>> that is it for us, thank you for pieg wit being with us. have a great labor day weekend. we thank you for being with us. good night from new york. >> so you believe that they are losing? >> no, i do not. lou:. stossel: the world has big problems. water shortages, overfishing fishing used to be big but not anymore. the cost of health health care, poverty, and people who cheat people. >> you are a piece of work. >> americans assume that there is another way. private solutions. >> the person that goes to syria

or iraq or egypt to help. >> markets work magic. >> look at that, ladies and gentlemen. stossel: markets can make bad things disappear. and good things reappear. and markets work magic. that is our show tonight. ♪ ♪ hate. ♪ ♪ announcer: now, john stossel. stossel: when most people think about free-market thinking about making money, wall street trading stocks are buying and selling houses, people selling things on ebay and so forth. but the truth is that markets do much more than that. when government lets free markets work, they solve all kinds of problems, including problems where people think only government can handle it.

take the water shortage in california. california is hoping for some other relief as the record-setting drought drags on. stossel: federal relief? they always want federal relief. taxpayers from all over america should be built so people like barbra streisand can water their lawn? >> it appears that some hollywood celebrities are not doing their fair share. barbra streisand. look at how green her lawn is. stossel: the media can't barbara simpson, julie roberts, j-lo, jennifer aniston, all of them using excess water while their neighbors cut back. so is that the solution to water shortages? public shaming enact it is a form of voluntary market solution and better than government force. but it's not the best solution. the best solution for this as with most things is an actual market, which means people

papers to. economics professor says that california's water shortages are man-made. we hear about this terrible drought. water utilities are monopolies and they are setting the price, not the market. and so for any other good, say gasoline, the price of gasoline rises into things happen, people drive less and people drive more fuel-efficient cars. well, if the price of water were to go up, people would consume less water and they would use more water efficient utilities. stossel: okay, the big drain on water in california, i am told, is agriculture. and there are all of these stories about omens. it takes a gallon of water to grow this and just to make it more clear, this much water to make omens.

but you say that it is unfair? >> it may take a gallon, but a lot of that is going back into the aquifers and streams. stossel: and it's not unique to omens. it's an ear of corn, look at these numbers. 25 gallons of water to the create this. a watermelon. 165 gallons of water. and a pound of beef. 1800 gallons. so it's certainly water intensive to raise cattle. >> it is, but what we need are water markets to move water usage away and move it to higher value usage which could include things like ivor omens were moving into cities where the environment for fish to drink and in rivers. stossel: you say that many armors would stop growing oranges and grow grapes instead

which takes less water if it was proper? >> yes, in areas where you tell them it's valuable, they do. but the problem in california is that the property rights to water are not well-defined. and you need really good property rights in order for markets to function. property rights meaning that this is my water and i can sell it. and instead the politicians are doing things like restaurants can only serve water to customers who ask for it. you can only water your lawn at this time of day. >> the market does a great job when prices are allowed to work at rationing goods. the price signal is not allowed to work. he set the price of water higher for municipalities, people can make their own choices about how to save water, perhaps take shorter showers.

not water the lawn. but instead we have these mandates that come down and say that this is what you have to do. what that does is it takes away all of the choices that people can make. stossel: socialists complain that rich people have choices that poor people will not be able to afford water. >> if you really care about the human rights of water, look at developing countries where the local government cannot afford to provide municipal water or they are too corrupt to provide water for the poorest. so a funny thing happens in those instances. they get their water from private entrepreneurs who truck in water and bringing it to the poor or turn to bottled water. so it's really the market solving this problem. stossel: buying it that way is still pretty cheap, 8 cents a gallon when they bring those trucks and and poor people can afford 8 cents per gallon. and you can tell people, it's nothing like saying that you're

paying for each gallon to make people think about it. in amsterdam people use one fifth as much water as people in san diego. >> they also have smaller lawns and are not washing cars. stossel: thank you. next, it can only be solved by government command and control. the slaughter of rare animals like elephants and lions and tigers and cecil the lion is one of them. >> a beloved lion is killed for sport by an american dentist. this is such a tragedy. >> you have heard the story. people across the world are furious because an american hunter paid to kill this line in zimbabwe. it turned out to be one that was monitored and studied by oxford university. not only was he killed but he suffered before he died. he was wounded by a bow and arrow and then followed for 40 hours until he was killed with a gun. a dentist who shot him has gone

into hiding because people threatened his life. these protesters want him extradited to zimbabwe. >> these animals are in danger, people are killing them all the time. the one that is part of their criticism, wealthy people. he can choose to pay $55,000 to kill a lion. the animal rights people want stronger bands on the hunt. but terry anderson says of this kind of thinking is just stupid? >> yes, it is, and if you think about it for very long it's stupid for three reasons. one is every time hunting has been banned, we end up with fewer animals. kenya outlawed all hunting in 1977. since then 70% of the wildlife population has disappeared to people that are killing them illegally.

stossel: so they ban it and people just ignore the law? >> especially the local people who want to meet. they kill those animals for meat and then they don't kill them in any sustainable basis. so the population of lions has fallen from 20,077 to now less than 2000. stossel: because nobody has any real stake. >> there is no ownership. the case of cecil the lion, it was illegal and unethical and didn't follow the rules. stossel: this was a bad guy, his guides qaeda dead animal to a truck to lure the lion out of the national park. they broke the rules. >> that's not hunting, it's illegal. but it isn't is reason to outlaw hunting, which is a part of management. if we didn't have hunting in all parts of the world, it's hard to guess what those populations would do.

if you don't manage elephant populations, they destroy incredible amounts of timber. i have been in botswana and have seen overgrazing by elephant and it just -- it wipes out trees. so you have to manage species. if you don't manage the lion population and spills out into the rural areas. oxford university interviewed villagers in tanzania and 98% said that they had lost cattle to lions or other carnivores like leopards. this is a pretty expensive proposition for those people and as a result they poison them and spare them, they trap them. it is far less humane than any other kind of hunting that we may allow. stossel: the only way to get the money to preserve them is for hunters to pay to kill them? >> hunting brings in revenue to these villages. if it pays, it stays. they are willing to put up with

these carnivorous. they build schools, dig wells, they built clinics. stossel: why does it have to be hunting? why not photographic safaris? untold hundreds of people can look at the same animal. >> yes, it's true that many of them spend a lot of money on photographic safaris, but what they don't do is pay the villagers as most of these hunting cases do. photographic safaris pay for lots of airfare to fly around and get pictures but they cannot put the money on the ground. stossel: there's more money from hunting to . >> yes, certainly there is from an individual animal than photographic safaris. stossel: we have a market success in the united states from allowing the market to work. there used to be 30 million buffalo. nobody owns them. so everybody shot them. and then a few people said that we are going to branch it off

and that changed everything? >> yes, it changed everything starting with one private arterburn nor in texas -- entrepreneur in texas. and today, we now have mr. ted turner right outside of my hometown in montana, has a 100,000-acre ranch with 45,000 buffalo. they show up at one of his grills. he's making money from them, he's replacing cattle, he's taken out fences. bison have flourished under private ownership. stossel: my facebook and twitter followers do not agree with you. chuck paterson says how do you like outsiders coming in and taking out your trophy animals. you are sick defending the cowardly man that has killed this fine creature for fun. >> i am not defending him, he did something that is illegal and something that any good hunter with day is unethical.

but what this person is really saying is that instead of an outsider, the hunter, the dentist than myself coming in and paying the villagers, live with this lion that just killed three cows when you only have five. the outsiders that advocate back and dictate that are far worse than those that are willing to pay something to those people who have to put up with these wildlife. stossel: alex wilson said the people of africa would kill every line if they could if allowed, they consider them test competitors. >> they are killing them because they don't get paid to have them around. when they kill the livestock, they want to get rid of them. a warrior with a spear who kills a lion is a hero. he will get paid in the form of more cattle for killing lions by his tribe. and better that the lion gets killed by a legitimate hunter

who pays cash that hunter and the tribe. stossel: one last example where it's hard to get my brain around how the market will work its magic overfishing because the fish swim all over the place and people who fished fish for a living are going broke and here's an example of that from new jersey. >> fishing used to be big, but not anymore. >> there's all kinds of quotas. stossel: government says that we are going to set a quota of how many fish you can take and not supposed to stop the overfishing. it did not because? >> every time the government said the regulation, the fishermen figure out a way around it. they set season limits so people fish longer days. they set the limits, so people give bigger boats. so that means giving him a share of a sustainable catch and new zealand has done this, iceland

has done this, every time we do it, we end up with managing the stock far better. and end up with more fish for them. no one takes care of it until they have a stake and then they take care of it. stossel: they know that they are going to get a certain% of the fishery. they don't want to overfishing is here. >> 3% of a hundred is 3% better than 10%. we get fresher fish, cheaper fish, everybody wins. stossel: thank you, terry anderson. next, can the market work its magic on war? helping to fight isis. but they do not work for the american military. is that a bad thing?bp

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>> ices controls the same territory today as it did last summer. stossel: americans may disagree about what to do about transit, but it is written in here in the constitution. though actually know we have pre efficient. so when it comes to something about wars commander something creepy about private soldiers. mercenary, people going to war out of their own self-interest? except if government is in good at running things like a post office, maybe private alternatives are worth trying as well. matthew vandyke runs a group called sons of liberty. what do you do? >> well, we are a security firm

that provides free military training to forces that are fighting isis and we funded entirely from contributions from the public and we put that money to good use. stossel: we already have government doing that. the united states has more than 3000 advisers and trainers and support personnel. >> well, you don't have government doing it very well. the iraqi forces have show that they are not such good fighters, you also have the iraqi army and that includes training courses at the government has not been helping and it has been completely overlooked and who have suffered greatly over the years both at the hands of isis and after the conflict. stossel: you trained iraqis for less than $50,000. the government has a 250 million-dollar program and trained fewer of them? >> yes, there has to be some

overhead somewhere. stossel: $4 million each according to politico. >> yes, we have some of the best trainers in the world. we have former green berets, navy s.e.a.l.s and apply, nearly 1000 applications sitting in our databases. and we took less than 1%. we take the best of the best in our screening process is quite intensive and even more intensive than what the u.s. military does when they screen. >> people say they are training a group of iraqi christians, one exercise has them search a house where they suspect terrorist may have hidden. >> you think you are making a difference? >> yes, for sure. the iraqi christians would not have this training.

the obama administration has been training only groups, christians have been completely overlooked, now we have a force in an entire battalion that will go and fight against them. and they are very motivated to fight, they are determined to be a part of the neighborhoods and they will do whatever they can. >> people have a tough time getting their brain around this. we assume war is thought with government. the you are not a big for-profit enterprise but a cross between a charity and a business. but do you understand why people are bothered by this? >> i really do not. we are serving a population the government doesn't serve. and you do it effectively. stossel: the most effective way to motivate people is money, and that is the market magic that i have been talking about and for years, this man has been the whipping boy for critics of private contractors and hold that government overpays him, the company is inefficient, it's sub contracts to cronies and

funnels billions to dick cheney and his friends. i don't believe those things but even assuming that they are true, he is still able to get meals to troops, transport things for half the money than the government says and they say that if private contractors were replaced by government people, the army's total cost for the about 90% higher. so why are you so much more efficient? >> they believe in fighting isis and they are doing it to help the cause. and part of the reason we have a low overhead is because we fly people were specific training programs. we don't have to pay large salaries. that they, and they do it and they do a great job. without the overhead and

government waste and without the politics, might i add. stossel: is this legal? >> we have not violated any laws according to the state department. it's a bit of a gray area but it is always a concern because you never know which way the winds are changing. stossel: you are not afraid of going to jail for this? >> certainly not. i was a prisoner of war for nearly six months. i am not afraid of being arrested and doing time in a federal penitentiary because i'm doing the right thing and helping christians in iraq and i'm going to take that risk. stossel: long before the united states officially declared war. >> that's right, but if that is what needs to be done, that's what needs to be done. next, the constantly stupid

claims. these people don't understand market magic. >> indiana is losing teachers and the reoccurring problem is centered around the shor

>> indiana is losing teachers. >> centered around the shortage of doctors. stossel: the media is telling us that there will be shortage of doctors. teachers and airline pilots. >> i remember when they made a lot of money they worked the shortest hours and there was prestige to it. stossel: it was a crisis, these people say according to "the wall street journal." and so what should we do about

that. nothing for how to fly an airplane. >> they have a wonderful record. when government gets involved, typically they don't provide the most appropriate solution to the problem. >> what is the solution to the problem.

>> and they have teacher shortage, doctor shortage, engineering shortage and none of them ever happened. >> something happen. it was crashing into a home just a few miles outside, killing all of the passengers and crew on board. >> there's a lot of copilots better sitting and they have $1000 of the highest license.

then the old standard was exactly correct. >> here's the interesting thing about the problem. they are attempting to do a good thing. and the captain of that airplane was flying at the time and not the copilot. so the rule is that congress developed didn't apply. in the 100,000 hour rule seems like a great rule. that the captain had an airline -- and the captain made -- that is exactly correct. and he just made a fundamental airmanship error that caused the crash and the crash was a result of something entirely different and so for a person to invest

the money that they need to do the pilot training, to be able to get those 400 hours of time, that individual will have to spend an additional, perhaps two years, two and a half years flight instructing to acquire the $1500 of experience and as a result, people are not investing the time and money and they are having troubles finding pilots were original carriers. stossel: that we don't need more government? >> no, we do not. the market is in the spirit of milton friedman. the market is going to take care of the problem. stossel: next, how market magic can make health care cheaper and simpler. ♪ ♪ ♪

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>> after all the votes have been tallied health insurance reform becomes law in the united states of america. >> the president promised it would bring health insurance to more people and help save lives to lower cost. it did bring health insurance to more people but some people did not get to keep their doctors and the costar up sharply in some states. whenever we think about obamacare it got america is to start thinking about how we pay for health care and that got patients and doctors to try new things and they allow the market to work its magic. the surgery center posted prices and said we don't take insurance. that allow them to lower prices so much to attract

people 1,000 miles away. this couple came from new hampshire. they had tried to get a quote for surgery on his arm and it was very expensive when they asked a doctor or hospital they could not get a price. >> there was a quote of $50,000 but to get here was one-third of that. >> how could one clinic be that much cheaper? let's ask dr. joseph doing something similar in atlanta up. it is the same thing? >> i used them as a model as things got more confusing, why does it have to be this way? teeseven how to do with more cheaply? >> the overhead takes insurance once you take the third-party payer system out of it does cost plummet.

>> there is so much overhead to hire the people when dash people to deal with the insurance companies. the whole premise is to get people more insurance but that means somebody else pays is a market but it cannot work its magic because somebody else pays. >> and the third-party payer system doesn't work efficiently. once you take them out of it i have no billing. no insurance. day spee. it is $300 up front everything is included. then it is done they see me they are examined by the you orthopedic surgeon in data cast or injection or a split it is all included. >> do you make money? >> yes. no billing or insurance or codeine or electronic health

records they are a total waste into not help patient care. >> what if they don't have $300? >> we have a credit company that will extend them credit that is affordable and simple. >> one-third of your patients have no insurance one-third have a high deductible plan. >> then is one thing i a unlike the bell be affordable care act is it increases deductibles of makes people pay attention if they're out of pocket then once their money is on the line they pay attention. >> i am on medicare and nobody pays attention. >> quito care of it is $5 or 5,000 because you don't pay. but people ask questions if it is their money and the cost goes through the roof. john: the one area of specialty where people pay their own bills by plastic

surgery and a basic surgery the prices come down the waiting rooms are nice and you have to be nice. >> data now why it isn't immediately apparent is so obvious to us but why would you want someone else? they can take control of themselves. john: people say it is too expensive you cannot afford to pay yourself. >> it does not have to be this way. if people were involved. >> just from market competition. john: and it cost 5,000 would cost 500. >> easily. look at the mri they are $3,000 but i know of one and that is $280 and so people don't ask questions so they just paid the 3,000.

john: good luck. how market magic can make us slow and stupid. >> you are a piece of work

>> you will get $5,000 several tv shows deal with legal disputes quickly. judge alex ferrer is a professional arbitrator. they arbitration that you'd do ochered outside the government pours system but the constitution says the courts are a job for governments. >> generally that is true that people can contract to waive their constitutional rights as long as it is legal land that is what arbitration is it is private judging entered into as a result of a contract. and barbara creches is done all the time between

companies and individuals and corporations that don't want to be in the typical courtroom. john: this is for profit to make money. but it makes use eight to work more quickly one consumer said an arbitration takes four months but in court it is 19 months. >> is quicker because you don't have the of backlog of the court system and usually it is cheaper sometimes those litigation in costa are economical because it drags on and the depositions are taken over with subpoena and discovery but some of that is absolutely necessary is unfortunately some of that is lawyers doing what they can to collect a paycheck. john: why don't they do that with arbitration?

>> it takes away the incentive. one of the points it is quicker and lust -- less costly and. john: so if you have to equal parties against consumers but not so well? >> yes. that is the optimal situation went to corporations are equally power to make a voluntary decision in to go into arbitration but every time you sign a contract with your cellphone carrier or your stockbroker the consumer never read some of fine print and they buried the arbitration clause it takes away your right to a jury and appeal your stock with the outcome and the arbitrator that you get this makes a difference. i am a great but if you look at it from the standpoint i will get a lot of cases from at&t but only one from john

stossel he may tilt the verdict to the hand that feeds him. john: but there is another danger would if you are not efficient? >> that is the possibility in court as well you cannot eliminate all of the ills but to make it as fair as possible i would love to see them get rid of arbitration clauses that is mandatory. no matter what dispute they have down the road if you voluntarily choose to go to arbitration tuesday avoid the court system, and then all power to you. john: there is a market incentive for you? if you take bribes people of

much use you. >> in the open market that is true if people have the ability to pick their arbitrator is not shut down your throat for those that our honest they will thrive and continue to do well from people in the open market but then they just keep doing it. >> the most amazing wonderful thing that has been accomplished by market magic, of 1 billion people used to live like this the longer do.bp

john: 50 years ago merrick the declared war on poverty me spent $22 trillion wafted away made it worse and more intractable. also for the first seven years of the war the poverty level did drop significantly. and improvement stopped despite 50 years of massive wealth creation that is about the same but it stayed

roughly double why didn't the improvements continue? because they encourage people tuesday's port even not get married if there was a man with a job in-house you may lose your welfare check. and he may have that to but instead they ask for handouts. >> people are accustomed to hand out with in a few blocks a dozen restaurants told us they are eager to hire people if only they would apply but those in the welfare line say things like this. >> there is nothing out there. >> no jobs? >> nothing in my feel like i'm a medical assistant. john: what about outside your field?

>> that doesn't give me the money i need to stay where i am. john: but not working well led her stay so she does. that is handouts' discourage work. so what should redo? so they work their magic so for thousands of years looks like this to lots of people but it the world bank living in extreme poverty has dropped by half this is the biggest unpublicized story of the century hall path high and they are no longer a miserably poor but more countries figured out it would allow free trade to create economic growth and

that space some will change their lives forever. we have a long way to go another billion dollars still live in extreme poverty trying to live on less than $1.25 per day the market could also work its magic if the government justin did less but still looked at the poverty rate charged again. but this time and added right before the war was declared and they were already lifting themselves out of poverty before welfare and progress continued but we have a solution before the war on poverty began. with limited government that preens economic growth americans would have continued to lift themselves out of poverty if government had not interfered by encouraging people to be so

dependent. if we could limit government constant interference we could end most poverty by letting the markets work their magic. ted is our show. video collection. (doorbell chiming) oh, hey, hi, dean. hey, hi there, uh... bob. (narrator) from the battlefield to the white house, from hollywood to the heartland, america's entertainer was bob hope. oh, this room, it's so dull and depressing tonight. if only there was some way to brighten it. oh, of course. (laughter)