2145 FBF: Housing Starts, Equity Stripping & The Birthplace of Capitalism with Dr. Nima Sanandaji

Welcome to this week's edition of Flashback Friday. Your opportunity to get some good review by listening to episodes from the past that Jason has hand picked to help you today in the present and propel you into the future. Enjoy.

This show is produced by the Hartman Media Company. For more information and links to all our great podcasts, visit hartmanmedia.com.

Welcome to the Creating wealth show with Jason Hartman. You're about to learn a new slant on investing, some exciting techniques and fresh new approaches to the world's most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine, self made multimillionaire who's actually been there and done it. He's a successful investor, lender, developer and entrepreneur who's owned properties in 11 states, had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason's footsteps on the road to your Financial Independence Day. You really can do it. And now, here's your host, Jason Hartman with the complete solution for real estate investors.

Welcome listeners from around the world. This is Jason hartman with episode 1028. 1028. Thank you so much for joining me today as I come to you from Naples, Italy. Yes, still in Naples. Visited Positano the other day. That was I guess Monday. Positano day was Monday. What a gorgeous place. Gorgeous place. But I tell you, the weather here is hot and humid and not that pleasant. Honestly, it's pretty tough. You know, the problem with Europe is. Well, among other things, there are so many problems with Europe. The place where I was born, Europe has lots of problems. It is in decline, a sad state of decline. Sadly, many would argue that the US is in decline. But eh. Compared to what? Compared to Europe. Europe's declining a lot faster. You know, it constantly amazes me these left wingers in the US that say, well, the US should be more like Europe. How is that? Let me see the roads that are falling apart, the. The places that don't have any air conditioning, that everything is smaller, lesser and more inconvenient apart. Is that how the US should become? Or should everybody in the US start driving crappy little European cars? You know, it's so funny, like if you think everybody in Europe drives a US level Mercedes or BMW or Audi, you're out of your mind. Those companies make little tiny tin can versions of their cars that are German engineered that people drive over in Europe. These cars in Europe are junk. They're little death boxes. They're terrible. They have roll up windows they have manual transmissions. I've been driving around this little diesel Opel car. Or Opel, I don't know, is that how you say it? Opel car as our rental car here. You know, it's stick shift. Kinds of fun to drive a stick shift, except when you're on these Italian roads where everybody drives like they're psych psotic and these scooters are. I mean, it is so dangerous to drive here, I can't even believe it. And this car is this little tiny crappy rental car with five speed manual transmission. And I do enjoy driving a stick a bit. It's kind of fun. And I know how to drive a stick very well, mind you. But folks, everything is smaller, lesser, lamer in Europe except culture. That's kind of neat. And the food, it's pretty good too. But yeah, we went to beautiful positive. So don't make the US More like that. Okay, Bernie Sanders, are you hearing me? We do not want to be more like Europe. Europe wants to be more like the U.S. okay, sorry, European listeners, I know you're out there. We've got many clients from Europe and I love visiting here. I come here a couple times a year. You know that I'm always here. I was born here. But the US is, is the land of abundance and Europe is the land of scarcity. Europe should be more like the US in terms of prosperity and convenience. Everything in Europe is a roadblock. Just try to get anything done here. It's just mountain of bureaucracy. Book an airline flight, do this, do that, rent a car. Takes a half hour for the clerk to check you out at the rental car counter with none other than an American rental car company. But the European version of it is just, mmm, it's super annoying. So, yeah, we got a good guest today, a European guest who's going to talk about the economies while a European Middle Eastern guest today who's going to talk about the economies of the Middle east and the economies of Europe and a little bit about the economy of the US you're going to learn some good stuff today. And it's a returning guest. Second time on the show was on the show several years ago. So we'll be to our guest here in a moment. But let me tell you a little bit about my trip. Don't you love it when someone goes on a vacation and they come back and they want to show you all their pictures and you know, the first, for the first like minute you're interested and then after that you're like, okay, you know, that's Enough. Yeah, I know, I know. So I'll be brief. So Monday we went to Positano. What a gorgeous place. Wow. I mean, Italy has these islands of rock coming out of the sea. Not the ocean. It's the sea here, okay? It's the sea coming out of the sea, jetting up many, many feet. Or shall I say meters? Because, hey, you know, the US Needs to fix a lot of things, but one thing they definitely need to fix is the US should be on the metric system. That is a much better system than this silly imperial system that we have. So the rock formations jet out of the sea many meters into the sky, and they build houses onto them. Because yesterday we went to one of those islands, Capri, as they say, and that was just beautiful. And Positano, the day before Capri, yesterday. And today, a lesson for all real estate investors, for all people who feel like they are masters of the universe, a lesson for us all to remain humble. Because that famous European Napoleon. Yes? What did he say? One of my favorite quotes. What is the quote? The most dangerous moment comes with victory. The most dangerous moment comes with victory. Why is that true? Because when we have victory, our head gets inflated, our ego gets big. We become complacent. We rest on our laurels. Someone please tell me. Go to jasonhartman.com ask. And please don't ask, but tell me, what the heck is a laurel?

You know?

Yes, I think I looked that up. It's like ivy or something. And I don't know why we don't want to rest on Ivy. But I digress, as I do a lot. So we don't want to do that, because today. Where did I go? Well, we went today to Pompeii. Yes, Pompeii. Pompeii was buried under lava and volcanic ash. An entire civilization, part of the Roman Empire, wiped out like they were nothing. Just remember, whatever problems any of us have, all you need to do to get your problems in perspective is look up into the sky at night away from light pollution and see all the stars in the sky. Look at the Milky Way. Maybe your eye will be seeing the galaxy. Our nearest galaxy, Andromeda, which is like, I don't know, what is it, 200 million light years away. Yes, if you travel at 186,000 miles per second.

Welcome to this week's edition of Flashback Friday. Your opportunity to get some good review by listening to episodes from the past that Jason has handpicked to help you today in the present and propel you into the future. Enjoy.

Not Hour per second, meaning you could circle the entire Earth more than seven times in a second. If you travel that fast, then it would take you four and a half years just to get to the nearest star. What is that? Alpha Centauri or Proxima Centauri? I keep getting confusing the two. But anyway, everything's really big. We're really small. Our problems are really small. The most dangerous moment comes with victory. So, you know, you got your property portfolio, you've built a big portfolio, everything's going along well, and then suddenly a problem strikes. Don't get too complacent. The problems will come. You know they will. We talk about them a lot on the show and how to solve them. And the crooks will come too. Yes, the bad people, the unethical people, the sleazebags that are so greedy and we've complicated webs of lies when it would be actually simpler just to be honest. Good decisions. And they will rip us off and we got to be on guard for that. So don't get complacent. That's the lesson. All those folks in Pompeii, they look like they had it pretty good at one time and then boom, it all changed and they were wiped out. Completely wiped out. You see bodies of people and dogs. Yes, dogs. My dog Coco was with us today in Pompeii. Yes, the international traveler that she is. She's been to nine countries so far. Yes, my dog's been to more countries than many people have, but she's way behind me. I've been to 81. So the dog has a ways to go to ketchup. But she's very tired here, laying down. Because it was a big day in Pompeii. It's very hot and humid. But yes, three days of. I'm a tired tourist, let me tell you. But very interesting stuff in Capri yesterday. Now, Capri is this really high end island. Lunch was a rip off. Lunch was a hundred and sixty euros. Yeah, we had a few drinks, but that was a ripoff. But it's expensive on Capri. And when we got onto the island of Capri, we took a ferry over there, this beautiful, beautiful island. And the first thing we did was we took the funicular, you know, but the way the Italians say it is so much better. Funiculari. Funiculari. We took the funiculare up the mountain, you know, up the rock, I don't know whatever, to this other place. Had lunch up there. The views were spectacular, stunning, totally spectacular. And then we took a taxi. They have These really cool swanky taxis there. And they take the roofs off of these cars, vans, whatever, all these different cars, they just cut the roofs right off and they put a cloth top way up high and they cruise you around in these taxis and. And we took a taxi up to the very top of the island and wow, the views were incredible looking down. And then we took the steps all the way down. Yes, all the way down, back to the port and got on the ferry and came back to Naples last night. That was like a thousand steps. It was incredible. And not a bad workout, but it would have been a much better workout going up. So that's kind of my update on vacation. I'm heading over to Germany and then I'm going on a river cruise. So I'll be reporting from that next week. And then coming back home. Time to get back home to the land of abundance, the good old US of A. Criticize it all you want, but let me tell you, life is pretty good. And we all should be very grateful if we're lucky enough to live in first of all, the western world. Because all of the western world has lots of abundance. Well, many places in the eastern world nowadays too. Of course. We've got many clients in Asia who should join us at our conference in Hawaii Prophets in Paradise, coming up in November. Go to Jason hartman.com and check that out and get your super early bird tickets. We've only had one price increase on that event so far. You'll definitely want to get your tickets ASAP for profits in Paradise, a totally new event, a two day conference that we've never done and we're going to arrange some fun stuff and some good networking stuff there. Hey, we'll be in Hawaii. The place is beautiful. We can't sit in a room all day. Okay. So yeah, and make it a family vacation. We got some great room rates at some beautiful hotels. So bring the kids, bring the family, you know, whatever. Stay a few extra days on either side of that. Come and join us for the Venture alliance conference as well or the Venture alliance retreat in Kauai. So we'll have those almost back to back. Just a day off in between. That'll be super exciting. I had a couple things for you I wanted to share real quickly. A couple real estate stuff stats before we get to our guest today. Where are they? Some news on the housing market. So of course we've talked many times on the show about how inventory is tight, blah blah, blah. You're probably sick of hearing that because I know you see it all over the place in the marketplace. Many, many people willing to pay above appraised value for the property because that's, you know, people take what they can get, Right? So check this out. Inventory remains tight, but could loosen up a bit, just a little bit in the near future. Inventory increased by 12.2% in the second quarter, the biggest gain in inventory since 2015. Now before you start thinking, well, why don't I see that all@jasonhartman.com on the website in the properties section. Well, I'll tell you why. Because that's the overall housing inventory. That doesn't mean investment properties. You know, a lot of these high end properties in these high end markets are starting to sit, they're starting to suffer. We've profiled that in Los Angeles and New York on the show. So is that a sign of a change, a sea change? Well, I told you a long time ago that we are way beyond the point of fundamentals in, in the housing market, in the cyclical housing markets. They are crazy, silly, but could they go a little longer? Nobody knows. And speaking of which, when I share that statistic with you of the 12.2% increase in the second quarter. Right. I want to also relate that back to another example I just saw the other day of how to lie with statistics. So I'm reading this little thing, this little article on food and health and foodborne illness, right? Listen to this short little thing and tell me if you can identify the lie with statistics here, right? It's talking about eating in restaurants versus eating at home. And the article says most restaurants are very careful to avoid problems. Most home chefs are not. Up to 80% of Salmonella poisoning occurs in the home. Protect yourself from foodborne illness. Use separate cutting boards for meats, vegetables and breads. Use a food thermometer to make sure food is cooked to the proper temperature. And by the way, I will add all the way through. Keep your refrigerator below 40 degrees Fahrenheit to prevent bacteria from breeding. Always wash your hands before, during and after food prep. Right. And by the way, learn how to wash your hands properly. Very few people know how to do this. You know, surgeons, they know how to do it. But what's the how to lie with statistics part? It says up to 80% of Salmonella poisoning occurs in the home. Okay, fine, but what percentage of cooking occurs in the home? You know, they didn't ever ask the question. Compared to what? Right. So if 90% of the cooking occurs in the home, but only 80% of the salmonella poisoning occ the home, then does that say that restaurants are safer or less safe than cooking at home? You get my point. Yeah, statistics, you really got to think about them. You know, everybody just takes this stuff for granted, especially in the political arena. It's terrible. It's terrible. Okay, one more stat for you. Let's get to our guest. Homeowners have an estimated. This is amazing. It's amazing. Amazing. You ready? It's amazing. Time to be alive. Homeowners have an estimated 5.8 trillion. That's trillion with a t trillion dollars in accessible home equity, the highest ever recorded. Despite this, fewer homeowners are taking cash than in previous eras. Well.

Did you catch the how to lie with statistics thing in that little report? And this one isn't that bad. 5.8 trillion. Hey, that's a lot of equity in houses. But is it adjusted for inflation? Probably not. Didn't say it was. Didn't say it was. I doubt it is. Right, because it says that the 5.8 trillion is the highest accessible equity ever recorded. And you know, that's really high. But if you adjust it for inflation, it may not be the highest in real dollar terms, but it's still very high. And hey, it's kind of good news that on the whole those people aren't taking all the cash out using their home like an ATM machine. However, that doesn't mean you shouldn't. You should. As an investor, you should equity strip. Follow my practice. I've taught you about it over the years and in the last many thousand plus episodes, you should equity strip. As long as you are using that equity for investment grade projects, you know, you're buying more real estate with it and you're getting good investment grade financing on that equity or you're cashing out and selling. That's what you should do. So hope that helps. Without further ado, I'm going along here as I always do. Let's get to our guest today. Be sure to go to Jason hartman.com, check out the properties we have for sale there and also be sure to check out and register for our upcoming events in beautiful, stunning, gorgeous Hawaii. We look forward to seeing you there. And let's get to our guest.

It's my pleasure to welcome Dr. Nima Sanandaji. This is a returning guest, president of the European center for Entrepreneurship and Policy Reform, author of a few books, including the new one, the Birthplace of Capitalism, the Middle East. Previously we talked about one of the prior books, Debunking Exposing the Myth of Nordic Socialism, also a book Prior to that, Scandinavian.

Culture, markets and the failure of Third Way socialism. So check all of these books out, they're really quite fascinating. Welcome back. Doctor, how are you?

Thank you, thank you. I'm very good.

It's good to have you back on the show. Yeah, thank you. A lot of people think of capitalism as kind of a European thing, starting in the markets of maybe Rome or something like that. But tell us about the Middle East. I don't know if you're going to talk about Egypt or what when you talk about the Middle east being the birthplace of capitalism.

Yeah, yeah. And actually I will talk about Egypt because often when people talk about free markets, and especially the people who are supporters of free markets, they often believe that capitalism is a new invention and it's often traced back to the industrial revolution. Or some people say, no, no, we go a little bit before that, the Dutch Merchant Republic. Or some people say, no, no, capitalism was born, and this is more correct in the Renaissance cities of Northern Italy. But this is the modern capitalism. And I say that saying that capitalism comes from industrial revolution or even Renaissance Italy is like saying that the iPhone is the first mobile phone. Because the iPhone inspired all the modern phones. Right. It's a superior modern phone, just inspired all other smartphones. But there were many, many, many phones before the iPhone.

Sure.

And this is the same thing with free markets, with capitalism. The first model of enterprise, the first market economy, the first early banks in the world actually begin in the countries we now know as Iraq and Syria. So it is in these countries, and more specifically the Babylonian civilization and the Assyrian civilization, that 4,000 years ago we had the first enterprises, the first free markets. And I begin writing about that in the book. And really I think this story is fascinating because archaeologists, you know, they've dug up many, many clay tablets and they've translated them. And these clay tablets, 4,000 year old, you know what they are, you know what it says on them, what they are? Receipts. They're receipts of economic transactions.

Okay, all right. Interesting. Yeah, okay.

And you know, that's why people largely invented writing to record transactions. And from these transactions we know that these guys, they invented pretty market based model and everything really supports this. The first codes of law that exist coming from these ancient, ancient civilizations, they were about protecting private property viciously, they were about protecting the right of contract. And during this golden age of humanity that you have in Babylonia, in Assyria, all this technology, all this wealth, it was market driven. And it's just fantastic how much development that these market driven civilizations had yeah, yeah. And you said something, you said Egypt. Well, I recently wrote an essay about the pyramids of Egypt. And these are. The pyramids of Egypt are seen as the true wonders of the world. I said they are the best examples of government waste in the history of humanity. Because the ancient Egyptians alongside the Mesopotamians were the first civilization on the planet. The Egypt was more of a centrally planned economy. So the government directed the resources of Egypt into building the pyramids, essentially building mountains, man made mountains to please the central government. Whereas in the Middle east they had much more free market model, they had a much more private ownership model, private manufacturing model. So what they did was they just invented many, many of the technologies, many of the goods, many of the early manufacturers that propelled human civilization further. And this is really something I find in my book, that the golden ages of human civilization in Mesopotamia, in China, in India, were very much driven by early forms of capitalism.

Yeah, yeah. Give us a sense of your worldview, if you would. Where are you located? You live in Scandinavian country somewhere, right? Are you Sweden in Sweden or.

I am born in Iran, Kurdish, Iranian. I lived most of my life in Sweden. I write still a lot of books for the Swedish political debate, but I've moved myself to Malta.

Okay, good. So I find it really interesting, your writings and thoughts about the Scandinavian countries and this sort of myth that they're so successful with socialism. And I'm really glad you're, you're raising that issue because it is big misunderstanding in the world today, I believe. So I want to make sure you get a little time to just comment on that and comment on your other two books, if you would. But take us deeper into this subject of Middle Eastern capitalism also, by the way, give us a sense of time. What year are we talking about ancient Egypt? Do we go back as far as 5,000 years or what?

Well, that's a very good point. So if we talk about the birthplace of enterprise, the first enterprises, banks, the first market economy, this develops 4,000 years ago in Iraq and Syria and then the Middle east for much of these 4,000 years has a very market driven economy. For example, in the time of the Roman Empire, you would always see that the eastern provinces like Syria and Turkey were much wealthier than the European provinces. And the reason is they were more of market economies. They had more of private ownership, factories, early factories producing goods for foreign markets. And the interesting thing is that the concept of enterprise, the concept of banking, it comes to Europe, it comes to Mycenae and then to Greeks. But the Greeks and the Romans Never embrace it. So in Greece and Rome, the people who would own a business, the people who would own a bank, the people who would be captains of merchant ships, they were often slaves. And these slaves could buy themselves free and become rich people. Or they were Syrians or Jewish people, that is people from the Middle East. Because European culture for many, many hundreds of years didn't really buy into market exchange being a good thing. So Plato, for example, the view that Plato had on entrepreneurship is so hostile that even Karl Marx, I think, would be surprised.

Wow. Yeah, interesting. Karl Marx. Sad. One of the most influential economists in all of history. Maybe the most. Right.

Isn't that terrible that the worst idea became the biggest idea? You know, it's kind of like back to the days of videotape. VHS versus Betamax. Right. The Betamax was the better standard. You know, many people would argue that Apple was the better operating system than Windows and dos. But it's strange how the best things don't necessarily become the most popular, do they?

Yeah, I'd like to make a comment and I briefly write about this in my book. The first socialist revolution in the world is also in the Middle East. Did you know that?

No. Tell us about that and what year. Give us a context. Time wise too.

This happened in Iran. So the ancient Iranians had a religion called Zoroastrism. And Zoroastrism is kind of a religion similar to Christianity and Islam. It's about the struggle of good and evil. It's very related to these religions. But Zoroastrianism is a very much more free market religion. So the Zoroastrian faith actually specifically says if you're an honest person and you don't lie, if you make money, not only is it okay, it's a good thing. And the ancient Persians were very free market oriented. I write that Persian king Cyrus the Great, who freed the Jews from slavery in Babylon, who founded the first big world empire, is also the first known proponent of free markets. But then persians, somewhere around 1500 years ago we have a priest of this Western faith who kind of clashes with these free market ideas. And his name is Mazdak. And Mazdak was essentially Middle Eastern, much early version of Karl Marx, and he carried out.

Socialist revolution. And this revolutionary socialist movement actually would migrate in Asia and it would spread even to the Chinese and the Moghuls. And why is this relevant? Well, I think it's relevant because it just shows you that not, I mean, many of these ideas, free markets, capitalism, voluntary exchange, and also socialism have a deeper historic root than we believe. And if you kind of analyze them, you see that they influence society much more. One of the things I write about my book is this contrast with the pyramids and the underground irrigation systems of the Middle east. Because I believe that the true wonder of the world is actually something that almost no European or American know about.

What is that?

Well, it's underground irrigation Systems. So around 3,000 years ago in Iran, they invented canards, cannot underwater channels which run maybe 100 meters underground. And they run for many kilometers typically. And they take water from underground to the deserts and they make the deserts fertile.

A hundred meters under the ground, that's, you know, 400ft. I mean, that's very deep.

Yeah. Imagine if you were to construct, I told you, with modern technology, I want to find underground water. You have to find it first. Then you have to build a canal that takes this underground water several kilometers, hundred meters underground. And you also need to dig a bunch of wells all along the system because otherwise, you know, your workers will suffocate. You need the wells to maintain this channel. And additionally, it has to have an exact angle if it's just too steep or then it won't work. It would be a difficult project, wouldn't it?

Oh, I can imagine. Sounds very difficult. I mean, everybody is in major praise of the Romans and what they did with the aqueducts, but this is more difficult than that. Those were above ground.

Yeah. And they actually didn't build a few of these. They built tens of thousands of these underground channels. And these channels are the reason why countries like Iran and Syria, I mean, throughout history have been very important places of civilization. A lot of people lived there. They were important because they dug out these underground channels. Now, a lot of people think that infrastructure must be built by the state. But these underground channels, which are perhaps the most impressive infrastructure in human history, and they actually watered the Middle east until just a few decades ago. The majority of the water supply came from these channels. These were built by market forces. The government didn't do anything. They were paid by farming collectives because private property was very strong. And if farmers knew that if they could irrigate a part of the desert, they would have ownership of that desert and that water and their children would inherit it. So they would invest, they would say, you know, take half of our harvests for 10 years time and dig this channel for us. And then a group of private contractors would actually carry out this massive project. And this would repeat thousands and thousands of times throughout the ancient Middle East.

Wow. Wow. That's really Incredible. What is the connection with capitalism on that or did you make it? I'm sorry if I missed it but certainly you could do massive public works projects with you know, enslaving people to the government or the king or the pharaoh. Yeah, you don't need capitalism, capitalism for that unnecessarily.

No, but. And what you get then is the pyramids of Egypt. The pyramids of Egypt which are these massive structures which are built by taxation and slavery and you know, they're so impressive that people say people couldn't have built them, they must have been aliens or whatever. No, they built them with their technology and they're worthless because it was state dictate. The cannot, the underwater channels were not built by state dictates, they were built by private contractors and they were financed by farmers. And the only reason that the finance was possible was very strong private property rights and limited by the way taxation because the farmers knew that they would keep what they were producing on that soil and they would use many years future revenue to pay for the ganats. So it was a private property based model that financed it and the work was done by private contractors. The only role the state had was to maintain private ownership.

Huh, Interesting, interesting, very interesting. That sounds almost Ayn Randian, you know, with a limited government and so forth. Yeah, very good, very interesting. What else do you want us to know? Maybe a question I haven't asked you or just any thoughts?

Well, I mean that many people are interested in the role of capitalism through history because they want to say listen, capitalism is a good system, free markets work and they usually buy into this European Western narrative which says all right, no, capitalism is something that came a few hundred years ago. But if that is, this has always annoyed me, if this is true then it means all the massive technological development, all the massive increase in better goods, better services that has happened throughout history has been driven by something else than capitalism. And that's why I wrote this book, largely because let's take hospitals, who invented modern hospitals? Well they were invented in India, China, very much in the Middle east during this golden age of Islam and they were to a very large extent private institutions. Progress of humanity through history has been very market driven. And another thing I think is the ideology of markets. So for example, I cite a story about a great Persian king, Cyrus the Great who's, you know, he's known for having written the early Declaration of Human Rights. If you go to the UN building, you find Cyrus Scrolls. When Cyrus 2,500 years ago had ideas about human Rights. What people don't write about is Cyrus the Great was a strong believer in free markets and he essentially believed that the government had no role in determining what is efficient exchange on marketplace. The only role of the government was to maintain private property and voluntary contracts.

Yeah, like Ayn Rand would say, just maintain a court system and maintain rule of law and leave everything else to the free market. Interesting, very interesting.

And if you fast forward to this age of Islam, so like this is a bit less than thousand years ago. Again the Middle east has a free market renaissance which actually starts before Islam comes, but then continues under Islam. And it's very interesting I cite what these intellectuals were writing because when free markets comes as a renaissance like thousand years ago in the Middle east, there has to be an intellectual tradition to defend it. When countries move towards capitalism, they have to have intellectuals that defend the model. And it's fascinating because the ideology of free markets that you find in the Middle east like a thousand years ago in the age of Islam is so radical. If you would have it today. For example, they said the public sector can do works like the public sector can build a road, but only if it benefits everybody. If only a certain group benefits from a project automatically they should pay for it.

Right, Right. Well that's what we've got in the United States and probably everywhere where you have big government, we've got the government's been hijacked by special interest. And you know there's that famous quote, and I can't remember the quote or who said it, but it's basically the concept is when the electorate can control doling out benefits to themselves from the public treasury, you know, the end is near. Essentially that's the concept. And, and here we are, right, We've got these certain groups who can vote themselves the perks. In the US we have these public employee unions. It's a disaster. I don't know how you ever recover from this. You know, once these, these golden triangles become entrenched or iron triangles, they as they call them golden triangles, you can't dislodge them anymore. It's just mind boggling really is.

Exactly. And let me take two examples, one from India, one from China. So in China we have confusion. And the ideas of Confucius, this philosophical tradition are still very strong in China. I mean they're not very religious people. Instead they believe in this philosophical tradition of Confucius. Now what is valuable to know is first of all Confucius was a big opponent of heavy taxation. He did not believe in taxation, but More importantly, the second most important Confucian philosopher is Mencius, who comes like 100 years after Confucius. And this guy, his ideas are basically like Reaganized economics. He's a libertarian conservative. He believes that taxes should be low, the government should not intervene in the economy, the government should not intervene in the freedom of contract. There shouldn't be monopolies. You shouldn't tax the marketplace. It's not a good thing to tax the marketplace. Very sophisticated and very free market ideology in one of the most important traditions even today. And then you have Taoism again, a Chinese philosophical tradition. The founder of Taoism, Laozi, is really without doubt the first known libertarian. And he would teach the ancient Chinese as many hairs as the oxen has on his body, as many laws does the government has to plague our lives. Or, you know, you can be afraid of a ferocious tiger, but you should be more afraid of the power of central government. So it really goes deep. And the ideas, they're much more sophisticated than you would think. In India, India also develops free markets on its own. In India, there's a story of the rat merchant. And the story, if I just tell it very quickly, is there's a farmer boy who's the poorest farmer boy you can imagine. And his dad tells him, I have nothing on my farm. Go to the city. We have nothing. So he has zero possessions, he has zero skills. He's young boy, he's starving. He goes to the city, and he overheard the Minister of Finance. The minister of finance tells his friend, if you're a good capitalist, you can take anything and become wealthy. If you understand the marketplace, I tell you, you could start with only a dead rat as a position. So this boy listens to this. He picks up a dead rat, he goes around the city, and everybody laughs at him. Look at that super poor child with a rat. But then he finds a merchant whose cat wants to eat the rat. The merchant says, I'll give you a coin for the rat. So he makes an exchange. He doesn't buy food. He buys a beacon of, like, something to have water in. He goes and fills it with fresh water. And he thinks, where can I sell fresh water? Okay. I go to the fields where they're picking flowers. When it's really hot, he sells the water. They say, you want money? No, give me flowers. He thinks, where do they want flowers? Okay, if I go to that part of the city, the young ladies will want flowers. So he continuously analyzes the marketplace, buys and sells, invests his money, and he makes other people Happy. And ultimately he's a super wealthy merchant. I mean, imagine this is the American dream, this is the Indian dream, the ancient Indian dream of accumulating wealth on the marketplace. And if you read these stories, I reread the stories of the Thousand and One Nights. You know, the 1001 Nights vaguely.

I can't remember it very well, but certainly I, you know, I remember hearing of it.

So it's important because Thousand and One Nights is a collection of the stories of the Arabs, Iranians and Indians. It's a story collection, like roughly a thousand years old, which collects the classical stories of this part of the world. And here's the thing, here's a kicker. The capitalists are often the heroes of these stories. Capitalists are the heroes of the stories and Thousand One Night, whereas capitalists, people who are looking for making profit, people whose goal is to make money, are very, very, very seldom the heroes of Western fiction. I mean, look at Hollywood.

Movie is a villain. Yeah, of course. I mean, we all know that. It's just terrible the way that is portrayed. You know, the big evil capitalist, the greedy scumbag. You know, that's always the way it is, but that's the way it is. You know, what can I.

Well, you could learn from the east, really here I think the Western world could learn from the, not the current Middle east, of course, but from the golden ages of development in the Middle east in India and China, because those were periods with market economy. And that one difference is that culturally I would argue that in Middle East, India and China, culturally, they're still more commercial than Western culture culturally. European culture, centrally is anti market. Americans are a bit more pro market. But look at Hollywood. So this kind of friction between culture and free markets and wealth creation actually still I would argue exists more in the Western world than it does in places like Arab world or Persia or India.

It's very, very interesting view. I, I think most people probably haven't considered that much. So I'm glad you raised it and, and talk to us about that.

We're gonna have to stop the episode right here due to time constraints. The remainder of this interview will be aired next Wednesday on episode 1031. Thank you for listening and happy investing.

Thank you so much for listening. Please be sure to to subscribe so that you don't miss any episodes. Be sure to check out this show's specific website and our general website, hartmanmedia.com for appropriate disclaimers and terms of service. Remember that guest opinions are their own and if you require specific legal or tax advice or advice in any other specialized area, please consult an appropriate professional. And we also very much appreciate you you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you're using and write a review for the show. We would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.