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Ep. 37 Socialism and Capitalism Myths — Transcript

by John Stossel · 3,671 words · 617 segments · language en · Watch on YouTube

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0:00The new book, it's okay to be angry
0:02about capitalism. People eagerly find
0:04fault with capitalism.
0:06>> If capitalism works, if this is the best
0:08we got, why does it seem to give such a
0:12raw deal a raw deal? Is that what we
0:15get? I hear that often. In capitalist
0:17society, the people who work the hardest
0:19make the least amount of money.
0:21>> We can either have extreme wealth
0:23inequality, or we can have a fair
0:27economy.
0:28Many people are upset about America's
0:30big differences in wealth. And they say,
0:33"Socialism would just be better."
0:35Socialism is the way forward.
0:39[Applause]
0:40It's time to take a closer look at the
0:42socialism THESE PEOPLE WANT.
0:47WE ARE COMMITTED TO TRANSFORMING OUR
0:48society into one based on freedom,
0:51equality, and solidarity. The belief
0:54that socialism will bring that is why
0:56it's now as popular as capitalism among
0:59young people.
1:02Another big reason is, oddly, this
1:0490-year-old linguist Noam Chomsky.
1:08Students study his work in class.
1:11Colleges pay him up to $30,000
1:14to speak.
1:14>> Thanks very much. Yet, for generations,
1:17Chomsky misled students by calling
1:19capitalism a grotesque catastrophe.
1:24I thought the fall of Soviet communism
1:26would put an end to such nonsense.
1:28Surely, everyone would now see the
1:30catastrophe is socialism.
1:34But no, socialism has come back strong.
1:37So, in this podcast, we'll bust five
1:40myths about socialism and even more
1:42myths about capitalism. Starting with
1:45socialism, the first is the claim that
1:47that wasn't real socialism. The Soviet
1:50Union, this was about as remote from
1:52socialism as you can imagine. It's
1:54absurd to say that the Soviet Union was
1:56remote from socialism. Economist Ben
1:59Powell reminds us that when the Soviets
2:01made private business illegal, that's
2:03about as close as the world ever saw to
2:05the pure socialist end of the spectrum.
2:07But whenever socialism fails, people
2:10always say, "That wasn't real
2:12socialism."
2:13>> It doesn't prove anything about
2:14socialism in other countries. Working
2:17people have to be in control of
2:18production. The Soviet Union was exactly
2:20opposite of that. Working people had no
2:22control over anything. But that's the
2:24problem. That is what socialism
2:26inevitably delivers. Socialism means
2:29abolishing private property in the major
2:32things that go into production, and
2:34replacing it with some form of
2:35collective ownership. In practice, this
2:37means state ownership and control. And
2:39the Soviet Union had an abundance of
2:41that.
2:44Of course, the Soviet Union is now gone.
2:47So, some say there is no true socialist
2:50country that exists today. But there is.
2:53Look at Venezuela. Just eating is a
2:55luxury. When I say socialism created
2:58hardship there, people trash me on my
3:00own social media. Read a book. Venezuela
3:04is not socialist. Think a bit. I'll do
3:07better than that. I'll listen to the
3:09politician who wrecked Venezuela.
3:13Because capitalism is tyranny, Hugo
3:16Chavez said his government must take
3:18over businesses.
3:26That's socialism. The socialist turned
3:29the richest country in Latin America,
3:31the nation with the biggest oil reserves
3:33in the world, into the poorest country.
3:36But it's not clear that that crisis has
3:38anything to do with their socialist
3:39policies.
3:40>> That's myth two. Venezuela's failure has
3:43little to do with socialism and a lot to
3:45do with poor governance. Some of
3:47Chavez's programs could have been
3:49sustainable if he pursued a sound
3:51economic policy.
3:53Yeah, some of his policies could be
3:54sustainable if he had a sound economic
3:56policy called capitalism.
3:58>> Why does it have to be capitalism?
4:00Oliver's saying if he just managed it
4:02better. It's a story about epic
4:04mismanagement. Or here's how Al Jazeera
4:07puts it. Economic policies have failed
4:09to adjust to reality. That's the nature
4:11of socialism is for their economic
4:13policies to fail to adjust to reality.
4:15Because economic reality is evolving
4:17every day. It's millions of
4:19decentralized entrepreneurs and
4:20consumers who are making fine-tuning
4:22adjustments to this. In our capitalist
4:24society, when COVID hit, what did we
4:27start seeing? Millions of entrepreneurs
4:29adjusting without government orders of
4:31how to deliver their products and
4:32services. Servers have switched roles to
4:34delivery drivers, while bartenders have
4:36turned into sales reps. Restaurants
4:38installed the heat lamps, expanded
4:40patios, did delivery. Although reporters
4:43complained about the absence of federal
4:45direction, no central authority could
4:48possibly direct all these individual
4:50adjustments in thousands of different
4:53places. In fact, federal direction would
4:55have prevented all that. In a market
4:57economy, the great thing is everybody's
4:59little adjustments gets tested, and we
5:02get to see what works.
5:05Blockbuster was great, but then people
5:07were offered something better. TV shows
5:10and movies at your command.
5:11>> By contrast, in a socialist economy, you
5:14get a one-size-fits-all adjustment, and
5:16you miss out on this learning process
5:18where some entrepreneurs copy others
5:20when they see things successful, and
5:21they stop doing it when it's not. For
5:23example, East Germany's socialist
5:25planners pushed these Trabants.
5:29They said the cars were great.
5:33But it was a terrible car, hard to
5:35drive, and it spewed pollution. Even
5:38when West Germans were building
5:40Volkswagens, BMWs, and Porsches,
5:44East Germans were stuck with Trabants.
5:46In a socialist economy, every one of the
5:49minor adjustments needs to be commanded.
5:51One mind who has to know all of those
5:53teeny adjustments, communicate down, and
5:55get everybody to do the right thing.
5:57That's impossible. No government
5:59department can manage millions of
6:01individual decisions and prices. When
6:04they try, shortages occur, and money
6:06loses value.
6:08If you work the whole month, you can buy
6:11one hamburger. Here's another excuse for
6:14Venezuela's failure. Oil prices
6:16plummeted in 2014, and Maduro failed to
6:19adjust. Vox made this video called The
6:22Collapse of Venezuela Explained. In the
6:25whole video, they never mention
6:26socialism once. They blame falling oil
6:30prices. The oil price is a complete
6:32distraction. There's plenty of countries
6:34around the world that depend on oil
6:35revenue. When oil prices went down, the
6:37people there didn't start losing weight.
6:40That just happened in Venezuela. Some
6:42people respond to my videos by saying,
6:44"People in Venezuela and Cuba struggle
6:47not because of socialism, but because of
6:50our sanctions and embargo." They
6:53certainly don't help the people, but
6:54it's an afterthought as a reason for
6:56their suffering. In Cuba, they drive
6:58around 1950s US cars, but we don't have
7:01a blockade on them. There's no US Navy
7:03destroyers preventing Kia, Fiat, or
7:06whoever else around the world from
7:07sending them cars. The reason for their
7:09suffering is they have an economic
7:11system that can't deliver. Here's myth
7:13three. Socialism brings good things if
7:16it's democratic socialism. The examples
7:18of failed socialism that critics use are
7:20not socialist democracies, but
7:22authoritarian states. Democratic
7:24socialists denounce all that. The
7:26keyword for them, democratic. They
7:28believe that both the government and the
7:30economy should be run by the people by
7:32way of the ballot box.
7:37BUT VENEZUELA'S SOCIALIST WAS ELECTED.
7:44They can start off democratically
7:46elected, and then once they centralize
7:48control over the economy, it becomes
7:50impossible to democratically unelect
7:52them. Now, Maduro rules while ordering
7:55state employees to vote for him or they
7:57lose their job.
7:58>> Maduro blatantly buying votes. They put
8:01food aid stations next to polling
8:03places, and you get rewarded with
8:04rations if you vote correctly. Now,
8:06democracy there is a sham. It always
8:09becomes authoritarian, always?
8:10Everywhere you try socialism, that's
8:12what you get. Why? It's hard to exercise
8:15political freedom if you don't have
8:17economic freedom. If you're dependent
8:18upon the state for your livelihood, you
8:20lose your ability to use your voice to
8:22oppose them because you can be punished.
8:24But unfortunately, people don't realize
8:26that when they're promoting democratic
8:28socialism. Democratic socialism is your
8:31kids' public school. It's the
8:33researchers and scientists paid with our
8:35taxes. It's our interstate highway
8:37system. We're not purely capitalist.
8:38There are some industries that are
8:40government-owned, operated, and
8:42controlled, socialized, if you will.
8:44It's no accident that when you look at
8:45these and think about things that are
8:47inefficiently done and underperforming,
8:49our public education,
8:51our congested streets,
8:53these socialized industries don't work
8:54well. But what about Norway? It's as
8:57socialist as they come. Instead of Cuba
9:00or China, think Sweden. Myth four.
9:03Socialism does work well in Scandinavia.
9:07But Scandinavian countries are not
9:09socialist. Sweden isn't socialist. Volvo
9:11is a private company. You go to
9:13restaurants, hotels, they're privately
9:15owned. Markets organize the vast
9:17majority of of Swedish economic
9:19activity. But Sweden did have a period
9:21in the 1970s and 1980s when we had
9:23something
9:24that resembled socialism. A big
9:27government that taxed and spent heavily.
9:29There were waiting lines to get health
9:30care. People couldn't get the pension
9:32that they depended on for the future. At
9:35that point, the the Swedish population
9:37just said, "Enough. We we can't do
9:39this." So, Sweden cut taxes and cut
9:41government spending.
9:43[Applause]
9:44They privatized trains, sold state-owned
9:47businesses. When I talk about democratic
9:49socialism, I'm looking at a country like
9:51Denmark.
9:52>> When American politicians wrongly called
9:54Scandinavia socialist, Denmark's prime
9:57minister came to America to refute them.
9:59Denmark is far from socialist planned
10:03economy.
10:04Denmark is a market economy. In fact,
10:06Denmark today ranks higher economic
10:09freedom than the US. With much freedom
10:12to pursue your dreams and live your
10:13life. Finally, myth five, socialism is
10:17completely different from fascism.
10:19When a congressman said The potential is
10:22out there
10:23for another Hitler socialist like Hitler
10:26to come along. Another congressman said
10:28he was wrong. It's the Nazis that's
10:29terrible, not the socialists.
10:31>> they were Nazis. They killed Jews and I
10:32get offended when you compare socialist
10:35to Nazis. They were fascist. It's true
10:37that fascism and socialism aren't
10:39exactly the same. But they do have a lot
10:42in common. They both replace market
10:44decision-making with command and
10:46control. While socialism abolishes
10:48private property and replaces it with
10:49state ownership fascism leaves private
10:52ownership in nominal terms at least but
10:54replaces decision-making with state
10:56control and orders. As an average person
10:59living your life whether under socialism
11:01or fascism you lose your autonomy your
11:04control over your own future. Only under
11:06capitalism do you have the freedom to
11:09say no. Entrepreneurs offer you their
11:11services they offer you employment, you
11:15can say no and choose a better path for
11:17yourself. You don't get that same type
11:19of choice when someone else is planning
11:21the economy. Powell and another
11:23economist wrote a book about socialist
11:25countries. We went to Socialism 2018.
11:29The biggest gathering of young
11:30socialists and they pointed out lots of
11:33problems in the United States. Problems
11:34with migration, with war, with policing.
11:38The problems they were identifying were
11:40the product of bad government that the
11:42US is giving them, not capitalism.
11:44Socialism appeals cuz it promises
11:46fairness and equality. Resources should
11:49be
11:50allocated to those who need them. They
11:53hear the preaching of socialism about
11:55equality but they don't look on what it
11:57actually delivers. The history of
11:59humanity is of poverty, starvation,
12:02early death. This was true throughout
12:05our history until very recently.
12:07In the last 20 years we've seen more
12:09humans escape extreme poverty than any
12:12other time in human history and that's
12:14because of markets. Right. Free markets,
12:17capitalism, that's what makes us richer.
12:20But everywhere people trash capitalism.
12:23No system has redistributed wealth from
12:26the poor to the rich as effectively as
12:28our own. I call it slavery by another
12:31name.
12:32>> We covered the biggest myths about
12:34socialism. Now we'll bust seven myths
12:36about capitalism. No one ever makes a
12:39billion dollars. You take a billion
12:41dollars.
12:44That's myth one. Capitalists get rich by
12:46taking money from others. Jeff Bezos has
12:49what? A hundred billion dollars?
12:51Yeah, his wealth is making a lot of
12:53people poorer. People assume that
12:55because they think We have a finite
12:57amount of money. A finite amount. So
13:00when they win, you lose. But that's not
13:03true. Because entrepreneurs create new
13:06wealth.
13:07Research shows that when they got rich
13:09they only kept 2.2%
13:12of the additional wealth they generated
13:14for the economy. Economist Dan Mitchell.
13:16In other words, the rest of us
13:19captured almost 98% of the benefits.
13:21Today Apple is going to reinvent the
13:24phone. Yes, Steve Jobs kept billions.
13:29But by creating Apple, he gave us more.
13:33So many new jobs and he added billions
13:36to our economy all by creating tech that
13:39makes our lives better. I hope that we
13:41get a hundred new super billionaires
13:44because that means that there's a
13:45hundred new people who have figured out
13:48ways to make the rest of our lives
13:49better off. Let's abolish billionaires.
13:51This former labor secretary says
13:53>> Entrepreneurs like Jeff Bezos would be
13:55just as motivated by say a hundred
13:58million or even fifty million dollars.
14:01Ooh. But he misses the most important
14:04fact about capitalism. I'm not giving
14:06Jeff Bezos any money unless he's selling
14:09me something that I value more than that
14:11money.
14:13Billionaires.
14:15No one deserves to have that much money.
14:17None of these zillionaires needs that
14:19much money. If you put a cap on how much
14:22money someone can make, are they going
14:24to continue innovating? No. Maybe you
14:26just decide to take it easy. You retire.
14:29You sail a yacht around the world.
14:30You're going to start consuming instead
14:33of saving and producing. When I say
14:35things like that, people call me a
14:37complete and tweet more money in
14:40the richest hands means money sitting in
14:43the bank doing nothing.
14:46But that's an ignorant view of banks. In
14:48reality that money gets lent out.
14:51>> Which allows other people to build
14:53businesses, buy homes, get educated.
14:57>> tools, factories, equipment, technology.
15:00Still, we hear the rich getting richer
15:03and the poor getting poorer. That's myth
15:05two. The truth is that the poor and
15:08middle class are getting richer, too.
15:10The economic pie grows. We are much
15:13richer than our grandparents and our
15:15grandparents were much richer than their
15:18grandparents. For thousands of years,
15:20the world had almost no wealth creation.
15:23Then some countries tried capitalism.
15:25You can see that per capita GDP is
15:28climbing and climbing and climbing.
15:30Capitalists helped everyone including
15:32the poor. They do by bringing cheaper
15:34and better food to my supermarket. They
15:37do it by providing better goods and
15:38services. So high-tech, it could only
15:41come from Motorola. Look how
15:42communications changed. 25 years ago
15:45phones looked like this. Then we got the
15:47Blackberry, the iPhone. Way smarter than
15:50any mobile device has ever been. Now we
15:52have cheap smartphones. When the media
15:54say The middle class is in decline.
15:56America's middle class is in decline.
15:58Well, they're right.
15:59>> But they miss why. It's shrinking
16:01because more and more people are moving
16:03into those upper income quintiles.
16:06The rich get richer in a capitalist
16:08society, but guess what? The rest of us
16:11get richer as well. The average family
16:13today is almost a third richer than 40
16:16years ago because capitalists compete to
16:19get our dollars.
16:21Of course, this assumes there's
16:22competition. But I'm told that's no
16:24longer true. In fact, I'm a miserable
16:27selfish pig for not saying that
16:30monopolies destroy the free market. Some
16:33Republicans and Democrats say that's why
16:36tech companies must be broken up.
16:38Calling Facebook, Amazon and Apple all
16:40monopolies. But are they really
16:42monopolies? We do have monopolies, the
16:45government school system, the postal
16:47service. Monopolies are almost always a
16:51creation of government intervention.
16:53Blocking competition for example.
16:55Keeping your phone system the best in
16:57the world. Government granted Ma Bell a
17:00monopoly on phone calls.
17:02And in 30 years their phones went from
17:04this to well, just this. Always
17:07improving.
17:09That's the Bell System for you. A short
17:11phone call cost $17.
17:14Ma Bell got away with that because
17:16government banned competition. In a free
17:18market economy, it's impossible to have
17:21a monopoly because if somebody manages
17:23to get a lot of market share and they
17:26try to raise prices, new competitors are
17:28going to spring up and they're going to
17:30draw away the customers.
17:33That happened to Blockbuster. It charged
17:35late fees. Netflix promised no late
17:38fees.
17:41Blockbuster soon went out of business.
17:44But people say today's tech companies
17:46are uniquely powerful. No one can
17:48compete with them. I use DuckDuckGo as
17:51my search engine. I don't use Google.
17:53But guess what? Even if I used Google
17:55and Facebook for 10 hours a day
17:58no one's holding a gun to my head.
18:00They're they're obviously providing
18:01something of value. Heck, they're
18:03providing free search engines, free
18:05social media. Just 14 years ago people
18:08called MySpace a monopoly. Then Facebook
18:11proved them wrong. Our government once
18:13called US Steel, Pan Am, IBM, Internet
18:16Explorer and Kodak monopolies. That's
18:19something to consider next time you hear
18:21Big Tech are the robber barons
18:25of the 21st century. Robber barons like
18:28Rockefeller, Vanderbilt. And we'll get
18:30to them shortly, but first, myth four,
18:33free markets create unsafe workplaces.
18:37Only government through agencies like
18:39OSHA can stop that. I've had some show
18:42me charts showing, oh, look at how
18:44workplace fatalities have come down ever
18:47since OSHA was created. Well
18:49I actually went to that same data source
18:52and I looked at the decades before OSHA
18:54was created. No wonder the bureaucrats
18:56don't show us that. Fatality rates were
18:59already going down just as fast. Why? As
19:03we become richer
19:04we become safer. The wealth capitalism
19:07creates lets us afford safety devices
19:10and build machines to do the most
19:12dangerous work. In capitalist societies
19:16we have cleaner water, cleaner air
19:19better lifestyles. We need more
19:22capitalism because when people get rich,
19:24they can afford more safety. But before
19:26government protected us, I'm told
19:29unfettered capitalism created evil
19:31robber barons. Collecting great riches
19:34at the expense of workers who toiled
19:36often in dangerous conditions for little
19:38pay. But little pay compared to what?
19:41When we look back upon factory life a
19:43hundred years ago, we think, oh my god,
19:45that's terrible because by our standards
19:47today it is terrible. But compared to
19:49toiling for 14 hours a day on a farm for
19:52half as much money, that stage of our
19:55economic development was practically
19:57nirvana. Still, most people were poor
20:00while the robber barons amassed a huge
20:03amount of wealth. Folks like John D.
20:04Rockefeller who created the oil
20:06industry. People still call Rockefeller
20:08a robber baron, but he wasn't born rich
20:11and he didn't rob. Rockefeller got rich
20:14by inventing ways to deliver oil for
20:17less. John D. Rockefeller kept lowering
20:19the price. That's why he got more market
20:21share. No one was forced to buy his oil.
20:24And although the media implied that
20:26people suffered to support the fat cats,
20:29the entrepreneurs' innovations actually
20:31made almost everyone better off. In the
20:341800s, the era of the so-called robber
20:37barons, we went from agricultural
20:40poverty to a country characterized by
20:43middle-class prosperity. Cornelius
20:45Vanderbilt was another tycoon the
20:47anti-capitalist media called a robber
20:49baron. But he too was no baron. He was
20:52born poor. At age 11, he quit school to
20:56work on boats.
20:58Then he invented ways to make travel
21:00cheaper. He cut the New York-Hartford
21:02fare from $5 to $1. His competitors
21:06didn't bother because they were used to
21:08friendly politicians giving them
21:10subsidies. That's not capitalism. That's
21:13corporatism. Only when politicians leave
21:16capitalism largely alone does it create
21:19wealth.
21:20Still, I hear that capitalism just isn't
21:23good for us. Capitalism is not designed
21:25to optimize our well-being. Does anyone
21:27still believe that cheaper iPhones or
21:30more Amazon deliveries of plastic
21:32garbage from China are going to make us
21:33happy? We're not buying iPhones and
21:36plastic garbage unless we think it's
21:38better for us than the dollars that we
21:40have in our bank accounts. Capitalism is
21:42the only system that gives people the
21:45liberty to make their own choices. I
21:47want liberty. However, now I'm told a
21:51robot is probably going to take your
21:53job.
21:53>> That's our last myth. Capitalism will
21:56take away everyone's job. 50% of the
21:59workforce being completely eliminated as
22:02in no more jobs for them. For years,
22:05experts predicted employment will
22:06decline. But so far, it's never
22:09happened. When markets are free, some
22:11people do lose jobs and that's hard on
22:14them and their families. If I was a
22:16typewriter builder 30 years ago, the
22:19personal computer probably destroyed my
22:21job. If I was a candlemaker, electricity
22:25destroyed my job.
22:27It's upsetting when any person loses a
22:29job, but overall, capitalism creates
22:33millions more jobs. When America began,
22:3690% of workers worked on farms. Now
22:38fewer than 2% do. Farm workers found
22:42better jobs. As long as our economy has
22:44the dynamism that free markets allow,
22:47we're going to see more job creation and
22:49higher income levels and that's what
22:51makes the children and grandchildren of
22:53typewriter makers so much better off.
22:56and steering on its own. Now truck
22:58drivers rightly fear self-driving
23:00trucks. Would you, Tucker Carlson, be in
23:03favor of restrictions to use this sort
23:05of technology?
23:06>> joking?
23:07In a second.
23:09In a second. In other words, if I were
23:11president, we're not letting driverless
23:13trucks on the road, period.
23:14>> Support the coalition of obsolete
23:16industries? But what would happen if
23:18politicians did block innovation? This
23:21parody lays it out pretty well. I used
23:23to have to clean people's toilets, empty
23:25them from the alleyway behind the house,
23:26and now flushing toilets and plumbing
23:28has taken away my job.
23:29>> Electricity has taken over my
23:31profession.
23:31>> Well, that sounds like Tucker being
23:33worried about driverless trucks. If we
23:35don't stop progress, how will anyone
23:36ever have jobs?
23:39Creative destruction does destroy, but
23:42what it creates is so much bigger, so
23:45much richer, and so much better for us.
23:48Better for most everyone, rich and poor.
23:51That's capitalism. That's something that
23:53we should be celebrating. No other
23:55system anywhere in the world has ever
23:58come close to capitalism's ability to
24:00generate mass prosperity.
24:02Thanks for listening. New episodes drop
24:04the first Monday of every month. You can
24:07subscribe wherever you get podcasts.

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Use the transcript to take notes, quote the speaker, build a study guide, generate a summary with ChatGPT or Claude via the YouTube Summary tool, or export it as a timed subtitle file with YouTube to SRT. You can also re-open it in the transcriber to choose a caption track available on the video.

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YouTube2Text is a free YouTube transcript generator — no signup, no daily limit. Paste any YouTube link and get the full transcript instantly, with timestamps, click-to-jump, caption language selection, AI prompts for ChatGPT, Claude, and Gemini, and exports to TXT, SRT, VTT, or Markdown.