that the west side of chicago should be a hive of commercial activity. why should? >> guest: well, should because then people would have jobs other than being goat peddlers. and can because once it was. before the highly segregated history banned it to the west side, there were lots of factories, lots of jobs. and now because of regulations of various kinds, it's not. it's, it's a free -- it's a free fire zone. not all of it. there are some streets where people by sheer act of will kept the street in good condition and they're not going to allow any of -- anyone to deal drugs. but then for the most part it's very sad. >> host: you say regulations. give an example of some of those. >> guest: well, to start a business in chicago and most places in the united states, worse in brazil or egypt, it takes months. it's hard to do. you've got to get permits, you've got to get a business license to braid hair, famous case, notoriouses case. to earn your living braiding hair, very common in the african-american community, you need a state license. why should people have to jump through these hoops in order to start a business? in the '50s in african-american, urban communities -- south side of chicago or harlem -- there were lots of successful small businesses. and then increasing regulation, some of it very well meaning -- people wanting to help poor people -- they ended up hurting the poor people. thank god in chicago we don't have rent control. that's one thing that really hunters poor people. hurts poor people. but we have enough of it the west side of chicago, and it could be so easily fixed if you had a, if you made the west side of chicago an enterprise zone where you didn't have to be heavily taxed or regulated, it would change. >> host: didn't the trump administration create enterprise zones with legislation? >> guest: i'm a little bit -- i don't think so, but maybe it did. i try not to look too closely at the trump administration. >> host: why is that? >> guest: well, because he's or -- i don't approve of mr. trump at all. and i think although on the one hand he's got some people in his administration deregular -- deregulated which if it's done intelligently is a good idea, the federal government has one million separate regulations. one million. now, that's kind of crazy. so that's one thing, getting rid of some of that. but on the other hand, he's doing these amazingly foolish economic interventions such as his madness about foreign trade. his adviser in foreign trade is an economist with the harvard -- [inaudible] named peter navarro. and he's a very foolish man. i'm so ashamed that i have a harvard ph.d. in economics that i'm going to organize a group of us to turn in -- [laughter] our harvard ph.d.s in protest that peter navarro has one. >> host: in 2016 in your book "bourgeois equality" you wrote that even trump the businessman does good by doing well. >> guest: yeah. when he does well. but, you know, trump hasn't done well. it's plausibly calculated that if he had taken the $400 million he got one way or another from his father and had invested it in randomly chosen stock portfolio, his net worth would be higher now than it is. because, you know, he did the trump stakes -- [laughter] and trump university and trumka see know and trump, trump, trump, trump, and they all failed. this is something that bloomberg pointed out during the campaign in 2016. bloomberg was a poor boy when he started, and he became rich and he actually became rich by doing well, by doing good. that's the way innovatism is. if you're in business or anything else and you're choosing well, you make profits. but the only way you make profit is if people like your stuff. they don't like trump steaks. or they find that the trump university degree is fraudulent. that's reduced everyone -- >> host: but isn't capitalism and our economic system about taking risks? >> guest: yeah, it is about taking risks. so you do things that are -- you make a mistake, then you get hit with it. trump makes mistakes all the time in business. he loses all the time. by the miracle of the electoral college, he's now our president. but as a businessman, he's terrible. as a tv performer, he's good. like you, he should have stayed -- [laughter] >> host: how do you define your economic philosophy? >> guest: i'm a liberal in the real sense of the word. the word comes from the latin which means a free person as -- and this was very much in the minds of romans when they used the word -- as contrasted with a slave. and one very simple way of describing true liberalism is to say that everyone has the right to say no. that's all. the right to say no. and that means that you don't have -- if you're a woman, you don't have to agree to be raped, so to speak. if you're in, if you're an employee and you don't like it, you can leave. whereas i'm realize -- reading a wonderful book by -- [inaudible] i think his name is, grossman, which is a novel about the soviet union. and the big thing there is that people couldn't say no. they were being bossed around by someone not voluntarily. you're an employee, i was an employee. we did what our bosses said we do. but we could always walk. and that's really fundamental to a free society. so the other way of talking about true liberalism is it's the, it's the theory of an adult society and economy whereas many of the other options -- modern populism of the left or right, fascist communism, social democracy and the welfare sate -- want people to be children. and i think we shouldn't be children. i think it's a good place to be adult. that doesn't mean we shouldn't help people. i call myself a christian liberal. >> host: and back to why liberalism works. quote: i can understand the progressive point of view. i can remember its attraction as one peruses the pages of the nation or noam chomsky's latest -- [laughter] it feels like one is doing good. >> guest: absolutely. and isn't that great? by just listening to noam, i actually debated him last summer. i was in a festival in england, and they had noam on a big screen like a large tv screen, and three of us argued with him. yeah. i think people who feel they want to do something for the poor should do something for the poor. instead of just feeling good about reading "the new york times" and thinking, oh, yes, i'm a good person. i care about the poor. for example, they should, they should help the homeless as i have actually in a small way by having them come live with them. i had some homeless people with me for four and a half years in my house. that doesn't make me a saint, it just makes me a person who wants to put her money where her mouth is. but the key point is to let the poor people free so that they can work, travel and live. you told me before you started that i you have two acres of lawn. well, that's probably because in your town you can't build a house without a large lot. that's to keep poor people out. that's what it's for. it's true in many, many places in the united states. people with their two-acre lot sitting there reading the nation magazine, i don't know. [laughter] [speaking french] >> host: well, i will say i am out in the country. [laughter] i'm out in the country, no rules -- >> guest: no ricks? >> host: no restrictions, no rules. but i'm going to go back to why liberalism works, and this is a quote from stephen lansbert. you say we all reject moral instincts every day of our lives. >> guest: well, that's right. think about not having to put your money where your mouth is, not pushing people around. i mean, look, i've never been a boss myself, but there are some people who are much, much better at administration than i am. and if in a free labor market, of course, the person, can leave if they don't like your management techniques or style. but in any case, people shouldn't like being nasty. [laughter] there was a bus driver this morning in the shuttle at o'hare. you know, he was real nasty. and i said to him your life would be better if you treated your customers with respect. i've been on buses in chicago where the bus driver is wonderful, where he welcomes people onto his bus, and he goes through the snow and slush of chicago and is proud to get there on time. and that's how we ought to live. we ought to live the way our mom told us to behave. >> host: professor mccloskey, are you still teaching at the university of chicago? or university of illinois-chicago? >> guest: no. i taught there from 2000-2015, but i've been in the blessed state of retirement. i highly recommend it to you all since then. my joke is that i retired in order to work more. and i finished my trilogy on the economic and social history of the last two centuries, and i finished this book that came out in the fall on why liberalism works. and i've got a new book coming up from chicago from the chicago press in the fall which is kind of a pop version of all of these called "lee me alone and -- leave me alone and i'll make you rich." [laughter] >> host: well, you talked about your trilogy, and this is the bourgeois trilogy, the most recent, bourgeois equality. what's the definition of bourgeois? >> guest: well, it's the french word, of course, for towns person. and usually specialized to mean the leaders of the town, the merchants and manufacturers and guildsman and is so forth. it was, in fact, the common term for that class in english before the phrase middle class became common around 1800 the bourgeoisie started calling themselves middle class. before the basic idea was there were priests, the nobility and then everyone else. the third estate. and it's only in the last couple of centuries that we started to make distinctions among the various people. and my point is really to argue against my friends on both the left and the right who are contemptuous of business, of people who like my grandfather. he wasn't contemptuous, he was an electrical contractor. and it was, it was an honorable -- that's an honorable thing to do. you're not cheating and, you know, you're doing your wiring of airports well and being paid for it. that makes for -- see what's odd about it is that it makes for a sweet society. there is this sort of mythology, marxist kind of tale that you see especially in the soviet, the history of the soviet union. because anyone who makes money is evil. on the contrary. i said before, you make money by doing things that people like. what exactly is the problem here? >> host: to go to bourgeois virtues, however, quote: the christian gospels attack well, surprisingly harshly by the standards of the west of the world's religious canon. it is not surprising, therefore, that in the 19th century a bourgeois but christian europe invented the idea of socialism. >> guest: that's right. in fact, socialism is a secularized version of christianity in many, many ways. the apocalypse of the revolution as understood, say, in marxism is very similar to the second coming of christ. the further the ideology among sow e yet communists and maoists in china, that when they were sent to a prison camp, they thought it was okay. because i, it must be that the party knows, and there's a very similar attitude in some versions of christianity. if the priest tell me i'med bad, i'med bad. and there's -- i'm bad. there's a certain protestant element to it as well. and it is quite strange that the west, so-called, which was most successful economically originally, now it's spread to the world, would have this ideology of anti-wealth thinking. i just reread -- a new translation, but a theologian named hart of the new testament, the whole thing. it's not that long, it's a horse book. and it's, there's really a socialist element to it. early christianity was a band of friends. and among friends this kind of equality and consumption and work assignments and so forth is very sensible. but it doesn't make sense in a large society. it never has. when it's tried in a large society, it doesn't work. when it's about friends or family, it works. socialism, i'm talking about. >> host: you identify as a longtime agnostic -- >> guest: i was. >> host: and now you're a christian liberal. >> guest: i am. >> host: liberal, small l. >> guest: right. >> host: okay. what happened? >> guest: well, i changed gender, as your audience might want to know, in 1995. i was once donald, now i'm deirdre. and i, in the years after that i felt there was something more that i needed to look into. so i went to the catholics, i didn't like that. i went to the opposite, the unitarians who pray to whom it may concern, and i didn't want like that. and then i found apingly cannism -- anglicanism, we call it episcopalianism. and it was just, it suited me very well. it's kind -- in fact, right from the beginning of anglicanism, even henry the viii but certainly after him, the anglying cans, the church of england viewed itself as the middle road between roman catholicism and puritanism. and that suits me. >> host: what is it about it that suits you? >> egg -- >> host: is it the customs? the beliefs in. >> guest: well, the belief is very good, let's talk about that. but it's, it's the whole spirit of the anglican church i like. it's -- [laughter] we're called, in the united states we're called the frozen chosen because in virginia especially the upper chat and in new york for that matter, the upper class was episcopalian. but it's not because the frozen chosen that i, that i like it. it's -- in their kind of joking way, it's claimed that in episcopalianism, you don't really need to believe anything. but you do the ceremony gnus. you come to church -- ceremonies. you come to church, you do the mass -- >> host: the smells and the bells. >> guest: no, that's high church. my particular congregation is a low church. i had a congregation in iowa, iowa city, iowa, and once a year we would do smells and bells. which was kind of fun, you know, incense and the host -- it was fun. but it's a very flexible framework for searching. because it's the journey. you don't have to believe in the virgin birth to be a practicing christian. t the practice that matters. indeed, i think that's true of economic performance. you don't, you don't need to be a student of the economy to be an electrical contractor. you just do your job, and you might learn from it after a while that there's mutually, mutual advantage here. and i, as i get older, i think -- i keep trying to unify my thinking to see what cross-fertilization there is. i a have a paper i'm working on right now about theological free will which, as you know, is the very, very deep, puzzling subject and free markets. i think they are connected. they're not opposed as so many modern americans or european theologians think. i think you don't have to be a socialist to be a christian. >> host: well, deirdre mccloskey, let's go back to your bourgeois trilogy, and this is the bowrming boy virtues. i agree with my favorite marxist economy that -- economist that education should be financed from the center. ma alternative care and early whilecare should be expanded and state financed, that inheritance taxes should be steep, that corporate welfare should be eliminated, that military expenditures should be cut to a tiny fraction of their present levels, that a modest minimum income should be given to every american, that tax laws should encourage both men and women combined paid work with family and community work. we followers of adam smith are egalitarians. >> guest: yeah. >> host: is there a but in there somewhere? >> guest: well, nancy is an old friend. she's a professor at the university of massachusetts and should get the nobel prize but won't. she was annoyed that i called her a marxist, because she's not an orthodox marx ifist, but she is of the left and i'm not. i was once. i was a kind of joan baez socialist. i dreamt i saw joe hill last night. but i, as i said, i'm a christian liberal. which means that i acknowledge a responsibility that we have towards the poor. that we can't just take a kind of country club view, oh, a bunch of losers. this, againing would be donald trump. oh, those losers, i don't care about them. i've got my cadillac. all is well in the world. so on a lot of the policy proposals that nancy makes from the left, i agree. i may not quite agree with the scale she wants to, wants to do them on but we agree that we should help poor people and pregnant women and so forth. that there should be not a fist in people's face, but an open hand of help. and that's perfectly kept with what we unfortunately call capitalism. when you think about it, the or their capitalist d i do not like the word, but capitalist transaction, we buy a cup of coffee. for one thing, the sheer act of buying a cup of coffee is mutually advantageous, and both people are happy about it, the seller and the buyer. but furthermore, you'll notice in your own life that if you make a habit of going to that coffee shop, you eventually become friends. commerce creates friendship. it's the same way with church creates friendship, a church does, or a college or high school class or whatever. people get together. they're not hurting each other, they're not forcing each otherred to do things. they're allowed to say no. and out of that comes what the french in the 18th century called -- they called it sweet commerce. that's right. whereas the coercion that's necessary for most activities of the state -- well, actually, all -- that's the nasty stuff. you've got to pay your taxes. if you don't, we're going to put you in jail, that kind of -- the threats from the irs on having a minor, non-legal dispute with the irs right now as so many of us do. i don't like coercion, i never have. >> host: you say that you don't like the word or -- >> guest: capitalism. yeah. the philosophy. >> guest: it's not the philosophy i don't like, it's the word i don't like. the word capitalist was used and was modified by marx to mean not just rich and investor, which is what the word meant in french say around 1800, to mean this whole group of people who are the bosses, right? and then after marx, in german capitalism became the characterization of our commercial side. it's a terrible word. academically, intellectually, scientificically, terrible word. because it's convinced economists when conservative or left or whatever -- whether conservative or left or whatever and marxist and everyone else that capital accumulation is the spring of our commercial economy. it's not. think of it mechanically. the gears are necessary. you need sunlight and so on. but the mode of force comes from the spring. and the spring in our life or, indeed, in old life too but it's been enormously expanded in importance, is innovation. it's creative. it's human creativity. and this is a view of economics that i'm coming to take, the kind of economics that i've done for many, many years in my ph.d. is misleading because it look at the capital. we kind of call it -- we want the word, want the letter c for other things. but capital is -- i thought that capital was motivational, that it did things. . >> then slaves, then slowly, women. immigrants. catholics. gay people. whatever. right down to this remarkable framing of transgender people. all of that works to encourage. bring courage to people to be creative. it had this amazing affect since 1900. real ability to buy stuff. and to go to university and so on has increased by a factor of 13. 3000 percent. not 100 percent. 200 percent. 3000 percent. and that's from the release of human creativity and free societies. >> doctor mccloskey, we are having general sense and debate about capitalism versus socialism in this country. this is not the first time we've had this. >> to put it mildly. it's been going on since the middle of the century. the kids that say let's try socialism.we love you bernie. i don't hate bernie. who can hate bernie? he's a very char