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Economist Russell Roberts and author Benjamin Barber debate whether capitalism is an ethical economic system.
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This economic system big -- capitalism.
Has no moral or ethical core to its -- better.
As the people do worse.
They have right there.
Makes it inherently.
Sick and what this is the.
I sick and twisted system.
And -- of dealer -- left wing think -- agrees with that.
But economist Russ Roberts is capitalism is only sicker twist that when government gets involved so when you me.
-- -- -- -- to get involved.
With courts and enforcing contracts the rule of law the problem is -- government decides to favorites friends rather than the people large.
And that comes when powers involved in what government some of the Wall Street which has been particularly destructive.
Is take out the loss part of the profit loss equation when they do that we're gonna subsidize.
Recklessness and that's what we've done over the last thirty years and it's a disaster.
So venue largely would agree with -- on that but you say government should do more than just.
Adjudicate disputes.
And that capitalism itself has big problem.
It does but I agree with -- because the truth is.
We have now socialism in America to -- -- kind of socialism -- worries about it's this we socialize risk.
We privatize profits catalyst was a great system its entrepreneurial its innovative.
It's -- genius and it's very productive.
It does those things very well Michael Moore says it has no moral -- right it does things badly to it doesn't create jobs necessarily it doesn't distributes -- very equitably even on makes a lot of wealth for society.
Mean pairing -- they inevitably result -- -- things equitable that's correct.
It -- in effect it allows people by taking risks.
To make a lot of money and very often the last will make even more money by taking risks that fail and then getting bailed out by the government so that what we need and that's.
We agree the bailouts are -- that but does so without that went wrong with taken big risks and some people make and much more money because we live in an integrated society.
In which the economy.
And banks and the currency and government all you know I didn't let GM go down you let Chrysler -- -- you that some of the big banks could have.
And the country goes down as well.
We want them bailed out you like that -- I don't know like capital I don't like it at all but I think we need to find ways to regulate industry so it doesn't run the risks that the tax -- has to pay for.
Why don't we try capitals -- for everybody.
What are we have to bail out G I'm glad we have to bail out.
The banks it would have been great let them fail it would have been great Virginia but -- -- a lesson every corporation when you make a lousy product and it promises she can't keep.
You've got to distance -- should go bankrupt and there are costs I'm told America would have fallen all those jobs would go away put out that women on the way in which they have an American earlier this -- -- I don't.
Resulting gone bankrupt the jobs would gone away they would -- smaller which would have been a good thing their competitors who had done a better job would have grown.
The suppliers everybody worried about -- caused unemployment they -- sold stuff to the other auto companies now that would have been doing better.
Instead we tell people when you do with lousy job you can get a do over.
Do overs irresponsibility subsidizing it is the worst thing we can do it's it's a disaster would be doing now.
For the politically powerful for the rest of us the people who are politically powerful we pay the price that's not capitalism it's crony capitalism.
I with a -- progressives would be against these bail out.
You are against them in principle the reality is that we can't simply pretend we're in the nineteenth century and letting -- firm go down as like letting the quarter stored it and doing enough business.
In that world someone has to be concerned with the public impact of private institutions.
Well they're getting a bail out so blip that let's go to the topic of this show which is evil bankers and when I went to the Wall Street protests I got the sense that the protesters there had no hopeful about what people -- Wall Street -- -- -- might help create wealth here's a -- When was the last time this rich people they don't -- days -- I.
How -- they make money based steal it from the working people.
Press I think that's sort of a sense of what goes on Wall Street what goes on Wall Street.
Well I think there's two things are -- on Wall Street some of them as one of the things they do is good witches that they take risks and that allows people to innovate.
The other thing Wall Street does is it makes bats often with other people's money typically borrowed money.
That's possible only because we've set a precedent.
That lets them think that they are going to be bailed out when you do that you encouraged Wall Street and other investors.
To invest -- -- -- we just invested trillions of dollars into more and bigger houses.
Is that -- something else that was eight terrible social mistake.
That was only done because of government encouragement about the housing market and the financial sector that was an.
Credible disaster it was a well but we're gonna get most of our money back -- the money getting the money back that's relevant what's relevant how much money we've wasted.
With our capital stock investing in -- -- and stop.
What has happened is that capitalism particularly when it's not pressured -- it's not helped when it's not incentivized.
By -- regulatory state.
Makes a lot of money for itself and has little or no interest in jobs for society in an equal distribution.
Injustice in making sure that the system doesn't go down just and as you might -- equal distribution for a minute history post civil war.
No regulation capitalism destroyed competition would be monopolies.
Today 2008 again the big banks -- -- -- on no regulation what's the problem with a fair partnership.
Between.
Democratic institutions and public oversight.
And private productivity private risk taking we need both if you get too much -- to get to tell terrorism you get too much mark to market he get anarchy the part.
-- -- what has worked a lot what I thought that take your first along with that your first point.
We've gotten rid of all this regulation and that's caused all this terrible harm all this is not my understanding but I'll let you respond all of financial sectors -- regulated sectors and in in our economy but.
There has been some loosening and I argue bush get higher 90000.
New regulators the so called.
Deregulatory.
Bush and the Democrat Clinton deregulated from getting into Glass-Steagall which created it always is and this is more regulation it's not like -- -- deregulation.
The problem is is that well intentioned regulations.
And some not so well intentioned regulations are going to be subverted by the actions of the industry and there's capture.
State regulators aren't looking out for the industry and captures the regulators because they're the ones who work with on the -- they have the most and -- Why wouldn't want to rely on that mechanism.
The regulators good intentions and ability to moderate in industry -- -- allowing people -- lose money what's a better lesson.
What's a better regulatory activity even telling people if you make better decisions you'll lose from then you -- answer my question Gavin and interdependent integrated economic world content that some part fail.
Without real risk to the risk and you've got to have someone.
Looking after the public.
Impact of all of this private whatever that's what they'll get rid of this that is the road to serfdom that is a road to an international body that's gonna somehow.
-- manage this global risk well.
We have lots of institutions the United States to try to manage global risk system so called systemic risk the Fed.
The treasury others who we get Fannie and Freddie had to own regulators they did a terrible job.
Worrying about the things you're worried about either because they're incompetent or they hadn't -- To keep quiet when their real bosses Wall Street were making a lot of money than I agree idea just how do you stop that -- with the tiniest on that -- -- people lose -- -- let's -- -- your last point inequality.
Terrible thing capitalism breeds so much inequality my understanding is that's part of freedom.
A pew study looked at families followed up with their -- thirty years later 68% of the kids.
Born of the poorest fifth to families had risen to a higher income group of kids in the richest family 61%.
Fell out of that group.
-- mobile society to handle -- Charlotte.
We -- look at the latest statistics -- mobility.
All those European socialist countries that the Republican candidates get their kicks out of kicking.
Are in fact way ahead of us and social mobility we used to be great that way we are weighed down.
I think -- I don't believe it's true we compare that at medium person in 1975.
Media person data not it's not the same person living through time -- people are Winfrey shall we was a welfare moms now she's an earlier horrible -- chains or Sergei Braniff founded Google.
Those people start off poor and hand operation and to me the most dramatic you -- three.
I'll give you more dramatic mid sixties -- -- we can't name all the other 16 dollars over -- --
