Use this or use flour, sugar, salt. It's not just that. It's in what proportion, in what order. When you start looking at it that way, you realize, okay, this isn't going to happen by accident. This has to work by people figuring this out, having tried it over the years, know what works and what does not work, what tastes good and does not taste good. But not just that. How much do the ingredients cost? And at the end of the day, how can we sell this thing or not for more value than we put into it? And who do we hire for labor? And not just that, what do we use for capital equipment? Do we use an oven? Do we have a spatula? Do we have mixing bowls? So you see all the elements of, wow, this really is capitalism. This really is a capitalist calculus. But here's the problem. Every time you say pie economics, it is usually used by egalitarians who will say there's something wrong with not everybody getting the same wedge of pie, everyone contributing to the creation of the pie, per the egalitarians, in their view, everyone should get an equal slice. And if not, there's some injustice going on. That's not true. It's a fact. It's a fact. It's a fact that different wedges, as they do go to different people based on their contribution to the baking of the pie. And it's not the physical labor that contributes the most. It's the intellectual, it's the recipe. It's the organization is the sequencing. Now, it's not just that, Scott. They not only have this view that everyone should get an equal share, they have the view that the pie itself is a collective process. When you can't figure out who contributed what. So this is like Obama or Elizabeth Warren saying, you didn't build that. And actually, capitalism is a system where by minute microeconomic calculations and bargaining, we do figure out who did what. It isn't a mystery. In other words, that CEO's contributed this much and the janitor contributed this much, and the middle manager accountant contributed that much. Is it always, you know, perfect in this sense of. Perfect in the sense of what? Some platonic standard? That's not rational. No. This is what annual reviews are. When people look at what did you contribute, what should your raise be? What should your income be? There are millions of decisions made every day about who did what, and people judging each other in a rational, egoistic way. And if you don't do it that way, you're going to be bounced out of the business. So the pie thing is they assume it's fixed. That's the zero sum game approach. And the second premise that's wrong is they assumed everyone created it collectively, and we can't figure out who did what. [00:35:17] Speaker A: Okay, I've got a follow up, but I want to go to Lawrence. Lawrence, thanks for joining. [00:35:23] Speaker C: Thank you. Hi, Richard. [00:35:25] Speaker B: Hi. [00:35:26] Speaker C: Thanks for doing this talk. I wanted to take what you've kind of just said and apply it to a recent real world thing event that happened, of course, because I'm in Houston, we have the hurricane, power outages, all that stuff. And I got to a conversation with someone about the price hikes that happened around the city, especially in regards to hotels, in regards to them charging 200 or 300% more than normal, because they are one of the few places that had power and ac and all that stuff. So it seems to me, of course, you know, on the one hand, you could say there, there's many people who want to get in and think in the hotel obviously can't deal with that capacity, and they've got to try to get people in to work and do all those things. So I can understand the price increase, but the other person made the point, it's not like them raising the price is going to incentivize other hotels to suddenly pop up to meet the demand because it's, one, can't do it fast enough, and two, it's all reliant on our company getting the power back. So regardless of that conversation, since so many people point to emergencies and price hikes as examples of immoral profit seeking behavior, could you maybe just responding to that, just sort of talk about how you would view it? How would you counter that view that people have? [00:36:51] Speaker B: Great question. Great question. And it comes up all the time in price gouging cases, there's laws against price gouging. Lawrence, you know, many years ago, Ayn Rand discussed in ethics, the idea of emergency ethics is the title of her essay. I don't have it in front of me, but I. And her view about emergency ethics. She said, notice when people try to theorize about ethics, they bring in rare cases. I think in Supreme Court years ago, someone said, rare cases are make bad law and emergencies and ethics are what we call lifeboat ethics. What would you do if you're on the Titanic and there's a light bulb and there's only, you know, 16 people and food for only four? The first thing she noticed is, why do you have this? Why would you build your ethical system on rare cases instead of the normal case. And her theory was, you seem to be looking for sacrifice. You seem to be looking for cases where, since there are limited resources and more demand, you are looking for someone being sacrificed. And then the only question becomes, who is sacrificing sacrificed? And of course, Ayn Rand's view was, ethics should entail no sacrifice at all. No win lose. No lose win. It all should be win win. And that's rejected. The same thing, Lawrence, happens in economics. This is not emergency ethics, but emergency pricing. These are hurricanes, these are tornadoes where all of a sudden there's mass destruction, not caused by capitalists, of course. It's called. I mean, you can call it acts of God. But the point is, there's some natural, quote, unquote natural catastrophe, and someone needs something. They need food, they need water, they need shelter, they need a hotel, they need whatever. They need a cab ride out of whatever. And the point is, prior to the event, all the people providing those things were providing those things. And what does economics teach us when there's a limited supply and then all of a sudden, a massive demand, right? Because of the catastrophe, because of the emergency, the price will go up, and that should go up. It's a natural phenomenon. It's not caused by the providers of the services. But the first thing people say is, I'm being price gouged. Why aren't you charging the same price for water now that you charged 13 minutes ago? And the answer is, because reality has changed. Because reality has changed. And why are you holding that against the suppliers? But the first argument will be, they're greedy. They're greedy, they're raising their price, and they're exploiting my suffering. Now, there are laws preventing such price increases, and guess what happens? All right, so they're forced not to. And they could do this themselves. Of course. The businessman could say, I don't have it. I don't face a law, but I want to be an altruist, so I'm going to just keep my price the same as it was. And what happens? Hordes of people show up at his door, and he's got a limited supply. What's he going to do? By favoritism allocated out to what his neighbors and his friends, the ones he likes, that it's going to be arbitrary. If you raise the price to fit, what's the reality of the case? People will pay for it if they really, really need it. And soon enough, the supply will be coming in from other places, other people will hear, oh, my gosh. The price of water is very high in catastrophe land. Let me deliver water to the profit motive. The actual greed of the profit motive will lead people to say, I need to send my water to that area or my plywood or my housing or fill in the blank. It's so wonderful, actually, that the capitalist system is able to handle catastrophes and emergencies in such a quick and easy way, because the high price will make the people who are marginally interested in the service not buy it. They'll just wait. They know it's a temporary condition. They'll wait. And not just that, it brings in supply. It induces people to send in supply. This happened with Katrina. I mean, once prices skyrocketed, people from all over the country send stuff to Katrina in the Katrina area. So it's so sad, because when these price controls go in and they go in ahead of time, of course they'll say, nobody can raise their price quickly over, you know, a two, two or three day period. And what are people left with? Shortages. They have no access to the resources. Everyone feels they're all very moral, and no one's raising prices, but nobody can get anything either. So they're still suffering. I don't know if that. I don't know if that helps understand what happened down in Houston recently, but I'm sure. I'm sure down in Houston, there are probably price gouging laws and price controls that cause people to stand in line and not be able to get anything on the grounds that they were being moral. [00:42:18] Speaker C: Yes. Especially, like you said, when it comes to water, severely limiting how much anyone could take. But it was just an interesting situation, speaking with this person, talking about the hotel being too expensive. [00:42:32] Speaker B: Right. [00:42:32] Speaker C: So that's why it was sort of an interesting thing I hadn't thought about. But I figured the same answer applied. But it. It was a little bit of a different context than what I normally deal with when I speak to people about this stuff. [00:42:44] Speaker B: Yeah. And. And notice what they would say. They would say, wow, the hotel prices went up if they were allowed to. Right. And what would they say? They would say, only wealthier people can afford those hotel rooms. But that's not necessarily true. I mean, that would be okay if it were true, but it's not just wealthier people. It's lower income. People might say, I really need that room tonight. I'll spend a lot of money, because you see what I mean. But people are making a calculus about how much it matters to them. But the idea of blaming or demonizing the people who actually have resources available during emergencies is so disgusting because who else has the prescience to provide services and then figure out how to allocate them in emergencies? We should be thanking and applauding those people instead of condemning them. [00:43:43] Speaker A: Let's go to Felipe next. Thank you. [00:43:48] Speaker D: Oh, yes, thank you. And, oh, and thank you, Richard. That was pretty awesome of a share. [00:43:56] Speaker B: Thanks for joining. [00:43:58] Speaker D: Oh, well, it's my pleasure. So I'll offer an observation for you to chew on. And it's the fact that I'm from Quebec and late Gen X generation was born in 77. And so we're french, we're Catholic, and we all know the relationship between Catholics and money. Right? It's, you know, the pious life, the humble life. And. And it was a time when. [00:44:33] Speaker B: The. [00:44:33] Speaker D: Church completely fell apart in the province. And between 89 until 94, churches were full to zero, essentially. And because it was such a taboo to be successful, there's something that became part of the parlance and it was the use of the word small. People would say, oh, I rented a small cottage and I rented a small car. And it's always, it's completely ubiquitous. It sort of was sort of a code. Right. And that survived. And to this day, it's still very much part of the culture there. You hear it all the time. And, yeah, it's sort of sad, really. [00:45:25] Speaker B: Well, I'm glad you. I was raised Catholic, Felipe, in Massachusetts, I think until I reached the age of reason, 97 years old, that I started questioning it. So I know what you're talking about. It's interesting because, wow, I feel born in 77, I graduated from high school in 77. A couple of things. I don't know if people know this or not, but the kind of anti capitalist concept of social justice, which is not that, you know, we should treat people justly, you know, based on what they've earned or not, but that there should be a more egalitarian distribution of wealth. And groups are responsible or not for interacting with other groups. It's Catholic. That's not marxist. I was, I found this out when I wrote, I wrote an essay called Holy Scripture and the welfare state for Forbes magazine back in, I don't know, 2011 or so. And I found that the concept of social justice came from a Jesuit called Luigi Tappirelli, and it was the catholic priests and clerics and others who were developing this concept. And it's thoroughly anti individualist, is thoroughly anti capitalist. And you're right, I think you mentioned earlier, Felipe, the kind of ascetic that's much more agustin the ascetic view that we should not be pursuing pleasures, that we should not be pursuing material mammon. We should be taking vows of poverty and vows of chastity and stuff that's much more medievalist, but I think that's been adopted today by the greenshouse. So you must know up in Canada, up in Quebec, the environmentalist movement is the one that is aesthetic in the sense of hating capitalism because it's so abundant, because it so much focuses on pleasure and having fun and rock and roll and sex and all that. But the holy scripture in the welfare state, I noticed in America in 2011 or so, it wasn't Republicans, it was Democrats who were criticizing Mitt Romney and Paul Ryan for, were advocating cuts in the welfare state. And the Democrats on the left said, it's unchristian. You guys are not being christian enough. And so there's a religious left in America, not just a religious right, there's a religious left. And yes, you mentioned humble. You mentioned humility. Ayn Rand's philosophy is you should be prideful, not humble. And anyway, I sympathize. Sympathize. I think I sympathize with what you're worrying about, what you care about up there. Quebec is not that pro capitalist, is it, Felipe? [00:48:29] Speaker D: No, no, it's not. It's, I'm in Toronto now, but. Okay, but it's, no, it's, I mean, at the time when I left, it was about 20, 2013, 2014. [00:48:43] Speaker B: Yeah. [00:48:43] Speaker D: It was still, it was still in the news. You could hear it on talk radio. The topic is, you know, can we stop treating successful, successful people like, like they, you know, they're crooks, you know, or they did something bad, maybe they're just successful, you know? [00:48:58] Speaker B: Yeah. [00:48:59] Speaker D: So that was still, I mean, you could tell that finally the, you know, the, you know, that's, that sort of culture was breaking out. Right. And so hopefully it continued and I may return back there. So I'll find out. But, yeah, it's cracking up. [00:49:18] Speaker B: Great. And your issue I hadn't addressed, your issue of small versus big is very interesting, too, because in America there also is a suspicion of big. And the small is sacred. And so anything big, big pharma big, Wall street big. I don't know. I think when meat prices started going up, Biden called it big meat. Big is bad in their philosophy. Now. That is so weird, actually, because if big means big government and it's oppressing you, that's a bigness I don't want. But if big net, but if big is Walmart. And they're big because they have so many customers that love them and patronize them. What the heck is wrong with bigness? But the antitrust policy down here and the distrust of profit, which is really my topic tonight, so much goes with bigness in economics. It's called economies of scale. They have this very straightforward argument for when you're big, you have low cost production and you can meet a mass market of people who can afford your stuff. That all sounds good to me. Right, but. But economies of scale means bigness. And so they simultaneously advocate economies of scale. And then if you actually achieve it and become big, they trust bust you. It's, it's. [00:50:46] Speaker D: Well, it's funny. It's funny you mentioned the Greens earlier and environmentalists because. [00:50:52] Speaker A: Quick point, Felipe. I want to give the other person. [00:50:55] Speaker D: Yeah, yeah, yeah. It's a quick. It's a quick story, but it's, you know, the Stephen Gilbo which became, you know, exactly that. He was the famous. Right. Green. And then he became, you know, PM for. [00:51:08] Speaker B: Yes. [00:51:08] Speaker D: He's actually wrecking culture here completely. [00:51:11] Speaker B: Right. So I remember. Yes, I know him. Yeah, yeah. [00:51:16] Speaker D: Thank you so much. [00:51:18] Speaker B: Thanks, Felipe. [00:51:20] Speaker A: Thanks. Let's go to Texas Liberty. With time we have left, I think that's Clark. [00:51:26] Speaker E: Yes, Scott, thank you. And thank you, Richard. It's great to hear y'all's voices again. And it's great to hear eloquent ideas expressed so. Well. I guess my only point would be that maybe, Richard, you can expand more on this, and I know you have in the past, but it appears that all these. The movements today. [00:51:58] Speaker B: And primarily. [00:52:00] Speaker E: Oh, I'm sorry. Can you hear me now? [00:52:02] Speaker B: Yeah. [00:52:02] Speaker E: So I guess just. Just wanted to see if you could expound more on that about how you know a lot of all these bad movements we have. [00:52:16] Speaker B: Well, can you hear me, Scott? [00:52:18] Speaker A: Yeah, I can. [00:52:19] Speaker B: All right. I think we lost Clark, but I think I gained. I think I understand what he's asking about ESG, which is an environmental social governance, or call it the stakeholder right. Theory versus shareholder or Dei. If I gather what he was asking, I think it's absolutely true that the profit hatred I'm talking about contributes to these other movements. Because if the idea is profit is evil and that corporations are motivated by the profit motive. Well, yeah, I mean, even major corporations today and CEO's are saying, oh, we have to change our mission. The mission can no longer be profit seeking or profit maximization. So what does that mean? I have long contended shareholder capitalism is a redundancy. That's what capitalism is. Shareholder means. You own the place. And if you own the place, you get to decide what's done with it. The stakeholder model, very cleverly phrased stakeholder instead of shareholder. The stakeholder model, which has been around since the seventies, but it's really being pushed and advocated today by the World Economic Forum and elsewhere. The stakeholder idea is corporations to serve non owners. It should serve people who don't own the place. It's a, it's exactly what Marx wanted. Actually. Marx has said that the workers should take over the means of production. They should seize in a larsonist manner. They should just see stuff they don't own. But the stakeholder model is corporations. CEO's, in effect, literally voluntarily giving up ownership and control of the enterprises they're supposed to be in charge of to non owners. Now, who are the stakeholders that are non owners? Employees, local officials, customers. I mean, there's a long list of people who are allegedly supposed to be served by corporations and all they're doing is eating them alive. They're like parasites eating these companies alive. And if that's what Clark is asking about, I think it's totally motivated not only by profit theory, but in part by profit theory, but by a whole bunch of other things that the corp that owners of stuff don't have any rights. [00:54:41] Speaker A: I can just add on, Richard, you talked about owning the means of production, but what about where there are these ESG hires and there's a corporatism where you can only become a CEO by being one of the gang? I mean, is that earned? [00:54:57] Speaker B: No, no, of course not. No, I think what I think what's happened is we have a mixed system. It's no longer fully capitalist. We have a mixed system. And by the way, it's not even socialist. We do not have a situation today, not really in America and elsewhere or Europe. We do not have a case where government is owning the means of production. On the other hand, they're not leaving it alone. They're controlling the means of production. They're regulating it. They're telling business people and business people are just falling over backwards, agreeing to this, which is disgusting. They have no backbone. But I don't really blame them. I blame the people with actual political power. They're telling them what to do with their property. And you could go personal on this and say, wow, the government is also telling people like women what to do with their own bodies. That's fascism. That is not socialism. Capitalism is private ownership and private control of your property. Socialism is the complete opposite. It's government or state ownership and control of your property. Fascism is a hybrid. That's what we're suffering from today. We're suffering from a hybrid that says you can own your, you can own yourself all you want. You can own your business if you want. We're going to tell you what to do with it. We're going to regulate, we're going to regulate you. We're going to tax you, we're going to force, we're going to for, and it's actually, when you think about it, it's so disgusting, it's brilliant. Because these people are saying, I don't want, I don't want the responsibilities of ownership. I'm not going to own the thing. Then it's, then it's mine. And I have to worry about whether I f it up or not. That's what the Soviets did. No, these people are like German Nazis. Their view is you keep the ownership and all the responsibility and I'll tell you what to do with it in the minutest detail possible. And that's what ESG is. That's what stakeholder stuff is. That's what dei is. And yes, it's terrible that the, it's called corporatism not because it's capitalism. It's corporatism because fascism, they came up with the word corporatism. By the way, the fascist model is let's have huge businesses. They're not against small, they're not against big. They want big and we're going to control them. There's going to be like two steel companies and we'll control them. There's going to be two munitions companies will control them. So, so people shouldn't be fooled today when they see big business in bed with big government. That's not capitalism, that's fascism. That is exactly the fascist model that they want. That's what was put in place in Italy, in Spain, in Germany. Big business plus big government. And big business just sits there and says, we'll do whatever you want. We will pay you, de Fuhrer. And that's what corporate CEO's are today. The bigger the companies are, the more they bow down to and obey what Washington is telling them to do. No one should confuse that with capitalism. [00:58:08] Speaker A: Great answer. Just in the last moments we have left. I mean, is it natural for people who adopt this zero sum view? Is that related to the polarization we're seeing around us? [00:58:21] Speaker B: Hmm. That's a good question. I, I'm not sure it's total. I'm not sure it's related. The way, the way, the way I would put the polarization is my own view. We can have a whole show on this, Scott. I think it's overdone. I think people make too much of, we're polarized, we're divided. We're, you know, we're at each other's throat. When you actually think about it, there's enormous agreement even when it comes to Trump. What is Trump trying to do? Is he trying to dismantle the welfare state? No. Is he actually trying to dismantle the regulatory state? No. What is the big effing criticism? That he doesn't want to be in NATO, that he doesn't want America to be imperialist, that he doesn't want to help Ukraine. He'd rather secure the border in Mexico than with Ukraine. That is why they hate him. There's no reason. A dictator, yeah, but notice, if you say you're going to get rid of Social Security, no. Going to get rid of Medicare, no. Going to get rid of the Reagan. No. What are they objecting to? It's very revealing that we could have a whole show on Trump. It's very revealing that both parties, for the most part, want the US all over the world spending on military and adventure, and Trump says no. That's the only reason they hate him. There's no other reason. It's not because they think he'll be a dictator. Biden is way more of a dictator than Trump. Way more. And they don't. That doesn't bother them in the least. [00:59:58] Speaker A: Great. Maybe we'll do a future episode about that. Well, this was a great conversation. Thank you, Richard. Thanks to everyone who joined us today. If you enjoyed this or any of our other materials, please consider making a tax deductible donation at Atlas society. And we'll see everyone next time. [01:00:18] Speaker B: Thanks, Scott. Thanks.