>> you can't have a novel without an audience and the fact there is this eager public wanting to know about the world around, wanted to know how life works, and he keeps this kind of thread of connection within the novel i think. >> you had the feeling rebellion against delivery status quo when you stumble into money in 2000

willing to learn about it and talk to bankers about it. at the point, i since you have some animosity towards going on in london. that it wasn't just a detached interest. >> i started the novel thinking it was going to be a crash. i started a book, describing a bubble, and thinking it would be a dramatic iron in some classic sense, when the audience knows something but the people onstage don't. michael and i both had our flies undone, that would be a dramatic irony. a daytime tv kind. so my fear was the audience would know. i'm describing this at the bank is being pleased with themselv themselves, and the reader would know a crash is coming. so i was really, really

interested windows crushed it, and it turned out to be something much, much bigger and scarier than i anticipated i was flat wrong when we. put all the pressure to come up to be a bubble bursting in the london property market. >> it's funny because i moved to london in come right out of college in 1983 and i saw the place but i was part of it. i worked in the city for solomon brothers, and the london i would do is hostile, was actually hostile to the market. it was an uncommercial place in an odd way. the last place on earth to think america investment banks we find a natural home. when i got there i had a grocery store i went to come and the grocery store sold the little biscuits.

the only thing i could eat. nothing was edible. i had a friend from new york who said whenever he walked by in english sandwich shop you want to walk in and strangle the owner. i went into by some and one day he worked there. i went to the leader owned shop and they said, we are the biscuits i always like what she said we used to stalk them but we kept running out so i stopped. like that was the sensibility. it was like too much trouble to make money. the idea that this money crowd would roar into place entrance from the city, at the time it would've seemed preposterous. you watched that like i watched that and that bothered, in one way or another it bothered you. >> i saw the impact of the change. just in terms of the novelist on one street, i was struck by the fact you could see just the texture of life in the streets

change because of the pressure. obviously the cars got more expensive, it was more work on the house with things like that. one thing interesting was it would be a house people and lived in for 30 or 40 years, and when it sold to the people who could finance it, because they started eyeing houses, you never knew the owners again because they also put the houses every 18 months. there was something quite striking about the, a place at particular human interactions and said it was like one of them dropped out in the house will be flipped and flipped and you never do them again. the other thing companies like the work of feminist science fiction because of the men get up at six, they are gone before dawn, back at night. you never saw an adult man in daytime and yet they're continuing to reproduce the.

[laughter] because the wife or to unload the children in these suvs and drive them off somewhere. that was one of the terms of the book, the sense, the texture of life in an ordinary street been rearranged by these large impersonal forces. >> did you blame us for it? do you think this was an americanization of english life? >> no. i grew up in hong kong. i see it as a kind of reverse, hong kong it was the most hyper capitalist society in the world. so i see it as hong kong taking over the rest of the planet. >> that's funny because my point of view it seem like americans overrunning london. all of a sudden these people of oxford and cambridge wanting to work for america investment banks. they started to say things that they would never say. >> a change that kind of culture.

those sort of hyper educated kids with the same time don't quite know what to do with their lives will do the thing they perceive as having the most risky she and money. in that oxford way to being prime minister or paul lawrie or whatever, that i want to go and work for those incredibly well-paying financial institutions. it's not just americans. a method sometimes used in england is called wimbledon position. the venue is local but the talent is international. you can see there are lots and lots of european thinkers. it's hilarious how far off you can spot them because you only see them in on weekends and there's a very interesting project. people are with their children but they're trying to do as many of the things that he would be doing if their children weren't there as possible the their

always on one phone, quite often onto. clearly there at work while the children can run around and doing the unstuck to the european banks, scotland about 400 yards off there's this particular thing to do those letters. they were the over their shoulders with arms draped down and that is the european bank. there are always these interesting kashmir colors and you can sort them. if you thought a sniper be able to arrange to take them out. >> your listing to the commonwealth club rated program club. our guest is a john lanchester and were discussing of the world of finance really works. i am michael lewis. you can find a few of commonwealth program on our youtube channel. let's get to the book. the book is a dictionary. it reminded me of ambrose

dictionary. you done an amazing job of taking essentially, there's an essay on either end of the dictionary of the dictionary itself is very readable. the joy of it is even if you know what a bailout is or what cdo is, that the descriptions that you provide you be thinking about them in any way. i'm curious how you decide what to include in this book. >> i would say this because i'm a writer but for me the first obstacles and the main obstacle following the subject was the level of vocabulary. it's just embarrassingly simple think not knowing what the words mean, and that was the first hurdle i had spent a list of what you did not. >> i tracked it down. whenever i was starting to read the stories, whatever their sword i did not mean, i would review it until i felt i did not the meaning.

>> can i stop you? when you found you know something and presumably you to a network of financial paper you could call and ask questions of, you seem to know some bankers and -- >> i do know a few. >> do you find that when you put your questions to people who are supposed to know, they often felt misplaced the? >> very often. one of the things, i was was mortified about the fact that it struck me fiscal and monetary. i went to oxford. i got a first class degree. i worked for 10 years on a political industry magazine and i was almost 50 before i knew what fiscal and monetary meant. which is embarrassing. the guy i was talking to the worked for reuters said it's funny you should mention that. i used to us that in interviews. 80% of the professional financial journalist applying to work at the reuters couldn't define fiscal and monetary. >> there's a horrible fear of

seeming ignorance in the financial committee. it creates an opportunity for all kinds of bs to slip in because nobody wants to say i don't know. >> nobody wants to be the kid that says excuse me, that emperor dudas no clothes. >> so your 20 figure what these words mean. where does it end? do you feel like you are now expert in the financial world and? >> absolutely not, no. the entertaining thing is that whenever there's any scandal or disaster, it's usually something you've never heard of. it's like the jpmorgan thing, the famous london whales which was a tempest in a teacup until turned out to be a $.2 billion. that was something about forward sadly etf derivatives. >> who knows what they are. >> whenever something blows up it's always something you've never heard of. >> i want to read a little passage. this is in his, when he's explaining the benjamin graham is.

one of the things i've been doing since i began taking an interest in the world of money is ask people involved in the world what they do with their own money. my question knesset is whether they do the things we civilians are advised to do in respect to pensions, investments and the like. i've asked 40 or so financial professionals on how to get medicine the one who falls the advice given to civilians. their reasons for not doing so are always twofold and always the same. the fees charged are too high, and you can't really tell what's going on inside these companies. do you, as you wander the world of investment professionals, has it all argue what you found? let me put the question another way. so you've got this wonderful dictionary explain terms to lay people that they probably don't understand and probably explain it to officials in the ways they don't understand. do you feel it is delivered?

do feel it's just an accident of some sort? >> funny enough, that was the question i was going to ask you. [laughter] whenever you have a book out, i'm sure you know this, there's always one question that keeps coming up and it's always when you're not quite expecting. my first novel was about a psychopathic snob possessed with serial murderer. he kills, i can't remember, its nitrogen people. the question i was most often as waking up, is the autobiographical? [laughter] and a decade and a half later, i still haven't worked out the correct reply to that. the one with this book is the way the braves put it is, do they do it on purpose? the thing to what i think i

think about that is that actually it doesn't matter because the effect is obfuscation, and the effect is to bamboozle people. if someone is talking to you about synthetic cdos based on rmbs, it doesn't matter if that person is to literally trying to bamboozle you or just, you do, using arcane for kevin. it's the fact that matters and the effect is systematically excluded, excluding an exclusive. so what's your view as do they do it on purpose of? >> kind of, yes. it's more complicated than that because i think that often when people dream up a complicated things, the people who do getting up there what people understand. it's better if you don't. it's better for them if you don't. there's a kind of arbitrage opportunity in your ignorance.

about what happens very quickly to the people dream of explain to those people who don't complete understand and they start repeating things. so the purse was deceiving often doesn't understand what he is saying. i think, so becomes less and less delivered as you get further and further away from the origin. from the source of creation. all professions have their argo, all have their short and. some of its useful. it's not all bad. the problem and the financial system is it's so much, so much of it is bad. if you think about, if you try to explain, if someone had just explained what a collateralized debt obligation was that was filled with pieces of the worst pieces of subprime mortgage bonds, some would've so those of which ones are great in history all public in one place and have

been given aaa ratings, i think people would've stopped and thought about it a little more. what they didn't put it that way. the financial sector doesn't put it that way. i mean, i can go on about this and this is really your conversation. but i would say that at the bottom of it all i do feel sometimes is that the financial sector often creates for itself jobs that don't need to be done, that it doesn't -- there is a useful purpose it serves. it's a pretty simple useful purpose. it's supposed to be bringing boroughs together with lenders. people who need the capital. if you go one layer below that it's evaluating risk and it's exposing the so people can evaluate it properly. in addition to that legitimate function, it is all the stuff it shouldn't be done. it pretends to expertise that

not only does it not have but it doesn't exist. protecting the prices of individual stocks, where gold is going to go for all the different things, all of the advice is given is basically nonsense. and so, i mean, it's just an unknowable. telling you, they're suggesting they know things that are unknowable. and the language is designed to prevent you from getting to the eventual truth. you kind of give yourself over to the person who was supposed with the expert and never find out that he doesn't have expertise. so i say that, it sounds very critical i know, i think it's just the way it is. i don't mean to be mean. it's just kind of the latest. i think anybody same with money, they shouldn't take much in what advice, especially the fact that they're paying for in a weird way. the more you pay for it, the more dangerous it is.

i'm partial cynic about the nature, about the language but i think also a lot of the people in the financial sector don't know this about themselves. they think they know things they don't know. know. >> i heard a really interesting thing, someone came up at a talk i gave in new york and he said, you know, in addition to the things you talk about, about obfuscation and indent, but he also made an interesting point produce it is also a disassociating effect that helps you switch off what it is you're actually talking about. i was struck by this because i had thought about disassociating ability for people on the site. to look at some numbers for business. i'm going through, and they would churn in the business. there were no numbers come in periodically and you see suddenly sort of step back and realize that what you looking at

was a residential care home, and the churn was people dying. and i must admit i had never thought about that. the language also gives installation to people making very brutal choices. >> when you stumbled into this subject, you probably didn't think you would be writing about it a decade later. you probably, if i asked you 30 years ago, if you be writing primers on how to understand finance. you look at me like i was off my rocker. do you feel like this is something this is now part of your life? are you looking forward to moving on from finance or is this something that is like a gift that keeps on giving? >> the stories continue to be interesting. at the same time i wouldn't, after i wrote iou, there's a saying they have in british journalism, especially in the

tabloid papers, no is just an emotional way of saying yes. [laughter] and whenever iou i said that sick, never again, never another word about finance. i finished. and greatly to my surprise, i ended up to him because i kept being asked to explain. that was the common thread about explanations. >> did it surprise you, this opportunity that sort of existed for you? the people are hungry for these things are riding? >> i think it's linked to the fact that people fear that nothing has changed since 2008. i think for an awful lot of people is still 2008 and they feel like flies trapped in amber, you? that things change, their circumstances have changed, the system is changed, the bad guys got away with it. so it doesn't surprise me because of that. i think in every other way,

yeah, i can't quite believe it in many respects. but i also think that, i feel a kind of point -- i'm sure you noticed people, lots of people very propped by money are quite boring i'm just starting to feel the thing that actually slightly amicable beyond a certain point, it's amicable to the writing fiction. money and economics, we seek the explanation it is the thing that's interesting about the phenomena behind the thing, the reason behind this thing, behind the veil. but at the same time if the reason for everything is always economic and money, you can't really imagine a novel. >> the mine comes to rest while short of a novel. >> actually it's a kind of antithetical project. it's the opposite of a novel eventually. as i was writing this book i was

thinking i probably to have to leave it here because if i keep on with this i won't be able to do, won't be able to see the sort of human content. >> you were a man of the left in england which makes you on our political spectrum a pinko. off the. >> i don't self identify -- your the guy famous wearing pink shirts. >> i was going to say -- [laughter] your associate with left wing, vaguely left wing journals. you move and left wing literary circles, that kind of thing. do your friends think it's strange you've gone this jag? i'm curious especially if they think you're too sympathetic to the world of money? you have to be somewhat sympathetic to do the job you can explain. you can't be just hostile and that's interesting to you are not really hostile.

>> i think you can't write about unless you're ambivalent about it. i think you're ambivalent about it. part of interest is to do with it. i know you've met, very interesting thing, he loves reading about this stuff and he gives this very interesting reason. he says they are like artists or like criminals in that they're just interested in getting this thing done. what's the thing that makes money? ignore the rules, they do everything from just have to get to the object? there's a kind of amorality involved in that, and actually lots of artistic endeavors and ruthlessness. part of me definitely resonates with it. people dig it, you know, there is a sort of default left thing in europe in general about anything to do with any kind of functioning of markets.

it's like your biscuits lay. it's wrong and arranged and sort of morally, any enterprise that has any kind of economic component is morally bankrupt. i both disagree and think it's stupid, and it misses some of interest. >> shall we take some questions from the audience? >> sure. >> there are so for me which i'm going to ignore, but for you, you grew up in hong kong. money is also key driver in what's happening there now. in addition to beijing's british -- brutish behavior, can hong kong continued to prosper within the chinese assistant? >> that's a big would. i hope so. can i see what's going on at the moment as being more than an economic thing, and it may be almost more than a political thing. it's to do with identity. i think that both the brits and the chinese, chinese communist

party were handed over the reins i think they underestimated the effect that hong kong feels. i think the notion was hand over in 1997, the elections are arguing about, the notion was the great and the good was that hong kong will be gradually assimilated with china by now, and a lot of the thing things we growing together but, in fact, what's happened is that sense of hong kong identity is growing stronger, especially for young people. the more they see the mainland the more they realize they are different from the. i do think it's about identity in a decently to take a kind of political manifestation but i very much hope that they figure out a way. hong kong is immensely useful to mainland china as an entrepreneur, and also there's

no company law in china. the -- >> if they didn't have a, it would have to created. >> that's right. so i think the broad guiding principle for anything with china is the chinese communist party tends to get what it wants. i think what it wants is for hong kong continued to be an entrepreneur and food to be relatively stable. so i imagine that some kind of you will be struck maybe, the current chief executive being encouraged to take some form of early retirement. i noticed the scandal surfaced about him in th in the australin papers. f. i were him i'd be asking a bunch of questions about where the scandal came from because it makes it much easier for him to be discreetly edged towards the exit spent another member of the audience asked london epitomizes the wealth gap today. russian and chinese oligarchs buying homes.

buying homes and driving up prices. can this go on in the same way? is a sustainable? >> i'm not sure it is. it's a very, very striking thing though. the rich metal parts of china are just empty. >> nobody is living there. >> nobody lives there. there's a very striking thing, kensington and chelsea, which is the richest constituency, the richest electoral constituency in the entire european union. and in the 2011 census, you have a census every 10 years, it was the only area in the entire british isles where the population had fallen. that's a sinister in weird thing. if the richest place which would be a magnet for the populations going down because things are empty, you know, it doesn't feel sustainable. but it may be that we are having

an odd thing that london is effectively decoupled from rest of the uk, maybe from the rest of europe and it sort of international capital mega city that was new york and maybe the ocean version in singapore. in a weird way they aren't in their physical location anymore. they are in this other location that is purely to do with money. local version clearly not sustainable, that maybe if it sort of decoupled, maybe that's a bit different. >> is there any kind of friction between the locals and the oligarchs who role in a bobby jon's of london? is there any attention at all? >> not particularly. a funny thing because of hauling out that occurs, in those very rich bits of london t there are only rich and poor, and the poor are there to service the rich. there's no one else. oligarchs and dormant and that's it. the one thing that londoners do like is you get this during the hot months of the year in the

arabian peninsula, the younger princes and princelings render supercars to london. so you see this assumption parade of maserati's, blekaitis, this, that, and the other, cars worth half a million bucks just driving up. they're doing two miles an hour just moving up and down very, very slowly. it really does, you know, it's like something out of a tom wolfe or illini or some bizarre, or monty python. [laughter] the locals all think that's hilarious. >> if i put you in charge, if i make you god of great britain, what do you change? does this growing sense of inequality can i don't know what the numbers look like, i assume you're experiencing a similar sort of thing that we are experiencing here. growing gap between rich and poor, since that's not just the 1%, but the one-tenth of 1% that

are taking over more of the games. is it creating anything that looks like it class warfare to you? >> i think it creates gigantic resentment, yet. a lot of it is directed at london from outside london spent we don't do class warfare very well but you do very well. you would think if they were going to be a revolution it would start over there. >> scroll it forward a bit and i think you'll be tensions in that direction. i can was a big thing in the scottish independence referenda. there was a lot of, you know, sort of a joke version which the scots hate the english which is lots of jokes, slightly too. that's the kind of permanent sort of joke. the thing that is taken on very specifically anti-london thing. the thing about being -- the thing about london, it's 15% of the population. i look at the numbers in an

american context and his san francisco plus los angeles post "new york post" chicago post by nicholas washington. i think you have to add the top 20 american cities together before you get the scale of london as a percentage of the population. it is also a media center, also to artistic center, it's where all the rich people are. it's where people go if they want to compose music, and it's the political capital. if the thing is sort of separating out from the rest, and that's where the kind of 1% and the .1% are living. there is real potential for very serious splits. >> what do you do to fix things because there's a few things you could do in relation to making it less of a magnet, ruthless international capital. our system doesn't just bend over backwards to accommodate

international capital. it actually is limbo dances. if you're very rich person you can live in london completely free of tax on your capital assets. that's why the oligarchs are there. they are not there because they love on whether. they literally pay zero tax at the only pay tax on income. that's never been explained why that law was brought in. it was i think initially around the time of attracting shit this in the 1970s, and basically if you're a james bond villain who's got away with it, you come and live in london. that would be, that's an easy fix. we chase the taxes the way you guys have. >> do you think that the british should introduce a more aggressive tax structure? >> the top 1% pay about, of

income tax, pay about 30% of tax. that's not obviously unfair, if you said that two marks, if you offered that deal, progressive taxation is one of the 10 things in the comments manifest, he would've said that was fun. the problem with people don't pay tax at all is more of an issue. thomas piketty has studied the assets and liabilities of planet earth and principal assets and by those always match, that's just what a county work. if look at the global balance sheet, the liabilities exceed the assets. earth is somehow in debt to itself. >> you mentioned is. i don't know where it is in your but the numbers are wonderful. what are they? remind you what they are. >> i'm a sub in a trance like state when i wrote it last night that's the crystal meth again. [laughter]

since the earth can't be content to itself what's happened is the missing assets are hidden offshore, you know? nobody knows what they are because they're in trust, in tax havens, in offshore and off balance sheet structures. that seems to me something really does need fixing in a coordinated, international way. that's barely the .1%. it's the points are one or the .001. that's a marginal issue, the rich are always going to cheat. but now i actually think it's a big missing part of the democratic picture. everybody paying their fair share of tax but really meaning everybody. >> between restructuring and rights issues you have reached less. which gets to this. your point very well taken is that they are all nonsense. we don't have a very good idea at all about rich people are worth. >> if such a cartoonish wealth if you actually directly look after. i was struck by looking a at the

assets of a bill is just seeing what's missing. >> another question from the audience. every profession it is to have good and bad members. do you think the compensation practices of wall street resulting disproportionate number of bad, dishonest members of the profession? >> the evidence would suggest that. [laughter] i mean, i think the problem with incentives, sounded boring way of putting it, but i do think if you very, very smart people incentivize to get around the rules anyway they can, you're going to have a problem with it. there's also the thing about the culture. we have in the recent epidemic of bank fines, it was one that was very striking that involved one of our big banks, barclays, fined 260 -- actually, i've forgotten what, quarter of a billion pounds. so 260 billion, nearly half a billion bucks for rigging libor.

which is the global into right bank the its most important number in all global financial sector. rigging it, they were. in the small print of all the stuff about funds, do something about a guy being fined for breaking the gold market. there's no gold market in london's exchange market. they agreed a price. we people agree a price cut is very, very prone to be manipulated by a bunch of the stuff and you agree a price slightly above what you paid and kaboom. and this guy was fined 23 million created. the thing that stood out about that to me was a day in which he tried to rig the gold market was the day after his employer was fined half a billion dollars for breaking it.

you are important for half a billion bucks rate in the market, you going to work the next day and you try and rig a market. [laughter] and what that suggests to me and to the questioner is that that's a cultural problem that is so deeply entrenched, you know. of f1 talks about leadership, we can fix it. i'm not sure you can fix that. if it's not hardwired, that baked in. >> so what do you do? >> i suspect there's another compulsion coming. because equities are paper thin. i was in washington the other day when the imf thing was going on. people are worried that things haven't been fixed. i suspect when this plays out -- >> this is an interesting point. nobody actually thinks the financial sector has been fixed the there may be people who may think you never need to be fixed in first place. there are people who make that argument. do you buy that argument?

>> no. >> neither do i. so we will not argue about that. but nobody who thinks the structure of the financial sector something to do with the category. they think it's been repaired. so the question is what comes next? >> i imagine what will end up with, i think and hope the in state's banks effectively been regulated like utilities. people investing utility covers all the time and they're quite good at that. >> the job should be born like your father's job was. >> and the return on equity is a terrible for the most part because they pay themselves. so the banks are more like utilities and if you want, i

think in some sense is hedge funds, the kind of a model of how it's supposed to be because people risking their money and their invested money, and in a could use a filter so imposed for domperidone, they crashed the for it to the end and a badger they go broke. we don't have to bail them out. it's kind of feral capitalism in it's supposed to work. the vast majority of hedge funds are close or have gone broke because the judges don't work. i think we will end up with a split between banks regulating utilities and all the go-go exciting stuff what they bet against each other. one guy wins, one guy loses and they cavort around a third any kind of separate sector of the economy. not so unlike the sector we have now.

>> you think we get from where we are now from their was some sort of other convulsion? >> i suspect so. i don't think we will commonsense our way towards that goal last night me and the -- towards that goal. [laughter] >> i want to ask another question from the audience. there's one slight a critical of us both. let me find it. michael and john, it's easy to be a skeptic about any industry. what do you propose be the alternative? thanks, i'll wall street analyst. [laughter] >> alternative to what? i suspect you were talking about, you know, you can understand borrowers, you can understand interest. that's what banks are supposed to do to match the two up and help allocate capital. i think that function of the

banking system will gradually be this invented. it's interesting in countries that have had banking, in sub-saharan africa, that you skipped a generation to which of his people transferring money directly to others by mobile phone that. your betters encourage doing transactions directly without a financial sector. the whole sector is ripe for destruction. i think we will move toward a lot of the functions of the bank sent to disappearing, being invented away. one of the ironies about it is s that is the more regulation have around it, one of the many ironies about the aftermath of the credit crunch is a lot of the things that were wrong are worse. the two biggest problem is worse because the banks are bigger. >> the people talk about it in england the same with we do here? when people be known the state affairs of the top of the same

things, too big to fail, for example? >> yes. all of that, and our problem is even worse than yours because your big bank balance sheets are about the size of your gdp. >> we can afford of some of our banks fail. you can't afford that. >> our for biggest things are five times the size of our economy. >> how did that happen? it's amazing. it's not as bad as i was but it's along the same road. >> they would say they were always made international is additions to its candidate legacy but i think it's also partly the if you want to grow your financial sector really, really quickly you just deregulate, rip up the rules and the capital comes pouring in because the capital is always looking somewhere. it's no accident that quite a few of the things that will open 2008, like the aig unit, legal argument going on at the mall, aig unit was based in london.

the. >> why has more political pressure been brought on the banks of? >> i think they are scared of the banks. >> a member of the audience just said they -- here, it's putting it too strongly, it's more competent than that but there is such a thing as a by center strategy. it's easy to prevent things from happening. >> it's not not true. >> the same in england. it's hard to see the connection. >> money hasn't taken over politics in quite the same way,

but there's also the 800-pound gorilla problem because our banks are so huge. i think there are five times the size of gdp and did you find it very easy when they don't own the politicians, which sometimes they do, they find it very easy to bully and blackmail them. anytime in talks about anything like credit for changing the rules, they have basically put this puppy on the lab called the uk economy and they have to resolve out. what were you saying about tightening credit rules? [laughter] this is such a nice puppy. it would be terrible if something happened to it. and they back off. >> it's a wonder that people aren't more angry. here i understand because we don't get angry about the sort of things, but there, people get angry. i can remember in 2008 i had friends who worked on wall

street and working your and had basis for cicada landed a were afraid to go to london because they're beating up of bankers in the street. there was a brief moment where i felt like -- >> and often misdirected. they read something about barclays making leiber and get angry at the cashier across the counter was barely earning minimum wage. it strange to sure about irish and i go there a lot. ireland had a terrible experience in the account of events that you write about. it was a real economic growth until about 2008, then it imploded. you have a thing about people being blazingly furiously angry and resigned at the same time. i've never seen anything quite like it. incredibly incontestably furious, philosophically resigned people.

>> they also felt guilty but they also felt complicit in it all spent i think they realized that got out of hand. >> the irish have a real talent for suffering last night when present with the opportunity to suffer, they rarely turn away from it spent its true. my mother's family, the largest number of potential pilgrimage sites. that it spent everything about performance in their sports teams. [laughter] >> assuming we have another question the audience consuming the foundation of it, is the trust, the playing field is fair to give you there's been a betrayal of that trust that endangers our economic? >> i think there is an issue about trust, to put it mildly. i think the big, dark, difficult thing about inequality, i mean

you know in some versions of political thought that is as it were a fair version of inequality which is where the more talented people do better. it's a right wing philosophy. i think the problem with where we are now is that there is a preview in the sense that it's clearly in evidence, correlation between inequality and in heritability. the more unequal society, the more life chances are inherited. so a baby is born to white on the backside and its first lung full of air draws in, its future income prospects, its future education level and even its life expectancy. rich and poor, from that one moment everything is set on course. i think that's a really, really dark prospect, i think we are actually traveling down a route of society as more and more like the. that's what the numbers suggest. i think that's a fundamental

breach of trust in the way the social contract is supposed to work. >> what's the political response to that? where do you see a? >> i don't really. >> wouldn't you think in a democracy they would be a people? >> it's a bit like winston churchill who said about america. churchill said you can always trust america to do the right thing but only after they've tried everything else first. [laughter] f'ing something a bit similar is true to democracy. the fact that all of the people are very preoccupied by this will eventually translate into politicians actually addressing it. it just hasn't quite happened yet. i think they're fighting with the word inequality. >> apropos nothing to do with regional passage to give people a flavor of the book. the laffer curve, the most influential complicit john lanchester definition of the laffer curve. the most influential audience

arrived in world on a cocktail napkin. an american economist who explains a duty to official in the nixon and ford demonstration in 1974. the idea was innocents government could raise more money in tax by cutting tax rates. is -- he made the .0%, the government raises no money but at 100% tax to begin the government raises no money because nobody will do any work. the government confiscates all proceeds. attackthe tax rates the reason t money isn't automatically right at the top end of the stupid government will often raise taxes by cutting rates of tax. as you can probably imagine this it is very, very popular with rich people. reagins administers was the first to put this theory into practice. the two officials to whom he pitched the idea would on from soap and dick cheney. so it is literally the case the same people who cooked up the second iraq war also brought us tax cuts for the rich.

to the napkin itself, the consequences are obvious. >> you can see the photos of the napkin online. >> did you find writing this book? >> i did and i didn't. i had fun thinking about and i'd problem solutions but i think the thing i was describing, thinking that actually there's a tipping point for your worldview mayor wayne with this stuff. that thing about the explanati explanation. >> mine is already so for nerds i would've come back. i understand what you mean. >> it doesn't show in your. you continue to be interested in sometimes people, that terms with flips. that's the thing you notice with a lot of people. by nature it is subdued. that does happen. >> do you have an explanation to yourself that you tell yourself

about why you're good at explaining this stuff a? >> no, but i knew things. i like being interested in new e things that i like the process of finding out about stuff, and the explanations to me first, i'm the first person to whom it's been explained. and i like the sensation of finding stuff out and working through how it works. i don't think about it more than that, but i notice i have kind of new affiliate spirit. >> it's a funny thing. you have the gift and it's a very unusual gift. i think you're not afraid of seeming ignorant. you're not afraid of your own ignorance. that's related to liking new things. but it's a fearlessness that i think is very apropos.

we are towards the end of a program to is anything else want to say before close it up? are you sure? did we miss anything to really wanted to get to? >> there's one point in the book that really interests me we have a code which is if it comes out in the data, because there's an optimistic think about the state of the world. hath immortality, carved a number of people living in absolute poverty, you know, within 20 years which is an astonishing material achievement. we are having and i think which i think is never happened in history of the world. that inequality between countries is now. countries are getting closer together at the same time inequality in such countries a sharply increasing. i think you can't put that on a slope and you can't put on a t-shirt. you can't arch behind that bad but i think that's the state of the water and i think it's a strange and interesting one. the world is becoming sharply more equal and sharply more unequal at the same time.

>> is hopeful aspect to it. >> there is. >> on that hopeful that we will end this otherwise depressing program. and our thanks to john lanchester, new yorker contribute and author of the new book, "how to speak money: what the money people say - and what it really means." we also think our audience here and on rare, television and internet. we want to everyone here that books will be on sale in the library on the program. we appreciate you letting john make his way to the book signing table as quickly as possible. aye michael lewis, and now this meeting of the commonwealth club of california, the place where you're in the know, is adjourned. [applause] >> [inaudible conversations]

>> booktv is on facebook. like is to get publishing news, schedule updates, behind the scenes pictures and videos. videos. author information and to talk directly with authors during our life program. facebook.com/booktv. >> and this book continues its book tour of the public library where now joined by isaac gewirtz. what di do you do at the library speak with i'm curator of the henry w. and albert a. berg of english and american literature. >> how did you get the position? >> i worked at the new york public library in the past. i've been in the rare book division, was later a curator at southern methodist university and downtown at the general theological seminary, st. mark's library. and got a doctorate in renaissance history at columbia and all that led to my being

here. >> how long have you been at the new york public library? >> as a curator since september 2000. >> you brought some things out to show that you have in the collection. what do you have? >> the bird is an enormous collection to about 2000 linear feet and tens of thousands of printed items. this is what i like to call the tip of the berg, so to speak. here we have the only surviving manuscript of john times holy sonnets sapphires and paradoxes that was done in his own lifetime. it's not in his hand but it is in and of these secretary and personal assistant. and this has the highest authority deriving directly from his own manuscript. you can see changes, the differences between the text presented here and the stakes in

transcriptions that were made in the first edition, and they were perpetuated throughout the centuries. for instance, in this sonnets all who war, birth, age, tierney's to all those who have been destroyed by this will be resurrected on the day of judgment. and this word, darth, was transcribed as death, and it was only 20th century that it was read correctly and corrected. >> who was he? >> john dunn was a great poet among a group now called the best posts of the 17th century. who used with -- philosophical inquiry and, in order to great highly formal, complex sonnets and other forms of poetry.

>> what else do you want to show a? >> we have a wonderful dickens collection, over 550 letters, all of it first edition but what is really remarkable about this is we have 13 of his performance copies, the copies he used to give public readings. this is the first one he ever did. the first thing he ever gave was, publicly was 1853. this is the performance copies for a christmas carol. he first read it in birmingham in 1853. this was not yet in existence, and he set about creating a text it to be short enough that people could listen to for over a period of our, 10 minutes or so. so he had a binder, at the leaves of the 1849 edition, put them in the blank with any went over a period of a couple years.

you can see that he sometimes rewrote passages because if he would have deleted something when a character was mentioned or a scene was described and then was referred to later, he had to somehow introduce it freshly. so that's what you see here. you also find bits of? where pages that were pasted together that he wasn't going to read at all. you can see postage stamps. these have broken off. he used these to turn the pages quickly, and the protruding ends have been broken over much use. here we have a photo of him taken in new york. this is the last group of photos, the last group of photos that were ever taken, new york 1867, the winter of 1867-68 was his second final reading to her of the united states. >> how did the library get

dickens material? >> well, the dickens, the performance copies came to the berg collection through the purchase of the two greatest collections of english and literature in private hands in the 20th century. this was back in 1940-41. one was from a great book publishing magnate from cincinnati, and a friend of the irish literary renaissance. a real friend of literature. he had some of these performance copies and so did john, the other great collector who was time's man of the year of 1929. founder of general electric. these proposed copies came from the collection but this particular one came from the how collection. i do want to make in one thing. this belonged to dickens.

here is his pen which you may want to hold. that's his inkwell. this is is ivory letter opener which has given him to buy his sister-in-law, georgina, and she had inscribed or engraved, in gothic letters, this is one of the forepaws of his cut, recently deceased cut, bob. story has that dickens had trained bob to put out his light candle with his par, so maybe that is the same law. >> not to be terribly crass, how much is all this worth? >> we don't like to discuss price, but in one sense it's invaluable. i don't like to think of it in terms of a national value because these are priceless objects. they can't be duplicated to certainly the manuscript i

suppose one could find someplace. another letter opener, although not one with the cut's paw on it. >> all injured i take a? >> the library has insurance, yes. >> one more manuscript. >> this is the first volume of three many script volumes of virginia woolf's lighthouse. virginia woolf was one of the great pioneers of the modernist novel along with james joyce. this novel was published in 1927. this is in her own binding by the way. she bowed her own books. it's not a pretty binder. it's not meant to be. she could do that kind of thing. and here you can see names to be used. she has names of characters,

some of which don't appear in the published version, and she always wrote, she always drew a blue crayon line on the left and margin so she could write little notes to herself as she went along. now come in this particular page she has a couple of diary entries. and down here for march 9, 1926, she writes, i observed today that i'm writing exact opposite thing from my other books. very loosely a first, not tight at first, and will have to tighten finally instead of listening to those before. also perhaps three times the speed. ..

we use the bound manuscript for her expedition 1090 minute presentations for reading groups for the public for displays for exhibitions. that is how the public gets access to these materials through special presentation. >> host: would you like to see these manuscripts online for everyone to see them?

>> guest: yes, there actually is a very substantial, robust, virginia woolf website, which disc contained those digital images from digital images, the digitized images sent back manuscript and other manuscripts available at i think. and here is one of charles dickens tasks. his chair, his lamp which has been retrofitted for electricity in this calendar is set to the date he died, june 9th. the story goes when the collection open in a toper 1940, it is a bigger vent and dare look word via was indicted. that is all fact. we have through all of tradition that the mayor, being rather robust gentleman sat in this chair and burst through the

keyname. so supposedly that is the only non-original part of this chair. >> host: but that is not a documented story? >> guest: i have not seen it documented in any way. but that was passed in an oral tradition. >> host: thank you for showing this part of your collection. >> guest: my pleasure. >> up next, william voegeli takes a liberal look at compassion. but they support government programs designed to help those in need can verify less concerned about what the programs actually achieve. this event was hosted by the manhattan institute in new york city. >> thank you all very much for coming. my name is brian andersen, editor at the journal. out of the welcome new out of the half as the inhabitants do.

anyone on the right-hand side of the political spectator, specially in new york is familiar with the stereotypes of conservatives about kerry, uncompassionate greetings, fellow greetings, selfish, mean-spirited. [laughter] it is true in some cases. [laughter] now after yesterday's study and election, will be getting very vigorous workout. not those on the right they don't like, and there are some of us, have to varying degrees degrees -- george w. bush calls himself compassionate serious. grandpa said republicans need to show compassion for people. even the great conservative hero president ronald reagan at the

right doesn't care when you said i believe the best thing program is jobs. access to government another more expansive other programs predicated on the notion that government must be ample friday, but it must show concern for the plight struggled with citizens. unfortunately, many liberals seem leather programs like head start actually work. the evidence suggests that program anyway to dispute only the programs experienced by their existence demonstrate they care. they play with this kind of narrative. neither have they completely are occurring of government priority. proving the efficiency is appropriate to put up with all been missing the forms?

what if the personal first the personal first u.s. circuit in san fran ultimate as liberal progressives leave. the pity party has perhaps the greatest subtitle in the history of publishing. mean-spirited diatribe against liberal compassion. [applause] william voegeli is senior editor at the very excellent claremont review of books. he's the visiting scholar at claremont mckenna college salvatori member. he holds statute in political science from loyola university in chicago has for a long time at the foundation. he's written for numerous publications including the city turnover among other things he's offered penetrating insights into california's future is here

a defensive anti-tax absolutism, which is one of our most trafficked pieces of all time. his previous book was never enough, america's undisclosed welfare state. he's also not mean-spirited at all. i still now discover, william voegeli. [applause] today, ladies and gentlemen, back in the day when i lived down the street from larry and kathy mullen and the john olin foundation but janice luttrell and jim person. i used to go to a lot of these manhattan events. i learned a lot with these great speakers, so it's a real honor to be here with you today. i wouldn't be here today.

i wouldn't have what is starting to seem like a writing career if it weren't for carol mann at the peril man literary agency and most of that two of my editors, brian andersen who presented all my pieces for the city journal and outside books published pity party. you will get his growing sense of the editorial skills as you reflect on the fact that prepared today's remarks all by myself. [laughter] modern american liberalism and compassion. what's up with that? kindness covers all my political principles says president obama. a prominent liberal asserts the quality that fits progressives apart if they care about other people, not just themselves. and conservative shake their

heads. can liberals really be so fatuous as to believe the profound challenges of politics which have confronted and usually got the better of statesmen and philosophers are in fact so simple and they are all we need to secure justice and peace. they are the lives to suggest that operation to about the project could be explained entirely to their opponents create, cruelty and pathological mean-spiritedness. they are yes and yes. the longest possible for the longest publishable answer is "the pity party" are now available in hard pack and e-book editions. between answer is, i know that

stories and of the "the pity party" would be the problem with compassion, a big problem derives from the left. excuse me. i don't talk. compassion literally means supper together. that doesn't mean identically. it doesn't mean i'm necessarily necessarily -- i don't know what to do if they gave that thank you. together in the political contact also turns out to mean your homelessness can the elements compared to stress makes me feel that it affects me. and now because of the reaction, my reaction is so far so good.

but that self regarding turns out to be sort of a trap door. because of what we see too often miss the liberal project is much more concerned with caring about kerry and then caring about helping. as a result of the more logic of passion, weirdly indifferent to whether there projects is that they wanted to do. if we are feeling better, it turns out the air theory better. i got to be the goal of any rational government side of public policies. so let me talk a little bit about how compassion wound up the intra- goal to the liberal lawyer.

first of all, liberals are in favor of the most basic political problems ended peacefully asleep. they can be solved by social contracts. where we agree to disagree about the contentious questions from a religious chief among them. liberals are not alone so conservatives and so it is a large portion of the american population that doesn't think about politics from left to right terms or doesn't think about politics much at all. it wants all of these advances of the modern party because of all the offenses at the premodern party. liberals want the maximal autonomy, different strokes for different folks and may also mark togetherness for the sense of caring and sharing that pervades in a united society as

hillary clinton lamented in her politics of meaning speech in 1993. we lack meaning in our individual lives have meaning collectively. they are produce a greater effort that we are connected to one another. from the liberal perspective, compassion solves this dilemma. we can have the best of both perkins, ancient and modern at the perfect liberal is someone so compassionate that he cares profoundly about how you wire. so nonjudgmental that he could not care less about what you do. it is on the space is liberalism believes the demands of individualism with those in the community. this brings me to my second compassion. like every political dispensation, and it ultimately best for certain precepts about human nature. the liberal view that's

distinctly hopeful on that score we can understand the perspective by tasking with the american funding, which viewed him with suspicion and resignation in the federalist papers, for example, james madison says to navigate the narrow to interest path between tierney and anarchy to cover her ambition and apply the defect of motives of rival interests. liberals by contrast take the solution to our most fundamental political problems does not lay it supplied the defects of the motives. but we willing need are better motives. underlying on the better angels of our nature is a perpetuating self-interested conduct by making it the fuel for our political machinery. the police documents are not inherently selfish, which means

their relations with one another are not necessarily borrowing heavily from jean-jacques rousseau. not coincidentally the great advocate of compassion are the best aspect was precisely why basic and accessible than the calculations necessary for ambition and to cover ambition. a third book about modern liberalism and compassion. liberals have come to emphasize compassion more and more because they have decided to emphasize progress less and less. the incident of the progressivism that laid the foundation for the new deal and enter rations of globalization was the belief in progress and learn to love for nature to explain to the physical world and their discoveries gave new capacities to control

technology. now social scientists would arrive that an equally penetrating grasp for the law of history creating a science that can perceive the powers of mankind to have to then accelerated. at the middle of the 20th century however, progressivism's land continent in progress was no longer sustainable. liberalism arrived to tell a terrorism by making it all and pass on the fact value distinction of moral relativism. the spirit of liberty is the spirit which is not so sure it's right in 1944. among the problems at this popular formulation is that it renders untenable the idea that we can know the truth about progress. progressive numbers are just some people subjective purposes. rather than current solutions derived from facts that are true and empirically verifiable.

compassion has proven to be extremely valuable in this regard and has played a growing role in liberals rhetoric in health understanding. yes, compassionate liberals cannot say our project for alleviating suffering does rest on nothing more fundamental than art who suffer. and whatever would it be better to formulate policies on the basis of indifference to suffering. moreover, making compassion the rationale for liberalism once it sells to apologize him about components. there is something ridiculous about the do-gooder, is an endangered species. but if the alternative is to be a due batter or a do-nothing or, the liberal do-gooder books

solid by comparison. progressivism now means less coherently, but also less problematically enon the right side of history. happily, such claims do not thought of the admonition not to be too sure when it's right because all it really means is the world will fulfill its destiny of becoming a nicer and nicer place as long as the nice people committed to that my school never to the main people who want the world to be a mean place. mommy now straight to is which liberal compassion doesn't work very well on the foreign practice. first, being simultaneously compassionate and nonjudgmental, caring about how people are, but not about what they do. disregard the many important ways that what they do determines how they are. liberalism's moral paradigm for social worker programs is the

relief effort after a natural disaster. for the same reasoning, try to frame every issue they can in terms of children's needs and vulnerabilities. governing entire nation on the basis of the next children necessarily and tantalizes those who are not children. it is a perverse, reckless compassion that urges people to tell him all the ways that cannot be expected to help themselves. and so, much will have the sympathy and generosity of others rather than all the ways individuals and families can discipline and determination prevail against event of severe challenges. history provides no basis for their belief that day pass for individuals or groups to acquire significant, durable social and economic damages to go sorry for themselves or induce others to feel sorry for them guilty about them. but the embrace of victimhood

secure since dad is a debilitating it and teach it being primate dependent on the kindness of strangers. second point. liberals hopeful trusting view of human nature police counterintuitively to strike denunciations of those who disagree with him for his stymied the progress of the liberal project. the world's default option is to be a nice place. liberals explain all the way it remains an ugly and difficult one in terms of stupidity or psychological mythology. liberalism exists to solve problems and recurs every source of the satisfaction or discourse has a problem, not an aspect of the human condition would like to ameliorate, but can never eliminate. the belief that humans are naturally this close to one another in one another in ways that are peaceful, respect old and mutually uplifting helps explain but not justifying

liberal vilification of those alleged to have caused the problems they seek to solve for who oppose the solutions they seek to implement. christopher lach wrote 20 years ago under the full tetsuya leaves when confronted with resistance to their initiatives, liberals betrayed that i miss featuring a live not far beneath the smiling face of upper middle-class benevolence. opposition to humanitarians, opposition makes humanitarians forget the liberal bridges they claim to uphold. they become petulant, self-righteous, intolerable in the heat of political controversy they find it impossible to conceal their contempt for those who stubbornly refuse to see the light. third and final point. liberals view of human nature jeopardizes many valuable things the modern art in chief among them. they are, for example, inclined to interpret by which i mean to

misinterpret people who detect their way of life as people who aspire to it. tolerance, nonjudgmental liberals instinctive response when islamist terrorists commit acts of mass murder is in paul's words to suggest ways that which the apparent mythologies are anything but the colleges and terror was reasonable inexplicable and perhaps even admirable of the present beheading videos, the spectacle of black uniformed warriors conducting human sacrifices gives us at shows, but it also makes us size. we tell ourselves, here is what comes with going to provide adequate social services to do then in blighted neighborhoods. in other words, liberals first reaction is to believe that if these people simply appeal to the decency late teens and others will ultimately be well.

conservatives are not always clear or in agreement with one another about what exactly we are trying to conserve or why exactly it needs conservation. i submit that american conservative task is to conserve our republican experiment in self-government because republics are permanently vulnerable to the work of sustaining the endlessly daunting a permanently necessary. conservatives oppose liberalism because we think it is mistaken, but also because we know is attractive in ways that make it especially dangerous. i am an employee of one can server to think tank thinking here is the guest of another and even irish liberalism were true. i wish that people and nations were so strongly disposed to get along with one another that eternal vigilance was not the price of liberty. i wish that wealth were so generated for the gratified by since i distributed it could be

dissing nature of the challenge in process of producing it. i wish the elemental emotion of compassion harbors so much power and wisdom that it divided clear answers to bother dieting questions about how to govern republic or 380 million people in a world of 7.2 billion people. i am pretty sure however that these wishes are and always will be just wishes. to take them seriously makes a hard task of governing even harder and the dangers inherent in republican isn't even more dangerous. liberals are as proud of their idealism as they are of their compassion. conservatives are very late, very afraid of both. edward kennedy spoke at the memorial for scully property in 1968. some men see things as they are and say why. i do things that never were and say why not.

the kennedy speech writers may not have informed their employers said they were paraphrasing george bernard shaw who wrote you see things that you say why. things that never were and i say why not. the lion appears that today's speaker addressing the garden of eden is the sarabande. everything is possible he goes on. everything. thank you. [applause] >> we have time for questions. just wait for the microphone to arrive on tv. we will start at this table over here. please identify yourself, too. >> i am bob weisberg. then they give you oppose trivia

question. how do we know what is the authentic aim of progress for the housing projects -- [inaudible] you can also argue a great source of jobs. this was for example is really aimed at improving developments are a kind makework per program for people to know of choice other than babysitters. the true theme of progress. beats me. [laughter] but i choose to at least attempt to understand our liberal friends as they understand themselves. some of you are old enough to understand for the ensure every week was who knows what lurks in the heart of man. they may know, but i don't.

i think a fair step in point is to say that the people who set up programs like head start at one point really were sincerely interested in having a good effect. but although you post is an caterer question, the ball cancer is the problem that often happens is once they both intentioned program is set up, to solve the problem turns into the effort in colonizing the problem, lives, career, reputation are all dependent upon the perpetuation management of the never the resolution or disappearance of the problem. >> my name is steve hoffman.

my question is i think maybe it was winston churchill that said if you are not a liberal when you're 28, you have no heart. if you're still liberal when you're 40, you have no head. i'm having a problem with determination liberal. comes from the word liberal. the problem -- my question to you is we all understand that what they call liberals were, as to use the word about progressives, but they -- their heart is in the right place. so my question to you is what it makes sense, particularly in

light of the recent election that republicans, if we changed our approach to how to help the have-nots grow up. i like the belief of you and the rest of mass would be nice if you will, believe them both for id. and also help being the have-nots. the taxi stand -- >> what's the question quick >> question is would it make sense in your opinion for great involvement between an obama who is now basically -- [inaudible] to make a deal on tax reform to get rid of all the subsidies for the rich people and only limit them to needy people, meaning

taxpayers, basically ideals. would you support that kind of approach? >> first of all, the terminology , the current use of liberal for the new deal approach really is sad and that rent the rest about, a lot of his gray sort of political rhetorical achievements, herbert hoover never consider to be called a conservative. the way in which fdr used that term to amalgamate the new deal but the american founding, with the liberal tradition of shoppers then was an important event in american politics. it wasn't until the national