mr. brooks argues that big government policies have weakened the american traditions of entrepreneurship, personal responsibility and upward mobility. this is about an hour, ten minutes. .. to in a very concise way

articulate what it is that we are about. as free-market conservatives, as people who love liberty, and treasure the freedom upon which this country was built. and, you know, i heard parker's story then. you know, the fact that he and his wife met in spain and were there, the french hornist, which is just unbelievable for me to imagine because of his current duties, but all the more impressive, all the more impressive. he really showed me then -- and this was about the time when you are right in the battle. we were treated to excerpts of the battle in double street journal and other publications. and i would, along with many of my colleagues colleted our those columns wedding for the release of the book. we got the book we so quickly

that we were not going to be disappointed, that the battle lines were drawn. he so clearly has been able to spell out the two different visions that exist in this town today. frankly it reflects the choice that the public is going to make this election in november. and it was really starting to -- stunning to me. earned success is a phrase that i have used and continue to use, if not once daily, several times daily. because it does really reflect to we are as a country. again, arthur's walk through life that has landed him where he is is proof that his theory and the demonstration of our success not only works, it is true. it is true. and so when i am out across the

country and i am talking to folks are having a tough time, talking to folks who don't quite to filter all of these sort of noise that is coming at them out of washington today of what is so easy for me to say. this election, this election season that is upon us is so much more than just about jobs and the economy. it is really a question of existential import for us as americans and really as human beings. and i do say that this is an election which is very much focused on who we want to be as a country. and that is where the erin success theory comes in, because all i have to do is look at my own family and how it is that i was so blessed to be standing in front of you today. you know, my ancestors, my grandparents, frankly, left

eastern europe at the turn of the last century. they left because they were not able to reach their potential, to earn their success under the czarist regimes in eastern europe and russia at the time. and they were subjected to extreme antisemitism and religious persecution. but when they came over here, look would have it, my grandparents were married, and loped, made their way down to my hometown of richmond. and there they began a family. without any formal education opened a grocery store. shortly after that to kids were born, one of whom was my father, my grandfather died and left my grandmother with two kids, and she was in her early 30's with what to do. a widow. she happened to be jewish in the segregated south. what was she to do? what she did is take advantage

of the opportunity that this country gives all of us. it is the opportunity to go out, to work hard, and with a little bit of luck, a lot of dedication to turn that success. and she was able to live the american dream, just like i think all of us or most of us could tell the same story, that we all came from somewhere because somebody made a decision that they were willing to go out , take a risk, and go and earned the success for the future of the cells in the family. that is what has been done for me in some many of my colleagues because as he is unveiling the road to freedom, it is now the comparison of earned success verses learned helplessness. and so i don't care whether we are talking about tax policy on the hill, health care policy on the hill, ways to address the deficit, or you name it these

principles apply, and it is just crystallized, i think, the debate. you have done just a phenomenal service for the country allow all of us to go out there and be defenders of economic freedom, to be defenders of free market and free enterprise, verses the alternative, frankly, that we see, so many of our allies pursued and ending them up in a real cul-de-sac. so, again, it is my real pleasure to be here to introduce someone that i call on regularly and i told them already, we are going to call on him so much he is not going to know what hit him. without further ado, my good friend arthur brooks. [applause]

>> thank you, eric. what a wonderful and gracious introduction. i would like to thank you all for coming. and say good night. [laughter] my guess is it is not going to get that much better for me tonight after hearing such a wonderful introduction from my friend, eric cantor. he is a real patriot during a yeoman's work today. he is doing work for all americans. he is doing work not just for economic freedom, but for the opportunities that people will have now and we hope that our children and grandchildren will have in the future. his endorsement means so very much to me. here at a ei, as most of you know, we are an institution that has been around since the late 1930's. we are dedicated to -- our mission says we are a community of scholars and supporters that believe that together our dedicated to the ideas of maximizing liberty, increasing individual opportunity, and fighting for the free enterprise system to get the most people

the best life. now, i would like to tell you that due to all of the wonderful work that we have been able to do that we are winning the debate. i am completely convinced that the work that has happened in the past 74 years has made it clear, the fact that we have uncovered have made it clear that the fair price system is the best system for the united states. it truly is america's gift to the world. i cannot tell you that we have won every debate. the reason is because we have not won enough parts. my view is that we have the words, but we are missing a lot of the music. that is what i want to talk to you about tonight. we are of little bit -- those of us and the free enterprise movement are of little bit, i think, like these three friends i want to tell you about just to open things up. three friends who have been golfing together for 15 years.

it is the highlight of their week. one of them is a psychologist. one is a priest. one is a free-market economist, dislike me. well, one may morning they got for their weekly golf camp. a beautiful day. they get stuck behind the slowest to some that they have ever seen. these guys are for putting every green. it takes five minutes to select their clout, even though they have a caddy. this is frustrating for our three friends, and they start making comments. by about the third hole, just loud enough for that to some to here. the priest says, i pray i never guessed it behind it to send this low ever again, that sort of thing. a couple of holes go by. finally, the three fans march up to the caddy in sec melissa, you have to let us play through. this just isn't right. the kenny says, fine, but you realize how rudy have been? do you know who these guys are? that three friends say, no.

well, remember last year when the town orphanage burned down? rubber those two firefighters who pulled out of the orphans but in the blaze they lost their sight in the accidental. now. that wasn't -- yes. those are the two firefighters. all they have left is this trough came. completely dedicated, but it goes a little slowly. the psychologist says, i can't believe it. i've dedicated my life to helping people and i guess of a lesson. the priest says i am glad for that. the free-market economist thinks about it for a while and says, it would be more efficient if they play at night to. [laughter] that's us. too often that is us. look, the facts are right, but we are not going to win in the hearts this way. i want to talk to you about a

paradox of government, and who i think we can solve it. there is a huge paradox today that the american majority believes that the free enterprise system is the best system for america and that the government is too big in trying to do too many things. about 70 percent of americans believe the free enterprise system is best. 70 percent of americans also think that the government is too big and must be scaled back. now, that sounds great if you remember that free enterprise movement, but here is the thing you have to keep in mind. we are not acting as if we believe this. for example, our institution formed in 1938 was formed in no small part in reaction to the fact that the government was gobbling up the enormous amount of american gdp that amounted at all levels of government to 15%. 50 percent of america's gdp was an outrage. being spent and used by state, local, and federal government. i looked at as pat and i say, take me back to the good old

days. today it is 36% and going up. by the year 2038, according to the congressional budget office it will be 50 percent of american gdp. 50 percent of our gdp will go through government. everyone of us here will work from jenny worry first through june 30th to pay for government that we don't particularly like. something is wrong. something is wrong. some people say that we are tending toward being a european-style social democracy. that is wrong because we already are one. if you look at any meaningful measure of the size of government, we are already on the scale of a european style -- style social democracy. we need to explain this paradox. european stock said they let free enterprise. 70 percent of america's love for enterprise. typically 30% of europeans to get his response. we look just like they do economically. so, there is a liberal explanation to make conservative explanation, and there is the

correct explanation. i am going to give you all three. the liberal explanation is that we don't really want free enterprise and limited government. we are just sentimental. we like the idea. what we really want is a good social democracy. the do what a social welfare state that gives us all kinds of goodies. now, the conservative explanation is that, no, we love free enterprise. we just have not been convinced enough by the facts. if we can get enough data and power point charts we can help them understand how fiscal consolidation works and tell them about how balanced budgets work in finland in 1996 and get all that good stuff in front of americans and finally 1,000 tower -- flowers will bloom and the tide will turn. now, i know that is not true. how do i know that explanation is that correct? i am the president of the american enterprise institute. if that were true we would have

one. we would have won, and we could do other things besides continually fighting the fight for free enterprise, as we are. the right explanation, and my view, is that we do, indeed, free enterprise. we know it is part of our culture. we know it is central to our culture, but our defense of it, given the fact that they tend to be focusing on materialistic impulses, don't stand up in the face of moral arguments against the free enterprise system that we constantly here. consequently, we lose the debate. if we want to win the debate we have to start making real and really good moral arguments. now, why do i believe that? because experience tells us that materialistic arguments always lose tomorrow arguments. think about it in your own life. maybe you're like me, the only conservative in your family. and at thanksgiving time it is always kind of rough.

you are around the thanksgiving table. people turn to you and say, hey, capital sky cannot defend the free market system after the 2008 financial collapse. not so great. you say, will, it was not free enterprise, it was exactly the opposite. the statist system that grew and grew, too much regulation. a housing market that was blown up by poor government policy, and furthermore, it is to unseeded corporate cronyism that required all these bailouts. you know what we need? get out of the wave of entrepreneurs, lower corporate tax rates. the american corporate tax rate is the highest in the oecd. it feels really good to have all the facts. nothing wrong with that argument, but in your sister-in-law says, well, you know, i think you just want to give bailout and tax breaks to millionaires. you know what else to my mental little girl who lives with her mother and a car. free enterprise is not so good for her.

you -- i mean, i lose. i lost that argument. just then. it doesn't matter if this is platitude and anecdotes. i lost the argument because i was making a cold materialistic case and it was going head-to-head with a hot moral case. this tells us something, and it turns out that my experience, and perhaps yours two is backed up by a whole bunch of research of a moral arguments. let's start with a little bit on brain science. one of the things that we know is about the most amazing part of the human brain, the meal free frontal cortex, the part of the brain right behind your forehead that processes all of these great things. one of the things that it does is help you make executive judgments. when you are driving to work in the morning and have to decide whether to go right or left and you make an explicit decision on the basis of traffic patterns, your able to do that and take the book that looks like it is fast to get to work. also, that same part of your brain helps you process moral

judgments. what does that intel? well, we do those things all day long. you get to work. your colleague says, do you like my tie? you have to make a decision. dry make him feel good but dry to on the shoes. that is immoral decision. so you're going back and forth between executive judgment, a practical decision, moral decision. all this is being processed by the circuitry in your prefrontal cortex. now, the question is this, if you are confronted with an executive decision and a moral judgment at the same time, which one is going to win out? we know the answer to that one. the answer to that one comes from a great friend of. john hyde is a social psychologist at the university of virginia who has written a wonderful book that was a bestseller called the rectus mind. it talks about moral judgment. the world's leading expert on moral judgment. he talks about the fact that when you are confronted with the deeply moral situation it

basically blows your circuit. you cannot concentrate on anything else. if someone comes to you with a deep moral argument, that will occupy your brain and attention, and he will appeal to do anything else. prove it? okay. let's prove it. i'm going to give you an experiment that has been used with audiences. and so sure that this is going to work, after i told you a little story 90 seconds from now you will be able to process anything but a moral judgment. i will occupy your meal free product prefrontal cortex. furthermore, if you know remember anything else you will remember the story i am about to tell you at this time next year. big plans. let's see. a family like mine. a little bit of background. my wife and i have three kids. my daughter is nine, suns are 12 and 14. the family is just like mine, three kids, nine, 12, 14. like most families, this family is at war with itself.

every family is fighting about something, it seems. a family in this story is fighting over something really comment. the kids want to get a dog, but mom and dad don't. c'mon. why can't we get a document because you kids are too irresponsible to have a dog. i know he's going to clean up after it and what it. are not going to give a talk. the same thing happens in this family and my family or virtually every other family. the kids win over mom and they're is a coalition against at. and so this family goes down to the pound. dad is really sullen. i know how this is going to end, he says. there at the pound together and pick out a puppy and name her muffin. they bring her home. now, it turns out that mom and dad or wrong. muffin is a great dog. as a matter of fact, to you know who loves muffin most? dad. no one else's happy to see him come home from work.

[laughter] and, you know, we go on for a couple of years and a priest's family together. nothing more. they're happy to have the talk, but one saturday afternoon, august, beautiful day, the youngest child by this time is 11 accidently leaves the front door open. there is a squirrel in the front yard, and often sees it. running out of the front yard, out into the street, hit by car and killed in front of the whole family. never heard a story like this at the eye, did you? killed. the kids screaming. mom is trying. that is crying because he loved muffin the most. the kid sick, that's what we do? that picks up the lifeless body. together they bring her into the house and decide to cut current each year. [laughter]

i said. you get tenure for that? this is the problem with america's universities, my friends. so he asks his audience at this point, was that the right thing to do? everyone says, of course not. it's wrong. how come? he gives them a bunch of these cold, calculating reasons. high-quality protein source. nobody, you know, this is like really in the news is so obama think. but, you know, it is legal. the dog was unhurt. it is there dog. people the dogs and other countries. there are all these things. yes. it's still not right. people can't say why. right now most of you can't say why it feels so wrong to do something like that. well, okay. that is how public policy arguments work. if you are confronted with a moral case and all you have is a

materialistic rejoinder to my guess is going to win. you can tell people, hey, you know, and finland the fiscal consolidation work better because of tax decreases and spending cuts them what we would do in the united states today. the little girl and the car has a face that everyone is seeing and you will lose the argument. you might as well go tell everybody that there we should keep their dog because that will be equally persuasive. what does all this mean? we must come up with a moral argument, not just to make a case, but to say what is written in our hearts. we are here for reason. we believe in this for a reason. we have to be able to state it. our founders knew this. they were moralists. our founders were not materialists. think about what they wrote. think about the second paragraph of the declaration of independence. you know it by heart. endowed by our creator with certain unalienable rights, among them, life, liberty, and

the pursuit of happiness. nothing about money in there. all about the moral covenant between our founders and our nation. they would be scandalized to hear how a free-market advocates talked about free enterprise today. they would be scandalized because we are not making a moral case. occasionally we remember. occasionally we remember to make the moral case or accidentally make the moral case and when. for example, when i was a kid growing up in seattle, washington we had very little money. a lot of our neighbors are on welfare. fortunately we were not because my dad had two jobs. the reason he did is because he honestly believed that welfare was horrible for poor people in the 1970's, and it was. families on welfare were disorganized. that comes and goes. you know, who are the parents? we don't really know. a car on blocks. chickens in the living room.

at the time that seems normal. turns and it's not. [laughter] we tried that in bethesda. [laughter] and, you know, the central claim that my father made was that it was horrible for people to be on public assistance. warble for the poor people. it turns out, everybody knew that. he was not some sort of visionary. everybody knew that. the only people who were not release saying this for politicians in the 1970's. they were talking about the fact that the welfare system was a colossal waste of money. what changed? the answer is, there was an idea , an idea in a book, book by a scholar named charles murray. charles murray, as all of you know, is a scholar at the american enterprise institute and wrote a very famous book called losing ground. that book made a central plan that was not that the welfare system was a colossal waste of money, which it was, but rather

that the welfare system was hurting the people that it was supposed to help, and that was immoral. that lit the fuse. it took a long time, 12 years before that translated into new policy and became the conventional wisdom of democrats and republicans and a democratic president courageously signed into law. that is what it took. and, you know what, every big public policy takes at least 12 years. every public policy inflexion requires that leaders and people who love their country compatriots, fight for at least a decade. that is the danger of anybody who makes the claim that the changes we need are only about 12. we have to understand that they are about 2013 and 14 and on. that is why a ei exists. in one decade we will be fighting these sites for you. back to welfare reform. welfare reform became the law of the land because scholars and then the citizens and legislators realize that it was

about morality, not about money. here is the question. what is the moral case for free enterprise today? like the welfare reform case, the pursuit of happiness, making money? i kind of gave away the show a second ago because i noticed. let's think about that for a second. economists of last question, does money bring you happiness? the answer is, as your mother simply told you, no. but this leads to all kinds of odd and sound seemingly illogical behavior. you know that money does not buy happiness, but you pursue it as if the pursuit of happiness or money itself. we do terrible things, waste money gambling, work all night long, neglect their families, cheaper this and sisters out of inheritance. it's horrible. it's actually release scandalous. the pursuit of money leads to some curious things that we find

i have written a lot. the first work ever did when i was a visiting scholar here was a book called gross national happiness. one of the things that i found in that book and that i have proved in subsequent research is that on think about men. the unhappiest average age that men experience. what to you think? as amended as it turns out women don't have this. much, much more constant. happiness does not have all of these tapes and things, and there generally happier all throughout their lives. so what is the average unhappiest age in a man's life? what do you think it is? very clear. i recreated the data analysis myself with proper controls and the particles. what do you think the average unhappiest age is? somebody's set 40. somebody else said 50. the average, 35.

why? psychologists usually give you family destinations. forty-five is when your wife gives up definitively the your boring. but said. forty-five. you're most likely to have a teenager in the home. misery. it turns out that economists have a really good explanation for this that is consistent with all the data. the economic explanation is basically that is when people figured out they have been chasing the wrong thing. now, when men are in their late 20's money and success move together. it's like a super highway with neon lights. you're cruising down it not paying attention to anything but going as fast as you possibly can. around 45 lots of men say that they realize that the kind of missed an exit somewhere along the way, an unmarked exits. they miss the exit that goes off down a road toward what they

really wanted. the question is this, what is it on that next? when we look at the data and ask what makes people happy, especially men in their '40's, incidently 45, it really does come up. of 47. it's going to be good from here on out. [laughter]

that can spread money around until the cows come home, give people unearned all the money you want, but only aren't success will bring happiness. this is according to the best cities available. what does this matter? in matters because the government to spread around money. the government cannot spread around turn success. this helps us to understand the paradox in which we don't like what the government is doing, but we ask for more and more and more. we are looking for the wrong thing, and when it is delivered we don't care for it.

a key point about our success is that it has to be earned. work and sacrifice mean everything. there is an unmistakable connection between sacrifice and happiness. there is a big literature of sacrifice and happiness. for example, a wonderful study the some of you may know about. my favorite study on sacrifice that involves children and a bag of marshmallows. there is a psychologist, famous psychologist from stanford who in 1972 wanted to figure out whether or not kids could delay gratification, like a sacrifice for something that they wanted. he took to the laboratory between four and eight years old and put a marshmallow on the table. you can eat that much smaller if you want, but i'm going to leave the room for 15 minutes. if i come back and it's still here, i'll give you a second one. a okay. easy. two-thirds failed within 30

seconds. they have it on tape. he confided on the internet. some kids are trying to discipline themselves. penning their heads on the table. i have to get the second marshmallow. interesting enough, here is where it gets really interesting . followed up 15 years later to see how their lives were turning out. all the same, right? no. the kids who could not wait have an average s.a.t. score 210 points lower than the kids who could wait. the kids who could wait one more likely to drop out of college, more likely to abuse drugs and alcohol, more likely to get divorced, more likely to commit crimes. there was a direct link that he saw between the deferral of gratification, sacrifice, and later success. it's not causal. just because they did not eat the marshmallow does not mean there would not have a successful life. how do we understand the causality? the answer is, we talk talked

with yours. let me tell you about a conversation we had with charles robb, the legendary investor, $15 billion company. i asked him about what it was like that found a successful company. he said, you don't have any idea one day it got so bad i had to take up a second mortgage on my house to make payroll. yes. tell me about your success. he says, i am. that is my success. that is what it's all about. the same conversation, the same conversation with dozens of on shipper nordstrom and they always tell you the same tank. they always tell you about the sacrifice. now, when they're is a sacrifice the answer is something else. you get learned helplessness. learned helplessness is the case in which merits don't lead to report. bad behavior does not lead to punishment. in laboratory testing, according

-- according to the eminent social psychologist at the university of pennsylvania who has done studies on this, when people learned helplessness they become passive and depressed. it attenuates the quality of life. immediately. now, this is a big deal. he did lots of test work. submachine with nichols coming out. no matter how often they pull the lever it had nothing to do with the nichols. as soon as they figure that out the stops applying. it became passive. they started to act a little depressed. why? people need to earn their success and people hate to where it helplessness. so once again, what do we need to? a system that allows us to earn success and avoid learning helplessness. a system that matches our skills and our passions, a system that allows us to be rewarded for merritt, a system that allows us to keep what we are in.

that is the free enterprise system. earned success is the first moral promise of the free enterprise system to all of us. now, a lot of reasonable people will object. they will object because they say card success sounds great and i'm happy for you. talk about this kind of weird journey, played the french horn professionally for 12 years before went back to graduate school and somehow ended up as the president of the american enterprise institute. it is a little weird. when i quit, when i decided to quit i played -- i called my dad i said, cat, i decided to take up of work. i'm going to go to college and become an economist and get a ph.d. in become a professor. what are you talking about? you are on top of the world. your life is great. you're making money, mary, starting a family.

why do you want to walk away from it? i'm not happy. silence on the phone. finally he says, what makes you so special. the answer is, nothing. i figure this can be done. i figure it can be done if we put our minds to it. it turns out, it worked out okay. some of you might object that is only really going to work for certain people. it is not fair that our success is not distributed to everybody. relatively few, wealthy of the ones to get to enjoy the fruits of our success. the poor left behind. we need to deal with these objections. let's examine them. we will first start talking about fairness. fairness is the leitmotif of this political season. you will hear it again and again and again. lately the president of the united states has gone on and on about fairness. he talked about fairness 14 times in his chances economic

policy speech. a practice that for two hours. i hope you appreciate it. he talked about fairness nine times in the state of the union speech in january. he goes on ceaselessly. now, on the other side, free-market advocates scatter at the first mention of fairness. we know that we cannot win. we can win on efficiency but not fairness. were not even supposed to talk about fairness. according to st. milton friedman , fairness is a subjective concept. it is not something that we can define. stay away from it. now, milton friedman was a genius and i'm not, but i don't agree with that. i think it's wrong. and the reason is because according to the latest research on moral judgment people crave fairness, and it does not matter if they're conservatives.

everybody craves and demands a moral system. the problem is, we almost never asked what it is. it turns out economists up in pretty good at trying to investigate what fairness is. they do this without the call to make games. here's how it works. first, the subject walks into a laboratory and is given to an dollars. second subject walks in and sits down across the table. the first subject has to decide how much he's going to share with his new friend. now, if the person on the other side of the table does not like the offer he can reject it. if he rejects it will forgo with nothing. if he accepts the author -- offer from the first they both walked out with what they were offered. so i walked in. i have to dollars. i say, to give you four. you say, fine. you get for, i get six. on the other hand, as the you

get one in use a forget about it and we both worked out with nothing. an economist would predict if i offer you a penny you will take it because it's better than nothing, but of course that is nonsense. people will spend each other, and to constantly. the average offer is $4. about 10 percent of the time it's rejected. it turns out, this experiment has been done all over the world. you find a dramatically different results. you find different results between new york and los angeles . they cooperate more in los angeles, and they don't cooperate in new york. it's about and a percentage point difference in the rejection rate across the coast. so the country that has the highest rejection rate and the lowest offers? the answer is our beloved spain. my wife and i were married and where we live for many years. the average offer is $2.50, and the rejection rate is 30%. my wife tells me, that explains doing business in spain.

it is not very cooperative. now, why did people think that it is fair to share? that is what people always talk about. the reason is because that $10 was not learned, it was given away. a friend of mine who is an economist on noting this seven need to change the experiment, so did a variant with college students. when the person got the $10, they had to sing a song in front of the class. tin box. dissing the bear went over the mountain. the pair went over the mountain. and it's mortifying, embarrassing. i can tell you for sure because for some reason i just did it. using this on and then given to dollars. he is not parting with that in dollars. the offers are really two are really low. they offer very little to the other partner. but here is the most interesting part, the offers are almost never rejected since the of a

person sees that it has been turned. they don't think it's fair anymore to share. they don't think it's fair because the resources weren't. now, another way of looking at this. the world values survey in 2006 axed this question. imagine two secretaries of the same age doing practically the same job. one finds out the other is considerably more. the better paid secretary is quicker, more efficient, and more reliable. is it fair or not that one is paid more than the of the? 89 percent of americans think it is fair that the secretary who is more efficient investors paid more. the numbers in europe are up 25 percentage points lower. americans believe that rewarding merit is fair if resources are and, bottom-line. 89 percent, overwhelming. if resources are unearned, however, americans believe that fairness means spreading the wealth. this is the definitional

difference. it is not whether one party is more fair. it's whether we believe americans have earned what they have. that defines whether or not we believe the american economy is fair. which do you believe? well, it turns out that 70 percent of americans think that by and large, not perfectly, but by and large we are and what we have and therefore rewarding merit is the right definition. the president's definition is incorrect. now, just think about this intuitively. talked about his ancestors. why did his ancestors come from russia? a but it wasn't to get a better system of forced income redistribution. , it was turned their success. it was to be treated fairly for the first time. imagine some guy in vietnam. of want to get to america. there they have cash for clunkers. forget about it. look.

you want to know what our success and real merit based is all about? talk to an immigrant. that is what they come to this country in the first place. a second objection is not -- it's beyond whether or not our successes and a fair system, which most americans would say it is, but to its benefits. who benefits the most when we reward and success. well, the rich do. the rich get really rich, and we have seen some run up an apparent income inequality over the past few years. statistics are pretty complicated but it does appear that the rich are doing quite well and have done quite well over the past few decades. it really only helps wealthy people. it's not so great for the port. that, it turns out, is manifestly false. the best recipients of an unsuccessful society, the best recipience our support themselves. how to my knowledge? the back to 1970 and compare

1970 around the world today. it turns out of her 1970 and 2010 the worst poverty in the world, people who live on $1 they're less has decreased by 80 percent as a percentage of the world population. it's the greatest achievement in human history, and you never hear about it. 80 percent of the world's poverty has been eradicated since 1970 that has never ever happened before. what did that? what accounts for that? united nations to act u.s. foreign aid? international monetary fund? central planning? it was globalization, free trade, the boom in international a entrepreneurship. the free enterprise system american-style which is our gift to the world. i will state and a search and offend the statement that if you love the poor, if you are a good samaritan you must stand for the

free enterprise system, and you must defend it, not just for ourselves, but people are around the world. the best anti-poverty measure ever invented. now, will suffice? will free enterprise sufficed? the answer, of course, is no. one of the things i talk about and the book is the need for strong, reliable, social safety net for the truly poor. the problem we have in america today is that relief that comes from the safety net. it even as the risk out of life. it equalizes for the sake of equality. it does not just bring people out of the most abject poverty. this safety net that we actually do need for people who are the least among us is threatened to the most by an economy that is under threat. when we damage's of free enterprise system to the extent that we are careening toward a greek style debt crisis, maybe not this year or next year, but you and i know that sooner or

later it's going to catch up with us given spending in the year's model policies we see today. when that happens, who suffers most? go back to our old home in barcelona. twenty years ago. today there are homeless people. today 52 percent of young people can't find work. today the overall unemployment rate is 25%. 46 percent of adults under 35 still live with their parents. misery. who is hurt the most? the poor themselves. the social safety net will be destroyed if we destroy the free enterprise system as we are on a path alternately to do. so let's summarize. it allows us to our success. it is the fairest system which is merit based. it's the system that is best that lifting up the least among us. that is the reason that free enterprise is not an economic alternative. it is a moral imperative.

now, the structure of a winning argument is this. you get 30 seconds. you get 30 seconds. i've been talking for 30 minutes. you get 30 seconds to convince her sister-in-law at thanksgiving. that is the battle in november. every american defining the system and defending the system that we love, not just the election you get 30 seconds to make your case. you have to start by establishing your moral but a fetus. you must do it in terms of current success, true fairness, and lifting up the poor. only then can we talk about data and policy. that is a hard thing for me to do. i am burden under the weight of a ph.d. it's hard for me not to go straight to the data. what to. it's not the right thing to do. i'm going to lose because it's not actually what is written on my heart. here are my conclusions.

the economic trend cannot be reversed. it can't. most importantly, we will lose the great gift from our founders and a system that dignifies us as individuals. adrs dollars and staff and supporters and friends, all of us here tonight are dedicated to the long haul for this fight, for this highly moral project. that is the reason that we are a community of scholars and supporters. this is a fight for what is right. a fight for ourselves, our kids, and for people that we will never meet. i am honored to be in this fight with you. my last words tonight are, thank you. [applause]

at backup know, what is standing between us and every session that includes alcohol is questions and answers. for some reason if you prefer questions and answers, i would be delighted to start. generally the ground rules, he put you're protested and the form of a question. tell me your name and maybe where you are from and we will be off to the races. who would like to kick it off? first is always the most difficult. right here in the front. >> thank you. competitive enterprise institute. that was one fantastic. i mean, really. >> are there any other questions to back. >> that was not a protest. i think about what is hot today, what movements are around.

the one movement that i can't seem to fit into your framework as environmentalism. global warming alarmists and, the notion that somehow polar bears drowning have homes to their icebergs and no humanity is unfairly taking it away. what do you see driving back and a firmer? >> one of the things that i have not talked about very much, but there is -- i mean, mercifully that i have not talked about this evening with you is a long chapter in this book about what i believe is the proper role for government that deals with a lot of these issues. to get the proper role of government is consistent with this notion of morality. there is no better offer to read than frederick hayek. iconic among conservatives, but he truly is a great economist. one of the greatest of the 20th-century. what should the government do? two things. number one, and minimum basic safety net for the indigent.

that's right. crazy stuff. and i have a friend of mine, very strong libertarian. we were having an argument about this. stickiness conservatives and their attorneys don't have to be against it. hake said that. he writes back the e-mail. justice. the minimum basic safety net. the answer is dealing with cases where markets fail. markets to fail. the burden is really high to get involved. we have to have a source of market failure. the market has to fail, contested the will to intervene, do so costa effectively. a huge barrier. generally speaking the government should not be involved. one of these cases is a case of what economists call externalities'. individuals or firms that affect

the welfare of others outside the market system. the trouble is this. does that mean every time we see some sort of pollution or climate change the government should get involved? of course not. we don't know whether or not the market is failing. we don't know if the government can make things better, and even if they can, we don't know if they can do so cost effectively. >> at a gut level if tomorrow we have persuasive evidence that guard barracks that has no impact on climate hundreds of thousands of environmentalists and emil prefrontal cortex would be devastated. it would feel something has been taken away from there. i'm asking you for an explanation of why they are wedded at this emotional level to the notion that humanity is

bad for the earth. a lot of people more elegant. much more eloquent than i am. how people deal with science and the deeply human questions as they interact with science. believe me. it's not always rational. what to some people feel that the problem with humanity and consequently put themselves squarely against amenity, i have a hard time looking to the hearts of others. in my view one of the pre moral to -- one of the precepts is something that lets people of. i can't exactly relate to that, and i'll leave that explanation to those are better equipped. >> i join you in your discomfort. >> right here.

>> we can make the case that we need to get mom a small apartments, the suburban home that the welfare state now pushes for and may be one that wall argument. too often they go for the much more expensive, the little girl needs a heart transplant and it will cost $200,000. why should she get the same treatment as warren buffett. >> well, what we have to decide on is what in minimum basic standard is. if we can't literally decide what a minimum basic standard is then we will make some decisions. we will all over the place. the side that old people should not be able to have all the medical help in the world. that is basically the kind of decisions that we effectively make, not making decisions means making decisions. this comes down to trim more.

we have to make hard decisions. it is a decision to not make a decision. it always goes to those who can screen the loudest. we make the decision that that will grow, we have to give it to our. she's not going to get a heart transplant. it will to love and to people retiring. status of that will fold up unless we are unwilling to make our decisions. i know it's much easier to have a closed mouth medical decision. sometimes the answer truly is moral courageous. >> mark taper, the jefferson institute. my question is about the earned success as a source of happiness. you made a compelling case, but i am familiar with the study of

over 100,000 people that found that it was love, the presence of people in your life to love you and you love the spilled happiness. i was wondering how you resolve that? >> sure. thank you. happiness to these are wonderful, and that is the reason i wrote a book on the subject. current success is a big driver, not the only driver. let me tell you about what charles murray eloquently called before a institutions of meaning . faith to my family, community, and location. those are the things that give us true meaning, and those are huge sources of happiness. our success is a big deal, but it is a driver of happiness as we design our economic lives and policy. we put together our personal lives, our personal policies. we need to revolve as a route the institutions of faith, family, community, and location which is to say work. that, of course car relates to

our success. but to say it is an exclusion would be inaccurate and would be unfortunate because it would lead us. >> john holliday, independent economist. i was thinking that one of the reasons that people that are recipients of redistribution are not always happy because they -- says the did not turn it. i have a moral question. not considering the minimum safety net, but when we get to redistribution and i start voting benefits for myself that are from somebody else, it is not enough that -- different from stealing. i am wondering if there isn't a moral case against that kind of activity. i'm not taking a minimum and a mom, but once it benefits me as a middle-class person.

>> is there a moral case against voting for your on benefits or to further your own best? for short. as a matter of fact, this is the reason their is a much more rebellion. that is exactly the reason. people recognize that is improper. the danger that we have in this country is that we are going toward a system where we have more takers the makers. about half of the american more alarmingly according to the tax foundation upwards of 70 percent of americans take more of the tax system and put an. at some point we had it to pinpoint where it is not in anybody's pecuniary interest of practical interest to not caring totally toward a welfare state. of course at that point all bets are off and everybody loses. how do we avoid that? the answer is, while there is still time we make the moral case. we talk to people about what it

means. for example, we have a fairness crisis. what is it? stealing from our kids. that is immoral. a system that rewards public-sector workers more than the private sector counterparts according to responsible research. that is not fair. we are corporate cronies, special bailouts and carve out special deals. corporate cronyism is nothing more than cut and instead is an. we know that. we know it would not exist. that's not fair. we have an unfair-crisis in this country. until we can address that in moral terms we will be in danger of exactly the situation that you identified such as precisely the problem increased today. right here. this side. >> over the last few decades there has been emerging evidence

to suggest that median average income has not been rising. he think that is an example of our success? they have not earned it, or do you think that different success with practice we would see higher median wages? >> request and. the middle and lower class, how do we deal with that? a couple of different ways. i recommend your interest, the work of our border here. he runs the enterprise blog which will be renamed the ideas in a few short weeks. pointing out that it is more than just free tax wages the way that we should look at income inequality. we should also look at government benefit, what happens with taxes. and that greatly attenuates the argument that wages have been stagnant. ..

>> he talks about the bottom 20% being marginalized. the question is not is this real or is it not come it is when we going to do to increase mobility

among them? is a civil rights crisis that is going on. it doesn't hurt my kids come in herds kids in the bottom 20% come and that is not right. school systems say they need more money. that is not true. we spend more and more money, but we don't get the results. number two. we have savagely claimed the benefits for were ourselves. we have not bought any meaningful or broadway about sharing the meaningful andhra -- onto person and culture. one of the things that are cheap economist writes about is the

fact that he will are unemployed, they start thinking of ways of entrepreneurial methods to strike out on their own. the first thing they talk about is the regulatory system is out of control. they don't know what the tax regime is going to be. they don't know what environmental policies are going to be. they don't know what labor policies are going to be. we are in the way of people to start their businesses. what are we doing to create entrepreneurship labs so that people can think entrepreneurially the way that most of you do. the answer is we are doing almost nothing or maybe nothing and it's not right. a third way is we don't talk openly about culture. we don't talk about the fact that they and family and community and location are values that are not evenly distributed across the population. until we can talk openly, we are going systematically as a

society to marginal at the bottom 20%. we will attenuate their mobility and we will see a worse situation in 20 or 30 years than we do today. that is not right. excellent question. >> i am from colorado christian university. my question is, about your comment about having 30 seconds to persuade someone. to persuade someone with this viewpoint. and appealing to their emotions and moral sides of the argument. with respect to the occupy movement, as much of a fringe as it is, would you -- how would you pursue going towards him, and are they miseducated from the start, or will that have to be -- is there pitch that he would make to and occupy member? >> that is a great question. no, they are right in our real

house. they see the american economy is not fair, and they are right. they are reacting to the fact that the american economy is game to the powerful. it is game to people who have disproportionate access to the tools of government that can turn public policy in their favor. those that are too big to fail, things that normal people come up ordinary people, most of you don't have. the problem is not the we have to much free enterprise. the problem is we don't have enough free enterprise. we need to start by saying you are right. you are right in your moral outrage. now we know where the problem comes from, now let's have a discussion about it. start off with fairness, and you are talking from the basic moral perspective. this can be a very constructive conversation, from my experience. before the settlement gets the

mic, i recommend his new book about the opening up of the soviet union. it is one the most powerful books on the culture of freedom. and its power around the world, not just the united states. it comes out on june 12. he is not going to criticize me right now because of what i just said. >> i have very little to add to that. thank you very much. [laughter] [laughter] what i was thinking, indeed, based on the research, and into the moral trickles of antiauthoritarian movements, in the world, starting with soviet union and going to the arab spring and grassroots movements in russia today. i was waiting for one word -- but inevitably i discovered as i peel the onion one layer after

another, getting to the heart of these moral triggers. that word is dignity. i wonder. aren't you, in fact, talking about dignity in your brilliant talk today? you use reality, of course, but isn't that the key component, and would you recommend that word? would you recommend it for the 32nd debate at the dinner table? >> indeed. excellent point. earn success is about the dignity of individuals. it is about treating people equally, which means treating them with equal dignity. that is what people seek. the beginning of your book talks about the fact that it was the lessening of the dignity of individuals, which has grown people down in the former soviet union, it is the reason that earn success ultimately matters. i completely agree.

>> my question piggybacks on leon's question. it seems like there was a sort of attention. a lot of people got your parable about the chickens in the living room and so on. why would it be bad for some people and not bad and not corrosive or harmful to the dignity of the people at the very bottom? >> that is a wonderful question. you know, how is the requirement of a civil sized society having a conversation about this. we all deserve our success. the answer is there is a balance between relief and opportunity, frequently. and we have to come to what that balance really is. relief matters. ultimately, the problem that franklin and eleanor roosevelt referred to as a narcotic am a destroyer of the spirit, is

where we reach above basic relief and we start equalizing returns and getting rid of risk in society. so that what was immediate relief becomes a permanent, dependent lifestyle. where we destroy the dignity of individuals, it is where we don't give them relief to earn beyond their success. that is the balance we need to find. we can't find it until we adjudicate some of this moral ground. it is an imprecise answer, but that is the ground we need to cover with a real debate of our time, how we are supposed to deal with the poor. where does really stop them and where does an opportunity society start? what do we need to do to make sure that one doesn't crowd out the other? i hope we find the answer to that, but we are not going to start until we start defending the moral case for free enterprise. it is probably a message. the message is it is time for us to go to the reception. thank you so much for coming tonight. [applause]

[applause] >> is there a nonfiction author or book you'd like to see featured on booktv? send us an e-mail at booktv@c-span.org. were tweaked us at twitter.com/booktv. what are you reading this summer? opb wants to know. >> there are two wonderful books out now about where al qaeda and the taliban are. steve kola is working on one, seth jones from the iran corporation is working on the other one. david maraniss is working on another biography at this time. there are lots of great books that come out every year by serious journalists and historians. warner ivins and spoke is -- i

read it quickly, actually. i read a wonderful book, written by a british fly fisherman about his father called "blood knots." also, one about the 48 campaign. the first election after the war. i am reading about terry anderson and the book about george bush and how he decided to go to war. my wife just finished catherine the great, which was given to me, and she picked it off. i have to go back and get involved in that. i read a lot of magazine stuff and essays. i actually opened up a little correspondence with donald hall, there was something that he wrote in the new yorker about growing old. it really spoke to mean way. we had a little exchange, and that was quite gratifying i am energetic and i'm pretty good sometimes.

a great writer moves me in ways that nothing in life does. >> for more information on this and other summer reading list, visit booktv.org. >> you know, for as important as this project has become for my life, i can scarcely remember the first time i learned about this historic congressional race between to future presidents in 1789. what i do remember is reading about it in a book and it was treated with the typical one or two sentences that you would see that this congressional race. and i thought to myself, way to bury the lead. all of a sudden, we are in this race between two future presidents, james madison, james monroe, they are talking about the bill of rights, what kind of unions we should have. all of a sudden, they are in the next congress. i decided to read everything i

could about the selection. when i found that no one had written anything about it, i decided i was going to write it. this book starts at the inauguration of george washington. what many people don't know is that when he took the oath of office, and two of those states were outside the union. north carolina and rhode island did not ratify the constitution because of their concern that it was missing a bill of rights. a guarantee of fundamental liberty. this was common for the anti-federalist throughout the continent. the common denominator among the anti-federalist, i wish james monroe was one, was that they oppose the constitution. many of them came at it from different angles. am of them genuinely believe that you could not have a union. they believed an independent states or perhaps regional confederacies, but they did not think that any government could be suitable for this entire continent. james monroe represented his objection to the constitution was centered around missing a bill of rights.

while washington took the oath of office, two states, new york and virginia, were agitating for a new constitutional convention. in the words of james madison and george washington, they were terrified at this process. they believed it would be infiltrated by enemies of the new government, and that the constitutional would would be scrapped when done away with. >> you can watch this and other programs online at booktv.org. >> pulitzer prize winner david maraniss visited places like kenya and kansas to examine president obama's family tree. book tv will give you a preview with exclusive pictures and video, including our trip to kenya with the author in january, 2010. join us june 17, at 6:00 p.m. eastern. later that same night, your phone calls, e-mails and tweets