[inaudible conversations] good afternoon and welcome to the Cato Institute. I direct the center for global liberty and prosperity here at cato the title and style of the book were featuring today, socialism sucks, is admittedly more irrev vanity than the typical more staid Public Policy books but i can assure you that the authors that we are featuring today are serious, accomplishments economyis whose decade of scholarly work inform the publication. Thesen title two economists drink the way through the unfree world gives a flavor nor unton generalizational approach. That subtitlele didnt surprise me. I tend to run into ben powell and bob lawson at economic or academic conferences around the country, and around the world, and inevitably they have drinks in their hands. Probably because we chat at receptions, hotel bars and the like. But the conversation is always interesting, informative and fun. And thats also true of this new book. This is a light book about a heavy topic so its fortuitous were featuring this on the birthday of milton freedman, a champion of economic and overall human freedom. We were lucking of the hasnt him for some of to us have worked with him to limited going. Im shoe he would agree with the title of the book but i cant recall him ever putting his opposition to socialism in quite those terms. Today socialism gained an appeal among some americansspecially young americans, as a viable alternative to a market economy, and to this market economy that has prevailed and characterized the United States. This is so much the case that leading political candidates and others openly espouse their admiration for the ideology and the policies it implies. Yet how much do americans really understand about socialism and are there aspects of its appeal that are wellfounded. One of the goals of the authors of socialism sucks is to disabuse readers of any idealism they might have for the ideology by appealing to reality, and direct observation that most readers can relate. To rather than by relying on reames of data, statistics and other empirical hard evidence that are damning but also dry compared to the approach they take in this book. They achieve this by traveling to places where real socialism has been put in place, cuba, north korea, venezuela, for example. Long the way they also visit other countries that have experienced socialism or are set to be socialist and explain through anecdote and observation how those systems really work. The end result, hopefully, is to dispose of any romantic notions of socialism. That the awe fors felt they needed to write such a book is a reflection of pour polarized times, where extreme ideologies on the left and the right, are having far more of a way among the American Public than was imaginable even a few short years ago. We will also be discussing why that has been the case and what else we might do about it. But lets let the authors tell their stories and well begin by hearing from ben powell and bob lawson and then by comments from matt kibbe. Ben powelles the director of the Free Market Institute the professor of economicness the jury s. Howle college of Business Administration at. [technical difficulties] texas tech university. A senior fellly with the independent institute, number of the author of a number of books including out of poverty, and making poor nations rich, published by Stanford University press. Research finding have been reported in 100 popular press outlets such as the New York Times and the wall street journal. Bob lawson is the approximate of practice of chair in Economic Freedom and is a director of the eneil center for Global Markets and freedom at Southern Methodist university at the cox school of business. He previously taught at Auburn University and Capital University and is the coauthor of the widely cited Economic Freedom of the world annual reports that presents an Economic Freedom index for more than 150 countries over the course of decades. He also is a past president of the association of private enterprise education, senior fellow at the Frasier Institute and a member of the help me welcome ben and bob. Thank you for hosting us, and i just learned it was Milton Friedmans birth debefore coming an and its fitting the publishers original blush says social jim suck is the bastard step child of Anthony Bourdain and milton friedman. So good solid economics communicated in a fun, entertaining way that would reach people that who wouldnt usually read the academic stuff we write. The timing is obviously good with the popularity of socialism. Started the book over two years ago, and part of the motivation when the books theme took shape was the glowing popularity of socialism in 2016. This is the everprominent Michael Moore tweeting out that young people like socialism over capitalism but confusing these things with fairness and selfishness. What bob and i wanted to do is write a book that explains what socialism and is is not, how it functions and to do it an entertaining way and the case bob wanted to get drunk in cuba and i wanted to write it off on my taxes and that is the trial chapter. The book does well, im pretty sure i should tell the irs im see reaching a seek quit and writing off my bar tabs from now until then. So, its no surprise to anybody now that socialism is bang and popular. A lot of the focus has been onioning people and millenials, but of course with the president ial dedates you see it month mainstream democratics as well. The New York Times had yearlong on the 100th 100th anniversary of the russian revolution, column called red century. I think exactly one column in that year was dedicated to the economic stagnation of the system. A handful mention atrocities and almost always with stalin, once mao. Instead you have articles like why women had better sex under social jim which even if true i dont know how we weight this against 100 million dead bodies, but this was the atmosphere that was taking hold as we were doing the book. Obviously grown now and we have confusion from pom particulars like Bernie Sanders who cup riz denmark, sweden and nor examples of socialism. Theyre not. I was going to include a quote from alexandria ocasiocortez but i decided it was better to leave is a placeholer. But the book, the tour we go there start in sweden, go to venezuela, cuba, korea, china russian, georgia, and then tending a large socialist gathering in the summer let start briefly sweden. Geoff the definition of social jim. Its some form of collective ownership or control over the major means production, abolishing private property in and the major factors production. Replacing with collective ownership. In practice in any Large Society this means state ownership and or control of means of production. If youre going to have large scale production, that then means youre also goal to have some form of Central Planning in order to do the coordination. A lot of these young socialists say we want socialism from below and everybody will decide cooperatively what to do. You hippie commune wont produce an iphone comrade. You need to coordinate the diverse area of the economy and when you dont use Property Rights that give prices and profit and loss, that has to be replace evidence something and thats a central plan. So, first of all, sweden, these other nordic countries are not socialists. Theyre highly capitalist, the all have private property, they have good contract enforcement, tolerable degree of the rule of law, free trade, light regulation of businesses. They have problems, sweden has big welfare state and high taxes. This is true of the other nordic countries and these interventions in at the freeway market have consequences but dont equal social jimmism, so when we go to sweden the beer is great, the mace is beautiful, its not socialist, bob is the coauthor of Economic Freedom of the world index, and this is true of other nordic countries as well. So, we can have Great Barrier in fact thats the in front of a bellum beer bar it and cost as ton of money and we tranq some in south korea on the other side of the world ask they were cheaper than in sweden. And this big welfare state has dragged down swedens growth theyre not as wealthy relative to rest of the world as they used to be but theyre prosperous because theyre mostly capitalist. Venezuela is dead last in bobs Economic Freedom index. Cuba and north korea are not ranked but we can guess where they would be. But venezuela, its important to remember, this is not a place that was always like that. The easterlye year of the index in 1970, venezuela was among the ten most economically free countries in the world. We saw a long peered of decline of Economic Freedom when they worse worst formates interventionism, but in 1970 when they were capitalists they were wealthy in fact wealthier per capita income that spain itself. Not true with 1998 when chavez comes to power but thats a capitalist, prosperous economy, and also dont have to go back very far to have people pointing to it as successful democratic socialism. Chavez came to hour in a democratic election that International Observers widely say was fair. Began putting socialist policies and place and what was happening is venezuela sits on the Worlds Largest oil reserves. Oil prices were high. As a result his socialist policies were cutting out the core of the economy, Food Production was plummeting. But they were using the revenues from oil to import food and other things for the population, give the free handouts politicians like to talk but and production win dont because the statearound oil company doesnt give very good incentives for maintaining equipment and pipeline and production and prices are down. No longer have the Foreign Exchange to import the necessities and crisis be see today and we saw when we were in in january of 2017, first hap. In fact the picture on the top left corner is of the bridge thats been in the news where they aid trucks were sopped from colombia. That we were there people were free to move back and forth and venezuelans were coming across into colombia to buy basic necessities unavailable in the venezuela economy. It wasnt typical third, world poverty. What you saw crossing the border is people who were middle class, upper middle class venezuelans who still had some access to money to buy goods when they crossed the border. This illustrates what a socialist economy does to those people who are previously prosperous in a capitalist society, theyre struggling to make ends meet. I should also say since we having this beer theme running throughout the book, venezuela ran out of beer. If i were a socialist dictator, like toilet paper, beer, the things that we always have. By the way thats not like election speech. But what actually happened is they had polar, which is a nominally privately opened can i by government planning al oak indicated foreign expect but didnt allocates nut Foreign Exchange and they ran out of beer. So, next on our i should just say about the democratic socialism with them, this what i think Young Democratic socialist mess, the necessary connection 2007 a lack of Economic Freedom and the lack of political freedom. Once you ail bowl issue private property you have to get state control. People dont like that. That means they are going throw you out of power if you let them voluntarily reelect you but youre able to repress them so they constant throw you out of office in a democratic election which is what we have win maduro. Reelectedded last year by wide margin but people on original last Something Like 24 pounds. Didnt all find jenny craig. When your population is not get us enough to eat theres na noh way to get reelect. You food eight stands next to polling place sound that is the necessary connection between socializing your economy and democratic tyranny. Cuba is not starving socialism. This is subsistence socialism. Chugging along. Heres a fewen neck anecdotes. State ownership of means of production, hotels are pat of the minneapolis of production so you heavier state owned hotel industry. You could stay at the hotel national, a fivestar Diplomat Hotel bit the stayowned hotels suck. We stayed at one and we arent trying to sandbag it. Supposedly three stars and a friend recommended the place. Looks okay in its picture from 1979. But looks a little less nice today as youll see the exterior. Going our rooms see how tall this building was, actually four elevators and three are out of service. Thats our bathroom ceiling. This is another state hotel, he hotel carib in central havana. Thats the glass that came out of the sanitary bag in the room with the stain on it. Thats the soap they kindly left us from the previous guest. Thats the hole in the taule they give us. Thats the bolt missing from the toilet so when youre on the seat you slide off. Now, same industry providing lodging, allowed limited operator i private Property Rights and the able for people to rent out papers, now we prearranged one through airbnb which is a miracle because thier is not widely available and your credit carts dont work but enough of them have relatives in miami that people in miami put it up on airbnb. They put the reservation and take the money and callure relative no cuba to tell then when youre coming, this one is the same price as our god awful hotel rooms, kitchen, dinette and we stayed in another one have at that time priced locate above a bar which was great. It had a porch, too so, could chain known cigars. The cuba trip was not funment from 8 00 a. M. To 12 00 p. M. And after that i drank and chain smoked cigars until 12 00 a. M. And that made everything all right sort of. Other oddity. No unsenttive is under the hotel. Incentives under the caution casas. Whats missing . Signs. Signs arent missing because cubans are poor. Its because no one gives a damn whether you come into their store or not. They dont make extra profit biz bringing you in there and if you show up, what youre confronted with a lack of variety. You can count maybe two dozen at most distinct items in the store. With the way, continuing with the beer metaphor, cuba have beer, didnt run out when we were there but two types, crystal and buccaneer. Both roughly 5 alcohol, half percent difference and taste like a skunky budweiser. Thats your variety of cuban beer. Private restaurants. Allowed state ownership of means of production is widespread, but theyve been given limited freedom to open private restaurants. They have restrictions how many people can be seat but widely ignored or worked around and theyre pretty good at first. And its because their trying. The right incentives but theres still in a socialist command economy and have to deal with the supply chain so all the private restaurants have the same 12 to 18 items on the menu, all taste basically the same, which i bland, cuban food in cuba sucks, cuban food in miami is delicious. In miami its a caappy ham and cheese in cuba. The supply chain is not there to provide it so pick a restaurant based on the venue of a rooftop or something lick that because the identified will be the same. Ill end on cuba here. The 1950s american cars in cuba. Then people think its because we havent an embargo on cuba theyre stuck with american car buts we have an they have to use bubblegum to make their 1950 considersic and in a country that is very poor, something on the order of 300ish per capita income and youover 1950s cars selling for 15,000, 16,000. The renault in the picture is a 30,000 car because its better suspension and brakes and might have ac. Doesnt exist in the United States. Dont give this to your High School Kid but if you stamp down supply hard enough, price goes very high. So ill stop with that and let bob continue the tour with you. Im going to talk about north korea. Our wives were very, very generous in letting us travel all over these crazy places but said we cant die or get arrested so we didnt go prison was okay we didnt go into north korea. We wasnt to the border of north korea and china, the northern north korea border, where theres just a river which separates the two countries, and you have many of you have seen the satellite photo of the Korean Peninsula, the north except nor capital is essentially dark and the south is wonderful lights and filaments of light and you see china on the northern side, which has developed quite nicely but a dark section of north korea. When we arrived in north korea, it was dark, and we got to the river, very excited. Were going to see north korea. Across the river and its just dark over there nothing over there. We were worried. The guide book said theres a city over there. We were worried maybe we went to the wrong city. Didnt teach be anything there when we woke up there is in fact a substantial city over there so that satellite photo isnt photo shopped, its real. You can stand on the chinese side and look over into complete darkness. The chinese side meanwhile, the city is not shanghai or beijing but its a substantial, modern, prosperous, chinese city with skyscrapers and lights and advertising of the modern things. So, that was north korea. And you see the dark picture again. The upper left is the north korea and then we wake up in the morning and you can see, theres actually a few hundred thousand people on the north korean side of the border but at night theyre empty. Going up and down the river, at one point i remembered can three chinese patrol boats, chinese navy coast guard, and i was very happy to see