well, which romney's going to appear? which etch a sketch will we know? but the answer to your question, in my opinion, is that the primary process has moved the republican nominee so far to the right, he's going to have to make a sharp u-turn, a persuasive one besides a sharp one. >> you can watch this and other programs online at booktv.org. >> up next, congressman eric cantor introduces arthur brooks in an event here in washington d.c. 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. [applause] >> good evening, carl, and thank you very much for the welcome. it is a realleasure for me to

be here to make an introduction of someone who i know needs no introduction here at aei. i first met arthur brooks several years ago shortly after becoming the minority whip. and i'll never forget the discussion that we were supposed to have for about 15 minutes that lasted perhaps an hour. when we first met in my office in the capitol. and i was struck then and have continued to be impressed by arthur brooks and his ability to in a very concise way articulate what it is that we're 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 arthur's story then, and, you know, the fact that he and his wife met in spain and were there, and the

french -- [inaudible] which was difficult for me to imagine because of his current duties. but all the more impressive because he really showed me then, and this was about the time when you were writing "the battle." and we were treated to excerpts of "the battle" in "the wall street journal" and other publications. and i would, along with many of my colleagues, devour those columns just waiting for the release of the book. and when we got the book, we saw very quickly that we weren't going to be disappointed. that the battle lines were drawn by arthur brooks. and he so clearly has been able to, um, spell out the two different visions that exist in this town today. and, frankly, reflect the choice that the public is going to make

this election in november. and it was really 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 who we are as a country. again, arthur's, you know, walk through life that has landed him where he is is proof that his theory and the demonstration of earned success not only works, it's true. it's true. and so when i'm out across the country and i'm talking to folks who are having a tough time, talking to folks who don't quite filter all the sort of noise that's coming out of washington today, what is so easy for me to say is this election, this election season that is upon us,

um, 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 earned success theory comes in. because all i have to do is rook at my own -- look at my own family and how it is that i was so blessed to be standing in front of you today. of you know, my ancestors or 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 tsarist regimes in eastern europe and russia at the time. and they were subjected to extreme anti-semitism and religious persecution.

but when they came over here, luck would have it, my grandparents were married, eloped, 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 their two 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 30s -- with what to do? she was 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's the opportunity to go out, to work hard and with a little bit of luck, a lot of dedication to earn that success. and she was able to live the american dream. just like i think all of us,

most of us could tell the same story, that we all came from somewhere because somebody made a decision they were willing to go out, take a risk and go and earn the success for the future of themselves and their families. that's what arthur has done for me and so many of my colleagues. because as he's unveiling the road to freedom, it is now the comparison of earned success versus learned helplessness. and so i don't care whether we're 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, and you've done just a phenomenal service for the country allowing all of us to go out there and be defenders of economic freedom, to be defenders of free market and free enterprise versus the

alternative, frankly, that we see so many of our allies pursuing 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 him already we're going to call on him so much, he's not going to know what hit him. but without further ado, president of aei, my good friend arthur brooks. [applause] >> thank you, eric. what a wonderful and gracious introduction. so i'd like to thank you all for coming and say good night. [laughter] it's, my guess is it's not going to get that much better for me tonight after hearing such a wonderful, a wonderful introduction from my friend, eric cantor. he's a real patriot.

he's doing a yeoman's work today in the house. he's doing work for all americans. he's doing work not just for economic freedom, but for the opportunities that people will have now, and we hope that our chirp and grandchildren will have in the future. so his endorsement means so very much to me. here at aei, as most of you know, we're an institution that's been around since the late 1930s. we have a, we're dedicated, our mission says that we are a community of scholars and supporters that believe that together are dedicated to the ideas that maximizing liberty, increasing individual opportunity and fighting for the free enterprise system gives the most people the best life. now, i'd like to tell you that due to all of the wonderful work that we've been able to do here at aei, that we're winning the debate. i am completely convinced that the work that's happened at aei in the past 74 years have made it clear, the facts that we have uncovered have made it clear

that the free enterprise system is the best system for the united states, and it truly is america's gift to the world. but i can't tell you that we've won every debate. and the reason is because we haven't won enough hearts. my view is that we've got the words, but we're missing a lot of the music. and that's what i want to talk to you about on tonight. we're a little bit, those of us in the free enterprise movement, are a 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's the highlight of their week. one of them a psychologist, one's a priest, and one's a free market economist just like me. well, one may morning they go out for their weekly golf game. beautiful may day. they get stuck behind the slowest twosome that they've ever seen.

these guys are four-putting every green. they take some five minutes to select a club. even though they have a caddie. now, this is frustrating for our three friends, and they start making comments by about the 3rd whole just loud enough for the twosome slow ahead of them, just loud enough to pray. the priest says, i pray i never get stuck behind a twosome this slow, that sort of thing. finally, the three friends march up to the caddie, and they say, listen, you've got to let us play through. this just isn't right. the caddie says, fine, but do you realize how rude you've been? do you know who these guys are? the three friends say, no. remember last year when the town orphanage burnt down? remember those two firefighters who pulled out all the orphans, but in the blaze they lost their sight in the accident? they say, no. that wasn't -- yeah. those were the two firefighters. you know, this is all they have left is this golf game. i mean, they're completely

dedicated to it, but it goes a little slowly. the psychologist says, ideal it, i've dedicated myself to helping people, and i guess i've learned a lesson here. priest says, i've got a contrite heart, and i'm glad for that. the free market economist says, it would be more efficient if they played at night. [laughter] that's us. too often that's us. look, the facts are right, but we're not going to win any hearts this way. i want to talk the you about a paradox of government and how i think we can solve it. there's a huge paradox today that the american majority believes that the free enterprise system is the best system for america despite severe ups and downs and that the government is too big and trying to do too many things. about 70% of americans believe that the free enterprise system is best. about 70% of americans also think that the government is too

big and must be scaled back. now, that sounds great if you're a member of the free enterprise movement, but here's the thing you've got to keep in mind. we're not acting as if we believed this. so, for example, our institution, aei, 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%. 15% of america's gdp was an outrage because that was being spent, used by state, local and federal government. now, look at that stat, and i say take me back to the good old days. because today it's 36%, and it's going up. by the year 2038, according to the congressional budget office, it will be 50% of american gdp. 50% of our gdp will go through government. every one of us here will work from the january 1st through june 30th to pay for a government we don't particularly

like. something's wrong. something's wrong. some people say that we're tending toward being a european-style social democracy, and that's wrong because, in fact, 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 social democracy. so we need to explain this paradox. americans say they love free enterprise. the europeans don't say they love free enterprise. 70% of americans say they love free enterprise. typically in surveys 30% of europeans will give this response, but we look just like they do economically. so what explains this? there's a liberal explanation, there's a conservative explanation, and there's a connect explanation. [laughter] so i'm going to give you all three. the liberal explanation is that we don't really want free enterprise and limited government, we're just sentimental. we just like the idea. what we really want is a good social democracy. we do want a real social welfare state that gives us all kinds of

goodies. now, the conservative explanation is, no, no, no, we do love free enterprise, we just haven't been convinced enough by the facts. if we can just get enough data in front of the americans, we can help them understand how fiscal consolidation works and tell them about how balanced budgets worked in finland in 1996 and get all that good stuff in front of americans, and finally the tide will turn on this whole argument. now, i know that's not true. how do i know that that explanation isn't correct? because i'm the president of the american enterprise institute. [laughter] if that were true, we would have won. we would have won, and we could, we could do other things besides continually fighting the fight for free enterprise as we are. the right explanation, in my view, is we do, indeed, love free enterprise. we know it's part of our culture. we know it's central to our culture, as a matter of fact, but our defenses 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 hear. and consequencely, we lose the debate. if we want to win the debate for free enterprise, 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 to moral arguments. think about it in your own life. maybe you're like me. maybe you're the only conservative in your family, like me. and at thanksgiving time it's always really kind of rough. ..

feels really good. you have all the facts. nothing wrong with that argument. but in your sister-in-law says, well, you know, i think you want to give bailouts and tax breaks to millionaire and you know what else? i met a little girl who lives with her mother in the car and free enterprise isn't so good for her. i lose. i lost that argument. just then, i lost -- it doesn't matter if it is antidotes. it doesn't matter. i lost the argument because i was making a cold materialistic case, and it was going to head to head with a hot moral case. this tells us something, it turns out my experience and

perhaps your experience too is backed up by a whole bunch of research these days about moral arguments. let's start with a little bit on brain science. one of the things we know about the most amazing part of the human brain called the part of the your brain behind your forehead. it processes all of the great thicks. one of the things that it cousin is help you makes executive judgments. when you're driving to work in the morning and decide whether or not to go right or left and u make decisions based on the traffic patterns. you're able to do that and take the road that looks fastet to get to work. the same part of your brain helps you process moral judgments. what does it entail? you finally get to work and your colleague says do you like my tie? you have to make a decision. [laughter] all right. do i make him feel good or tell the truth? that's a moral decision. you're going back forth company executive decisions and morm

decisions. all of it is being processed in the part of your brain behind the forehead. if you're con friended with the executive decision and a moral judgment at the same time, which ones go going to win out? we know the answer to that one too. that answer to that one comes from a great friend of mine called john height. he is a social psychologist who is a wonderful book called the "righteous mind." it talks about moral judgment. he is the world's leading expert on moral judgment. he talking about the fact when you're confronted with a deeply moral situation. it blows your circuits. you can't cons trait on anything else. if somebody comes at you with a moral argument that's what's going on occupy your brain and attention. you won't be able to do anything educational. you say prove it. okay let's prove it. i'm going to give you an experiment john has used with add i didn't think sos.

i'm sure it's going to work. after i tell you a story the 90 seconds from now you're not going to be able to process anything but the moral judgment. i'm going to occupy that part of your brain. if you don't remember anything else about the speech. you're going to remember the story i'm about to tell you at this time next year. big plans. let's see. there's a family, like mine, i need it give you a little bit of background. my wife and i have three kids. my daughter is 9 and my sons are 12 and 14. the family in the story is just like my family. like most families, the family in the story is at war with itself. every family fighting about something it seems. and the family in this story is fighting about something common. the kids want to get a dog but mom and dad don't. the kids are saying, come on why can't we get a dog and the mom says you're too irresponsible. who's going to clean up after it and walk it. we're not going get a dog.

the sometime thing happens in the family that happened many my family or virtually every other family. the kids win over mom and there's a coalition against dad. right? [laughter] and so, this family goes down to the pound, right, and disad solemn. i know, how it's going to end. he says they're at the pound and they pig out pick out a puppy and name her muffin and bring her home. muffin is a great dog you know who loves her most? dad. it's because nobody is else to see dad come home from work. [laughter] and, you know, we go on for a couple of years like this. it brings the family together. nothing has brought the family together more. they're happy to have the dog. one saturday afternoon, it's august, it's a beautiful day. the youngest child, by the time is 11, accidentally leaves the front door open. now, there's a squirrel out in

the front yard and the dog sees it. running out into the front yard out into the street. killed in front of the whole family by a car. you never heard a story like this with aei. killed in front of the whole family. the kids are screaming. mom is crying. dad is crying. because he loved muffin the most. the kids say, what do we do? dad picks up muffin's lifeless body and toct they bring her into the house and they decide to cook her and eat her. [laughter] [laughter] i said to john, you got tenure for that? this is a problem with america's universities, my friends. [laughter] so he asked the audience at the point. was it the right thing to do? everybody says of course no. it's wrong? he said how come?

he gives them the cold call rated reasons why it might be okay. it's a high-quite a lot protein source -- it's a high quality protein source. it's not in the news since the whole obama thing. it's legal, and the dog wasn't hurt. it's their dog. people eat dogs in other countries. you can go through the things. it's still not right. why? people can't say why. i bet right now most of you can't say why it feels so wrong to do something like that. okay. that's how public policy arguments work too. if you're confronted with a moral case, and all of you've got is a materialistic guess who's going to win? you can tell people that hey, you know, in finland, the fiscal consolidation works better because of tax decreases and spending cut then ha we would do in the united states today and the little girl in the car has a face that everybody is seeing and you're going to lose the

argument. you might as well tell everybody they should eat their dog. that will be equally per persuasive. what does it mean? we must come up with a moral argument. to say what's written in our hearts. we are here far reason. we believe it for a reason. we have to be able to state it. that's what i want to talk about today. our founders knew this. they were moralists. our founders were not materialists. think about what they wrote. thaibts the second paragraph of the diseklation of independents. you know it by heart we're endoubt bid our creator among them, life, liberty and pursuit of happiness. nothing about money. it's about the moral cough innocence between the founders and our nation. they could be scandalized how to hear how fee market advocates to talk about free surprise. we're not making the moral case.

occasionally we remember to make the moral case or accidentally make the moral case and we win. for example, when i was kid, growing up in seattle, washington, we had very little money. and a lot of our neighbors were on welfare. okay. fortunately we weren't. we aren't because my dad had twojobs. the reason he did he believed that welfare was horrible for poor people in the 1970s. it was. you looked at families on welfare. they were disorganized. dad comes and go goes. who are the parents? we don't know. the car up on blocks. two houses down, they had chicken in the living room which at that time seemed normal. it turns out it's not. [laughter] we tried that in beth -- that. the central claim my father made was it's horrible for the poor people to be on public

assistance. it turns out, everybody knew that. he wasn't some sort of public policy visionary. everybody knew that in america. the only people weren't saying it was poll tibs in the '70s. this were thawbtding the -- they were talking about that it was a waste of money. there was an idea in a book a book by a scholar named charles murray. murray is as all of you know is a scholar at american enterprise substitute. he wrote a book that made a central claim that it was no a waste of money, which it was. that the welfare system was hurting the people it was supposed to help and that was immoral. that lit the fuse. took a long time, twelve years until it translated into in policy. before it became the convention gnats wisdom of democrats and republicans and the president signed it into law.

every big public policy inflection requires that leaders and people who love their country patriots, fight for at least a decade. that is the danger of anybody who makes the claim that the changes we need are only about 2012. we have to understand they're about 2013 and 2014 and on. and that's why aei exists. we exist tbhaws a decade we're going to be fighting the fights for you. back to welfare we form. welfare reform became the law of the land because scholars and citizens and legislatures realized that it was about morality. not about money. here's the question. what is the moral case for free enterprise today? like the welfare reform case. what is the pursuit of happiness is it making money? now, i kind of gave the way the show a second ago. i noticed it wasn't in the declaration of independents. let's talk about that.

economists have asked the question. does money bring you happiness? and the answer is as your mother certainly told you, no. but it leads to all kinds of odd and some seemingly illogical behaviors. you know it. but you pursuit it a lot. if the pursuit of happiness were money itself. what do people do? think waste their money gambling. they work all night long. they cheat brothers and sisters out of inheritance. it's horrible what people do for money. the pursuit of money mistaking the pursuit of happy rches leads to curious things we find in the literature of happiness. i've written a lot about happiness. the first work i did was a book called, "rose national happiness" one of the things i found in the book and i proved in subsequent research, the odd thing about men. the unhappiest average age that

men experience. so what do you think? now, i say men women don't have it. women are much more constant in the happiness. they t doesn't have the dips and everything. they're generally happier throughout their lives than men are. you'll be happy to know. what is the average unhappiest age in a man's life? what do you think it is? it's very clear. i've recreated the damage da that analysis myself with proper control and good protocols. what do you think the unhappiest age is in a man's life? somebody said 40 and somebody said 50. ha 45 is the average unhappiest age in a man's life. if you talk to psychology they give you family explanation. it is when your wife figures out that you're boring. [laughter] that's it. 45 you're most likely to have a teen in the home. right?

misery. right? it turns out that economists have good explanation for this that is with data. the economic explanation when people figure out they've been chasing if the wrong then. money and success move together when they are in the 20s it's like a superhighway and you're cruising down it. you're not paying attention to anything else. around age 45 lots of men say, they realize they kinds of missed an exit somewhere along the way. unmarked exit. they missed the exit that goes off down a road toward what they really wanted. the question is this, what is it on that exit? when we look at data and ask what makes people happy especially men in the 40s. incidentally 45 it comes up after that for the rest of your life. i'm 48, it's going to be good from here on out. [laughter] those of you who have 43,

sorry. so what is it off that exit? what is that we really, really crave? the answer is what eric told you in the introduction. it's earned success. now, that's not a term that we made up. it's something that pops out of the data on the subject of human happiness. when people say they have earned their success, you can predict they will be the happiest people in america. so let's earn success. it's believe you've created value in your life and lives of other people. when people say they have earned their success they become much happier than their neighbors and friends and families. for example, using d.a. that data from the university of chicago. you find if you two people who have the same. they both feel they have earned their success, and then the same in age and education and race and religion. i mean the same college, same town of residence.

everything. except that one earned eight times as much money as the second. you will find they will be equally happy to say they are happy about the lives. you can spread money around. you can give people all the money. it is earned success that will bring happy happiness. this is according to the best studies available. why does this matter it matters because the government can spread around money. they can't spread around earned success. it 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're looking for the wrong thing. what it's delivered we don't care for it. key point about earned success is that it has to be earned. work and sacrifice mean everything. there is an unmistakable connection between sacrifice and happiness. there's a big literature on sacrifice and happiness. for example, there's a wonderful study that some of you may know about. it's my favorite study on

sacrifice. it it involves children and a bag of mash mellows. there's a psychologist famous psychologist from sanford named walter who in 1972 wanted to figure out whether or not kids could delie gratify indication. what he did is took the kids in the laboratory. kids between 4 and 8. he would put a mash mellow on the table. he would say, you can eat that if you want, but i'm going leave the room for fifteen minutes if i come back and it's still here. i'm going give you a second one. okay. the kid said okay. easy, right? two-thirds failed within 30 seconds. [laughter] right? they have it on tape. you find it on the internet. you see kids are trying to discipline themselves. they're inning a any. they say i have to get the second. interest enough, but here's where it gets really interesting. it followed up fifteen years later to see how the lives were turning out. all the same?

no. the kids who couldn't wait had average s.a.t. score 210 points lower than the kids who could wait. the kids who couldn't wait were likely to drop out of college, abuse drugs and alcohol, more likely to get divorce more likely to commit crimes. there was a district link. maybe you're saying it's not because they didn't eat the march mellow. so how do we understand the cause lty of this? we talk to entrepreneurs. let me tell you about a conversation i had with charles squash. i asked him about what it was like to found the successful company? what did he tell me? he said, you don't have any idea. there's one day when it got bad i had to take out a second morning on my house to make the

payroll. i said tell me about the success. he said i am. that's what it's about. the same conversation the same conversation with dozens of entrepreneurs and they always tell you the same thing. they always tell you about the sacrifice. sacrifice leads to success. now when there's no sacrifice whether there is no earned in the earned success. what do you get? the answer is something else you getting learned helplessness. it is a case in which merits don't lead to rewards. in which bad behavior doesn't lead to punishments. in laboratory testing with the imminent psychologist at the university of pennsylvania, who has done studies on this, he has shown when people learn helplessness they become passive and depressed. immediately in laboratory experiences. this is a big deal. he did lots of tests there were

slot machines with nickels coming out. they figure the out no matter how often they pulled the level and the dials came out had nothing to do with the dials. as soon as they figure the it out they stopped playing. they acted depress. why? people need to earn their success. people hate learned heplessness it turns out. so once again, what do we need? we need a system that allows us to earn success and avoid helplessness. we need a success that allow us to be reward for the merit. a system that allows us to keep what we earn. 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'll object because they say, earned success sounds great, i'm happy for you you earned your success.

eric talked about this kind of weird life journey that i've had. playing the french horn professionally for twelve years before i went back to graduate school and inned enended up as the president. when i decided to quit i called my dad and i said, i've decided to take a lot line of work. i didn't go to college. i'm going go to college and become an economist and maybe gate ph.d. and become a professor. he said what are you talking about? you're on top of the world. your life is great. you're making money, you're married starting a family. why do you want to walk away from it 1234 i said i'm not happy. there's eye lens on the -- silence on the phone. he said whab makes you so special? [laughter] and the answer is nothing. just an american. i figured this can be done. i figured it can be done if we

put our minds to it. it turns out it worked okay. it some might object it's really going work for certain people. it's not fair that earned success is not distributed to everybody. the relatively few, the wealthy are the ones who get to enjoys the fruit of earned success. the poor are left behind. we need to deal with the objections. let's exam them one at the time. let's talk about fairness. fairness is the light motif of this political season. you're going hear it again, and again and again. lately the president obama has gone on and on about fairness. he talked about it 14 times in the economic policy speech. i practice it for two hours. i hope you appreciate it. he talked about it nine times in the state of the state of the union speech in january. he goes on about it. free marketed advocates

scattered at the mention of fairness. we know we can't win. we can't win on fairness. we know we're not supposed to talk about fairness. according to saint mill ton freed monofairness is a subject concept. it's not something can define. we should stay away from it. mill ton was a genius, i'm not. i don't agree with that. i think it's wrong. and the thing -- the reason i believe it's wrong according to the latest research on moral judgments people crave fairness. it doesn't matter if they're conservatives, liberals or seize trysts. everybody craves and demands a moral system. we never ask what is it? turns out economists have been pretty good in laboratory ciermt experimenting trying to investigate what it is. they to do it ultimatetive games. here's how it works.

first, subject walks into a laboratory and given $10. second subject walks in and sits down across the table. the first subject who has $10 has to decide how much of the $10 he's going to share with his new friend. now, if the person on the other side of the table doesn't like the offer. he can reject it. if he rejects both walk out with nothing. if he 1e7 accepts the offer they both walk out with what they were offered. okay. i walk in i have $10. you walk in and i studio i'll give you $4. i say fine. i said you get $1 you say forget about it. that's not fair. we walk out with nothing. you spited me. economist like me would predict if i offer you a penny you'll take it because it's better than nothing. it's nonsense. people will fight each other they do constantly. in the united states the average offer is $4. 10% of the time it's rejected.

turns out this experiment has been done all over the world. and you find different results. you find different results between new york and los angeles. people cooperate more in los angeles. and they don't cooperate in new york. nearly as much. it's about a 8 percentage point difference in the rejection rate across the coast. what's the country that has the highest rejection rate and the lowest offer? the answer is our beloved spain. my wife and i were married and lived for many years. in spain the average offer is $2.50 and the rejection rate is 30 percent it explannings doing business in spain. it's not cooperative. why do people think that it's fair to share? that equality is fair sentence because that's what people always talk about in the experiments. the reason is because the $10 wasn't earned. it was given away. now a friend of mine who is an

economist noticing this said we need to change the experiment. he did a variance on experiment with college students. the person who got the $10 had to sing a song in front of the class. say $10 have to say the bear went over the mountain. ♪ the bear went over the mountain. it's embarrassing. i can tell you, i just did it for some reason. [laughter] he had to sing a song and give him $10. he's not partying with that $10. it turns out, the offers are really, really low. they offer very little to the other partner when they feel they've learn earned. the offers are thrm never rejected. when the other people says it has been earned. they don't think it's fair anymore to share. they don't think it's fair because of the resources were earned. another way of looking it. the world value survey in 2006 asked this question of about 4,000 americans. imagine two secretaries doing the same job. one finds out the other earns

more. the better paid secretary is quicker, more reliable in your opinion is it fair or not one secretary is paid more than the other. 89 percent of americans think it's fair that the secretary who is more efficient is paid more. the number in europe is 25% blower. americans believe that rewarding merit is fair if resources are earned. bottom line. 89%. overwhelming. if it is unearned fairness means spreading the wealth. it's not whether one party is more fair than the other. it's whether or not we believe that americans have earned what they have. that defines whether or not we believe that the american economy is fair. which do you believe is true? it turns out that about 70% of americans think that by and large, not perfectly by and large we earn what we have and

rewarded merited is the right definition of fairness. and the president's is incorrect. okay. now think about this intuitively. eric talking about his ancestors. why did his ancestors come from russia in 1900. i bet it wasn't to get a better source of income of force of redirection. it was to earn the success. it was to be treated fairly for the first time. right. imagine some guy in vietnam said, you know, i want to get to america. they have cash for clunkers. [laughter] forget about it, right. look. you want to know what earned success and real merit based fairness are about? talk to an immigrant. that's why they come to the country in the first place. the second objection is not -- beyond whether or not earned success is an in a fair system which most americans would say it is. who it benefits. who benefits the most when we

rei ward earned success? it's easy to say. the rich do. right? the rich get rich and we have seen some run up in apparent income inequality. the statistics are complicated on that. it appears the rich doing well and have done well over the past few decades. earned success helps wealth people. it's not so great for the poor. that turns out, is man manifestly false. the best reaccept gents of earned success the best recipients are the poors themselves. how do i know it? go back to 1970, and compare 1970 around the world with today. it turns out between 1970 and 2010, the worst poverty in the world. people who live on $1 a day or less. it has decreased by 80% of the world's police station. you never heard about that. it's the greatest achievement in

human history. you never hear about. has been eradicatedded never happened before. so what did that what accounts for that? united national? u.s. foreign aid? international monetary fund? central planning? no. it was globalization, free trade, the boom in international entrepreneurship and short, it was the free enterprise system american style which is our gift to the world. i will say, and i will assert and defend the statement 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 others but for people around the world. it is the best antipoverty measure ever invented. now, will it suffice? will it suffice to help all the poor in answer of course is no. one of the things i talk about in the book we're discussion z

us this evening 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 accrues to the middle class. it evens the risk out of life. 2 equalize for the sake of equality. it doesn't bring people out of poverty. the safety net today we need for people who the least among us is threatened the most by an economy who is under threat. when we damage the free enterprise system that we're koreaning toward a debt tile crisis. you know sooner or later it's going catch up with. when that happens who surface most? go back to the old home in barcelona that. twenty years ago compared to today. there are homeless people. 52% of young people can't find

work. the overall unemployment rate is 26 percent. misery and who hurt the most? the poor themselves. the social safety net will be destroyed if we destroy the free enterprise system. as we -- as we are on the path to do. so let's summer rise. it allows us earn us the success. it's the fairest system defined how americans define success which is merit based. it's the system that is best that lifting up the least among us. it's not an economic alternative. it's a moral imperative. now, the structure of a winning argument for free enterprise is this. you get thirty seconds. i mean, i've been talking for thirty minutes. you get thirty-seconds to convince your sister-in-law that's the battle in november. that's the bottle in november is

every american defining the system and defending the system we love not just the election. you get 30 seconds to make your case. you have to start by establishing your moral objectives. you must do it in terms of earned success. true fairness and listed -- lifting up the poor. it that's a hard thing for me to do. it's a hard thing for me to do. i'm burdened under the weight of a ph.d. it's hard for me not go duet. it i want to do it. because i have the data. it's not the right thing to do. i'm going lose. it's not written in my heart. here are my conclusions the economic friend for social democracy cannot be reversed without a dominant moral case. we'll lose the grift the founders in a system that dignifies us as individuals that lifts us up if we don't make the moral case. aei scholars supporters, and

friends all of us here are dedicated to the long haul for the fight for the highly moral project. that's the reason we're a community of scholars and supporters. it's the reason we do what we do. it's fight for what's right. it's a fight for our kids, ourselves and people we will never meet. i'm honored to be in the fight with you. my last words tonight are thank you. [applause] thank you. now what's standing between us and reception that includes alcohol is questions and answers. it for some reason you prefer

questions and answer. i'd be delighted to start. question have microphones. generally you put your protest statement in the form of question. [laughter] and that you tell me your name and maybe where you're from and we'll be off to the races. who would like to kick it off? the first is the difficult. right here in the front. sam. >> thank you i'm with competitive enterprises. that was one fantastic talk, really. i mean. >> thank you. are there any other questions? >> that was no a protest, either. so i think about what is hot today what movements are around, and the one movement that just i can't seem to fit into the framework is environment lymph. global warming alarmism. is the notion that how the pole polar bears. is there icebergs and humidity unfairly take it away. what do you see driving that in the framework that you presented

to us. >> one of the things that i haven't talked about much but there's a, i mean, mercifully that i haven't talked about evening. there's a long chapter in the book about what i believe is the proper role for government that deals with the issues. to get at the proper role of government that is consistent with the notion of morality and the free enterprise system. there's no better author to to read than freedic hayek. he is iconic among conservatives. he truly a great economist. one of the greatest economists in the 20th seize pry. what should the government do according to him? two things. a minimum basic safety net for the indigent. he says that. it's crazy stuff. i had a friend of mine, very strong libertarian and we were having an argument. i said look, a safety net conservatives and libertarians don't have to be against it. hayek said that. he writes back in the e-mail.

itself from was a scwish. [laughter] minimum basic safety net. the answer is dealing with cases where markets fail. they do fail sometimes. the burden is really high to get involved in marketeds. we have to have a source of market failure. the market has to fail. the government has to be able to interstrene and do so cost effectively. the huge barrier and generally speaking when we see a source of market failure. the government shouldn't get involved. one of these cases is a case of what economists call externalities. it is a case where individuals or firms effect the welfare of others outside of the market system and pollution is an example of that. the trouble is this. does it mean every time we see some of sort of pollution the government should get involved. of course not. because we don't know whether or not the market is actually 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. >> [inaudible] >> yeah. in a gut level, if tomorrow we had per sway sieve evidence that carbon dioxide has z no impact on climate. it seems to me that hundreds of thousands environmentalist in the brain would be devastated. they would feel something had been taken away from them. i'm asking for you an explanation why they're wedded at emotional level. at the moral physical level to the notion that humanity is bad for the earth. >> yes. this is -- there a lot of people more eloquent on the subject. which is different than i'm talking about. much more eloquent. i recommend john who talking about how people deal with science and deeply human questions as they interact with

science. believe me, it's not racial. it's not always rational. why do people feel the problem is humanity and put themselves against humanity. i have hard time looking into the heart of others. that's hard for me to relate to. in my view one of the key things of the good culture, economy is one that lifts people up. lifts all people up. wasn't actually antihuman. i can't relate to that. i'll leave that explanation to those who are better equipped. i join you in your discomfort. >> you sir. >> fill johnson. i understand that, you know, the little girl in the car and we make the case we need to get mom a small apartment and not the home that the welfare state now fors for and win that moral argument. too often they go for the excessive thing. they need the heart transplant and it's going to cost $200,000

why shouldn't be she get the same treatment as warren buffet. >> what we have to do is what a minimum basic standard is. we can't decide for the welfare state we will make some decisions. we will all over the place. we decide that old people should be able to have all the medical care in the world with no constraints it doesn't matter if it's crowding out kids and poverty which is the decisions we make. not making decisions means making decisions. so this comes down to true moral leadership. this is the reason that we need true moral leadership because i have to make hard decisions. it's a decision to not make a decision and it always goes to those who can scream the loudest. we make the decision that the little girl in the car we have to give it to her. she's not going to get a heart transplant. it will involve people retiring

earlier and take more out that are unwilling to put into it. it's easier to have closed forum math mall call solution. sometimes the answer is moral courageous leadership and this is one of those cases. yes, sir? mark, the jefferson substitute. my question is about the earned success as a source of happiness. you made it a excelling case. i'm familiar with the study of over 100,000 people that found that it was love the presence of people in your life who love you and whom you love that spell happiness. i was wondering how you resolve that approach. >> sure. thank you. the happiness studies are wonderful. and that's the reason i wrote a whole book on the subject. earned success is a big driver. it's not the only driver.

there are other things we need. let me tell you about charles murray calls the four constitutions of meaning in our lives. faith, family, community, and vocation. those are the things that give us true meaning and those are huge sources of happiness. so earned success is a big deal. earned success is a driver of happiness as we descrien our economic lives and economic policy. we put together our personal lives. we put together our personal policies we need to resolve those around of institutions of meaning, fate, family, community, and vocation which is work. that relates to earned success. but to say earned success is exclusion of all else would be inaccurate and unfortunate. it would lead some to loss of lives. >> [inaudible] john? john independent economist.

i was thinking that one of the reasons that people that are recipients of redistribution are not always happy because they have a sense they didn't earn it. i have another question and it's a moral question. that is 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's not awfully different from stealing. i'm wondering for there isn't a moral case against that kind of activity. i'm not taking the minimum minimum but once it benefits me as a middle class person. >> yeah. is there a moral case against voting for your own benefits or feet are your nest. for sure. as a matter of fact, this is reason there's so much moral rebellion against earmarks in congress. that's the reason. people recognize that's improper to do something like that. the danger we have in the country, is that we are going toward a system we're more

takers than makers to put not too fine a point on it. about half of american wage earners have no federal income tax liability. or more alarming according to the tax foundation 70% of americans take more out of the tax system. we'll hit a tipping point it's not anybody's interest or practical interest to not careen totally for the welfare state. at that point all bets of off and everybody loses. the whole country gets poorer. how do we avoid it? while there's still time we make the moral case. we talk to people about what it means. for example, we have a fairness crisis in the country bhap is the fairness crisis? we're taling from our kids -- we're stealing from our kids. immoral to be stealing from our kids. we have a system that reward public sector workers nan private sector according to research done here. it's not fair.

we are corporate cronies with special bailouts and special deals. it's nothing more than the codependent spouse statism. we know that it . wouldn't exist without statism it's not fair. we have unfairness crisis in the country. until we can address that in moral terms we will be endanger in exactly the situation that you identify. which is precisely the problem in greece today. right here. we'll go over to this side. >> news weekdayly beast. over the last few decades there's been emerging evidence that suggests median average income in the country have been been rising. do you think it's an example of earned success and action which is to say if they haven't risen they earned earned the rise if you think that earned success was practiced in the country we would see higher median wages. >> the fact there has been apparent stagnation. how do we deal with the fact?

couple of different ways. i recommend your interest work of jim who is the blogger here. who runs the enterprise blog when will be renamed ae ideas. i had points out it's more than just pretax wages. the way we should look at income inequality. we should look at government benefits what happens with taxes et. cetera. and that greatly the argument that wages have been stagnant. look at the blog if you want to understand it. moreet to point let's say that mobility hasn't been high enough. mobility is the key concept. when the president of the qliets or any politician talking about income inequality. he's wasting our time. the problem is mobility. that's what everybody cares about. when you focus on income inequality. you talk about how to bring the top down. if you talk mobility you can talk about people at bottom. what we care about 20% of the

income distribution. they have seen less income than economic and opportunity mobility over the last few decades. doesn't matter how you look at data. you will see some lessening of mobility in the bottom 20% of the police station. read charles murray's new book coming apart. big best seller this spring. he talking about the bottom 20 percent of marginalized. what are you going to do? the question is not earned success matter earned success not is it real or not? what are we going to do to increase mobility among bottom 20%. there are answers we need school system that exists for kids not grown-ups. it doesn't hurt any kid. it hurts kids in the bottom 20%. it's not right. everybody knows you're not supposed to hurt poor people. if you don't know, that were raised by wolves. everybody knows don't hurt the poor. our school system marginalized the poor systemically. school systems say they need

more money. it's not true. we spend more and more money. we don't get the results. okay. number two, we have selfishly claimed all of the benefits and all the blessings of the entrepreneurial culture for ourselves. we have not fought in any sort ever meaningful broadway low to share the imeerpship culture. what are we doing to bring people into the -- writes about is the fact when you're in an economic crisis like we are today. one of the first things happen is they start thinking about ways that entrepreneurically they can strike out on the own. we're getting in the way. we talk to small business people that are trying to strike out on the own. the first thing they talk about the fact that the regulatory system is out of control. they don't know what the tax regime is going to be. they don't know what environment policies are going to be or labor policies are going. we're in the way of people who

should be able to start their businesses and act entrepreneurly. what are we doing to create labs in inner cities and so people think entrepreneurly the answer is we're doing almost nothing or maybe nothing. it's not right. the third is we don't talk openly about culture and the institutions of meaning. we don't talk about the faith, community and vocation are not values that equally distributed. until we can talk openly about cultural issues. million we can talk openly about the facts we're going systemly as a society to mar began lose the bottom we'll see a worst situation in twenty and thinker years. that's not right. excellent question. thank you for that. right there. my name is franklin from colorado christian university. my question is, about your comment about having 30 seconds to persuade someone with this

viewpoint and appealing to their emotions and moral side of the argument. with respect to the occupy movement as much as the fridge as it is. how would you pursue going towards this them. are they too miseducated from the start or does it have to be fought educational. it is there a pitch you would make to ab occupy member. >> great question. no, not be under redemption. are you kidding? they're making a bing strong moral argument. they say the american economy is not fair. they're right. they're reacting to the fact that the american economy is games to the power it's game to people who have disproportion gnat access to the tools of government that can turn public policies in the favor that are too big to fail. that have tax carveouts and bail yowlts and things that normal people most of you don't have. that's where they bridle

against. the diagnoses of the problem is wrong. and we need to start by saying you're right in the discomfort in the moral outrage why you're wrong is where the problem comes. let's have a discussion. start with fairness and talking from basically the same moral perspective. in my experience it can be a constructive conversation. leon aaron? before he gets the mike we recommend his new book which is coming out june -- june 12th. his new book about the opening up of the soviet union. one of the most powerful defenses of the culture of freedom and the power around the world and not just in the united states. truly he understand the moral case for freedom. leon aaron. he's not going to criticize me now because what i said. >> i have little to add to that. thank you very much.

>> actually what i was thinking indeed based on the rebelling not just in that into the moral triggers of the about movements. in the world starting with fall of the soviet union going to the arab spring and to the grassroots movements in russia today and the protests. and i was waiting for one word which inevitably i discover as i peel the onion one layer after another getting to the heart of the moral triggers. and that word is dignity. i wonder, i mean, aren't you in fact talking about dignity in your brilliant talk today? you use morality, of course. is that key component. would you recommend that word for the thirty-second debate at the dinner table? >> indeed.

leon, excellent point. earned success is about the dignity of individuals. it's about treating people equally treating them with equal dignity. that's what people seek. the beginning of your book talking about the fact that it was the lessening of the dignity of individuals is ground people down to the former soviet union until there was a moral rebellion. it's the key concept. it's the reason that earned scows matters. i agree. >> my question piggy backs in a way on leones. it seems there was a sort of tension two the different thins. on the wound hand you are saying welfare is cro rossive. the chickens in the living room and so on. the other hand you're saying need safety net. why would it be bad for some people but then not bad and not corp.s arive and harmful to the dignity at the people at the

bottom? >> wonderful question. how is the requirement of a civil life -- not possible with the concept of dignity of every individual we deserve to earn our success. the answer is, that there is a balance between relief and opportunity frequently. we have to come to what that balance is. relief matters. ultimately the problem that frankly roosevelt referred to as a subtle narcotic destroyer of the spirit is where we reach above basic relief and we start equalizing returns and getting rid of risk in society. what was immediate relief becomes permanent depent life sometime we destroy the dignity of individuals. don't give them an opportunity beyond relief to earn their success. that's the balance we need to find. we can't find it until we adjudicate some of the moral ground. it's an imprecise answer.

that's the ground we need to wild fire the real debates our time. about how we're supposed to deal with the poor. where does relief stop and where opportunity society start. what do we need to make sure that one doesn't crowd out the over. i hope we find the answer to that. we're not going to start until we defend the free enterprise. this is a message and time for us to go to the reception. thank you for coming tonight. [applause] is there a non-fiction author or book you'd like to see featured. send us an e-mail at book tv at c-span.org open tweet us at twitter.com/book tv. kenya indonesia, hawaii, kansas, chicago and washington this weekend on book tv. follow david on his journey walking in a president's footsteps.

for president obama the story. sunday starting 6:00 p.m. eastern a video record of his travels. live david takes your calls and questions. s a this weekend conservative commentary blames liberals for ongoing war on ideas using the tyranny of cliches. american politics is distorted for the last century or so by the idea that the further you move away from the left, the closer you get to bad things. one of the words thing we use is racist, home phobic and in some ways that's working definition of the fascist is winning an argue. >> that's on sunday night at 9:00. on book tv. this weekend on c-span2. >> many of you might not have been born in 1973 and '73 when watergate took place. richard nixon won in one of the biggest land sides in the history united states.

meant mo americans who voted voted for him. yet, when facts came out suggesting that laws were violated, the american people including the overwhelming majority who supported him said congress, you have to investigate. we have to have a special prosecutor, the laws have to be enforced no matter what. and in the end, when the house and shared committee acted in a bipartisan basis, to vote for the impeachment of richard nixon the country overwhelm supported that verdict. what did that tell us? that more important than any political party and more important than any president of the united states, and more important than any single person and more important than any ideology was the bedrock principle of the rule of law and the preservation of our constitution. and americans united on that

scene regardless how they voted just about a year and a half before that. we're not talking about ancient history in that vote. people put behind them their own partisan views and said what is good for the country and riewlt of law and one standard of law was critical. so i said agree, you know, that's an important principle. i believed in it too. and then, we got the bush years. the accountability principles pretty much worked, i don't want to say they were perfect, hardly, government doesn't operate in a perfect world. and in i.t. is rarely perfect. then we got to the bush years and things changed many and so i and i coauthor cynthia wrote wrote a book. it's a niche area of expertise. about ten of us had the

experience of dealing with the terms of the constitution and the impeachment proceedings that worked the nixon impeachment proceeding. but we saw and wrote a book and we saw however that there was in accountability through the impeachment process. and then we said let's look what cells be done because we knew the framers of the constitution understood, and it's clear in the debates about the institution what the president completes he, somebody maybe she can be process cutted. there was nothing in the framer's debate that said you've been president, free. you gate forever free from jail card. nonsense. the framers understood that presidents could very bad things. i mean, they were human. they created checks and balances because they understood presidents could to do bad things. they und understood congress could