Economists Robert Lawson and Benjamin Powell break down the differences between capitalism and socialism

This is a rush transcript from "Life, Liberty & Levin," August 25, 2019. This copy may not be in its final form and may be updated.

MARK LEVIN, HOST: Hello America. I am Mark Levin. This is "Life, Liberty & Levin." Tonight is a very important program -- socialism versus capitalism. Liberty versus tyranny. I've got two great professors here to help me. Professor Robert Lawson, Southern Methodist University and Professor Benjamin Powell, Professor of Economics, Texas Tech. How are you, sir?

ROBERT LAWSON, PROFESSOR, SOUTHERN METHODIST UNIVERSITY: Doing great.

LEVIN: Good to see you. It's a pleasure

BENJAMIN POWELL, PROFESSOR, TEXAS TECH: Good to be here.

LEVIN: Thanks for being here. I read your book, "Socialism Sucks: Two Economists Drink Their Way Through the Unfree World." And you went to these places or came close them: Venezuela, North Korea, and so forth, China. This is a fascinating book.

One of the things I like about your book is it's readable for the people who need to read it like millennials, like leftists, like Democrats running for President of the United States, that's just me speaking.

So let's get started. Let's start with you, Professor Lawson. What is Democratic socialism? We hear Bernie Sanders and others use this. What does that mean?

LAWSON: Well, let's start with what socialism is.

LEVIN: All right.

LAWSON: Socialism means that the state is going to control the means of production, the land, the labor and the capital are going to be run by the government, a central plan of some kind.

Now, if you want to attach Democratic in front of that, then the idea, I suppose, is that you're going to have some Democratic system -- voting politicians -- who will elect central planners. Now that's actually where the problem comes in. Because once you centralize economic control in the hands of a few people, and that's what socialism inevitably and by definition does, then how do you have millions and millions of people influencing it, it doesn't actually work.

And so it's been tried. The greatest example in the modern era of Democratic socialism is probably Venezuela. Chavez was elected by all accounts, a free and fair election. He instituted a new Constitution and started his Bolivarian socialist revolution.

They've nationalized industries, price controls -- all of the things that go with socialism. And what happened? As it inevitably it has happened every time socialism have been tried, that concentration of power, that concentration of economic control in the hands of a few. They couldn't keep the democracy side, and they end up using the power of the state to hammer down on their political opponents, the media, the independent media, independent journalists, the independent professors, and all sorts of people and the other political parties.

So that's the problem is that you can try it for a minute, and it has been tried. But there's an internal contradiction, centralizing control over the entire economy, usually -- not usually -- inevitably means that you're not going to be able to maintain a democratic, free and open political system.

POWELL: Socialism isn't -- democratic isn't a magic phrase to put in front of socialism that makes it not socialism. As a result, there are high points of this out in the road to serfdom years ago, that you can't have meaningful democratic freedom without your economic freedoms, too.

When people point to places like -- and say, "This is successful democratic socialism," like Sweden. Well, they've got a problem. In fact, in Socialism Sucks, our chapter on Sweden is called not socialism, because Sweden isn't socialist. The government doesn't own the major means of production in Sweden.

Instead, the government is too big, it's got a big welfare state. It has got high taxes. And we think there's problems with that, but we shouldn't conflate it with socialism.

The type of big welfare state and high taxes that Sweden have will slow down its rate of growth, but it doesn't impoverish you and get rid of democracy the same way that actually nationalizing the major means of production does.

LEVIN: So in these true socialist projects, first of all, there is no pure socialism. It's impossible, isn't it?

POWELL: Well, in fact, actually, when you look around the world, pure capitalism or pure socialism doesn't exist in its purest form anywhere. Everything is on the scale. And even in our very capitalistic countries, there's government regulations that impede private property and markets. There's some nationalized industries or state provision of things and same on a socialistic --

LEVIN: But let me ask you, this Professor. But the aggressive pursuit of socialism is an aggressive pursuit of a police state. The aggressive pursuit of capitalism is the progressive pursuit, ultimately, of increased liberty. Isn't that a big difference?

POWELL: Oh, yes, absolutely. Don't get me wrong. We're both in favor of pushing as far down that capitalist road as we can go. But when we look around the world --

LEVIN: But for the audience, I want them to understand that, you know, capitalism is a good thing, socialism is a bad thing. And so an aggressive pursuit of socialism is an aggressive rejection of liberty and an aggressive pursuit of capitalism is an aggressive embrace of liberty.

POWELL: Yes, capitalism is just embracing people's liberty for consenting acts between adults. Any market exchange is okay, as long as people mutually agree to it. This is freedom. This is liberty. Socialism takes that away. And ultimately, you are part of the means of production that the government is going to control. And they're going to tell you how to use your labor and how to interact the economy. That's the opposite of freedom.

LEVIN: Let me ask you this, though. Inequality, imperfection, the rich the poor, capitalism versus socialism? What's your take on that?

LAWSON: Well, it's the social assault -- that's been their selling point. Their selling point from Marx from the very, very beginning, the selling point for socialist has been "Give us the power, we will centralize the control of the economy and we will deliver not only good economic performance," which is a lie, "but we will also deliver equality."

And that's been that's been the selling point, and equality, I have to say isn't on its surface, a horrible sounding concept. More or less, all things being equal, think equality is a nice thing. The problem is they don't actually deliver it. It's an empirical lie.

What socialism gives you, if it gives you anything at all, it will give you sameness. And this is one of the things we discovered in some of our travels.

When you go to a socialist country like Cuba today, you get two types of beer, the meals at every restaurant are basically the same. Just the day- to-day drudgery of things. Now, there's a certain equality in it in the sense that we're all going to be eating the same meals, we're all going to be having the same products available in the stores, but there's going to be no variety available.

So it's a type of equality that I like -- I think it is called sameness -- that is not the kind of equality that most of us would really want to have. And so one of the things that I think when we have this conversation about equality is let's separate what the socialists claim they can give us. They claim they can give us equality, but what they're actually going to give us and what they have given us when it's been tried, has been a dreary, sort of sameness of life.

Everybody gets whatever the government says, you're going to get what I get. I'm going to get what you get. And that's not really what equality means to me.

LEVIN: As you point out in your book. How many new cars are there in Cuba?

LAWSON: Well, new cars?

LEVIN: Any?

LAWSON: Essentially zero, yes.

LEVIN: I mean, you have basically 1957 Chevy's.

LAWSON: Well, or if you're lucky, you might find a 1990's Peugeot from France. Now in 1990s, Peugeot, Mark is a terrible car. It was a terrible car the day it was made. But it's a terrible car. And in Cuba, these cars will sell for $30,000.00 because the government won't let anybody important cars.

And if you don't anybody import -- the supply and demand. If you limit the supply, prices go up.

LEVIN: Let me ask you this. But what about the human spirit and creativity and productivity and the invention of things that help people whether it's technology or medicine, and so forth and so on, in a society that promotes uniformity?

POWELL: Yes, it kills the human creativity. Ultimately, humans are the ultimate resource. It's our creativity. But that creativity needs the liberty to flourish. And you can see it side-by-side. We're talking about Cuba and sameness and the bland Cuban food, you know, when Bernie says, "Why do you need 17 types of deodorant?" People say, "I don't know about that."

Well, try eating the same meal again and again and drinking the same beer. That's constrained human creativity. But those same Cubans, 90 miles away, make delicious food in Miami. A Cuban sandwich in Miami is great. A Cuban sandwich in Cuba is ham and cheese that's old and kind of cruddy.

When the Cubans are given their liberty, they do wonderful things with it, and instead, it is stifled on an island.

LEVIN: I want to go through a few policy issues with you. There's a lot of talk about a Green New Deal. You know, I can remember, I'm old enough to remember that the attack on free market capitalism was that it didn't create enough wealth for enough people.

Now, the attack on free market capitalism is it creates too much wealth and too much materialism. So we apparently need to regress and we need to limit the access to economic wealth -- financial wealth -- that this economy creates. And they've created this green New Deal. But this Green New Deal as I see it, I'm interested in your take, is sort of a de-growth moment, or a deindustrialization moment, wrapped up in a climate change argument. How do you see this?

POWELL: Yes, I see the Green New Deal as a Red New Deal. This is an attempt to have command and control in our economy in various ways. And it's not full out socialism of say the Cuban and North Korean variety, but it's one more step down that road to serfdom, as we lose more and more of our economic liberty and those who know best in D.C. try to plan our lives first.

The environmental part is just a sideshow. It's like you call it environmentalism in this context -- watermelons -- green on the outside, but it's red on the inside. That's the Green New Deal.

LAWSON: You know, all the problems that people see on the left, all the problems that they see -- the racism, sexism, whatever ism -- of the day that they see, the problem and some of them are real problems, I'm not going to say they're not.

All of those problems are better if we're rich. You wouldn't deal with the poverty in America. If you want to deal with malnutrition, you want to deal with infant mortality. If you want to deal with every problem you can think of, it's going to be better for the rich, and we're not going to get rich by turning over our economy and the energy that drives our economy to windmills, which are, you know, orders of magnitude less efficient than fossil fuels.

So one of the challenges is, how are you going to achieve your -- if I'm a leftist, how are you if you're a leftist going to achieve your social goals of equality and justice, and so on and so forth, while your economy is falling apart? Because a Green New Deal will absolutely cripple the American economy. I mean, you simply can't --

LEVIN: Why?

LAWSON: Well, because you can't replace fossil fuels. I mean, the driving energy source that keeps us -- keeps our houses cool in the summer and warm in the winter and our food from spoiling, our MRI machines working at our hospitals and all of these things, all of that stuff have extremely high energy requirements. And we're not going to replace that in any lifespan - -

LEVIN: And under the Green New Deal, they get into zoning, car manufacturing -- in other word, they get into anything and everything that we do in this country. And who is they? Who are going to make all these decisions? politicians and bureaucrats?

LAWSON: That's exactly right. And that's why it is the type of socialism. It's not the type of socialism maybe of the Soviet Union, but when you've got government bureaucrats who are deciding, again, what kind of energy you can use to fuel your business or fuel your hospital or your household, you are replacing a central plan. You're replacing your decision about how to do things with a central plan.

And that's what socialism at a fundamental level is. And you're -- again, you're concentrating power in a very tiny few people's hands.

LEVIN: So again, this Green New Deal is an attack on more than our economic system. It's an attack on our liberty as individuals to make decisions for ourselves to live how we want to live, where we want to live, to do what we want to do. Is that correct?

POWELL: Yes, this is about controlling people and getting rid of your liberty. Absolutely. And what people in this type of planning don't appreciate is that we are planning and coordinating in a market society. This is the role of prices and profit and loss.

When energy prices go up. That tells us that we should work on getting some substitutes. We should minimize energy use. That's the signal. We don't need a planner to do it for us. The price system is what should coordinate that.

LEVIN: You know, I remember, it wasn't that long ago, again, we were talking -- wouldn't it be great if we were energy independent? Now we're energy independent. And the same people who were saying, "Wouldn't it be great if we were energy independent," are trying to destroy the instrumentalities that have made us energy independent?

Ladies and gentlemen, don't forget, most weeknights, you can watch me on Levin TV, Levin TV. Join us by giving us a call at 844-LEVIN-TV, 844-LEVIN-TV or go to blazetv.com/mark, blazetv.com/mark to sign up and don't forget, the hottest book in America, "Unfreedom of the Press." By the way, the second hottest book in America, "Socialism Sucks." I'll be right back.

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LEVIN: Professor Lawson, Professor Powell. Professor Powell, I ask you about this. Medicare-for-All including illegal aliens, how would that possibly work? And what is it?

POWELL: It's a horrible idea. So the government is too big in our healthcare industry right now. People complain about the high cost of healthcare and they don't like how it's working. But that's not markets.

We have a severely regulated healthcare industry, whether it's the AMA controlling access to the profession and not letting nurse practitioners do more things, whether it's the FDA that makes it cost a billion dollars in 10 years to bring a new drug to market. This isn't freedom. This isn't capitalism.

Our problems in Medicine come from too much government running, doubling down and doing more government and Medicine and promising it for free would be even worse.

In fact, lots of the socialist countries have given free healthcare for everybody. The Venezuelan Constitution puts in there that everybody has a right to free healthcare.

Now, but having a right on paper doesn't actually deliver it. There's still scarcity. I mean, the average person in Venezuela last year lost something like 19 to 22 pounds. This isn't a healthy country. Putting it on a piece of paper doesn't deliver.

There's still scarcity, you still have to ration which is why you hear about these horrible things like death panels that decide who gets what care and whatnot, when you have socialized Medicine.

LEVIN: How many people run from the United States to Canada for healthcare? How many people fly to Britain for dental care? In other words, you're right, these utopian ideas just don't cut it. And so you have what? Rationing, line waiting, you don't get the cutting edge technology. You don't get the cutting edge drugs. And who do you go to if you need help? How does this work?

LAWSON: Well, it's the old saying, if you want to find out how something can be expensive, make it free, you make healthcare free. And you're going to create waiting lines. I mean, we are -- there's no country that's richer than us, including the rich United States to just say basically write a blank check for everybody and say, "Here, have as much free healthcare as you want." Because we will run out of resources.

And so we don't have enough resources, so then what? Well, then you have to ration. You have to ration. Someone has to decide. And if there is no prices to do the rationing, then it's going to be a government agency. It's going to be the Medicare-for-All agency, whatever we call it, and those guys are going to be the ones that decide, okay, Mark, well, you're sick. We don't have enough doctors, nurses and medicines to go around. We give everybody free medicine. So we're going to have to decide whether you're one of the lucky ones that gets it or not.

That rationing is required in the system. And you make that rationing so much worse when you don't charge prices. Because who is to say if your illness is worse or more deserving of care than say, Ben's illness? Well, it's going to become a bureaucrat that makes those decisions and that's inevitable. And that's how it's done in England. That's how it's done in Canada and everywhere else.

LEVIN: And this is life and death. This isn't a joke. What office do you call that can actually deliver what you need. You know, we talk about insurance companies, which are also basically appendages of the Federal and state governments at this point. But who do you call? There's no nobody - - there's no relief.

POWELL: Now, this is the problem in fact. And we've witnessed when we were traveling for socialism, so we actually went to Cuba and people would talk about socialized Medicine in Cuba being a success. This is all a myth, people have to bring their own sheets to the hospital in the places that are so poor.

But what they have is good care for the ruling elite, because some comrades are more equal than others. And for paying foreigners who pay the Cuban government for healthcare, they can get high quality care, but the average person gets horrible care there. And it's a myth that they have this great life expectancy because of socialized health. They don't have cars to die in car accidents from. They have forced abortions at their hospitals of high risk pregnancies.

Basically, they're cooking the books when it comes to the life expectancy stuff in Cuba. Socialized Medicine is a disaster there just like it would be everywhere else.

LEVIN: And we had this Obamacare that was supposed to be Nirvana. And now they basically don't even talk about Obamacare. Obamacare was like a foundational point, and now we have basically -- it is centralized control healthcare. The VA without choice.

Now, if I'm a vet, and I'm told you have a right to healthcare, that's what Bernie Sanders says, okay, I'm going to go in the VA and say, I want this, this, this. I have a right to health care. I have a right to that doctor. I have a right to that medicine. But you know, they don't. Let me put it to that -- isn't socialism one big damn lie.

LAWSON: Well, it's a great promise. It's a promise of utopia. It's a heaven on earth kind of promise. And the problem is, we don't live in a utopia. We live in a world with scarce resources, and doctors and nurses or other human beings and the people that make the drugs and design the drugs, the scientists, they're human beings, and we don't own them, you know.

And when you say healthcare is free, and it's your right, what you're essentially saying is those doctors and nurses are obligated to work for you, or the taxpayers have to pay them for you. And I think we really ought to ask ourselves a moral question. Is that really worth what this is all about? Or maybe we should have a system -- a medical center system -- that is more based on mutual gain?

Like, look, I need something I really would like something fixed, Dr. Levin, would you help me? That is a more humane, in my opinion, a more humane system for getting our needs and wants satisfied.

Turning it over to this sort of utopic almost heaven on earth kind of thing. It is really -- it's really childish on us to present this.

LEVIN: Wouldn't it be better if we embrace our strength? Blew the system up, competition, less government, all kinds of policies, all kinds of coverages, all kinds of costs, all kinds of competition, all kinds of availability.

We do it when we're selling toasters and washing machines and dishwashers. We have a department within the Department of Justice called the Anti-Trust Division that says, you know, you can't combine this TV company and this TV company when it comes to the private sector.

But yet when it comes to the government, it's the opposite. The more centralized, less competition, the better. Are we doing this backwards?

POWELL: Yes, absolutely backwards. We should be leaving people in Milton Friedman's words, "free to choose." And the competition in the private markets like that could be moved to where we don't have competition in private markets now, and it would function a heck of a lot better.

LEVIN: So a lot of the same people running for President that I see talk about the need for competition in the private sector, while they're talking about the need for monopolization when it comes to government. Monopolizing that, which is in the private sector controlled by the government.

When we come back, I have a question for both of you. Why is it assumed that people who work in the government are smarter, more noble, more earnest than people who work in the private sector? We'll be right back.

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LEVIN: Professor Lawson, so why is it assumed that if the government does and its personnel handle things that that's more noble, more humane than if it's done in the private sector? Isn't it kind of the opposite?

LAWSON: Well, I'm not sure it's the opposite. I think people are more or less people who wake up in the morning, most of us want to just make our lives a little bit better off at the end of the day than it was when we started the day.

We want to feed our kids, take care of ourselves, take care of ourselves in old age and so forth. I don't think government bureaucrats are much different than say people who work in the private sector.

LEVIN: You don't think they're different in their pursuits?

LAWSON: Well --

LEVIN: Somebody who wants a 30-year civil service job versus somebody who takes a risk? I'm not saying their DNA, they're not human beings. But there are different motivations.

LAWSON: Well, there's -- perhaps, but the difference is that they're in different systems. If you put me in a market system, where I need to create value, in order to provide for those things that I want in my life, I need to provide a product that people want to buy at a profitable level of a price level.

Or if you put me in a civil service job where the government can't have a job. We rely on taxes, which are forcibly taken from taxpayers. The DMV literally cannot go out of business. So if you put me in a DMV office, I'm going to behave in a certain way, you put me in a private sector, I'll behave in a better way.

LEVIN: So why is it assumed that people in the government offices can produce better, make better decisions than people in the private office?

POWELL: Well, they can't. And this cuts to it being the whole -- a systematic problem. It's not just about the wrong people, although, I think bad people are disproportionately attracted to politics, rather than private markets. But even with people being people.

The entrepreneur in the private market has prices and profit and loss to guide his decision making to create value for others. The government planners don't have access to that same information, because they're not getting people to voluntarily purchase their services from them.

So the informational component of it isn't the same. This is the fundamental problem that the economist level, Ludwig von Mises pointed out almost a hundred years ago in his article on socialism, and he asked socialist economies, how are you going to calculate even if we have angels in the planning bureaus, how are you going to make the calculations to coordinate your advanced production? And he says, without markets, it's impossible.

LEVIN: And isn't part of the problem, Professors that politicians and bureaucrats with good intentions could be a big problem? That is, they may have a million good intentions, but that shouldn't be imposed on us. That is their predilections, those are their desires, those are what they want. No?

LAWSON: No, that's absolutely correct. I mean, when we talk about the economy, the economy is me, and you and Ben and all the people that are watching the show. It's individuals who have their own goals and objectives. They own things that they want to do.

And government bureaucrats have this what Hayek called -- Friedrich Hayek called the fatal conceit, they have this conceit that they can divine what people really want, and that they're going to sit in their offices in Washington or the state capitals, and they're going to make the decisions to give you, Mark the things that you really want, because you're maybe not smart enough to know what you really want.

And it is a conceit. And it's not a conceit that's consistent with a free people.

LEVIN: What about this universal basic income? I remember this coming up in the 1960s. And everybody kind of blew it off and laughed at. But it's back. Cory Booker has brought it up, Elizabeth Warren, everybody is bringing it up. What is the universal basic income?

POWELL: So, it's a horrible idea. But what it is, is guaranteeing everybody a certain minimum of income that goes to everybody in society whether you need it or not. And the socialist economies, some of them that we visited in writing "Socialism Sucks" have essentially a universal basic income for everybody. And it's called poor. Poor and equal except for the ruling elite.

In the United States context, doing something like this would be just tremendously costly. And thinking about like, if there's deserving poor, or poor that you want to help. Why would you do your programs that you spend money on everybody else who doesn't need your help, too. That's got to be a really inefficient way of helping poor people.

LEVIN: And is that a way to motivate people to be self-sufficient?

LAWSON: So I grew up on the other side of the tracks. We were pretty poor. If you'd offered 13-year-old Bob Lawson. What are they talking about? They're talking like $1,000.00 a month. A $1,000.00 a month was just an insane amount of money to 13-year-old me. I was poor.

And would I have worked this hard? Would I have studied this hard? Would I have gone to college, gotten a PhD and become a professor? If you told me at 13 you can coast out the rest of your life with $1,000.00 a month, I would have probably taken that deal because to me, a thousand dollars a month, man, I was rich.

LEVIN: I'm looking at all of this. All of these subsidies, welfare related things, why would you work at all? I mean, there are people who would work regardless. But you would have a greater and greater percentage of the public who are induced by the government not to work.

POWELL: Our free enterprise system, capitalism is about two things: incentives and information. So profit and loss and salaries, these gives you incentives to do things for others, and the prices give you the information to tell you whether you're doing a good job for others.

In the socialist economies, this doesn't work the same way because they don't generate the prices for the information. And by the way, that new socialist man who is going to work for the good everybody else, he never showed up and punched the time clock. People continued to be people and concerned with themselves and weren't doing it just for the common good.

So for both those reasons, the more you socialize an economy, the less productive you get, the less good you are at satisfying the desires of everybody else in society.

LEVIN: Folks, don't forget, almost every weeknight you can watch Levin TV, Levin TV. You can give us a call to join up, I hope you will at 844-LEVIN- TV, 844-LEVIN-TV or go online blazetv.com/mark, blazetv.com/mark. And don't forget to get your copy of "Unfreedom of the Press." We'll be right back.

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LEVIN: Now, Professor Lawson, going down the long list of utopian ideals here, free college and eliminate college. This obviously is aimed at the millennials. Two thirds of people in this country never graduate from college. So you'd actually have people who are poor than those people subsidizing them and paying off their loans, too, while we're at it. So much for the little guy. But what do you make of that?

LAWSON: Well, we went to Chicago for the socialism conference and talked to a lot of young millennials, if you want to call them that.

LEVIN: You were having a hell of a good time writing this book.

LAWSON: It was fun.

LEVIN: North Korea, Venezuela.

LAWSON: Yes, Chicago.

POWELL: We got to drink all over the place.

LAWSON: It was great. And certainly the student loan and free student loans or forgiving student loans was a big part of the agenda at the socialism conference. This confused Ben and me a little bit because free student loans aren't obviously a socialist plan, it is just a big state -- welfare state plan. So calling it socialism was a little bit of a problem.

But we certainly had a lot of people who thought that was a good idea. But we go back to the same conversation we had about free healthcare. You can't make something free -- well, you can, but if you do, you have to ration it, because everybody is going to want to go and one of the things you see with the free university systems in Europe, is they don't take very many college students.

So we're trying to send a third of our high school or 40 percent of our high school students, 50 percent -- we're trying to send huge numbers of people to college in the United States. The only reason this is financially viable is if we charge them.

If you make it free, we're not going to be able to afford to send that many students. We have to, again, the central planner or some bureaucrat, some testing agency or somebody is going to have to decide which lucky high school students get to go to college. Because if it's free, we can't afford to send everybody who wants to go when it's free.

LEVIN: We also know those decisions aren't always based on merit are they? You've got all kinds of political, ethnic, genitalia -- all kinds of decisions that are built into these things that have absolutely nothing to do with brain power. What do you make of this?

POWELL: Yes, absolutely. And you know, when we went to Chicago -- it was fitting it was in Chicago, this big socialist conference, we called the chapter "Back in the USSA." And we talked to a lot of these millennials and young people there, because it was overwhelmingly young people.

And while they talked about free college or forgiving debt, what you actually got when you talk with a lot of them is a whole host of issues where they are just kind of far left of the Democratic Party. But when you ask them, are you in favor of abolishing private property and replacing it with state planning and control? The majority of them aren't. They don't equate socialism with its defining characteristic.

Instead, it's whether it's the environment, gender issues, pick your issue -- they're just far to the left, and somehow someone has told them socialism is the answer, when really what we need to be saying is capitalism, freedom, free enterprise, free association, and cooperation -- a type of word that socialists and lefties like.

Capitalism is cooperation, buying and selling, exchange, this is cooperating on a voluntary basis. So what we've tried to do in this project is reach out to millennials and write in a way that they can engage with and understand some of the benefits of capitalism and how socialism is the opposite of a lot of the values that they espouse.

LEVIN: Part of the great difficulty from my perspective, you're both professors, is that you're in a small minority around the country. And it's relatively easy, particularly if you're a Marxist to get tenure in these colleges and universities.

And in some of the so-called leading colleges and universities, faculty pick incoming faculty, it's a very incestuous relationship. And so you speak out, I speak out. Most Republican or conservative politicians have marbles in their mouths, I don't know how to explain these things.

So even when it comes to informing our fellow citizens, particularly young people, it becomes difficult. So the emotional or passionate plea, I'm going to give you this, I'm going to give you this, the world's going to look like this, the world's going to look like -- there's not a lot of counterbalance. And this is extremely concerning to me, extremely troubling to me.

There's no answer, so I'm not going to say how do we fix this? But I am going to say, maybe the government should do a little less subsidizing of universities and colleges, and a little bit more promotion of, again, competition, which would promote more ideas, more opportunities for different kinds of faculty, for different types of professions, and so forth. What do you think of that?

LAWSON: I think the higher education business, it needs to be, what's the word today? Disrupted. I'd like to see much more competition. The higher education accrediting agencies have created a sort of homogeneity across the landscape, and that is not good for a vibrant education. So I'm in favor of this.

LEVIN: You won't get in trouble.

LAWSON: One of the things that Ben and I -- you know Ben and I teach in Texas and there's a reason for that and it's because we found some difficulties in other states teaching and espousing the ideas that we do. So we went out --

LEVIN: So let's stop. Hold on that point.

LAWSON: So we gave up and went to Texas.

LEVIN: We're supposed to have what's called academic freedom. Ideas. This is the place it's supposed to take place. Really vibrant debate, different ideas. Libertarians, conservatives, constitutionalist, whatever we call ourselves. We love that.

POWELL: Dude, Mark.

LEVIN: Yes.

POWELL: We're two academics. We wrote a book called "Socialism Sucks." Two economists drink the way through the unfree world. That's academic freedom working right there.

LEVIN: Exactly. But you had to go elsewhere do it. And what I'm saying is, more and more of these universities, a conservative wants to speak. They have to bring in the police. The commencement speakers always seem to be of one ideology and so forth.

And so my concern is, and I don't mean to put you gentlemen on the spot is our universities look more and more like these socialist regimes that we talk in terms of liberty and freedom of speech, and so forth, not exclusively, but more and more -- from the outside, I don't work in them -- than when I was going to school.

I went to Temple University, it was a very radical left wing school in North Philadelphia. And I was an outspoken conservative for Ronald Reagan. And people wanted to hear what I had to say. Today, I think I would have been, perhaps beaten to a pulp.

POWELL: You know, there is some aspect of that out there, Mark, I don't want to underplay it. But I think it's disproportionate in how it's covered in the media first, at least how I've personally experienced it.

LEVIN: But you're in Texas now.

POWELL: But I speak all over the country. And my pet topics that I'm usually invited on are either socialism, sweatshops, defending sweatshops or immigration. So these are all controversial topics. And I've had students protest me when I'm speaking, but I've always been able to deliver my lecture and have a civil conversation with the vast, vast majority of the students there, and the faculty who attend.

LAWSON: I will say this, I think that if you're a conservative or a libertarian professor, you have to be a little bit more guarded about what you say and how you right and how you talk to students.

Maybe you need to publish one or two more articles than your left wing colleague down the hallway, but it's at least in Economics. Now, Ben and I also are also on Economics, we're not in Humanities. And I don't want to speak to what it's like in the Humanities. It doesn't look very good from afar.

But at least in Economics, our chosen profession, if you're good at your job, and you publish, you can be any political thing you want to be.

LEVIN: We'll be right back.

(COMMERCIAL BREAK)

LEVIN: Now, Professor Powell, let me bring up this issue of cost. I know it doesn't excite people. But everything has a cost. And I don't hear it brought up to any of that based by any of the journalists, so we're asking you the questions. There's more than even this that's being proposed. Plus we have our current circumstances of massive debt. How do we pay for all this?

POWELL: We're not going to. The government is ultimately going to have to default in the long run on some of its promises that it's made. Forget the free college, free healthcare, everything else they are talking about.

What we have on the books right now is not sustainable. Social Security will not be able to pay for itself going forward. We are not going to be able to make the type of payments that are promised. So that's going to mean some sort of default whether a default on actual obligations in terms of defaulting on the debt, or whether it's changing the ages and the requirements and the payments that you get under Social Security.

The government has promised more can be delivered. You can't squeeze blood out of a rock. You're not going to squeeze more money out of our economy to pay the type of debts that this government is racking up.

LEVIN: Don't we have a massive debt now?

LAWSON: So yes, so one way we can default though is to print money, maybe one of the greatest risk of the national debt at its scale. If the politicians won't actually have, but they won't be brave enough to tell our Social Security recipients, "Sorry, you're not going to get that $400.00 check, you're going to get a $300.00 check because we are out of money." They are instead going to print a hundred dollars, and at the scale we're talking about that is inevitably inflationary.

So I think that the default might be a different type of default. It might be an inflationary default, which is still a default, because the value of the money that you're going to get as a recipient of Social Security or Medicare won't be what you were promised.

LEVIN: What does that do to everybody in the country?

POWELL: Oh, a hyperinflation of that type of magnitude, utterly wrecks an economy. It destroys your price system, your ability to calculate profits and losses between things. It all gets -- this is not like a three percent inflation. This is hyperinflation. It grinds economic activity to a halt.

I mean, this is what we saw with Venezuela. We saw people lugging suitcases across the Venezuelan border into Colombia to buy basic necessities to bring back with them. But the suitcase was heavy both ways, because it was stuffed with the worthless cash that they had from Venezuela because of the hyperinflation there. They needed a suitcase full in order to buy basic supplies.

LEVIN: When we see these pre-World War II black and white films of Germany, and the Myanmar Republic, and people pushing barrels filled of their paper currency at the time. So what it does ultimately is it destroys the society. Right? Completely destroys the society, starvation, poverty. Why do we need example, after example, after example of this? We've got one south of the border in Venezuela, which is rich in oil. It actually has more oil reserves than any of the country on the face of the Earth. It was a vibrant, rich country 50 years ago, probably the richest country south of the border.

Look at it. It's the poorest country -- one of the poorest countries on the face of the Earth. People starving to death. People being killed because they object to what's taking place. How many more examples do we need, that liberty related economics works? And tyranny related economics is a disaster.

POWELL: Hopefully no more examples, Mark, but unfortunately, I think we're going to keep getting them. But when we look -- I think Venezuela is really important to look at because you're absolutely right. In 1970, the average Venezuelan was richer than the average Spaniard. This was a relatively wealthy country. And it was democratic, as we discussed earlier. This is what Democratic socialism will give you -- political tyranny and poverty.

LEVIN: I noticed Bernie Sanders doesn't point to Venezuela anymore.

LAWSON: Yes, he likes to point to Sweden and Denmark as his iconic place - -

LEVIN: But you're also -- he is wrong.

LAWSON: He is also wrong about that. But you know, I think Bernie is a little bit of a shyster, frankly. I think he is lying to us. You know, he went to the Soviet Union in the 70s and he liked it.

LEVIN: Yes.

LAWSON: And so for him now to say, "Oh, no, no, no, I don't mean socialism like the Soviet Union. I mean, Denmark," is a massive bait and switch on his part, and we shouldn't let him get away with it.

LEVIN: No. And it appears that Elizabeth Warren is running to his left. Go figure. I'll be right back.

(COMMERCIAL BREAK)

LEVIN: Professor Lawson, 10 to 20 years from now, America, more socialist? More capitalist?

LAWSON: I'm an optimist. So I'm going to go with more capitalist. And part of the reason I say that is because if you'd asked me that question 20 or 30 years ago, you know, coming out of the 70s when we had wage and price controls, we had borderline hyperinflation. We were talking about industrial planning at the national level. All of those ideas were considered to be absolutely absurd now, right? I think it's -- no one would national wage and price controls in the United States today.

So we are much freer and more economically free, much more capitalist today than we were in Jimmy Carter's 1970s. And I think that trend is still going on, it is still going on around the world and U.S. is part of the world. I think we're on a trajectory. This is a little bit of a hiccup. But I'm actually an optimist.

LEVIN: Professor Powell?

POWELL: I'm an optimist, too, but because I believe in the power of ideas. I think the ideas of freedom and free enterprise are more compelling than socialism than an anti-capitalist rhetoric more generally. So if our ideas are better, and we do a better job of communicating, the world should move in that direction.

Now, I think economists generally do a fairly bad job of communicating these things to the general public. Bob has written plenty of boring journal articles that nobody reads, I have written some that probably nobody reads --

LEVIN: He is your friend, right?>

POWELL: Yes, but this was our attempt in writing "Socialism Sucks," as a travelogue, as fun, as having beer, trying to relate to particularly millennials, but normal people out there who wouldn't read Mises, Hayek, Adam Smith, but who might read a couple of semi-sober economists going around the world, but still get the deadly serious ideas of the economics and the history between capitalism and socialism.

LEVIN: I'll tell you what I'm concerned. The center keeps moving left. The government keeps growing. I don't really know of any political or governmental way to start to contain it other than maybe Article V Convention of States.

I see the progressive movement of a hundred years has been extremely successful in devouring numerous institutions, including yours, in my opinion. I see some pushback. So I think it's a coin toss. At best. It's a coin toss at best. The Republic's don't survive forever. I'm not saying this one's over. We're fighting like hell with ideas, with books, with this TV show and so forth. But it's a tough nut. The American people must get engaged.

Professors, it has been a great pleasure. Thank you.

LAWSON: Thank you.

POWELL: Thank you, Mark.

LEVIN: Thank you very much. Appreciate it. Don't forget next time to watch "Life, Liberty & Levin."

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