Welcome to Keith Knight. Don't tread on anyone in the Libertarian Institute. This is a section from Why It's OK to Mind Your Own Business. On many measures, right now is the best time to be alive in human history. Look back just 200 years and 94% of the world's population was living in extreme poverty, the inflation adjusted equivalent of less than $2.00 a day in purchasing power. There was nothing remarkable about the human condition addition 200 years ago. We had always been poor.
I got to say some of those cathedrals were absolutely remarkable. What is remarkable is the human condition now. Today, less than 10% of all humans live in extreme poverty. Over the same period, the literacy rate jumped from 12% to 86 percent. 43% of people died before their 5th birthday in 1820. Now less than 4% do. Our world has improved so drastically because in the past 200 years we have enjoyed an unprecedented explosion in economic growth.
If you're reading this book, you might not agree, but you're probably fabulously wealthy compared to almost every other human who has ever lived. The news is not all good, of course, and we don't intend or need to defend every part of the story that got us here. 1 unfortunate feature of this sudden emergence of affluence is that some regions of the world haven't developed as quickly as others and so have been left
behind. It is popular in some circles to blame this disparity, which scholars call the Great Divergent, on colonialism or other forms of exploitation of developing countries by rich Western ones. But wealthy societies did not get rich by extracting their wealth from elsewhere. Rather, they did so by becoming more productive and thus creating more wealth. I should look into the history of how this colonialism caused
poverty in 3rd world countries. I guess the theory is that places like Africa had like airplanes and really big buildings and they had cell phones and they had computers and they had printers and they had air conditioning and they had plumbing systems and really tall, beautiful buildings. And then the Europeans went over there, stole all that stuff, brought it back to Europe and America and you're and Africa
has not rebuilt since. If it's just the natural resources that were stolen, well, the lesson could be let's stop violating the non aggression principle and apply that to governments today. But if the claim is that the natural resources were stolen, that doesn't explain how those resources existed since The Big Bang occurred. You actually need intellect and human capital.
If I gave you a barrel of oil in the year 1700, you wouldn't know what to do with it. But with refinery methods, you can get it to run a car and get people across the country. So even the resource, the extraction doesn't address the human capital. The division of Labor, the importance of free trade, the importance of competition and free market innovation book continues.
We emphasize this point because for purposes of seeing what good has been done and bringing us to our contemporary condition, it is important to understand that the rich did not simply take what they have from the poor. The world economy is a positive sum game, not a 0 sum game. The pie got bigger, much bigger again. Did the poor have yachts and mansions and then they were stolen or, well, their labor was exploited? As if there weren't people engaged in slavery in the days of Hammurabi.
Hammurabi's code, the code of Urnamu, found thousands of years ago in ancient Mesopotamia, Labor exploitation and some people confiscating wealth from others, has existed since the beginning of time. But it's, you know, favoring innovation, supporting free trade, respecting private property, engaging in voluntary contracts. That's actually how places like Singapore went from completely impoverished when, you know, my mom was born.
And today, they're one of the wealthiest countries on the planet per capita. Now, how has this process of enrichment happened, and what does it have to do with meaning? Well, as economist Deirdre McCluskey writes, Once Upon a time we were all poor. Then capitalism flourished, and now, as a result, we're rich. Of course, capitalism is only
part of the story. A lot of other pieces of a complex puzzle had to fit together just right for the Industrial Revolution to happen and spark an explosion of a economic growth. But capitalism is the element that allows us to explain this example of how people can do a lot of good without meaning well. Very important lesson when you look at someone like Cornelius Vanderbilt who drastically improved people's access to steamship travel and travel by railroad.
People used to not be able to go far distances, or the few people who could were kings and Queens. But Vanderbilt drastically lowered the price of steamship travel from 7 dollars to six cents. Not because he was a nice guy, but because he knew that he wanted to make more money so he created a product that more people could buy.
Amazon does not only sell products to the 1%, they sell to the masses so they can make more money, which gives the average person access to more products and services they ever could have imagined. Same with Sam Walton in creating Walmart. More job opportunities and more products and services that people have access to. Andrew Carnegie drastically lowered the cost of steel, not because he was such a kind, virtuous person, because that's where the money was. He had competitors.
He couldn't just charge a trillion dollars per ounce of silver. John D Rockefeller drastically lowered the cost of oil production and the ability for people to work and exchange the dollars they earn at work for oil, referred to by Marion TUPE as Time Price, this is a much more effective way to measure an economy's wealth as opposed to
gross domestic product. What TUPE does is he basically says, let's look at the number of hours a person had to work to achieve access to one night at a motel in 191019401990 and 2024. How many hours of work did you have to do to access a movie? When I was younger, movies were just something you would go to at the theater. You'd have to save up and spend two or three or four hours of Labor on watching a movie. Now there's like 10 billion movies for free on YouTube.
You have access to more content at 0 cost, 0 monetary cost then certainly better than anything the mass murdering government provides. But capitalism is the element that allows us to explain this example of how people can do a lot of good without meaning well.
Steve Jobs is another example. Drastically increase people's institutional power in their life, their ability to communicate with other people across long distances, the institution of private property, the rule of law, a price system, and highly specialized division of Labor, and allowing people to freely trade, for example, all work together to create a positive sum game in which the size of the pie of wealth
increases dramatically. We are not claiming that capitalism is perfect, but it is ingenious in this one respect. It harnesses the human tendency to pursue our own self-interest and not only renders it mostly harmless, but also directs it to promote the good of others. So when we think about the concept of self-interest, if human beings are self interested, well, giving them access to a government is not going to change it. They're still self interested.
So what you'd want to focus on are the incentives people face given all human beings are self interested. For those who don't believe all humans are self interested. Anyone who has watched television instead of gone out and built houses for the homeless and fed the starving people. Any time you engage in leisure activities as opposed to helping people in Malawi get food, well that's because you're self interested. You care more about yourself. All humans are self interested.
So given this inevitability, what set of systems or incentives would we want to set up that make it so people can harmoniously pursue their self-interest 'cause if there's socialism, if you have any degree of state action in a society, then I am able to increase the amount of resources I get by having the state issue taxes, issue regulations on my behalf at the expense of you without your consent.
Under free markets, you can't get a penny out of my pocket or a second of my time unless I voluntarily give it to you. That's what the authors mean when they say they're harnessing the self-interest. They make it so they comple. The self-interest actually complements one another. And that's how wealth is created through positive sum exchanges, whereas the state creates 0 sum exchanges. So imagine Northrop Grumman trying to get as rich as they are if they had to voluntarily raise money.
How much money could Barack Obama have raised voluntarily for his nice little invasion of Libya along with the Libyan Islamic Fighting Group to take down Moammar Gaddafi? Probably could not have raised that money voluntarily, but he had access to a state which allowed him to pursue his self-interest and the interest of his advisers at the expense of everyone else. No one had the right to opt out
of funding this. You try opting out, the police are going to put you in a cage and shoot you if you resist. Socialism is anti collective, it's anti community. Capitalism and free markets are pro cooperation, pro community and pro harmonious relations with others. As Adam Smith writes famously in The Wealth of Nations, it is not from the benevolence of the butcher, the Brewer or the Baker that we expect our dinner, but from their regard to their own
interests. We address ourselves not to their humanity but to their self love and never talk to them of our own necessities but of their advantages. So in other words, all the restaurants we have access to or not, because people said we got to build something, everyone has to get on the job training and we have to come to work because Keith Knight needs to eat. All these people at every level of the process for building restaurants, for building
supermarkets. They were engaged in mutually beneficial voluntary exchanges while they were pursuing their self-interest, which allowed me to access the products and services that they developed. Under the capitalist system of free exchange, we can be useful to others without caring about
them at all. Many of us do it every single time we go to work, buy something from a store, pay our mortgages, or perform any other economic transaction we enter into voluntarily because it helps us achieve our ends. This is a very good point because it's not just that the free market libertarian position is that it's the capitalists who create value and no one else does. It's anyone engaging in mutually beneficial voluntary exchanges.
So whether it's a take a cashier who voluntarily has a job, the reason that the company is giving this cashier a portion of the scarce money that they have and allowing them to represent their store and, you know, develop the reputation for the company is because they see him as a valuable asset to the organization. If they don't like him, they can fire him. If he doesn't like them, they
can quit. So there's this sort of general move towards pleasing people who you're in these exchanges with, whereas the state has no incentive to provide good schools because you have to pay them. This would be just like if a company got your money involuntarily or voluntarily. Wouldn't make a difference. Obviously it makes a huge difference because they're not on their toes trying to please consumers. That's why everything the state creates is absolute trash.
But when it comes to they conflate low status jobs with not creating value. Cashiers create a hell of a lot more value than any rich elitist like James Clapper who advocates the Russiagate conspiracy theory, or any psychopath like Ibram X Kendi, the absolute fraudster who believes in the racism conspiracy theory. These people are far more parasitic, and it has nothing to do with the high status or low
status of someone's job. It has to do with whether or not they're engaged in mutually beneficial voluntary exchanges. That's how you know it's beneficial if people, when given the choice, choose to interact with them. That's why the left basically hates school choice, because they know that no one's going to voluntarily choose to fund or attend their horrific schooling systems where they try to turn
boys and the girls for 12 years. On the other side of these transactions is another person doing the same thing who also need not care about us. The vast majority of our free exchanges result in both parties walking away better off than they were before. It may be impersonal and sometimes even alienating. As opposed to the mass murdering government. Send us 40% of your income every April 15th. We'll put you in a cage if you
don't. And if you try to resist us, we'll blow your head off in front of your kids. Is that alienating? Is that joyful, as the Vice President would like us to believe? There's nothing more alienating than socialism, but the result is an overall improvement in the human condition that no other form of economic organization can come close to equaling. Capitalism has become unpopular in recent years. The state monopolizes and coercively funds compulsory education. K through 12, then start
subsidizing colleges. Yeah, In recent years, generation after generation, if the Catholic Church was allowed to coercively fund Catholic Church schools and they mandated attendance of all children aged 5 to 18 to these Catholic schools, saying we're going to put parents in jail for violating truancy laws if you don't send your kids to Catholic school church, Would you be like, there's been a decrease in Protestantism recently, obviously.
What did you think? Capitalism has become unpopular in recent years in a way that it hasn't been in the West at any other point in our lifetimes. We are aware that some of our readers will find this entire example example highly off putting, so let us make this point explicit. We are not saying that everything people do in response to the incentives a capitalist economy puts in front of them is kind or fair or pretty to look at. On the contrary, it is often mean, heartless, and ugly.
But enough about Liz Cheney. But it is also the best way humanity has discovered of allocating resources efficiently and using them to produce good outcomes. And it works because it economizes on good intentions. Thus, it turns out people can do a lot of good without caring about it one bit. People don't have to mean well if the system they live under appeals to their selfish nature
to trick them into doing good. Anyway, thanks to everyone for watching Keith Knight Don't tread on anyone in the Libertarian Institute.