adam smith's then and has it grown in value and importance over the years? >> interesting, it had very little impact on the united states. alexander hamilton said the idea that markets can run themselves is one of those paradoxical notions that has grown in strength during the revolution. he absolutely had nothing to do with it. but it was important in england. and it moves into early 19th century to become the basis of economic thought. and then economics changes in the end of the 19th century, and you no longer have a labor theory of values. they have a theory that value comes from demand. what we will pay when we are just about satisfied with an object. anyway, so adam smith has not been important in modern economic theory, except as sort

of a godfather and as a totem, as a symbol, as a name with resonance. so, i would say he's still important, and i'm sure he's taught in most economics classes. >> the second on the list is thomas payne's "common sense." another brick. >> another brick. well, you know, he was another american immigrant, too. because he thought he was going to stay. he didn't realize they would have all the wonderful revolutions to call him back to europe. payne was important because payne had this -- had such powerful attacks on privilege and political conservative and traditions, and he was such a p polemicist that he opened people's eyes to being ruled by ideas that are 800 years old and political arrangements, and, of course, he had an impact on the american revolution, because he came here immediately -- the first thing he did was write a

tract against slavery and then he began writing just common sense. but payne was very important -- i wanted to -- i wanted to make the point that the 18th century, the century of increasing technological virtuiosity was also a. ed by a new concept of human nature, human possibilities, and the proper ordering of government so that everyone would plure iflourish. that you had in payne and that i think you have in the declaration of independence, you know, drawing on that. >> when you and i talked in 2000, you were an adviser to something called thomaspayne.com. >> i don't know that i was really an adviser, i guess i am an adviser, but they don't ask for my advice very much. >> are they still active? >> they are trying to get -- yes, they are active, and they are still working on a -- i

think a television series. but they're still active. they write letters to the editor and whatnot. >> the reason i bring it up is because, you know, a number of years ago we did a feature on thomas payne's, one place, one shrine to him up in new rochelle, new york, this is not a criticism of them too much, it doesn't get a lot of support. >> no. >> you have been active in history for years, one of the few people that's run both the organization of american historian and the american historical association. i want to ask you about both of those organizations. but give me your views about history right now in this country and what people -- i mean, what is the american people's view of history and how important is it, has it changed, is what i'm getting at? >> you probably know more about that than i do. you talk to more people.

i think history, judging from the books that sell, i just came from los angeles, the festival of books "the l.a. times" has, 100,000 people are there or more reading books, getting books signed, listening to people and reading their books. i worry about the fate of the entire education in america. i think we -- having achieved an absolutely first-class university educational system, taking the private and the public universities together, we're just resting on our laurels, and the state universities are losing more and more state support. they're going out for private funds, so they're becoming more like private institutions. tuition -- california used to have a virtually free education. it's pretty expensive now. and that's how it affects students, but the way it affects history is that there is an underfunding of scholarship, and

it's -- i don't know. it's very hard to promote an intangible like an understanding and appreciation of history or of art or of literature, and yet they are just fundamental to people's grasp of the world they live in, of putting their world in the stream of time. so in that sense i'm worried about history. >> kathleen parker who just won a pulitzer for her column, had a column recently and i use it for statistics and she's talking about history and historical. she says america's growing historical illiteracy is well known to educators and policymakers. in 2006, for instance, the intercollegiate studies institute tested the civic literacy of 14,000 freshman and seniors at 50 colleges and universities. the average senior failed with a score of 54%. >> you know, they've been doing these things for a long time. what do you think they would do -- i mean, it's a tribute to

history that they do it, but what do you think the score would be if you went out and tested their knowledge of biology or of chemistry. >> about 10%. >> maybe. so, you know, that doesn't bother me so much. something that bothers me you have what's going on with texas now and that's not the university education, it's high school and middle school and elementary school where they are rewriting the textbooks along with a particular ideological line, and that's troubling. again, it's a tribute to how important history is that people would take the time to try and put in their ideas of what the revolutionary period was like. >> but they think obviously that historians are telling the story -- >> incorrectly. >> -- incorrectly. >> right. >> how do you get around that? >> it is kind of a problem because everybody thinks they know history. but no one would say, holook, m

chemist, you don't have an idea about the elemental table, let me tell you what belongs. in other words, it's the accessibility of history that makes people experts. i suppose you get around it by having more and more opportunities to confront these people who say certain things about the writing of the constitution or precivil war period with people who do know the documents and you can have some open forum. what you're trying to do is to persuade a third person. you're not going to persuade the historians that they're wrong or these people that they're wrong, but it's the spectators that need to be convinced and they can only be convinced i think by hearing this. >> she quoted another survey, kathleen parker, in a 1999 survey commissioned by the american council of trustees and alumni, 98% of students from 55 top colleges and universities could identify the rap singer snoop doggy dog and 99% knew who beavis and butthead were.

again, it's that same thing. >> right, right. >> the surveys -- are they relevant? do they matter? >> well, if they get people more interested in history education, yes. i don't know whether relevant, but i thuffiink they matter and think it would be nice if students retained -- i'll give you an example. maybe i've said this before. i used to -- when i taught lower division courses, i used to present a constitution that was opposite of our constitution to get them to read the constitution. this was a simple 20-list element, everybody voted, purely democratic through and through, only one house of the legislature, zmi would give it them in advance and read both constitutions and come into class to be prepared to defend which one you want. i had to beg people to take my constitution. when they debated, they came up with all the answers, all the statements that were made in the fad r

federalist papers which i don't think they read, but they knew why a bicameral legislature was better and they knew why you had an independent judiciary and they knew. i was very impressed. that told me something more than these polls did, that there is a general understanding of our institutions. but it's not something you can spit out when someone asks you a question. >> i mentioned that you had run these two or been elected to run these two historical institutions. explain them. what's the difference between the organization of american historians and when were you -- what, chairman or president? >> president. >> when? >> i was president in '88, i guess, '89. that is an organization for all scholars whose field is american history. it has people in france who study american history, germany, japan, china. the other is the american historical association and that's an organization for all the historians in america. >> and when were you -- were you

president of that or -- >> yes. i was president of that. you know, i was trying to think. i think it was '97. yes, it was, '97. >> and what do these organizations do for history? >> they do a lot of good things for history. they obviously do two things that are important for their members. they have an annual meeting, the latest scholarship is discussed. and they put out terrific journals of history scholarship and the one is just american history and the other is all kinds of history. but the american historical association in particular does a tremendous job of defending history in america, whether it might be a historian who is going to be fired because of some provocative study or access to the archives. there have been lots of legal issues in which they have become a party to a case which is going to open up the archives to the

public or something to do with the library of congress. so, they maintain an office here, and they are always alert to what it is that scholarship needs. and they do a tremendous job. >> back to your book on capitalism, how many countries in the world are not capital? >> well, there are 57 failed states, now whether they are not capitalist, i don't know. but they're probably not doing it very well if they're failed states. so, i'll give you 57. >> but you call china a capitalist country? >> yes. >> when did it become a capitalist country? >> well, it started in '78 with the liberalization program. you know, kind of very hard to say when it became. but when you have them allowing peasants to sell their land and

put their land up for collateral and farm individually, which happened about -- it's within the last 12 years. i mean, they said they could only do it for 30 years but no one thinks they'll ever clubs for start-ups. they still run the big industries, but even those big industries are now being run on a profit basis. and actually they're pouring their profits back into their pension funds which they don't have. so, i would say -- i would say the last 10, 12 years.

>> what you know about capitalism, can they continue to be a communist country for very long? >> i think it's going to be hard. and the reason it's going to be hard is because a part of their -- communism. it's not so much communism but their authoritarianment is controlling information and information is absolutely critical to capitalistic development. this is a fast-moving, technological world and you need to have access to it. you don't know where innovation is going to come from. your people need to have access to these things. and i would say in the foreseeable future, the next quarter century, we're going to see more and more of an easing up. when they have a bi-party system, i don't know, but they're going to ease up on the control of individual lives, as they are already. >> go back to what you said about your own interest about poverty. eradicating poverty and having a more equal society. is there a country in the world that's more equal than this one? >> well, i think -- yes.

i think sweden and finland, i think these countries put in -- have a tremendously strong social net. measuring the inequality, i was looking at the economist last night on the plane, it's very low in finland as compared to the united states and britain more than the united states and china and india are worse than the united states in the spread of wealth. but a part of that is a function of the fact that there's so much wealth at the top. before everybody was poor. it's not that the poor have gotten poorer, it's just that there are many more well-off people so you have this spread of inequality. yes, i would say the sc scandinavian countries, stronger support of labor, labor participating on corporate boards. you know -- and they're economically strong and getting

stronger. >> what about the fact they're less -- more homogeneous than this country? >> yes, that's true. >> by a long shot. >> by a long shot. they all have some pocket of guest workers that have stayed put and offer some variety of vanilla which dominacom dominat that's a very important factor but i don't think it's unsurmountable. >> and you go to japan it's the same. >> japan the same. they really aren't comfortable around strangers. we're heterogenous but we're used to that. does it bother me when i go to the ucla campus and i can see every skin color in the world? not at all. it isn't threatening. so, over time once we -- i shouldn't -- over time that's going to be, like, homogeneity, we're still having some difficulty with immigrants.

and concern about them in some parts of the country. >> so, you mentioned adam smith and then we went to thomas payne and we've talked a little bit about the declaration of independence. i want to go back to that time. what role did capitalism play in the creation of this country? >> well, this country was tied to salute front-runner, great britain, so they had been economically active and innovative from the very beginning. in massachusetts, in virginia, and virginia unfortunately was a slave system, but it was highly capital intensive, massachusetts is much more plucky, entrepreneur. and this meant that it fostered individualism, individual initiative and individual responsibility. those are kind of the moral -- the moral bedrock of capitalism. you have to take care of yourself, and you have to act on your own. so, i think they had a lot to do with causing the revolution.

people felt confident. when the british try and change the rules, they're not at all happy about it, and they're not afraid to oppose it. and so i would say that economic initiative, you know, economic initiative was -- widespread economic initiative was critical to the revolution and to the founding of the country. >> what about slavery? you mentioned that. talk about it in your book. slavery not just for this country but around the world. >> caribbean, right. slavery is a terrible -- it shows what social greed will do. there were these profits to be made in the tropics by growing sugar. imagine a world without sugar and all of a sudden they could get sugar. and this led to this really vicious exploitation of labor. really to me what's tragic about slavery is that it weighed on the conscience of these european countries. so, what did they do? they blamed the condition on the slaves.

it was their quandary. they were meant to be slaves. and this left a bitter legacy of prejudice, which was put in there in the first place to salve the conscience of the slave owners. >> and tobacco? tobacco played what role in capitalism in this country? >> well, tobacco was the underpinning of the southern slave economy, tobacco and rice in south carolina in the 18th century. it was then replaced by cotton which was even more valuable as an export, more demand for it. so, it gave capital dark slavery a lease on life. slavery was going strong all the way up to 1860. but by this time the conscience of the world and the north was such that this was absolute insistence it not be spread. that's what the civil war was about. it was not slavely where it wsl

was the spread of slavery. the north said no and the south would not have it. i think it had in the long term a very alarming impact. in the short term, it was very important to northern prosperity, because the south concentrated their labor and their land on cotton and they bought everything else from the north. so, you have this giant buyer as it were, cheap clothes, cheap shoes, barrels, the works. >> unions, when did they first start in this country and why -- you mentioned this earlier -- it was not a very unionized country? there were 12 million or 13 million out of -- >> the second half of the nan19 century, and gompers in 1886 starts it and then you had the wobblys, you had anarchists that

were involved in labor agitation. i think there are lots of reasons why it didn't succeed in this country. one of them is the individual initiative that i talked about. that's just hardwired in the american psyche. there's a dislike for collective action, that we all hang together and do this thing. it seems un-american. the other thing is america had an incredible flood of immigrants starting in the 1880s and the immigrants and took the jobs from the factory and pushed up people who were born in america into white-collar jobs or to formanship, to organize the basic labor you had to organize people who were just trying to get assimilated in this country, just trying to learn the language. extremely hard. someone like gompers was successful because he specialized -- not initially, but then he specialized in skilled labor and he discriminated, he discriminated

on blacks and they looked at women as strike breakers and he had a group of unions looking out for themselves. he was a master, a master psychologist and he understood capitalism. his feud, what he wanted was more. and when we get more, we're going to want more. and he shrewdly saw that the workers were the best customers for america's industries. there was a mass market, and if you pay them well, you'll have a great group of consumers. people had not recognized that. but the sense if you are always driving down wages, you are destroying your market. and gompers seized on that and that's why he succeeded, and, of course, then later we had the john lewis and the cio which was more unskilled laborers and eventually you do have the labor unions doing well, but really

not until the late 1930s. >> if you take, though, the 3 million teachers out of the union and the state workers and all, you've got very few unions left. >> 7.5 million. >> why do you think that's happened? >> i think competitiveness. i think because the major employers -- what is the major employer? it's walmart. and they have made a success from a lot of things, from their fascinating use of technology, but also keeping wages low. it's very different from waller luther's day when wages were high and there were all the good jobs in the steel mills and the auto plants. but america was protected. there wasn't the same competition. there wasn't this flow of capital around the world. so, while i wish walmart would change its ways and pay more, i recognize that it is sort of a different economic environment,

and it succeeded brilliantly in that economic environment. >> has there ever been a country in the world that succeeded without capitalism, you know, from a -- >> economics point of view? >> yeah. >> no, i don't think so. i mean, there are countries that have succeeded. probably you went to new guinea and to tribes and the amazon basin, there are groups that feed themselves or have enough of the way of life they want, and those are economies. but in terms prospering, getting more goods and enjoying a higher standard of living, no. >> so how do you explain -- i know you did a segment on walmart, how do you explain walmart in the capitalist system? how does it happen? >> you had a brilliant, brilliant strategist who saw -- sam walton was just a master of introducing efficiency. he and henry ford, they were

brilliant organizers. they are businessmen but they see these possibilities, you know, it's just a lot of squeezing over prices and wages. but there's also this use of technology. never sending out trucks that don't come back full. they've got -- you know, they use information technology to be constantly telling the trucks where to go. you know, discover that one system of tagging boxes in their yard where they have their inventory isn't as effective as another, they replace the other. and someone says walmart keeps every employee on a very tight technological leash, you know, that every sale goes into the accountant's office, the inventory, the planning, there's just no slippage there. you know, it's kind of a brilliant plan. >> we're going to get more of walmarts or less in the future? >> i think we're going to get more walmarts. i think it's very interesting that home depot and target and

one or two others are in the top 50 fortune 500 club, companies. walmart has had imitators, too. >> where do you put the stock market in that capitalist market? >> i think it's absolutely essential when the companies want to raise money, it also gives enormous number of people a chance to participate in the profits that are generated by companies. i don't know how you could -- i don't know how -- i suppose there's another way to do it. i don't know that there's a more efficient way to share the ownership and to have access to the capital. >> in studying the history of capitalism, where does the recent 2008, 2009 financial problems we've had fall into history?

>> oh, i think it's another one of those panics, bubbles burst, that as a result of the fact that no one is in charge and you have a very strong sense of incentives that are pulling people into riskier and riskier behavior. and you have a government that is complicit, one, deregulating the banks and also pushing for home ownership in a kind of mindless way. when i heard that there were no income, no asset loans, i realized that they had really thrown all caution to the wind. so, i think it's a convergence. capitalism does not correct itself. it needs regulation. and that is a great failure. i think we'll always have panics, but as someone pointed out very recently, we had controlled most of the recession up until 2008 to the sense of the recession, and we'd done it because of the federal reserve system. we'd done it because the mechanisms we had in place. it just didn't work this time

around. >> so, if you had to nominate somebody to be the most successful capitalist in history, who would you put there on top? >> oh, maybe josiah wedgwood. >> who was? >> he was a ceramics maker, china maker in england, and he took a very lazy kind of organized set of pottery workers, potteries in england, all little workshops. he brought them together. he -- he made this lovely china. the queen of russia wanted 1,000 plates with different scenes from greek mythology on them. and he was just desperate because he didn't have the artists to produce it. he did finally produce the order. but then he realized, i need to have a school and i need to get gifted teenagers to begin to design and paint.

so, you know, he's like walton or ford or one of these people that see the industry whole from the very beginning of making it, the product, and then market in it. ford would have to be another one. ford not only did he see the possibility of a cheap car, but he saw the possibility of selling his own cars. he set up 7,000 dealerships by 1910 i think. so, i think that's the really impressive capitalist is where you have the integration of the whole system in one person. tom watts was another one, ibm. >> there are more that you can read about in joyce applebee's book "the relentless revolution, the history of capitalism." we're out of time. thank you very much? >> it's been a pleasure talking to you. >> for a dvd copy of this program, call 1-877-662-7726.

for free transcripts or to give us your comments about this program, visit us at qanda.org. "q and a" programs are also available as c-span podcasts. april 15th, 2010, i'd arrived in paris, walked into the hotel room -- the hotel lobby. met general mcchrystal for the first time and he looked at me and he said, so you're the "rolling stone" guy, i don't care about the article. i just want to be on the cover. >> michael hastings wrote about the commander of u.s. and nato forces in afghanistan in the june 2010 issue of "rolling stone." >> i said, well, sir, i think it's between you and lady gaga. i was trying to make some joke, not knowing that lady gaga would be on the cover. general mcchrystal replied, put