My name is Steven Pittz. I'm the director of the Center for the Study of Government and the Individual here at UCCS, and I'd like to welcome you all to campus on a very strangely balmy November day. But thank you for joining us today for this important discussion. We are happy to be partnering with the Steamboat Institute to bring you a very timely debate. I think we can all agree on capitalism versus socialism. I will soon introduce the CEO of Steamboat, and she will be introducing the speakers and the program, but I would like to just take this opportunity to say a couple of things about CSGI, or the Center for the Study of Government and the Individual.
CSGI has been around since the year 2000, so we're at our 25-year anniversary now. And CSGI works to educate and prepare UCCS students and the broader community for citizenship through three different programs.
First is our program on preserving a free and prosperous society, which was actually the initial program when CSGI launched in the year 2000. And in this program we focus on civil society, limited government, and the role of markets in maintaining a free society.
Second is the program on the American Constitution, where we study the foundational principles, ideas, and texts of the American political system. And then our third program is a program on civic discourse, where we teach civility and the deliberative virtues that are needed for a democratic society, and we include in that basic civics education.
And it's really this third program that I think tonight's event fits most squarely under, because debates like this are the single best way to model civil discourse — the idea that we can argue and disagree without being enemies or becoming enemies.
And in my view, the university is the best place to practice civil discourse and the deliberative virtues precisely because the stakes are relatively low. Honest disagreement and debate is precisely what a classroom is for, right? We all know that disagreement can be uncomfortable, and that it's possible to lose your job or become estranged from a family member over a bad or heated political discussion. That doesn't happen in the university. Worst-case scenario, your professor isn't very charitable and gives you a worse grade. They never should do that. If there's honest debate in the classroom, it should not affect your grade, but that would be the worst-case scenario. So I think that in the university, the stakes are relatively low. And in a university setting guided by academic freedom, that is where we should get accustomed to having disagreements and learning from them.
Of course, I should say that by saying low stakes, I don't mean that it doesn't require courage, right? Debating does require courage, and I think you would say it requires exceptional courage to debate in front of, you know, approximately 200 people in front of you. So I think even before we begin, our speakers deserve a little credit for that, right? But I also suspect that by the end of this debate they won't leave as enemies, but rather as those who have learned from each other and have a little more respect for each other. My prediction could be wrong, but that's just what I predict. That's what I predict. Again, we are thankful to the Steamboat Institute for inviting these speakers and for moderating this event. So I will now introduce Jennifer Schubert Akin.
So Jennifer Schubert Akin is the chairman and CEO of the Steamboat Institute, an organization she co-founded in the year 2008. The Steamboat Institute promotes America's first principles and encourages civil discourse by hosting debates on college campuses across America. So they actually do many of these on different topics, different campuses across the nation. Jennifer is a member of the advisory boards for the Benson Center for the Study of Western Civilization at the University of Colorado Boulder and the Ed Snyder Center for Enterprise and Markets at the University of Maryland. She also serves on the board of directors of Rebecca's Angels, a nonprofit organization helping children with post-traumatic stress disorder founded by Boston Marathon bombing survivor Rebecca Gregory. So please join me in welcoming Jennifer.
Good evening, everyone. Thank you, Steve, for that warm welcome. We love coming to Colorado Springs. I have to start off by saying, when we founded the Campus Liberty Tour debate series in 2018, the very first tour was on nationalism versus globalism. We came here to Colorado Springs, to UCCS, and had 500 people at the Ent Center to see Nigel Farage and Vicente Fox debate. So that was one of our very, very first debates right here at UCCS.
I want to thank all of you for coming out tonight. Thanks also to our livestream audience watching from all over the country. A few of the watch parties I would like to mention: we have Josh Rosales and Latinos for Tennessee; Veronica Cargill and friends at the Washington and Lee Spectator in Lexington, Virginia; and Joseph Presler and friends with the new Turning Point USA chapter at Vale Christian High School. So I'm glad you guys are watching tonight with your groups of friends.
Steamboat Institute was founded in 2008 in Steamboat Springs, Colorado, where we wish there was snow right now, but there's not a lot, for the purpose of educating people about America's first principles and fostering an appreciation of the freedom we enjoy as Americans. We've hosted dozens of debates on college campuses over the past seven and a half years. Why debates? Well, it's because civil debate and discourse, not violence, are the key to solving our nation's problems. When we stop talking to each other, bad things happen. With each of our debates, the emphasis is on critical thinking and critical thinking skills, and learning how to think, not what to think.
Tonight is the last of six stops in our fall Campus Liberty Tour. In September, we kicked off the fall semester at Virginia Military Institute with a debate on whether the US is experiencing a constitutional crisis. It was a fascinating conversation between George Washington Law Professor Jonathan Turley and Boston College Law Professor Daniel Subrin. In October, we visited Cornell University with a debate on whether American global dominance is the best defense against tyranny and evil. After Cornell, we went to the University of Texas in Austin with a debate on the impact of tariffs on the economy. Next stop was the University of Maryland with a debate on whether the government should ban all diversity, equity, and inclusion programs. And last week, we visited Grand Canyon University in Phoenix with a debate on the impact of artificial intelligence.
Looking ahead to the spring 2026 semester, we're planning a full schedule of debates. So we hope you'll check out steamboatinstitute.org to view our full debate schedule. I believe we had some flyers out here too with more information about the debates. With all of our debates, you can register to watch live from anywhere in the country. Just go to steamboatinstitute.org or to our YouTube channel. If you get some friends together to watch a debate, we'll be glad to send you a watch party kit with some debate swag and some good stuff in that.
Also, all of the previous debates, if you're interested in any of those I've mentioned, all of those are available for free on Steamboat Institute's YouTube channel. So check that out if you get a chance. As a nonprofit, nonpartisan organization, Steamboat Institute relies on the support of many generous individuals and foundations to bring programs such as tonight's debate to campuses across the country. I would like to extend a special thank you to our major sponsors: the Adolf Coors Foundation, the Diana Davis Spencer Foundation, the Lynde and Harry Bradley Foundation, Jack Roth Charitable Foundation, Arthur N. Ruud Foundation, Bruce and Marcy Benson, and John W. Childs for their support, which has allowed us to expand the Campus Liberty Tour to more than 30 campuses across the country.
Now for tonight's debate. The debate over socialism versus capitalism centers on how society should organize their economies to balance freedom, equality, and prosperity. Supporters of capitalism argue that capitalism drives innovation, rewards hard work, and creates wealth through competition and voluntary exchange. Critics contend that capitalism can lead to inequality, worker exploitation, and excessive corporate power. By contrast, supporters of socialism say that it promotes social justice and economic security for all. Opponents argue that socialism discourages innovation, limits personal freedom, and leads to inefficiency or government overreach.
Tonight's program will offer a fair and balanced debate on the following resolution: Be it resolved, capitalism is better than socialism for human flourishing. We invite all of our audience members, including those watching the livestream, to respond with your view on the resolution — agree, disagree, or undecided — before the debate begins. So right now, if you haven't, use the QR code or a text you may have received if we had your cell phone number. Go ahead and vote in the poll. And then when the debate is over, we're going to ask you to vote again. So be sure to vote again at the end. We want to see if your opinions have changed.
So you will see the poll up here, and you will see that as people actually vote, the poll results will change as you vote. And now it's my great pleasure to introduce our speakers and moderator for this evening. So let's welcome them to the stage, and then I will read each of their brief bios to introduce them to you. Come on up. Welcome.
So each of our speakers will remain seated while I introduce all of them, and then I will turn it over to our moderator. Arguing the affirmative on tonight's resolution is Yaron Brook, chairman of the board of the Ayn Rand Institute. In addition to podcasting and speaking globally, Dr. Brook has written several books, including his most recent, In Pursuit of Wealth: The Moral Case for Finance. Dr. Brook also co-authored Free Market Revolution: How Ayn Rand's Ideas Can Beat Big Government, and another book, Equal Is Unfair: America's Misguided Fight Against Income Inequality.
Dr. Brook was born and raised in Israel. He served as a first sergeant in Israeli military intelligence and earned a bachelor's degree in civil engineering. In 1987, he moved to the US, where he received his MBA and PhD in finance from the University of Texas at Austin, and he became an American citizen in 2003. Dr. Brook serves on the boards of the Ayn Rand Institute and on the board of the Clemson Institute for the Study of Capitalism. Let's give a warm welcome to Dr. Yaron Brook.
Arguing the negative on tonight's resolution is Bhaskar Sunkara, founding editor of Jacobin, president of The Nation magazine, and author of The Socialist Manifesto: The Case for Radical Politics in an Era of Extreme Inequality. He is former vice chair of the Democratic Socialists of America. Mr. Sunkara has been published in The New York Times, The Washington Post, Vox, Foreign Policy, and other outlets. In 2020, he was named to Fortune magazine's 40 Under 40 list in the government and politics category. He earned his bachelor's degree at George Washington University, studying history. Please give a warm welcome to Bhaskar Sunkara.
Our moderator for this evening's debate is Hadley Manning. Hadley is director of Steamboat Institute's Fellowship for Public Policy and American Exceptionalism, which supports the careers of principled young journalists. Hadley was a recipient of this fellowship in 2016. Hadley writes and provides commentary on a variety of issues, including economics and health care policy, for Fox Business, The New York Times, Forbes, Real Clear Policy, and other outlets. She graduated from the University of North Carolina with a double major in economics and journalism, where she was a Morehead-Cain Scholar. And now I'll turn it over to Hadley to begin tonight's debate.
Thank you, Jennifer. Good evening, and thank you to all of you for joining us, and thank you to those of you on the livestream. Thank you to everyone who's voted in the pre-debate poll. I'm going to review our results at this moment. 59% of our audience agrees with the resolution that capitalism is better. 26% disagree, and 15% are undecided. We will take a post-debate poll at the end of tonight's discussion to see if anyone's changed their mind.
But I just want to say, as it's been my privilege to moderate many Steamboat Institute debates over the years, that I think there's so much value to coming and hearing a debate, even if your mind's not changed, because my hope is that everyone will leave with a better understanding of both views, both perspectives. So to get things started, we're talking about, as Jennifer mentioned, a huge topic — how we arrange our economy and our society — and a relevant one because New York has just elected a socialist mayor. It is certainly something that we're talking about at all levels of government, and something that we'll get into very deeply tonight.
We will start with five minutes of opening statements, first from Yaron and then from Bhaskar. And during the course of tonight's debate, I want to encourage all of you in the audience to submit questions. You should have a QR code and a way to do that through your phones. You can do this if you're watching the livestream. Those questions will come to me on this iPad, and during our discussion I will insert some audience questions. So, Yaron, opening statement number one.
Sounds good. It strikes me that this is not a typical college campus if 59% agree with the proposition. So I wish that was the state of American colleges. I don't think it is. So I'm going to argue tonight that capitalism, from a historical perspective, from an economic perspective, from a theoretical perspective, and from a moral perspective, is the system that leads to human flourishing. And indeed, socialism destroys human flourishing, destroys human life. And in history, at least, those who've advocated for socialism, those socialisms that have been tried, and in my view theoretically has to this outcome, has to be the manifestation of socialism leads to death, destruction, and poverty. So it leads to the exact opposite of human flourishing.
But before we get into the details, and I'm sure during the debate we'll get into a lot of the details and we'll break this down, it's important, I think, to set our terms, to define our terms — what we mean by capitalism, what we mean by socialism. And I'm not sure we're always going to agree on, even up here on stage, never mind in the audience, about what those terms mean. So I'm going to tell you what I think capitalism and socialism mean.
So capitalism, in my view, is a system of private property and voluntary exchange. It is a system in which individuals are left free to interact with others as they see fit, where the role of government is the protection of individual rights — rights being the freedoms to pursue your own life, the freedom to pursue your own values using your own reason. It is the freedom, the lack of coercion, the absence of coercion, the absence of force, the absence of a gun in human interaction. Government is there only to protect us from people who would violate our rights, and the only way to violate our rights is through violence, through coercion, through some form of force. So that, to me, is capitalism.
Capitalism is the system that enshrines individual liberty, individual freedom, that takes out of society completely violence. Violence is monopolized by the government and can only be used in self-defense to protect.
Socialism is a system in which the means of production are owned either by the state or by the workers. That is, it is a coercive system, a system that negates private property. It's a system that negates the idea of individual ownership. Everything is collectivized, and different socialists would collectivize it in different ways through different mechanisms. But it is a system, based in my view, on coercion, on force. It is a system in which, if you wanted to start a company, if you wanted to employ people, that would not be allowed.
Whereas, for example, in capitalism, if you wanted to start a little commune and share everything, or start a co-op, you're fine. Just compete. You can do that. So socialism is a system of exclusion. It's a system that excludes voluntary interaction. It excludes the idea of private property. And look, we've never had — based on my definition, we've never had a purely capitalist system. We've never achieved it. But the closer we get to it, the closer we align with it, the more successful society is. The richer it is, the wealthier it is, the more freedom individuals benefit from.
If you align economic freedom with GDP per capita, which is not the best measure of human well-being, but it's one of the measures we have, there's a clear correlation. The freer you are, the more wealth there is, and the more, I think, flourishing there is, the more entrepreneurial activity there is, the more innovation there is, the more progress there is, the more people are free to pursue their own values in their own ways. The less economic freedom, the less of all of that there is. So as we get closer to an ideal of capitalism, we get more and more of those benefits.
I think the opposite is true when we talk about socialism. You know, as we get closer to the ideals that are being put into action in the past, what we get is less economic success, less prosperity, less economic well-being, but we also get real manifestation of human harm in poverty and often in death and destruction. So capitalism is the system of human flourishing. It's really the only system in human history that has led us towards human flourishing. And when we deviate from it, we deviate from the potential to flourish. Thank you.
I want to begin tonight in a place that might surprise people at a debate like this — with praise for capitalism. So Karl Marx, the original socialist critic, wrote with real admiration about its achievements. He described capitalism as the most revolutionary force in human history, a system that shattered feudal stagnation, dissolved inherited hierarchies, and helped realize many Enlightenment ideals. And capitalism, even in the 21st century, continues to be dynamic, not just in North America but across the world. South Korea was in the 1950s poorer than many sub-Saharan African nations at the time. Today it's a high-income democracy and technological powerhouse.
Around the world, we've seen what happens when marketism and global trade is unleashed at scale. Hundreds of millions of people have been lifted out of poverty in just the last 20 years alone. These are genuine achievements. Any serious person should acknowledge them. But here's the key point: being better than feudalism or better than underdevelopment is not the bar for human flourishing in the 21st century. A system can be indispensable for development and still fail to deliver the flourishing its own productivity makes possible.
Capitalism opens enormous opportunities, but we could still live in a society that is paradoxically more dynamic, more equal, and more democratic. Capitalism's shortfall isn't just its extreme income inequality; it's capitalism's extreme inequality of power. Market exchange helps generate wealth, but it doesn't guarantee that people creating that wealth have real agency in their lives. And that democratic deficit is where my disagreement with tonight's resolution begins.
I'm a socialist because I believe that in a wealthy society, the basics of a decent life shouldn't be conditional on your bargaining power in the labor market or what zip code you were born into. And I'm a socialist because I believe that the people who actually make our economy function — workers — have far too little say over the conditions under which they labor. In political life, we understand that freedom means more than just freedom to leave. It means voice, the ability to participate in shaping the institutions that govern you. We don't say that as Americans we're free because we can leave our country. We say we're free because we have democratic rights within it. Yet in the workplace, where people spend large parts of their waking lives, democracy largely stops at the door.
Now, I'm not here to advocate for a centrally planned economy. I'm a market socialist precisely because I think markets are indispensable. They convey information efficiently. They discipline inefficiency. They allow consumer choice. But the market is a fantastic tool that can be used in different ways. In contemporary visions of socialism, markets remain, prices remain, competition remains, but firms themselves will be democratically run, governed by workers, financed by their market sales, and embedded within a social democratic state that guarantees health care, education, child care, and a strong floor underneath everyone's feet.
Central planning disastrously failed. Democratic socialists were among its first critics. It failed because no group of planners could gather information or create the incentives necessary to coordinate an entire economy. But capitalism too has failures that are also important to address. First, distribution. In markets, $1 equals one vote over what society produces. And in a society where most essential workers earn very few dollars, their needs and preferences are systematically outweighed by the extremely wealthy.
The rich don't just have more power in markets for consumer goods. They use their market power in production to block the kinds of redistribution that would broaden human flourishing. The very success of capitalism at generating wealth creates actors with the political and economic clout to prevent that wealth from being better distributed. Second, democracy. Workplaces under capitalism are largely authoritarian institutions. You could quit, but quitting is a very thin form of freedom. Democratic socialism wants to give people both a voice and exit — extend democratic norms into economic life.
It lets, in other words, people who are generating a firm's profit get both its dividends in addition to a fixed salary and have a say in its governance. And because democratic firms still compete in markets, they cannot avoid innovation, efficiency, or labor-saving technology more broadly. They simply share in its gains. So let me be clear: capitalists perform real entrepreneurial and managerial functions. The socialist claim is simply that those functions can be replicated in a labor-managed firm governed by workers themselves.
Capitalism transformed the world. Socialism's promise is to push further and build upon the world that capitalism has made possible in the 21st century. I see no reason why we can't experiment with new modes of creating a society that'll be both more equal and more democratic. Thank you.
Thank you. So to get started, I wanted to share a note that I encountered earlier today in the Merriam-Webster online dictionary. The note on one entry said, 'Communism, socialism, capitalism, and democracy are all among our top all-time lookups, and user comments suggest that this is because they are complex, abstract terms, often used in opaque ways.' This is the case in many political terms. And so to get us started, I want to be sure that we are on the same page, that we're talking about these terms with clarity. And I appreciate that both of you addressed this in your opening remarks. We don't have to belabor the point, but Bhaskar, can you offer a definition of socialism?
Well, I think I'll start with saying that it's the inverse of capitalism in the sense that capitalism is production for the market through the accumulation of surplus. So capitalists convene together workers and other means to produce goods for market production. Workers are in a state of market dependence in which they have to work for the capitalists or starve, generally.
In my vision of socialism, workers would be both guaranteed a floor, so they wouldn't be under the same condition of market dependence. But for those who enter into the market economy because they want to earn more and consume more and achieve more, they would be entering into worker cooperatives essentially, in which even if there's inequalities within the workplace in terms of pay, power, responsibility, it still would be subjected to democratic norms, not the structure of existing capitalist firms.
Yaron, do you agree with this definition of socialism? Can you offer a definition of capitalism?
I mean, no. I mean, I agree that this is one form of socialism. Again, I think that the essence of socialism is the subjugation of the means of production to some form of collective, whether it's the state or whether it's the workers. So, I mean, in that sense, I think this is one of the many forms that socialism has taken in the past and could take in the future.
This is probably the most sophisticated one you will find out there in terms of the way it's worked out, and the one that acknowledges markets the most, because typically socialists don't, right? At least historically. Capitalism is the system. I don't agree that the focus here is on capital or the focus is on means of production. I think the essential characteristics of capitalism is as a social, political, and economic system in which individual rights are protected, in which the individual's freedom is protected, in which coercion is banned, and in which private property is protected by government. Do you have some comments on that?
I would just say that in many ways capitalism isn't a zero-sum game in the sense that any form of production that produces wealth is not zero-sum. But one thing that is zero-sum is power and autonomy. So, for example, if you own a workplace and you have a bunch of people who have freely decided to work for you and your operating hours are 9 to 7, you're not the worst person in the world. You're running a fair workplace. No one's getting hurt. There's no child labor, but you're working from 9 to 7. This is your arrangement, and then a law comes in that establishes a 40-hour week — your autonomy as a capitalist to do what you want with your place of work, your machinery, whatever else, is limited.
But if those workers are guaranteed the same pay, but now they're working 8 hours instead of 10 hours, I would argue that in many ways their autonomy and scope of freedom have expanded. So there's all sorts of ways in which this is a trade-off. This might be a bad policy for a developing country; it would create all sorts of objections to it. But I do think this is where there is this zero-sum relationship. So where I would disagree is this idea that socialism and the role of the state is just taking away freedoms, because I think it's a little bit more complicated. In some cases you're giving freedoms and you're taking away freedoms and autonomy as well.
So I think every time you take away freedom like that — the freedom of the workers and the owners to negotiate how many hours they're going to work and at what pay — whenever you enforce a regime like that, you are engaged in a negative-sum game. That is, I think it is a net destroyer of economic value, and I think ultimately it is a net destroyer of freedom. That is, what about that worker who actually wants to work the 10 hours? Or what about, you know, you're taking away the flexibility of being able to negotiate terms. You're taking away freedom from both the worker and the owner. So it's limiting, it's restricting, and any socialist or government intervention like that is restricting and limiting. It's taking freedom away, and it's destructive. It's not just zero-sum, it's negative-sum.
Do you have anything more you want to say?
Yeah, I mean, I could keep going on and on. I mean, obviously, in existing societies where we already have these rules, workers are entitled to time and a half. Generally, reductions in hours have been tied with increases in pay. Often when the state intervenes, the state intervenes to create floors which change the conditions in which workers negotiate and bargain. Your average worker — I hate this term, but your average unskilled worker — has very limited avenues to bargain as an individual. That's why by nature they're forced to bargain collectively. And I think there is a role for both the state and for organs of collective bargaining that inherently are going to be limiting the freedoms of capitalists to act how they want to act with their private property. I think it also just creates other avenues of freedom for the majority.
But particularly in the 21st century, in the kind of economy we have today, that is just untrue. I mean, in Silicon Valley, who has the power — is it the worker or the employer — in terms of flexibility, in moving around and determining rates? I mean, the number of job hoppers in Silicon Valley among workers, right? The worker, and of course more and more people are exactly that. Fewer and fewer people are doing the kind of work that maybe the average worker did in the past.
So, you know, and yes, workers should be able to legally join together and negotiate jointly as long as it's voluntary, as long as there's no coercion or force being involved there. So I don't see it as any kind of imposition. And look, what we know is when we get freedom, we get increased productivity. Increased productivity, we know, raises wages. And my view is under capitalism, if you took away all these restrictions and laws and so on, you would get a massive boost in productivity, which will ultimately benefit everybody, both the employer and the employee, because of increased productivity.
Okay, here I do want to jump in. And I suspected that simply trying to define terms in this debate would yield great debates, and I was right. Silly me. I thought the difference between socialism and capitalism was who owns the means of production, but it sounds like it's much more than that. I want to ask to try to get to...
But it is that, and we agree with that.
And that's what Merriam-Webster said too, ultimately, if you read through the definitions online. I want to get to one other term that's in our resolution, because I think this will help audience members decide whose side they're on, and that's the term human flourishing. I want to ask both of our debaters to talk about how they define or measure human flourishing. If there are particular metrics that you can point to — for example, a decrease in poverty, or an increase in GDP, an increase in happiness as measured by a survey, or an increase in well-being, however defined — give me some, put some flesh on that, and tell me about your definition or your metric for human flourishing.
Sure. I mean, I think that you'd have to aggregate a number of different things. Certainly GDP per capita or some measure of wealth is one. I think the levels of poverty, no question — the number of people living in poverty and defining poverty properly would be important. I think measures of people's ability to pursue their own values, and it's not clear how you measure those, but one measure, for example, is both social mobility but also mobility. Right? America, for example, America used to be a country in which people moved all the time. They always sought out better opportunities. They moved cities, they moved towns, they moved states, and that's gone. Americans have become a much more passive people. We don't move as much for a variety of reasons, mainly related to the welfare state, but we can talk about why.
I think that mobility, that dynamism, is part of what human flourishing suggests — people pursuing values, going out there and reaching and trying to achieve things. I'm very skeptical about measures of happiness, particularly the one that everybody cites, which is one question with a ladder where you are — it's just a very, very bad measure. There are other more sophisticated measures where they try to estimate happiness, and the result is not the standard result that you get. But you know, I'm not a scientist in that field. I'm just skeptical. I'm skeptical of self-reported happiness and people measuring. I mean, it would be great if we could measure people's happiness, and that would be the ultimate measure of human flourishing, but I think it's ultimately the opportunities people have. What opportunities do you have to live the kind of life you live?
And, you know, I'm going to argue that capitalism maximizes indeed human opportunities to manifest the kind of life that you want to live without other people dictating it. And I'll just say one of the disagreements between us that we should probably get into is our view of democracy, right? I think that's maybe a key difference between us, is that I think Bhaskar places a huge emphasis on democracy both for human flourishing and for economic activity. I do not view democracy as some kind of holy grail, as something that important for human success, but that needs to be defined and discussed.
I think on the actual definitional questions we largely agree, particularly on the happiness question. On the question of mobility, though — I would actually maybe not social mobility, but physical mobility — I would actually say that I think what we've seen as a root of people's self-reported unhappiness and other real obvious crises of addiction and hopelessness and loneliness is the hollowing out of a lot of our communities and civic institutions.
So I think that's probably where I would say I would add another measure: how many friends do you have? How many people do you interact with on a daily basis? How many deep and meaningful relationships do you have? I believe in a much more robust social safety net provided by the state, but I also believe that we as individuals should be able to call upon our friends and family in times of need, and that should be one of our first calls.
And when we look at, I think, a lot of American history in the last 20 years, it's been the loss of jobs, deindustrialization, it's been increasing addiction, it's been other social indicators. I'm not particularly religious, but declines in church attendance and other things have gone hand in hand with declines in people showing up at the, you know, local veterans hall or union halls. And I think all these are things that make our lives richer. And I think there is something to the economic insecurity that Americans feel in a society with a weaker safety net than our peers in Europe that is tied to these things and, in my view, inhibits human flourishing.
So I see it exactly the opposite, right? So I think that it's a social safety net that actually is preventing people from pursuing their values. That is, so if you're a steelworker in Cleveland, Ohio, and you've lost your job, and politicians are telling you the job is coming back — 'Don't worry, we're going to reindustrialize, it's coming back, sit around and wait' — and in the meantime, here, we'll pay you welfare and we'll fund you sitting on your sofa watching TV and not doing anything, then yeah, that's going to create real social angst, and that's going to create real alienation, and that's going to create the real challenges that we're seeing. And I think that is prevalent.
There's no shortage of jobs, for example, in America today, in spite of all the economic problems. There's plenty of jobs, but they require people getting off their sofa and actually going to where the jobs are. You know, if you go to West Arkansas, there are plenty of jobs in western Arkansas. And, you know, people moving and engaging, going to a new place is not alienating. As somebody who's done it many, many times in his life, it's actually very rewarding, you know, creating new social contacts and new friendships and new environments. It's actually quite rewarding to be able to do that.
And I think what's happened is people are staying in the same place. They're not ambitious. They've lost that ambition. And I think the welfare state encourages that, supports that, promotes that. And it's very, very damaging to the psyche of the people who actually receive the welfare. I think that's one of the big damages that it causes.
It sounds like on my question of what human flourishing is, though, we're in agreement that it's not just an economic metric. It's not just about economic prosperity, but it's about moral well-being, social well-being, the way we relate to one another in society. And so about the welfare state, I do want to move on to some of our audience questions. There are some that actually look like the questions that I brought tonight, so we're of one mind.
But in the United States and in many countries around the world, there's this question of the role of government and things that the government should do and things that the market should do. And it seemed that you alluded to this in your opening statement, Bhaskar, but I want to ask you both about a story that goes something like this: capitalism is good for some things. It's good to have innovation and profit and competition in some areas of the economy, but for basic needs — health care, education, child care, those were a few you mentioned — socialism is the way to go. So, Yaron, how would you respond to that?
I'd say look at the quality of our health care and look at the quality of our education and judge whether socialism does a good job with either one of those. It does a pretty lousy job at delivering those products. I don't get it, right? I don't get the difference between health care, education, and, I don't know, my iPhone. I really don't. Nobody, I think, in this audience thinks the government should produce my iPhone. I mean, just the thought of a government committee designing an iPhone should send shivers down your spine. Then why is it okay? Why do you think you'll get a good result with the government designing your health care system or the government designing your educational system?
Imagine — and I know this is hard because we've never really experienced it — but imagine an educational system that was driven by the same kind of incentives and the same kind of entrepreneurial motivation, the same kind of innovation that applies in tech or that applies in food production. Food is very important. We all rely on food. We would die without food, and yet we leave it completely to the private sector to deliver food. Not completely, right? We subsidize huge amounts. I wish we left it completely, but mostly, right, as compared to health care and education. Why can't we do that with — imagine competition between schools. Imagine the innovation that would happen. Imagine the variety that would be offered to parents. Imagine what would be possible if we actually brought that same spirit of competition and collaboration and innovation to education and, of course, to health care.
And those of you who think that's what our health care system is — it's private — our health care system is the worst of all worlds. It's a mishmash of bad incentives with a huge amount of socialization. Like, I'm going to turn 65 soon, and I will get socialized medicine, right? I'll be just like in Europe. The government will fund all of my needs when it comes to health care. And, you know, but the private part of it is badly incentivized because of this huge Medicare and Medicaid. So it's a mismatch that is a disaster, and we regulate insurance companies so we don't get market-driven insurance.
Again, imagine a world in which this was actually driven by market incentives. What a beautiful thing that could be. How cheap health care would be, and how innovative it would be, and how we would all be living much, much longer than we are living today. Now I can't prove that because I can't point to anywhere where they have that. But why can't we extrapolate from the areas where the markets work to areas where we don't let the markets work and see what happens?
I'll just — there's a famous graph that the American Enterprise Institute puts out about the cost of things, how things have changed in terms of cost, and almost everything that is market-driven has gone down in cost in terms of inflation-adjusted, wage-adjusted, however you want to look at it. It's, you know, it's 99% cheaper to buy a television today than it was 20, 30, 40 years ago. The only things that have increased in price are the things that the government heavily regulates — education and health care, right? And, you know, housing is flat, but of course that's super regulated as well.
So things where we allow a market to function, where we allow capitalism to function — I mean, somewhat, they're all heavily regulated, heavily controlled. Imagine what there would be if there wasn't all that. Declining prices. Everything else is upward. I'd like to see declining prices on everything and increased quality in everything, and I think that is what's possible if you bring markets into it.
So I think if you actually look at all the components of your iPhone, every component can be tied in some way to state research and development. And, you know, I'm not saying the state necessarily has to have that role, but it's just a matter of fact that in your particular iPhone example, it did have that role.
I would actually agree — I'm being excessively generous today. I woke up in a very good mood today. But I would actually agree that our health care system in the US is kind of the worst of both worlds in the sense that we heavily subsidize consumption of health care, but the state doesn't have the mechanisms like other countries have to control costs. So I would say in a more socialist health care system, the state would have more mechanisms to, for better or worse, more mechanisms to control cost rather than just subsidizing consumption.
I think the education system in the US as a whole, K through 12 education, is actually a radical success story that has been undermined by broader social problems. You know, broader problems of kids, poor kids going to school hungry and things like that. But America has actually produced innovative education methods. I was better educated than my parents, who were educated in the British style, British Commonwealth system of rote repetition and education. We were at the cutting edge of all these techniques, and they happened in K through 12.
There needs to be strict measures on the performance of schools. There needs to be schools of different types and varieties. But I personally think that education should be guaranteed as a social right. I actually think this is one case in which the state should continue to run areas of public education. In other areas, you might say that the state should guarantee the right to free — I say age two to six — child care, but that these providers should still be private providers. There should be some method of cost control, and essentially the state should just be subsidizing access and enabling everyone to have access. There's many different policy ways in which we could decide what should be a state-owned enterprise.
and what should be a guaranteed right. But in general, I would say that the core of what it takes to live a good life, at the very least, the core necessities of education, child care, healthcare, should be guaranteed as rights just by virtue of being born. Though I do agree that the way in which we've constructed the US welfare state is often the worst of both worlds, in which we again subsidize demand without controlling cost or being able to produce more goods. I think Nordic countries do this much better than us.
I want to jump in because you mentioned the term social right, and I want to ask you, Bhaskar, what your definition of a social right is and how you differentiate. Because maybe it's a stretch to say that the government's going to nationalize the creation of iPhones, but there are other areas that are not healthcare, child care, and education, things like transportation or housing, things that you might consider to be basic needs in our economy. And I think this is one of the challenges politically for socialism, is that it seems to be a slippery slope between what are the things that we really need that the government should provide for everyone and where do we draw the line on that? So I'm going to ask you, where do you draw the line between things that you consider to be social rights that should be socialized and other things?
We could draw the line at a policy level of what's efficient, what works, what doesn't. So at the very minimum, we should say there should be no street homelessness in the United States. That might mean that we are giving people shelter beds that are safe but are not somewhere where, given other choices, people would want to spend long term. That's ensuring a basic right to housing at an extremely minimal level, a level comparable to other advanced capitalist countries. It's a policy we have in New York and other places. But you can't tell me that this would disincentivize people from wanting to live in, you know, nice stable homes or whatever else. It's often a last resort. I think there's other areas where one can argue what are the policy ramifications of free child care, of shifting that burden from just private families onto the public at large. I would argue that there would be plenty of additional offsets of making it easier for women to decide to reenter the workforce if they want to reenter the workforce if they were given these options. There might be other knockdown positive effects. We just have to figure out how to design these programs. But if you actually look at the countries with the most expansive welfare state, often this has been tied to not stagnation and people just relaxing and sitting back and leeching off this welfare state, but it's actually been connected to having a more dynamic economy. So in Nordic countries, for instance, often you'll have greater rates of firm failure than you do in the US. In terms of these firms, they emerge, they have to deal with both high wage demands because the workers are generally covered by collective bargaining agreement, and they also have to deal with a host of other competitive pressures. These firms fail, workers go unemployed. So a lot of the dynamics you want to happen. But there's a social compact that says, hey, this isn't the worst thing in the world because we have active labor market policies to get us into other jobs and other sectors, and we also have this welfare state to rely on. So we know we're not going to be destitute. In America, I think people are really afraid sometimes of the consequences of failure in part because we don't have these welfare state institutions.
So Nordic states, I mean, the United States, you know, is probably the most entrepreneurial country in the world. Sweden is relatively, you know, entrepreneurial compared to Europe, but it's less entrepreneurial than the US, less entrepreneurial than Israel. Denmark is less entrepreneurial than Sweden. So fear of failure exists all over Europe. You know, a failure is a much bigger deal in Europe than it is in the United States. Entrepreneurship rates in the US, particularly if you take Europe as a whole, are much, much higher in the United States than they are in Europe. And repeat entrepreneurs, that is one of the measures, if you failed, you start up again, those measures, the United States blows Europe out of the water. So indeed, in spite of the welfare state, or maybe because of it, fear of failure is greater in Europe than it is in the US, and social stigma associated with failure is much larger in Europe than it is in the US. In Silicon Valley, failure is almost a badge that you wear. In Europe, it's something that if you fail, banks won't deal with you. You know, and even family, there's a stigma around it. I want to address a few things that Bhaskar said. In terms of, you know, you have to admit that if you start offering homeless people free housing, at least at the margin, there's some people who are paying rent right now that would rather drop out of rent in order to get the free housing. So at the margin, there's always going to be a group that is incentivized, yes, to abandon whatever housing they have in order to accept the free housing of the state. And you see this in Los Angeles. The more free housing they offer, the more homeless people there are. I mean, literally, the homeless problem is increasing as they increase the number of housing they provide homeless people, which is completely predictable. Any economist would predict that when you offer something free, demand for it increases. So this is the problem. The problem is that government is equipped to only do really one thing. The essence of government is force. I mean, George Washington has said this in, I think, his second inaugural address. Government is a gun. That's the central characteristic of government. When government says something, it is imposed on us. When there is a law, somebody shows up and enforces that law. And the consequences are violence, the consequences of force. Force is good for only one thing. There's only one good use for physical force, and that is self-defense. Using force in economic policy is destructive. It always is. So government policies are always going to be destructive, whether we can see it immediately, right, because it looks like it had positive effects, whether we can see the distortions and perversions or not, force is always going to be destructive when it is applied to, you know, to the economy, to our lives as individuals, to anything in which we can have a voluntary exchange. And it surprises me that Bhaskar thinks the educational system in the United States is so good. I've experienced three educational systems. I went to school in England, in Israel, and in the United States, and the United States by far had the poorest education. I went to like a top school in Brookline, Massachusetts, where all the kids of faculty from MIT and Harvard went, and it was a disaster, right? I fell behind by a year in my two years in that school relative to what they were studying in Israel. It was a complete disaster. But more than that, more important than that, is the quality of education that poor kids in this country get by government schools. I mean, I think we both care about poverty. Poverty is a real feature of, you know, minimizing poverty is a feature of a flourishing and successful society, and one of the elements of that is education. And it's horrific what happens now. You can blame it all on parents, you can blame it all on the environment, you can blame, but then it's hard to explain experiments in private education in the same neighborhoods where the result is so much better, that is so superior to what, and it's not just that one parent is more motivated than the other parent, because the differences are so extreme that something is fundamentally wrong with the government education that we are providing in these poor neighborhoods. And I believe that the solution to that is competition. It's private markets, and the private schools are also very inefficient. Public schools are very inefficient in terms of cost. So take away that burden of cost, the opportunities for real innovation and real progress in poor neighborhoods in education is astounding. It's one of the reasons, you know, poor parents often support kind of school choice because they realize that what the option they have, the government is providing, is a really, really, really poor option.
Do you think that school choice or private schools is an indictment of the socialized education system in US states?
