my next guest say they know why our brains are wired that way. lita is a evolutionary psychologist at university of california. and sean is mind of the market. let me start with you. you talk about the mind. you say the state and government comes from evolution? >> i think the natural propensity we have if somebody has more sufficient stuff than

somebody else there must be something done wrong, something unfair. we've evolved in the hunter gatherers with a few dozen to a few hundred people in very resource poor environments. any kind of redistribution had to be done fairly equally or was obvious somebody was else was getting something by unfair means. >> also when we lived in the clan or tribe there was an elder or a few of them that ran things? >> right. >> you sit down in the quad and you talk things out. there is a big man who solves the problems. we tend to look up to the alpha male. you make the decision for us. >> and evolutionary psychologist do you agree with that? >> a lot of it.

we live in an advanced economy where markets involve millions of people. and we did evolve in small social groups where most the people were family and friends that you were in intimate contacted every day. our moral intuitions for sharing is a small scale situation you knew who you were interact go and whether they were contributing with you or gathering with you or making an effort or loafing. you could see what was happening. you could sense it, too. >> why should it be different because we have 300 million people? >> two problems. it doesn't scale up even hundreds of people because you can't do the same kind of monitoring. second problem when you try as was done in communist countries

for many years to organize businesses as collective actions where you de-couple reward from effort. >> they failed one after the other. >> it's not just they failed. yes, they failed because those that contribute, when people free ride, they want to withdraw and contribute less and less. the only way you can sustain it is through punishment and coercion. there is a dark side of communism. communism, how lovely. we'll all share and it will be wonderful. a lot of research has been done this and showing without the possibility of punishing free riders you don't get sustained for the public good. let's talk the issues, where government must step in. one thing that seems instinctive to people in this rich country. sense some of us are rich it makes sense to take from the rich and give to the poor.

most we interviewed said it was fair. >> everybody has to pay a fair share. >> it seems fair. >> it does seem fair and the wall street protests, based this hatred of this inzblalt if you put a name to it, you say, you mean steve jobs did something bad? and famous amos, cookies are okay and apple company is fine. it's and entity that is easy to tribalize as an enemy. it feels right but it's worthless. >> instinctively usury, which is really loaning money at some interest rate that somebody decides is too high. our economy is built on loans? >> it is. this is one of these tribal

instincts this is taking something from me. because of our environment and history up to the industrial revolution, most people did not fairly make money. there was some kind of going on, it was zero sum game. only reasonably it is a win-win by my charging a profit but helps you and helps everybody. it has to be resold and repeated over because it doesn't feel right. >> let's go on to rush limbaugh's point. charity is a big and no doubt about the answer to this question. >> who helps the poor more? charity or business? >> charity. >> most everyone said charity. >> because they helpful money. >> what is wrong with.

>>? >> let's say we dissolved apple computers and gave away all the billions of dollars. most wealthiest company in the world right now. would that help more people if they kept making great products and hiring people? everybody knows dissolving it would be a disaster. they would spend billions and nothing would be improved. >> so the greed driven making a product hiring a people and expanding is certainly, you really have to look at economics this has helped many more people? >> right. >> and still counter intuitive. yes, they should give their fair share but the rich is getting way more than their fair share. again, we have that sense of the way things ought to be because for the last hundred thousand years, things are not like they are now.

talk about rent control. make sure the rent is reasonable? >> it sounds like a nice idea when they vote for it they are doing something nice for homeless people. when people have actually studied this it turns out it shrinks the supply of housing and particularly shrinks the supply of low cost housing. you end up throwing people out into the streets of brutal life of poverty. it seems nice but you are making the problem worse. >> you know the price is down? >> you feel like you are doing something good because the way you feel about it, we don't live in that world. we live that complicated world where the complicated policies need to be analyzed. >> one hour mo example, price gouging. people on the street, they would

sneer, disaster happens, somebody raises the price of water, generators? >> it looks bad and intuitively and our minds are evolved to dislike that. the long term consequence as lita said, if you calculate out it ends up better. >> because more people bring in batteries? >> it solves the supply and demand problem. >> thank you michael, lita. what is most likely to kill you? not what you think. and next, should these people vote? >> do you know who this is? >> tom brokow.

[ applause ]

>> john: in the last big election, 90 million people voted. that sounds like a lot. until you realize there are more than 200 million eligible voters. most people didn't vote. that is terrible, i'm told, but i don't think it's terrible. i think it's good because a lot of you are stupid. [ laughter ] >> some of you, too. you are the audience that bothered to come to my show so you are obviously okay. [ applause ] >> john: a lot of americans don't follow the news. i took these photos of romney, gingrich, ron paul. i figure someone who ron paul is. but surely they would know who they are. >> i know it's face but i can't think of his name. >> looks like will ferrell. >> who is this guy? >> i don't know.

>> how about this? >> he is a character on a sleazy reality show. yet more people knew him that knew important politicians. >> this is one reason, get out the vote drives are dumb. they hold them at rock con earth is. many of the young people had no clue about national affairs. most of them don't vote. those that don't pay attention will be less likely to vote. i take heat for saying that. some people shouldn't vote. one economyist that agrees with me is brian caplan, the myth of the rational voter and why democracys choose bad policies. because voters are not rattle natural? >> exactly.

>> john: but people want to do the right thing. >> people do want to do the right thing. it doesn't mean they are doing it. you have to know something. you can easily mess things up. >> john: you say voters don't have an incentive to get informed? >> that's right. you have to ask yourself if you voted at random, the answer is the same thing that happens. >> john: it doesn't matter? >> one little vote out of millions of people. so if you make a terrible decision the same thing happens to everybody else. i was in argument and problem we're getting what we deserved. real story is we're getting the government they deserve and that is the problem. >> john: and the people that really get informed and really likely to vote are the special interest groups? >> that often true, yes.

>> john: because they have more at stake? >> special interest groups are paying attention. they know what is going on and people who are listening to them will do what they are told? >> the rest of us have lives, it's not our main interests to get somebody in office? >> that's right. people have their own lives and people are doing other things. it's very hard to know what is going on. here is the interesting thing. if all you want to do is vote intelligently, there is this. being honest, there is bunch of things i don't know about and i have no opinion on that. >> john: so if you are dumb about personal purchases you are hurt? >> that is right. if you were walking by a used car dealership and the best cars in the world for lowest prices. you can still exerted your skepticism, when a politician

comes, he looks so trustworthy and he has a great smile. he won't lie, would he? >> john: if you buy a bad car, the market punishes you? >> you say i'm not going to do that again. it's not so much voted, even smart people act dumb when they voted. i know an engineer who is very clever, but his economics is ridiculous. he knows what he likes and doesn't want to hear anything else. >> john: is my test here fairly shallow. is this representative of other surveys have found amazing things? >> not so much when people don't know the answer as when they think they know answers that aren't true? >> for example on the budget foreign aid is the largest item in the budget.

one of the biggest is winners is foreign aid. >> not social security, not medicaid. >> welfare and foreign aid is probably less than 1 percent. >> roughly ten when you put them together. >> john: social security and medicaid are ten times bigger. >> what people think how much they like people. whether they like you, you are good for the budget. elderly don't cost much. >> john: thank you brian kaplan. up next, what are you afraid of? the thing you fear is going to get you. that is next. [ applause ] [ male announcer ] in bli, even ragu users chose prego. prego?! but i've been buying ragu for years. [ thinking ] i wonder what other questionable choices i've made?

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>> john: anybody ought to be worried about terrorism. we should be. ground zero is few miles south. are you worried about terrorism in just raise a hand if you worry about it. do you worry about your home catching fire? okay, you are an unusual group. most people are more worried about terrorism but it's much more likely that your house will catch fire. how about crossing itself street 5,000 people get killed every year. what scares you more? who is scared of flying? who is scared of driving?

one person. [ laughter ] >> i ask people outside about that. people say, they know driving is risky but it's flying that scares them. >> i pick flying i can control my car but i don't have control of the plane. >> flying even though i know the odds of being in a plane crash is much less than a car crash. >> he knows his odds are better in the plane but he still worries more about that. david a former director of communications for risk analysis and he has been studying attitudes about them. risk perception is subjective. you imply by the numbers. that is not a human being does it. we perceive everything with the facts and how the facts feel. >> john: this guy i interviewed. >> whole language, there are

four five fields of science. >> john: how risky is it really. >> so the scientists told us about where the subjective information to come up with judgments come from. risk have personality traits that make them less scary. so more people are afraid of environmental risks than evidence says we need to be. those risks cause cancers. and identify people, are you afraid of more cancer than heart disease, it has the characteristic involving more pain and suffering. doesn't it make more emotional sense it's nastier. >> i would say yes. >> heart disease kills more per

year. by the way, policy, federal government spends way more researching the number two cause of death. four times as it spends on the number one cause of death, heart disease. research is being done and what is more likely to kill us? >> john: i'm puzzled by people's explanations why they fear this or that. the threat does seem more important than the risk. here is one woman why he fears terrorists more than car crashes. >> there are people that want me bad. there is no one out there trying to kill me with their car. >> john: i don't get it. if somebody wants you dead. it makes it much scarier. >> because it's how you get dead. >> john: car crash is just as violent. >> you heard her. i'll give you a perfect example

of this. do you use your cellphone when you drive. you are on the phone and driving along and using psychological called optimism bias, it lets us say, it won't happen to me. we play games to do all the risky things. there is somebody swerving and speeding up. that guy makes you angry. do you think our state laws, people, cellphones take away mine. take away the risk that is being imposed on o me because it feels different. >> john: some of this comes from years of evolution? >> the theory is that along the way we needed to develop mental short cuts for making quick

calls on what is dangerous. if you spent a lot of time. poisonous snake and you want to think about it for a while, you are dead. so it makes sense. we would have adopted mental short cuts and emotional filters for judge go situations how scary they are. we are mostly that animal. we pride ourselves on intellect and you're dead, it shouldn't matter. in devil's dictionary, the brain is only the organ we think, we think. most of it happens below the radar. >> when i research the numbers what kills people. it blows me away. we fear terrorism. let's say 9/11 happens every ten years, but that is, fall may be

20,000 deaths. people crossing the street. 5,000. fires 4,000. choking on small objects, 3,000, bicycles, 600, drowning in swimming pools 300, all statd tis particularly more likely to kill than a terrorist. >> they need to come with the grips with the facts we judge what is scary and make decisions for ourself and put ourselves at greater risk. using the mobile phone when we drive. we need to recognize that it's subjective and formed by feelings as well as just those statistics and recognize there is a danger in that. phenomenon is perception gap is the danger we can study. and we can use that to help reduce those pitfalls. >> john: one final thought,

nuclear power or school shootings or brain cancer from your cellphone. there is no evidence that anybody has been killed in america by nuclear power, or their cellphone but assume ten people die a year. that would be horrible. it would be all over the news. 25 are killed by plastic bags. it's a big country. lots of nasty stuff happening to people. stay with us. how the free market solves things like racism without government. that is not intuitive but that is next. when you have tough pain, do you want fast relief? try bayer advanced aspirin. it has microparticles so it enters the bloodstream fast and rushes relief to the site of your tough pain. it's proven to relieve pain twice as fast as before. bayer advanced aspirin. than leading regar juice drinks. because less sugar is a better way to fly.

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lifelock service guarantee cannot be offered to residents of new york. [ applause ] >> john: tonight we're talking about how our instincts areo wrong and we push for government policies that make problems worse. of course, politician that push popular policies gets rewarded for that. and they push more stupid policies but in business, someone whose instincts they get punished. in business you face reality when you go out of business. that has some surprising unintended consequences, good ones says jonathan beam. an author of "race and liberty

in america." jonathan in your book, race is the largest word in the title, what does it have to do with free market? >> everybody is racist, business people are racist, greedy how can you argue that business people had to something to do with civil rights movement. they had a lot to do with civil rights movement. >> john: why? >> let me give you one example. he built a business, st. louis cardinal, he was rough anti-deal republican. he built a championship series. he had the st. louis browns. >> john: this is baseball we're talking about? >> baseball, he builds it up if into an empire but he couldn't, it was against the law to admit

blacks to baseball and he had jackie robinson but other people those other people were punishing themselves for their racist acts. so he left for the brooklyn dodgers and they ended up winning championships. st. louis cardinals did not hire a single black player until 1958. >> john: people hired black players because it was good for business? >> it was good for business. >> and perception is racist and government has to protect us from that. at the time it was government that was racist enforcing jim crow. even southern businesses fought that. >> government was ricky's problem. he had to escape the government of missouri. down south, there are companies like pepsi that advertise to

black consumers. >> john: they were doing it when it was illegal according to the government to share pepsi at the lunch counter? >> these ads came out before people knew who martin luther king was. >> john: pepsi wanted to make...? >> money. they were nearly bankrupt during the great depression. coke won't sell to negro consumers so the rest is history. >> john: in jacksonville, florida, city officials acting the behest of companies wouldn't force segregation ordinances? >> everybody knows about it separate and equal is okay on street buses and cars. what happened was, they didn't want to enforce it. it cost them business. so they fought it. blacks boycotted, it was a mess.

ultimately the government in many cities has to enforce the businesses to do it. one city, jacksonville, the companies convinced the government to back off. >> john: other places, businesses refused to obey the jim crow law? >> yes. we assume that when government passes a law that businesses will follow through. but the corporate lawyers dragged their feet. that was benefit for minorities and also the benefit of business. >> john: years before, hundred years ago, there was something called the chinese exclusion act? >> that act all up and down west coast. businesses hired chinese workers and white workers wanted to keep chinese out. business stepped in, went to washington, d.c. and testified, chinese are best workers we have in america. they ultimately lost that case.

business against labor and big government, that is a story of the immigration right up to today. >> john: let's be inclusive and unions and governments saying, no. >> look at google. they want to hire people, many companies were founded by immigrants. the person who doesn't hire the best employee because that employee is chinese or japanese or black is giving more work to his competitor. >> john: one more benefit of capitalism that we instinctly hate. thank you jonathan bean. audience wants to question you and some of our other guests. s are those great-tting little o's made from carefully selected oats that can help lower cholester. is it a superhero?

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[ applause ] >> john: we're back with

audience comments and questions for michael shermer from the sceptic society and brian kaplan david, author of the book, how risky is it really? and jonathan bean. who is first. >> if you ask most people that you interviewed on the street, probably they would agree that government for the most part is inept and corrupt. those same people i would think would want more government intervention to have an equal playing field, for people in this country in general. why do you think those two issues, ineptness and corruptness don't coincide with the desire for less government. >> john: anyone? people say government is corrupt. we need government to fix it. >> i think instinctively, as

long as our tribe we are connected to, they will make the right decisions if they are kinds of decisions we want them to make. if it's going in favor of the other tribe that we don't like, we'll attack them as being incompetent. we only see them as corrupt with the other party or other guy there is an example of this in texas. they have recently adopted something for drunk driving called no refusal. in many states when you are stopped for drunk driving, attorneys say don't give them the breathalyzer because it's worse. if in texas you are stopped when they are enforcing this law called no refusal and you refuse to blow the state of texas has the right to take your blood. talk about government intervention. so you would think texans would

object to that, as michael alluded to, they are more afraid of drunk drivers. >> that is a great question. i think the problem, this is the reason i wrote my book. if you open a high school history textbook, that is most exposure that you will have to american history. i mean, look, segregation, it was government, force the sterilization, the nazis got that from us. i'm not making that up. it's no surprise that government schools are teaching government is good. it's a lot of people that opting out with private schooling. >> it's good when it works for you. so it's government is not doing stuff. there is not any contradiction in their minds because a government was honest and actually be doing a lot.

>> john: yes, sir. >> what can the schools do and what can we do to try to educate people to get passed their instincts and actually step back a try to think of things rationally? >> brilliant question for all of us. i think we need to get past the belief perfect reason is impossible. there are vast bodies of evidence that suggest these are deeply ingrained connected to survival sorts of instincts. what we can do, i think, my argument is, we can realize that our instincts get us into trouble. we can be rationale enough to study where those instincts have come from. use that knowledge of to be smarter about foibles being dangerous to us. that knowledge of the danger of risk decision-making being the

risky environment, when you go out driving you are entering a risky entitlement. we have the tool of knowing where the foibles come from. so we learn more about the instincts. >> i think an important thing do with education, tell people the answers. there is so much effort made, all in american history now figure out what you are supposed to learn from it. that isn't the way people learn. when you give them the information, they don't know what to think. wouldn't it be better to say things like, this is why. don't expect people to connect the dots. >> i'm not that optimistic. i would love the schools to improve. i'm old enough it's not going to happen in my lifetime. we have to go around the schools. >> sometimes government has to step in our behalf, we have laws against drunk driving and what

not. >> differences between men and women, men want to be rough and play hard. women want to be compassionate and nurturing. is any of this based upon be like a male, female dominated society. are we femiizing things? >> in this perception they are dramatically. there is white male effect. i emphasize the white as well. if you ask people in any group, what you afraid of, they will all rank the same, how many people more afraid of, white men between 18-59 or 10% less afraid of the same stuff because research suggests that white men seem to have more control. the white and male part, guy walking down the street is less

afraid than a woman because the same control. so risk perception is absolutely proven. >> john: and is god based on instinct? >> it comes naturally to think there is some hidden force behind the scenes running the show. we call that an agency we tend to see invisible agents running things. >> john: mom and dad ran the show and elders ran the show? >> i think there is something like god of the government. we almost like a government is like a deity force that we can pray for and casting our vote and telling us to do something. >> john: it's not a god. don't believe that. thank you michael, brian, david and jonathan. coming up next, how instinct tells us to say, yes, we can and invites politicians to manage our lives, but the truth is, no,

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>> john: simple answers are so satisfying. green jobs will fix the economy. stimulus will create jobs and, of course, everyone should vote. all those instinctive solutions are wrong. everyone shouldn't vote. these people shouldn't. >> who is this guy? >> i'm not sure who that one is. >> i don't know. >> do you know who this is? >> i can't think of his name, newt romney. >> john: it's refreshingly good to find someone that does know.

>> who is this guy? >> ron paul. >> who he is? >> mitt romney. >> who is he? >> gingrich. >> john: good for her. should she vote? too often it's wrong on instincts. frederick hiedik the problem that we use instincts when we evolved living in tribes to make complex decisions. curious tasks of economics is to demonstrate how little they really know about what they imagine they can design. people understand that. congress has only a 12% approval rating. good. people should be suspicious on what congress would design. central planners failed in the

soef toyota union and cuba and at the post office. however, despite all that failure, whenever another crisis hits the natural instinct is to say, got to be law. government must do something. that is what i used to think. i learned in my years doing reporting on local tv stations, that news stories should draw attention to some terrible problem, homelessness, crack cocaine, people spending too much time on the internet. people not spending enough time on the internet. whatever the problem, there was usually one answer. government should act. it seemed like common sense, but that common sense is just flawed. for each new problem, the central planners create new ones. politicians did nothing, the self-correcting mechanism of free people in the free market would mit gate most of the problems, mitigate with far less

money but people don't get that. people instinctively say, there ought to be a law. fighting big government isn't easy. even couples fight about it. i got a kick of these two. question, should we tax the rich more? >> yes. >> no. >> i think she is going on instinct. >> john: he understands economics. >> why would they be taxed more. >> to help the economy. >> i'm helping it. >> even more if you pay more taxes. >> john: i wish them luck in their relationship. if we vote for politicians that pass more laws and spend more money, the result will not be a country with fewer problems but a country that is governed by piecemeal socialism. we can debate the meaning of the term but there is no doubt that big government leaves us less prosperous and less free. we should be realistic what government cannot do, being realistic we have to fight our

instincts. that is our show. thanks for watching. good night. [ applause ] [ male announcer ] drinking a smoothie with no vegetable nutrition? ♪ [ gong ] strawberry banana! [ male announcer ] for a smoothie with real fruit plus veggie nutrition new v8 v-fusion smoothie. could've had a v8. it's got 10 speeds, my friend. ♪ is it fast? it's got a lightning bolt on it, doesn't it? ♪ is it fast? i don't even know if it's street-legal. ♪ is it safe?

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