The Zeitgeist Movement: Response to Peter Joseph's Three Questions TZM

I'm the co-founder of Flow, Conscious Capitalism, Peace Through Commerce, Radical Social Entrepreneurs, Startup Cities Institute, and the Kibale Strong Incubator. I'm also the lead author of Be the Solution: How Entrepreneurs and Conscious Capitalists Can Solve All the World's Problems, co-authored with John Mackey, Mohammed Younis, Don Beck, Fernando de Soto, Bryan Johnson, and others. And I'm here to respond to Peter Joseph's invitation. Peter Joseph is the founder of the Zeitgeist Movement, and Peter Joseph has invited people to respond to 3 questions about the market economy. So before I get into responding to those 3 questions, I want to provide some bridge-building background. I'll emphasize commonalities before I emphasize differences. First, on the commonality front, I celebrate the fact that the Zeitgeist Movement is interested in innovating in governance. I think innovations in governance are a good thing. The Startup Cities Institute celebrates and proposes innovations in government and in governance in small zones around the world. And if the Zeitgeist Movement successfully found a small zone or region within which they could experiment with their governance system, more power to them. It doesn't quite seem plausible to me at the abstract level, and I have read the book as well as the movie, seen the video. But it could be that there are workable ideas in there, especially if there was time to iterate. So I'm not opposed to the idea of improving on governance and having many. I blog for a blog called Let a Thousand Nations Bloom, and I'd love to see thousands of small-scale experiments in governance, including that of the Zeitgeist Movement. I actually was working for a period of time with somebody associated or an advocate of the Venus Project, which I understand is a covenant— a cousin of the Zeitgeist Movement. That said, now I'm going to move on and say that another thing that I share with the Zeitgeist Movement and their proposal is I'm a great believer in a basic income or citizen's dividend. Later, when I address the question about different people and how we're going to have interesting jobs for everybody, I do believe we'll have interesting— we can create an economy, a market economy with interesting creative jobs for everyone. That said, I think for a variety of reasons, basic income, citizen's dividend is both just and a good idea. So I am, as is the Zeitgeist Movement, I'm an advocate and supporter of some form of citizen's dividend or basic income. The third commonality which is where we begin to separate, is when I was younger, I was a big fan of Thorstein Veblen and his approach to thinking about economies scientifically. I'm still a big fan of Buckminster Fuller, and both, both Veblen and Buckminster Fuller are influences on Peter Joseph's thought and that of the Zeitgeist Movement. So with all of that in mind, now I'm going to shift a little bit to my background and differences before responding to the three questions. First, when I was— as I said, when I was younger, I was sympathetic to much of the critique of capitalism made by the Zeitgeist Movement. As a consequence, I went to the University of Chicago to see why the Chicago economists believed what they believed and supported free markets when they were so clearly harmful in my perspective. I ended up studying with Gary Becker a professor of economics and sociology at the University of Chicago. He was my dissertation advisor. I worked on a dissertation on ideas and cultures, human capital, with him. Becker later won a Nobel Prize for his work on human capital theory. And Becker was described by Milton Friedman as his best student, and in Becker's obituary— he died a couple years ago— he was described by the New York Times as one of the greatest social scientists of the 20th century. So I've studied rather deeply these issues, and I've also spent the rest of my life since then working on solutions that, while different from those of the Zeitgeist Movement, at least I acknowledge the same kinds of issues as were acknowledged by Peter Joseph and the Zeitgeist Movement. With that in mind, I want to go to the three questions. First question is, and I'm going to read it: Given the market economy requires consumption in order to maintain demand for human employment and further economic growth is needed, is there a structural incentive to reduce resource use, biodiversity loss, the global pollution footprint, and hence assist the ever-increasing need for improved ecological sustainability in the world today? In order to answer this question, I first need to introduce the concept of property rights solutions to tragedy of the commons problems. Essentially all environmental problems are tragedy of the commons problems. When we have many people polluting into the atmosphere, it's not in the self-interest of anyone alone to stop from doing so. Everybody puts out their pollution and cumulatively there's a lot of pollution in the atmosphere if there are no constraints. Constraints on it. Likewise, in terms of using an aquifer, if everybody's using an aquifer, they're apt to pump too much. Or a fishery, if everybody is using— is fishing as much as they can in a fishery because they all want to catch as many fish and make as much money, or even feed themselves, whatever the motive, eventually the fishery will be depleted in the absence of certain conditions. So I will agree with Peter Joseph that in the absence of some kind of change in the incentive structure, that the market economy will ultimately destroy most, possibly all, of the environment. Now, that said, what I see no indication of in the work of Peter Joseph or the Zeitgeist Movement is an understanding of the way in which property rights solutions to these tragedy of the common problems have been successfully implemented in situations that used to be environmental problems are no longer so. I'll give you a couple of examples, and my book, "Be the Solution," goes into considerably more depth on these solutions. It also has academic citations for the facts that I'm going to summarize here somewhat more informally. Um, so property rights solutions to tragedy of the common problems. I'll take a fishery example to start with. So one way to keep fishermen and fishing companies from overfishing is to give each of them a property right in the fishery. For instance, If your family and my family have both been fishing forever, and I usually catch one-third of the fish and you usually catch two-thirds of the fish, instead of going out there and trying to get as many fish as possible, we could simply come to an agreement where I get one-third, you get two-thirds of whatever the catch is, and that's property, right, that could be bought and sold so that when I die, if I'm careful and preserve the fishery, and when you die and you want to preserve the fishery, the value of our stake in the fishery is more valuable the more sustainable we make the fishery. So we have an incentive to ensure that the fishery is sustainable. That's very different from a situation where everybody gets as much as they can. So there are various systems of individual fishing quotas or catch shares, they go by different names, which have been successfully implemented in fisheries. And under the right conditions, sometimes it takes a bit of tweaking, fisheries that were once unsustainable become sustainable by means of these approaches. There's fisheries in Alaska and Newfoundland that were once on a collision course with unsustainability, and then they now become preserved and are sustainable. Likewise, New Zealand There are dozens, probably hundreds of fisheries around the world where these fishing quota systems have been implemented and have changed the situation from unsustainable to sustainable, and actually these are consistent with free market capitalism once the fishermen or fishing corporations have a property right in the fishery. A little bit trickier in deep ocean fisheries but there— and some technological problems would need to be solved, but there are people working on property rights solutions for fisheries, even in deep ocean fisheries. To go to a different example, if we look at one of the great victories in environmental property rights was the sulfur dioxide regulation, sulfur dioxide property rights in the early 1990s. In the 1980s, people were very concerned that acid rain would be destroying forests and lakes really around the world, but certainly industrialized countries. Coal-fired power plants were burning off smokestacks of lots of sulfur dioxide. It would interact with the environment to produce acid rain, and potentially a very serious problem was taking place. In the late— in the early 1990s, a bipartisan— in the United States, a bipartisan group got together and agreed to create property rights in sulfur dioxide, such that coal companies could not only— not only had permission to emit a certain amount of sulfur dioxide, but they could buy and sell their permits, and environmental groups could buy up their permits as well. And what happened after they installed the property rights in sulfur dioxide emissions so that— this is also called a cap-and-trade system— it became in their financial interest to decrease emissions, because if they could install technology, scrubbing technology that reduced sulfur dioxide emissions, they could then sell their permit to a coal-fired plant that was not as successful for whatever reason. Maybe they had dirtier coal in reducing emissions. And now the company that was able to sell off its permits because it had better technology was more profitable. And this created a market in innovative scrubbers and sulfur dioxide technology. And as a consequence, the cost of reducing sulfur dioxide emissions became much cheaper than anybody imagined as companies— as for-profit companies maximized profits and by doing so invested in increasingly efficient technology to reduce sulfur dioxide emissions. The other piece to this is then environmental groups started buying up the sulfur— unused sulfur dioxide emissions permits to reduce the total amount of sulfur dioxide emitting. So the result after a couple of decades was that for-profit corporations drove the cycle of innovation that dramatically reduced the sulfur dioxide emissions, and environmental groups bought up the remaining permits so that today these companies are actually spending much less to produce much cleaner air than they would have with technology as of early 1990s. It's a spectacular success. Read about it, great stuff. It shows that when property rights solutions are applied successfully, we can provide— for-profit companies can actually drive innovations that ultimately reduce pollution. Um, third example, water. Uh, many people are very concerned, rightly so, about the, um, aquifers being over-pumped and thereby creating even potentially wars, various water crises. But again, that's because there are not property rights in the aquifers. If everybody had, or if there was one entity— there are different ways to do this And it gets complex. But if there were either individuals had proportionate rights and/or— not and/or— or an entity, for-profit or nonprofit or a trust held the rights, water rights to the aquifer, then that entity would have an interest in pricing the water appropriately so that the aquifers were not overpumped. Turns out the municipal— well, governments around the world underprice water. Because they want to sell water cheaply to consumers. Politicians want cheap water to consumers, cheap water to agriculture, cheap water industry, and as a consequence, most places around the world, um, water aquifers are being depleted at an unsustainable rate. The solution again is to create some kind of property right, a trust, a for-profit nonprofit, or a coalition of water users that gives them an incentive to preserve water. Once that's And again, there are for-profit situations where you get the profit motive aligned with preserving the aquifer and the problem is solved. So I was actually disappointed in the Zeitgeist Movement book because at no point did Peter Joseph recognize the existence of property rights solutions. I see property rights solutions that internalize externalities as the path to an environmentally sustainable future, and one in which once we get the incentives right, incentives right, for-profit capitalism can actually accelerate innovation on behalf of the environment. Separately from the whole long-term issue of internalizing externalities through property rights solutions, it's worth emphasizing that in many ways The environment is got— getting better despite what you hear. I want to do a plug here for Matt Ridley's The Rational Optimist, great book. Um, Ridley does not address property rights solutions as well as I'd like, but nonetheless he provides a lot of the evidence that in many ways environmental trends are getting better. I'll, I'll just point out one that's not as well known as it should be. In developed countries, the forest cover is now greater than it was 100 years ago. When, say, in the United States we were at peak agricultural population early in the 20th century, the deforestation was also at its peak. You know, we had all those pioneers coming and chopping down trees in order to grow food, but since the early 20th century, millions of formerly rural residents have moved to urban areas, we now produce a lot more food on a lot less land, and as a consequence, millions of acres of forests have come back so that we are now seeing an increase in forest cover in the U.S. and Europe relative to 100 years ago. Deforestation is a very serious problem in developing nations, but there's every reason to believe that as those nations develop and urbanize, and every developing nation is rapidly urbanizing, then as well we will see an increase in forest cover relative to peak deforestation. So a lot of these trends, when you look at the long haul, they are net positive. And with property rights solutions, there's every reason to believe that capitalism will create— will in fact be consistent with an environmentally sustainable sustainable future. It will take decades, decades to implement adequate property rights solutions. None of this happens quickly, but compared to the scale of change to which the Zeitgeist Movement aspires, creating property rights solutions in hundreds of thousands of ecosystems around the world is not such a challenge compared to what Zeitgeist is trying to do. So with that, I'm going to switch to the third question, actually. So Joseph asks three questions, but because of the nature of my answers, it will make more sense for me to answer question number one, which I've done, then go to question number three, and then recur— return to question number two. So now I'm going to read question number three: In an economic system which inherently generates class stratification, and overall inequity. How can the effects of structural violence, a phenomenon noted by public health researchers to kill well over 18 million a year, generating a vast range of systemic detriments such as behavioral, emotional, and physical disorders, be minimized or even removed as an effect? Okay, first I want to point out a major empirical inaccuracy that pervades both the video and the book. So there are two really different kinds of poverty in the world. On the one hand, there is developing world poverty, the 5 to 6 billion global poor, and on the other hand, there are the so-called poor in the developed world, and they're very different situations, very different conditions, and I want to deal with them one at a time. So with respect to the developing world poor, something that was also unapparent in Peter Joseph's work is a complete lack of awareness of the dramatic drop in global poverty in the last 20 years. People do not— many people are not aware that more than 1 billion people have escaped poverty the last 20 years. It's been the fastest escape— fastest mass escape from global poverty in world history. It's one of the greatest moral victories in world history. You know, the end of slavery, which is not completely gone, but still the shift from slavery is acceptable to unacceptable and dramatic decrease in slavery around the world, it has been a moral victory, but But the dramatic reduction in poverty in the last 50 years, but especially the last 20 years, has been one of the world's greatest moral victories. And that moral victory is unambiguously due to free market capitalism. So I'll give you a few details and we'll— I'll explain where we stand on global poverty today. China is the source of the biggest numbers. In China, the average erbe— urban wage, the average wage of an urban worker in China, has gone up almost sixfold in the last 20 years. 20 years ago, it was about $1,000 per person; now it's almost $6,000 per person. And that— there are about 700 million urban human beings in China, that's families with children, who have benefited from the sixfold sixfold increase in urban wages. Rural wages have gone up as well, but not nearly as dramatically. But for 700 million people to benefit from a sixfold increase in household income, just mind-boggling. Mind-boggling. My wife is Senegalese, west coast of Africa. Average GDP in her country is $1,000 per person, roughly the same across most of sub-Saharan Africa. They would be so happy, so grateful if their income increased 20%, 30%, 50%. If their income doubled, it would be increasing 200%. 6 times. Mind-boggling. A charity, a generous charity can't raise, you know, a million people to a doubled income. It's just— there's not that much money. If the United States had given, including all of our wealthiest people, if all of the wealth of the United States had been given to Chinese citizens 20 years ago, that would not be as large a positive impact as the sixfold increase for 600 million people. It's a matter of wealth creation. The manufacturing in China has resulted in massive wealth creation. Nuts and bolts sort of things. Many people despise consumer— many anti-capitalists despise consumer goods. I grew up poor. I don't despise consumer goods. I grew up— there were times when I got a blanket for Christmas, or I couldn't afford new pants, so my mother would sew extensions onto my pants that looked dorky, but that's— we didn't have any money. When the washing machine broke and we had to wash clothes by hand, it was a nightmare. When the heat didn't work in northern Minnesota. It was freezing. It was horrible. Basic consumer goods make life better. And in China and India and in many other countries around the world, in the last 20 years, poor families have been able to buy their first bicycle, their first refrigerator, their first washing machine, their first blender, their first wristwatch, their first cell phone, their first television. Previously poor families that were in many cases at subsistence level have now become, by some standards, middle-class families who are using consumer goods to make their lives better. Um, this is not to be trivialized by any means. It is an important fact. The next piece I want to emphasize is that not only has free market capitalism brought a billion people out of poverty in the last 20 years. The reason that it hasn't brought a lot more out of poverty is because poor countries are poor because of an absence of free markets, an absence of economic freedom. The Fraser Institute, which produces annual studies of economic freedom, shows that the— and this is based on third-party objective data— that developing nations are largely overregulated, they lack clear property rights, they lack rule of law, and this is why they're poor. Wealthy countries have a lot of economic freedom, poor countries do not. The 30 countries— most poorly ranked countries on the Economic Freedom Index are mostly African, along with Myanmar and Venezuela and a couple of other basket cases. Um, my wife's country of Senegal is one of the most highly regulated countries on earth. Again, this is typical of Africa. Peter Joseph at points talks about how, oh, what's a free market, what's not free, as if it was hard to discern. It's not. It's not. The Congo, one of the poorest nations on earth, it requires 17 documents to import or export a good. In Singapore, 2 documents. Is it more free if you can get a document in or out of a country by filling out 2 documents rather than 17? I would say so. It's not too unambiguous. They're all government offices. When you have 17 documents to import or export, there's 17 opportunities for somebody to try to take a bribe. It's less free. Different example: in Denmark, you can open up a business in one day. In much of, say, in Burundi, it can take months to open up a legal business for somebody with modest income. And that's because they have to get all sorts of permits from all sorts of government offices. Do we— is it more free if you can just walk into an office and boom, get something going in your legal business? Yes. You know, in the US you can do everything online in a matter of minutes. Different example: notary publics. In most developing nations, all developing nations that were civil law countries, that is former colonies of Spain, France, or Portugal, notary publics are lawyers who ask for $500 to $1,000 to notarize each document. Business documents in these countries still need to be notarized, but from that fact alone, only upper middle class or upper class people can afford to do illegal business. So as a consequence, um, Hernando de Soto, whose Mystery of Capital is a book that's absolutely mandatory reading De Soto estimates that when we do business with Latin America, we're really only able to do business— we, America, through the global system— with the 8% elites who are actually able to do legal business. Everybody else, the poor person with the taco stand or a seafood restaurant on the beach, they may be business people, but they do not have legal businesses because they can't afford to legalize their business. That means they have no police protection. They're black market, grey market business. The police can harass them as much as they want. They can't get bank loans, they can't get insurance, they have no protection, they can't build equity, they can't legally have their children inherit their business. It's basically as precarious as is the drug business. Um, as a consequence, these people are often abused by the authorities because they have no legal rights. One famous example of this is that in Tunisia, when a street seller had his scales taken away from him for the umpteenth time by a bureaucrat who wanted to get paid off before he would give him the scales to weigh fruits and vegetables again. When this happened, this man, in great frustration, immolated himself. He lit himself on fire, and that was launch of the Arab Spring. The Arab Spring was caused by the excessive regulation and bureaucratic harassment of a street seller. One of the biggest moral issues of the time is the lack of free markets in developing nations. So anytime Peter Joseph or anybody, any anti-capitalist, fails to understand that excessive regulation is the leading cause of poverty, along with weak property rights and weak rule of law. These are free market institutions. When anybody blames capitalism for poverty, I'm really frustrated by the ignorance that they show. There's a rumor among the anti-capitalists that, for instance, the famous Savar building collapse in Bangladesh where more than 1,000 people died was due to unregulated capitalism. That too is false. It turns out that Bangladeshi labor law has been endorsed by the International Labor Organization prior to this building collapse. Uh, the building codes of Bangladesh were, um, recommended by a Japanese inspection that came and compared their Bangladeshi building codes to those of Japan. The regulations are there. It's not about lack of regulation. Meanwhile, Bangladesh is one of the most difficult countries on earth in which to create a business. Huge legal obstacles to creating business. No, the fact is when you have a few elites and millions of poor people, the elites abuse the poor people and are corrupt. By making it— by removing the barriers to entry so that millions, hundreds of millions of poor entrepreneurs could create small and medium-sized legal businesses, that's the path to prosperity everywhere, everywhere around the world. And because there's a lack of economic freedom in developing nations is why they're poor. So that was a separate rant simply because insofar as Peter Joseph believes that many of the crises in poor countries are due to capitalism, he simply does not understand what's going on. Relatedly, violence. There is a huge literature on ways in which economic freedom is more important to peace than is democracy. So again, the Arab Spring would not have happened if people had had adequate economic freedom. Economic freedom correlates with economic growth, the growth of small and medium-sized enterprises that create most of the jobs, and that's the path to prosperity and opportunity that reduces violence around the world. Palestine is one of, again, the most heavily regulated, worst property rights in the world. One of the reasons the Palestinians are in such a horrible circumstance is because it's impossible to create entrepreneurial capitalism there. There are tiny bits and pieces But relative to Denmark or Sweden, nothing. I often say, because the left loves, uh, Scandinavia, that— but— and they don't realize that Scandinavia is among the most free market countries on Earth, that if only the entire world was as free market as Scandinavia, we would have no more poverty and no more war on Earth, pretty much. So with all that said, uh, now that we've addressed the path to peace and prosperity through entrepreneurial capitalism in developing nations. One other factoid, I can't resist one more. In 1960, Hong Kong and Singapore were two of the poorest countries on Earth. They have been the most economically free ever since, and now they are two of the most prosperous jurisdictions on Earth. Any country that has sustained economic freedom becomes prosperous over decades. We just need to help everybody get there. Okay, so now let's go to the other concerns. The second part, as it were, of question 3 is the— what Peter Joseph calls structural violence. I've addressed his false premise on the developing world issue. With respect to developed world poverty, I want to clarify a few facts and then go into my solution. First, to take the United States: the United States people, the average person below the poverty line in the United States Lives in a house that is larger, has more square feet than does the average Parisian. Not more than the average Parisian under the poverty line, the average Parisian. The average person under the poverty line in the United States is wealthy not only by developing world standards but in many respects by European standards. The average person below the poverty line in the United States is more likely to have a car, a TV set, a refrigerator, air conditioning, a microwave, a computer, cell phone, a washing machine. There are all sorts of common consumer goods that are standard even in the homes of most of the poor in the United States that are not ubiquitous in Europe. It doesn't mean there isn't a problem with poverty, But still it's worth noting that developing— developed world poor, in particular in the United States, are at a very high level by global and historical standards. The other thing, because people are often shocked by the statistics— it's government data, nobody questions the data— is that what people don't realize is that many of the people below the poverty line in the U.S. are, for instance, retired people who may have very low incomes but who are living in a substantial house full of consumer goods. They may have to budget to buy groceries, and healthcare may be a concern, but they live in what is usually considered comfort. There are also college students who are still low earners or between gigs or at home, traveling. There are various reasons why college students often have very low incomes but still are comfortable by global and historical standards. And sometimes there are people, you know, an entrepreneur or somebody unemployed for a period who has low income but still has more comforts than most Europeans. That's where this average person below the poverty line is not what most of us think of when we think of the American poor. There are people, typically the chronic poor in the US, 5 years or more below the poverty line, where things are more serious, and there— that's where most of the serious issues with poverty in the United States the United States are. And when Peter Joseph is talking about the very poor health statistics, there's a real serious issue in the United States with the chronically poor, and we urgently need to do whatever we can to help them. That said, again, Peter Joseph wants to believe it's about inequality. Give one anecdote that shows that it's not about inequality alone, and really not about inequality. What not everybody's aware of is the— although health researchers know about this— is the Hispanic health paradox, where when people come, say, from Mexico, Central America, most Latin American countries, and immigrate to the U.S., for the first number of years, and usually for most of the first generation, at a given level of socioeconomics, they have much better health than does the average Euro-American or African-American or Native American. The second or third generation then reverts towards the mean, and they once again have the poor health characteristics that are typical of people in their socioeconomic demographic. But until they assimilate, they actually are remarkably healthy. Little-known fact, um, Mexican, Mexican Mexican American women in LA are among the most long-lived people on Earth. Many people know the Japanese, in particular Japanese women, uh, have an average lifespan today of almost 90 years. Mexican American women in LA are right there with them. Um, people are not entirely sure of what causes the Hispanic Health Paradox. There are a couple of hypotheses. One is diet. The healthy diets, again, traditional Mexican, Central American diets of rice and beans and a few veggies, a little bit of meat, is actually a pretty healthy diet. It's also really cheap. And it's only when they start consuming sodas and fast food that their health collapses and becomes typical of that of low-income Americans. So it could be that dietary issue. Many Many researchers believe that plays a major role. It could also have to do with the religion and family structure. There's a lot of evidence showing that tightly— people in tightly knit communities are healthier than are those in more isolation. Relatedly, there's evidence that people who live lives of meaning and purpose are healthier than those who lack it. So in addition to the diet issue, it could well be that while they are connected to the traditional culture, and perhaps the Catholic Church deserves credit as well, they are healthier than they would be at their socioeconomic demographic. But that point alone is evidence that it's not simply a matter of economic inequality, not simply a matter of poverty. With the right culture, people can be relatively healthy and well regardless of income and socioeconomic demographics. I say this again as somebody who came from a very low-income home, and I've seen different people in my family— people with good habits and attitudes become healthy and well and successful. People with very poor habits and attitudes have very difficult lives and experience most of the dysfunctions typical of inner-city Americans. I've got siblings and cousins that have had just about every problem you can name. So contra to Peter Joseph's hypothesis of structural violence. I believe the real issue is how can we help all people of all socioeconomic demographics have the kind of healthy culture and attitudes that are typical of low-income but healthy people from around the world. Immigrants from around the world, not just Latin America, come to the U.S. and find this a land of plenty, and very often it's because of what they bring inside of themselves. Again, it's not about income. So I want to shift from this to a bridge before I go to the second question, and the bridge is going to do— have to do with how we can help people of all socioeconomic demographics create a culture, better culture. Most of my life I've been an educator. I started out as a public school reformer, then I created a series of private schools and a charter school. Angel Fire at Moreno Valley High School in Angel Fire, New Mexico, which I co-founded, was ranked the 36th best public high school in its third year of operation. I'm currently co-founder of the Cubelli Strong Incubator, an entrepreneurial private school where kids learn how to create conscious entrepreneur— entrepreneurial enterprises. I've had kids at all my schools become much happier, much more well I've had kids say that it was the happiest school day ever, the happiest day of their life. A girl who'd been to 13 schools said it was the best school she'd ever been at. I've had many students who were clinically depressed and/or suicidal who have come to my schools and been happy and well. Children who have been on ADHD medication who no longer needed the medication when they came to my schools. As a consequence of this experience as an educator, I believe that government schooling is one of the one of the greatest causes of dysfunction. I think normal human beings, when they raise their children, do everything they can, including putting them in environments where they can learn healthy habits and attitudes. Indigenous cultures around the world allow their children both to play as well as to learn the responsibilities of mature adults so that they could become functioning members of those tribes. And we didn't see the kind of dysfunction, the adolescent dysfunction that's typical in the United States today. 16% of American teens are on psychotropic medications, legal prescribed ADHD, antidepressants, etc. I think that's a catastrophe when we're medicating 16%. When— why are they so sick? And I would say they're, they're, as it were, diagnosed by the establishment in part because Big Pharma does it. Again, I'm happy to bash certain capitalist companies when they're guilty, But for me, the big cause is because we have government schools that are soulless and rip the heart out of human beings. I believe the big— the most important thing we can do is to allow people to create the kind of schools based on love, compassion, meaning, and purpose. And there's a lot of research that adolescents with lives of meaning and purpose are much less likely to become involved in drugs and gangs and addictions and teen pregnancies, etc. We urgently need to get government out of the schooling system and allow people with citizens dividends or whatever to create schools based on love and meaning. And for me, that is entrepreneurial capitalism. Again, I'm private schools. Peter Joseph thinks it's all about making profit. No, the shift to conscious capitalism, you know, I worked with John Mackey off who with Raj Sisodia wrote Conscious Capitalism, the book. Um, and I'm going to do this, uh, after— I'm going to get into this after I read the second question. So to recap, um, the first question on environmental concerns, I pointed out that with property rights solutions to environmental problems, we shift the dynamic of free market capitalism so that for-profit companies have incentive to innovate to reduce the amount they pollute. It's a long, complex process to implement adequate property rights solutions, but we will do so over the next few decades. And as we do so, environmental problems will increasingly be solved as entrepreneurial capitalism continues to innovate. With respect to Peter Joseph's concern about structural violence, I pointed out that he's simply misguided when he believes that global capitalism is responsible for global poverty. It's precisely the reverse. Anytime global capitalism is allowed to operate within a condition of free market capitalism, economic freedom, then countries rapidly become prosperous and rapidly become more peaceful. So free market capitalism is the cure, not the cause, of developing world issues. That are known as poverty today. With respect to the developed world, the number one thing is to liberate entrepreneurial capitalism in the world of education, and we'll talk soon about healthcare and so forth, so that we can create healthier opportunities for young people. I would also add we need to eliminate occupational licensure, which prevents people from— people without expensive educations from doing what they want to do in their life. Now let's— let me read the second of Peter Joseph's question, and I'll get into this. In an economic system where companies seek to limit their production costs, cost efficiency, in order to maximize profits and remain competitive against other producers, what structural incentive exists to keep human beings employed in the wake of an emerging technological condition where the majority of jobs can now be done more cheaply and effectively by machine automation. Okay, before talking about the issue of automation, first I have to address a huge misunderstanding that Peter Joseph has. It's a common one, so it's not typical to him. First of all, there is no thing called capitalism. There's a reality which we interpret, and there is no doctrine of free market capitalism that says it has to be profit maximization. There are various people who push back against that. There are economists who talk that way, and I have as much of a problem with them as Peter Joseph does. But the problem is not with what's going on, it's with a certain mainstream approach to economics. But surprisingly, that mainstream approach is not the most free market one. Mises and Hayek— and Joseph mentions allude, big one, Mises. Mises and Hayek, the founders, the most prominent members of the Austrian School of Economics, were perfectly clear that what they're talking about is purpose. It's not about maximizing profit, it's just about purpose. So properly understood, the free enterprise system is a purpose-driven system, and whether or not an entity happens to be nonprofit or for-profit or for-benefit or meaning-based for-profit, whatever. There's nothing, absolutely nothing intrinsic to capitalism that says it has to be based on maximization of profits. Again, conscious capitalism is an entire movement where surprisingly they document the extent to which very often purpose-driven companies like REI, Whole Foods, Patagonia, Southwest Airlines, Panera Bread, and Nordstrom's, Container Store, many more, the purpose-driven companies often outperform other companies with respect to profitability. And it sounds like a subtle distinction, but the point is that if you do something that's meaningful, you're probably going to do a better job than if you're merely maximizing profits. I'm going to shift a little bit to Maslow's hierarchy. I think that Maslow's hierarchy is fundamental to understanding the 20th, 21st century. Maslow had at the bottom of the hierarchy basic needs, and beyond basic needs we get to status needs, and then at the very top, self-realization. I think that as the developed world is becoming increasingly prosperous, we're seeing more and more people, millions of people rapidly moving up Maslow's hierarchy. There's most Americans, including, as I've mentioned before, most Americans below the poverty line have their basic needs met. Many Americans are still at the phase of status seeking, and a lot of the wasteful consumption that one sees in capitalism is due to this status stage. Um, I despise Donald Trump as one of the crassest status-seeking idiots out there, but at the top of Maslow's hierarchy Many people grow up emotionally and are focused on self-actualization, meaning and purpose, and those people are driving the transformation that is behind Conscious Capitalism. The conscious consumer movement is huge. There are estimates that one-third of American consumers use meaning and purpose in at least some of their consumer decisions. The conscious employee movement is even greater. In many cases, meaning-based companies find it much easier to attract great talent than do simply profit-maximizing companies. It's now become disrespectful— many people don't want to work for oil companies, they'd much rather work for a green company. So there's this internal dynamic separate from the property rights solutions, but basically more than the anecdotes we've seen now, I think that Maslow is absolutely right. More and more of us are moving up Maslow's hierarchy, and as we do so, we don't want more stuff. We want meaning and purpose. We want quality of life. We want self-actualization. And as that is taking place, that will drive a further transformation in free market capitalism. Now I'm ready to talk about the automation issue. A lot of, a lot of, you ink has been spilled on the automation issue and know that Peter Joseph is by no means alone in worrying about it. In order to understand how I see this issue taking place, I'm going to introduce the concept of the experience economy, where what people ultimately want to buy is not things. They don't want goods or services, they want an experience. What people— Aristotle— people ultimately want happiness. That's what everyone wants. And yes, right now many people are not— their lives are not structured so they can seek happiness adequately. But the next phase of capitalism, which can take place in a properly structured free market, is towards a happiness-based economy. So how do we get there? My favorite definition of an entrepreneur is someone who stays awake at night thinking about what sucks and how to fix it. And what's interesting about that is one can see all sorts of little examples. Some of my favorite little examples, let's start with alarm clocks. Many of us grew up with alarm clocks that were meh, meh, meh, horrible. I hate waking up with alarm clocks. But now they have alarm clocks where, among other things, you can have a light gently make your room brighter, or music gradually become louder, or a scent filling your room with sweet smells. You can have an alarm clock that brews coffee next to your bed to wake you up, or even, even an alarm clock that cooks bacon next to your bed. Innovators have created a huge range of ways to wake up in the morning that are more pleasant. Very different example: I know an entrepreneur who wants to create a seat pad so that when you're flying in coach class and your butt hurts, you have a memory foam, like memory foam pillows, that memorizes exactly how to, how to make your butt comfortable. And you use this on coach class. Trivial example, but it makes you feel better. Different example, retail and restaurants are increasingly becoming experience businesses. People don't just go to a store to buy things. I often talk about Whole Foods' museum-quality produce sections. Safeway— I grew up going to Safeway with 4 fluorescent lights and ugliness and buzzing, and it was really not a pleasant experience. Whole Foods— forget about the organic food— Whole Foods is a beautiful experience. It smells good, the lighting is nice, it's pleasant, it's soothing. Retailers such as Anthropologie create a nice environment. Restaurants often want to specialize in a great experience beyond the food. We're seeing museums start putting in experiences rather than just look at something through glass. Increasingly, what people realize is they need to offer other human beings better experiences. There are still things like commuting that are terrible. On the other hand, there's an experience-based bus now in San Francisco where they have basically replicated a high-end coffee shop where people can sit comfortably on couches and chairs and read their newspapers, have a cup of coffee, have great internet, and so instead of riding a bus being an uncomfortable, noisy, unpleasant experience, now the whole bus experience has been transformed to become more pleasant. So increasingly we'll see an experience economy develop. In the realm of education, to go back to my specialty, as I said, I've created schools where kids love going there. I went to public schools, I found schooling to be the most boring and cruel years of my life. I was a good student, so it wasn't humiliating, but many students are humiliated day in, day out by getting poor grades and being put on the spot for this and that. I see our existing school system as abusive. There are great teachers, heroic teachers in public schools, great principals, but on balance, most of the time, for most students, it's just abusive. Why are we doing this to kids? We need to allow entrepreneurs to create schooling systems that are wonderful, that are magical, that are delightful, that create good habits, that help young people while they're teens move up Maslow's hierarchy. I want to create schools where most students are self-actualized before they go to college, so we don't have all of these, uh, people— I see most people causing most of the problems coming out of a place of misery and need the status need, if it's not the physical need, and we need to launch them by means of beautiful schooling experiences. This is what I do for a living, day in, day out. I can do it, millions of other people could do it. We could create healthy, positive experiences for kids to develop world-class skills without the misery associated with schooling. We just need to get government out of it. Similarly, healthcare. I'll go to a specific example. Birthing is a really important life event, shouldn't need to be said. With— I have two grown children. When my first child was born, it was in a hospital that claimed they'd have a natural birth, but it was a high-tech medical aggressive invasive approach by the medical establishment. The second, my second child, was born with a midwife in a very simple, beautiful environment because my wife at the time couldn't stand to go through a hospital experience again. We need, and I'm not going to say that you should be this way or that way, but I predict there will be a growing demand for beautiful experiences in healthcare and dentistry. Why are dentist's office so boring and unpleasant? We need to have beautiful experiences in dentistry. Increasingly, the economy is going to go to high quality experiences. And the reason this relates back to automation is while we still will be building things, a lot of stuff needs to be built. Do a riff on that. Um, I'm a great— I'm a fan of going to Mars and the moon. It's going to take a lot of man-hours. Automation is not going to do that solo. As we do bigger and more projects, we'll, we'll need people developing this. The sea— I'm a big fan of seasteading. As we create new colonies on the sea, huge technological things and all sorts of innovations to create. I love eco-resorts. We need to have magical eco-resorts that preserve habitats of animals while allowing human beings to vacation in beautiful places and experience nature in positive ways. There's so many things that need to be built. All of that creation, it's ultimately creation, even if robots do the building, if a lot is automated, there are so many things to be created to create wonderful experiences for us. But to go beyond the building of stuff, the real experience creation is fundamentally human. My specialty as an educator myself is Socratic dialogue, thinking and talking, asking questions. I don't see computers replacing me ever. Most people love talking to other people. There is a human side to bodywork, there's a human side to healthcare, there's a There's a human side to therapy, there's a human side to education, there's a human side to retail. Yes, you can have vending machines, but the high-end restaurants, they want high-touch and human interaction. Human beings who become ever better at delighting other human beings, that's the direction that entrepreneurial capitalism will go. And as we automate more, as we have more robots, Hurrah, everything will get cheaper and better. Let me introduce you to Strong's Law. Strong's Law is that under properly structured entrepreneurial capitalism, everything becomes faster, better, cheaper, and more nuanced in terms of meeting the needs of human beings. By more nuanced, as an educator, I'm all about individualizing instruction. As healthcare becomes more personal, and it needs a lot less restrictions from government to do this, it will become a lot more personal. Go to law. In the Startup Cities movement, one of the things we're talking about is entrepreneurial creation of law and governance. And when we do that, right now, many companies prefer private arbitration to government courts because government courts are slow, ineffective, bureaucratic, corrupt often. They would rather have private arbitrators who have great reputations for settling disputes fairly than government courts. We will see much more sensitive security. Nordstrom— the security forces at Nordstrom's and Whole Foods would never abuse people the way the security forces of Ferguson and Baltimore have had. These are just tip of the iceberg indications. Once we allow for the entrepreneurial creation of better experiences through conscious capitalism, and it becomes increasingly ubiquitous, then we'll understand not only did government cause poverty and war in the 20th century by preventing entrepreneurs around the world from doing their thing, likewise government is preventing the creation of better education, better healthcare, better law, better security, better governance. Hey, if the Zeitgeist Movement can create a better form of governance, Go for it! Go for it! I love it! We need to realize that once we allow entrepreneurs in a properly structured free market system to solve problems, everything will get better. And ultimately we will see a world in which all of us wake up day in, day out working creatively to provide ever richer, more meaningful, and more possible experiences for our fellow human beings. We need to unleash the genius of 7 going on 8 billion creative human beings, so that we can all work together to solve our problems. And it is a pity that despite the good intentions of Peter Joseph and the Zeitgeist Movement, they do not understand the institutional barriers that are preventing entrepreneurial capitalism from achieving greatness. Inherent in it. So once more, for a lot more detail, please read Be the Solution: How Entrepreneurs and Conscious Capitalists Can Solve All the World's Problems. And go ahead and follow me at Radical Social Entrepreneurs, or I'm on Facebook, Michael Strong. Let's create a conversation about how we can create a much, much better world. While understanding exactly how to do so through best practices in institutional design and purpose-driven conscious capitalism as we become self-actualized human beings committed to improving the lives of our fellow human beings. Thank you. Michael Strawn. Good night.