And part of this hesitance is that younger people dont really know much about markets or wall street except cartoons, right but markets are so valuable. They are. A gift to us and we think of them as a gift. But if we go way over to the left away from wall street socialists think of the markets as a gift too because theyre logical proposition is given colon a 20 or 30 trillion dollar economy. We will spend the money thus and thus and redistribute it the market the money the wealth is assumed by everyone. But markets are like souls the economy is like a soul. Theyre like humans and they can make a choice a market. Can choose to come back or it can choose to stay away and that . That problem the fragility. Of markets that the decision to stay away. Thats our problem. Nationally. We have to keep the markets here and we have to keep the markets happy. Um, whats an example of that . Ill just mention one example, because again, all live among caricatures. An example is saturdays off. We think thats a given right . Were americans we get saturdays off, but it wasnt always that way americans used to work six days. What changed . How did saturday become hours . How did saturday become saturday saturday became saturday because of a cold capitalist concept . Called the productivity game. Suddenly factories could in five days make what they used to make in six. That it sounds cold, but its very personal and it wasnt just the plutocrat or henry ford who made that decision. Was it dave . It was the actual statistical productivity game. Well all this is kind of hard to translate so its my its special and happy honored to introduce my friend david banza. Here today, he can explain why markets come and why they go he has a special and rare talent. There are a lot of Financial Advisors in the world. Dave is a Financial Advisor who can translate what markets are doing to . People even not just to clients not just on television, but even to children. And this book is a special book daves book . No free lunch. Most economic books are tomes with charts . This book doesnt have a single chart. It just takes Market Insights from the stages. And helps them along brings them forward. You can see dave with his sharpie yellow highlighting at night texts from the sages that are useful to you and me he communicates them 250 economic truths here for the reading very short. I think its no accident that these 250 truths plus a little explanation from dave read a bit like devotionals. Habit is part of life. Not just the life of faith, but also the life of family and the life of markets so i commend to this book one reading a day. Its my honor to introduce dave his colleagues and his book. Theres no free lunch. Im an ask dave 12 questions, and then were gonna open it to you. So wonderful opportunity to to get into daves brain dave. The first question is the title of this book. Theres no free lunch. We know in your life as a Financial Advisor as a wealth creator, youve said that over and over again. Where does that title come from . Well, i thought when i was titling the book, theres no free lunch 250 economic shoes that i was stealing it from Milton Friedman who it wrote a book and 1975 that said there aint no such thing as a free lunch, and he used that language in quite a high volume of speeches and articles and essays. But i did in my Research Find out that it was the by the way your looking today at one of the great economic historians in our country particularly in the era of the Great Depression the 1938. There was a newspaper in el paso, texas trying to make a point about opportunity cost is the First Published record of the expression. Theres no free lunch, and it was meant to be a reference to the idea of opportunity costs, which of course Milton Friedman expanded upon and i love the definition. It was great. Mancow said it was an advisor in the George W Bush administration all theres no free lunch means is that to get something i want i have to give up something i want. Its that simple and ive and ive tried to talk about it in the interviews. Ive done thus far about the book in the context of tradeoffs that economics in a lot of ways because were studying the allocation of scarce resources. We are studying tradeoffs ergo. Theres no free lunch. You know, im going to break our rules and advance a question dave. Okay, because i i do think and you make this point that in the covid discussion. Theres very little awareness of the tradeoff factor. Can you explain how that works with covid . Well, i think that covid is unfortunately one of the most profound examples of this principle that i do believe somewhat with the gift of hindsight, but i actually was really kind of writing about this a year and a half ago as well that this was a classic case of tradeoffs and they were in this case not merely economic tradeoffs. They were societal social some cases medical and societies have to make decisions about tradeoffs. The other great contemporary example is the environment in a sense that our approach to the subject to Climate Change is one massive case study and tradeoffs and and were trying to deal with different longterm things with shortterm implications and vice versa but in the covid moment, we were worried about the spread of a highly contagious virus and the wellbeing of the Economic Community had to be traded for what we hoped would be the avoidance of spread. It didnt seem to work very well avoiding the spread but we did get an awful lot of the Economic Impact on a macro aggregate sense. Its been less impactful because of the amount of money that the fed in the congress as far as flowed into the system, but on a micro level it did unspeakable devastation, but it was part of a tradeoff around what we were trying to remedy in a health situation. Im glad you touched on the social because when child stays home for two years. Theres some sorrow often not always but often and some damage and that of course is one of the tradeoffs that was unacknowledged in the very pursuit of perfect covid prevention, right . Well, ironically ill say one more comment on that Wharton Business School highly regard is one of the top Business Schools in the country and certainly never accused of having some right wing bias ran an extensive white paper, very academic estimating the hit to gdp. Over the next 30 years that they anticipate isolated to the School Closures of the covid moment, and its significant. And so i think that speaks to a tradeoff then in that case can even be expressed in economic terms. Yes. Well you think of the gi bill which got a lot of people through college after world war ii who might otherwise not have gone to college that increased our productivity. What does the opposite to when you have people less prepared than the baseline expectation, but now i want to move on all daves life. Weve known each other a long time dave and i made a cartoon book together. Its very important to be creative and econ and that that was a wonderful venture cartoon history of the Great Depression, but all the time since ive known you dave youve talked about flourishing. What is flourishing and where does the phrase come from . And what do you mean by it in the context of this book . So the notion of Human Flourishing as the aim of economics as the purpose of economics. First of all invites me to approach economics from a fully holistic standpoint. So just to use a very simple analogy if i could argue that theres an action that could be taken that would in aggregate produce an extra 10 basis points of gdp growth and would damage the soul of the society would decrease the aggregate level of happiness. Peace harmony, i would argue that that was antiHuman Flourishing that what were looking for in our economic aggregates is something that advances the wellbeing of humanity. So the way im defined it for High School Students that im teaching this subject to the semester and i know some of you are laughing right now as you should be but they so far have not thrown me out of the room is the notion of Human Flourishing as the synthesis of material and spiritual wellbeing and so Human Flourishing that leads to a harmony that to a joy of peace now, its the great Arthur Brooks at the American Enterprise institute who all of a sudden helped a popularize this concept a lot of economic minds of faith, and i consider myself an economic mind to sort of but of faith a great deal and weve been talking in this language amity for a long time about flourishing Arthur Brooks came around about 10 years ago and said, this is how people achieve happiness is with earned success that the component of family a friends of some religious connectivity and then of work that it is these are the factors that it when harmonize most bring about a happy human experience. This is theres a long tradition of teaching of this in the church both catholic and protestant traditions, and i believe that human forishing is no more complicated than that which advances the wellbeing of society and i think that economics is a profession losing. To that aim and moving into more you mentioned charts and graphs and econometrics has gotten this incredibly wrong. Well, but im going to push back a little there dave. Does that mean a child credit is more important than a significant reduction in the Capital Gains rate. Well see again that involves a tradeoff and charts and it does require charts, but what were doing when we study the charts and and evaluating an adjudicating the policy issues child tax credits have a prima facing acceptability capital gain tax reductions have a prima face acceptability. How do we look at these things and do pros and cons . I believe that reasonable people can disagree on the policies. I favor more capital gain reduction than i do child tax credits because of my belief of incentives, but i still want the aim in that policy adjudication to be Human Flourishing. Well, lets just allow since were were up here in controversial a Capital Gains rate cut can increase flourishing. It not only can it should be assumed that it will and when i say that i merely quote the great Democrat John f kennedy. Yes, sir movie i want to mention Something Else the best part of this book is not the great dave finds. Its the intro by dave dave bonsen. Please have a look at this intro and what struck me was david no noted that perfection or the concept of perfectibility was dangerous. Can you speak a little bit about that because often when we are about socialism. It sounds way better almost perfect. Um, and thats very concept that that we can get to perfection you as sale on this side of glory. I have no intention of embracing rightwing utopianism anymore than weve hopefully spent the last hundred plus years rejecting leftwing utopianism. So most rightwing criticisms right now of what they call market orthodoxy are rooted in the nirvana myth. That we can achieve utopianism and it is a forgivable mistake from the left in the sense that theyve always been making it since the progressivism of woodrow wilson. I could go further back philosophically, but i dont want to disrupt anyones lunch by talking about hegel, but the fact of the matter is that utopianism is the ultimate fallacy and Economic Policy setting for no other reason than it cannot be achieved. So you try and try and try to do things that cant be achieved how what could go wrong . Well right now many on the right would look to certain things that have not gone perfectly within markets and want to throw the baby out with the bathwater, but if they didnt have as their aim the belief that perfectibility could be achieved perhaps they would rethink that and i think we would get to a wiser approach to dealing with the challenges that we do face in the economy today. Well, yes and the Republican Party in particular is grappling with this actually both parties are grappling with these concepts whats feasible and whats just ideal and easy to sell on television. Theres a wonderful statue in edinburgh scotland. Basically black a black material right on the mile when you walk down to the parliament from where all the tours go and that is the statue of adam smith. The great philosopher in your book you say you quote smith. You say how selfish so ever man may be supposed there are other motives in his nature. Can you explain why smith is important and what he meant adam smith had the fortune of being the most famous economist in the world in a day and age before google where adam smith would have been lost in the shuffle for the vanillaness of his name, but in 1776 when wealth of nations was published and his equally significant, but somewhat lesser known book theory of moral sentiments this book, which i found from this quote that you referred which i found from russ roberts refers to something that smith hit upon that i think is profoundly important about human nature. The characterization that adam smith talked about selfinterest in a gordon gecko way that we all operate from selfinterest meaning im going to get whats best for myself. Is entirely ignorant . Adam smith did speak to the rather obvious reality of incentives that when we go to work to provide for our family, which sounds like a noble thing. We are inevitably doing commerce with somebody else and that it is benefiting and that those are good things in its this the construct of the invisible hand. But what smith says here is that mankind is more complex than that and that there are im desires to be lovely desire to be seen as lovely and that there can be we know this from aristotle and augustine and aquinas. There is a moral nature demankind that feeds Economic Activity and i believe that smith as as one of the great enlightenment philosophers. Got this right at a time that the class of Economic School had a chance to take off and so for us to now then take the advantage of what the class of Economic School created for 200 years and characterize adam smith as gordon gecko is totally unfair. So i go straight to smiths own words to basically trying to embody the notion of moral sentiments that are selfinterest when it becomes more enlightened morally leads to a better societal response of Human Flourishing. Thats right. Smith didnt write a book the story of gordon gecko and wall street greed and bad people who short he wrote a book called theory of moral sentiments. Thats right, and and thats important to to look into and to help. Im just going to go through a couple more names. Okay, david found the names. Its this ones a hard one frederick bastia. Its a french name. Okay. Bastia. But hes an important one bus just speaks in your book and in his wonderful treatises about the things one sees and that which one doesnt see what what must be foreseen. Tell us about it. Tell us the story of bastyas broken window fallacy. So i as a very very young person who did not have a very easy time getting dates with girls read henry hasletts economics in one lesson and and became very familiar with the broken window fallacy, but as i became more serious in my studies as all serious students do decided to study original sources and not merely writings about original sources that 100 years later. So hazlet was quoting from Friedrich Bastiat about his notion of broken window about fallacy and i immediately became an throttle basquiat and now its very briefly share why but biographically boston died at the age of 49 and he i think was the most important european 19th century thinker. Alexander hamilton is my favorite founding father. He died of the age of 47. My father was a incredibly remarkable christian intellectual who died at the age of 47. So i have this soft spot in my heart for people who changed the world and never made it to age 50. Its something just very interesting about it to me bastiat wrote about the broken window fallacy, which just starts with the idea of a whoigin throws a brick through a window and people come by the next morning and look at the shop and they go oh on one hand that windows broken, but this is great because now its going to help the economy because someone have to come out and fix the glass and measure the window and it will and then it will create some sort of Economic Activity out of repairing the window and bossy instead. Of course, thats true for the glass maker and the window repair person. Theres an economic benefit, but what you failed to see is that all youve done is transfer with the owner of that. App was going to do with the money to the glass and repair person and presumably if he had gone about a new suit or something more productive to his business, that would have been a more rational allocation of capital and he used it to point out one of the most important things in all of economics, and i just happened to be talking about this right now to you one week after sharing this and i think changing the lives of a bunch of 16 and 17 year olds of the classroom when they can see how economics needs to be understood and in the visible effects, but also the invisible how it affects one group of people, but also how it affects all groups and how it affects things in the short term, but also how it affects the longer term so the invisible and this is something you can carry with you your whole lives all bad economics all comes down to ignoring the invisible the longer term and all people while you look at the visible the shorter term and some people and that was bastians great. Beers and out of the 19th century hazlet was a austrian economist who wrote for the New York Times in the 20th century and popularized it and now i think its one of our most profound economic insights t