In Jason Brennan’s new book, Why It’s OK to Want to Be Rich, he shows that the moralizers have it backwards. He argues that, in general, the more money you make, the more you already do for others, and that even an average wage earner is productively “giving back” to society just by doing her job. In addition, wealth liberates us to have the best chance of leading a life that’s authentically our own.
0:00:07.2 Aaron Ross Powell: Welcome to Free Thoughts. I’m Aaron Powell.
0:00:09.2 Trevor Burrus: And I’m Trevor Burrus.
0:00:10.8 Aaron Ross Powell: Joining us today is Jason Brennan. He’s the Robert J and Elizabeth Flanagan Family Professor of Strategy, Economics, Ethics, and Public Policy at the McDonough School of Business at Georgetown University, and is the author of many books including ‘Against Democracy’ and ‘The Ethics of Voting.’ His newest is ‘Why It’s Okay to Want to Be Rich.’ Thanks for coming back on the show, Jay.
0:00:32.8 Jason Brennan: Yeah. Thank you for having me. I’m sorry that we can’t do this in person. I’ve secretly infected you guys with the flu every other time and I was planning to give you COVID today, then you just demanded we do this virtually lost, thus preventing me from doing that, but oh well.
0:00:45.1 Trevor Burrus: We could always hit our eye on you. It’s okay.
0:00:47.1 Aaron Ross Powell: Early on in the book, you make a pretty provocative claim, you write, ‘if you despise money and making money, the problem is usually that you don’t understand what money is and what it does for us and what it takes to make it.’ Let’s begin with what it means to despise money and making money, after all, most of us do both, right, so we can’t really despise it.
0:01:10.9 Jason Brennan: Yeah. I say early on that most Americans, I think and maybe around the world, most people really have two minds about this. I try to push that idea that we all really do want more money, we like having money, we don’t usually give it away, even people that claim to hate money and complain about it are often trying to make as much money as possible. Michael Sandel, who complains about how money corrupts us, charges $25,000 to give a talk and wants first class airfare and four star hotel… I know that for a fact by the way, I’m not making that up. But at the same time, we think things like greed is horrible. It corrupts us. Money makes us bad. If we were good people, we wouldn’t want it. Rich people are horrible. We find that there’s this widespread anti‐profit prejudice where people, if you tell someone that a company is making a profit, they naturally assume that the more profit it makes, the more harm it’s doing, whereas the less profit it makes, the more pro‐social it is. It’s not backed by any evidence. So I honestly think we’re a bit schizophrenic or bipolar about our attitudes towards money, we think it’s the root of all evil, and we also love it.
0:02:14.8 Trevor Burrus: You also write that money is one of the greatest inventions in the history of mankind, which, I mean, fire, the wheel, writing, does money really deserve a place up there?
0:02:24.7 Jason Brennan: Oh yeah, it might even be to the point where it might beat the wheel or something, it’s like that important. So if you’re an economist, this won’t sound special to you, but it’s a thing that people don’t recognize unless they’ve taken enough economics and maybe Cato‐type listeners are the ones that actually understand this more than the general public, but basically economists say that in order to get people to cooperate with one another, you need something that gives them information about what’s useful for them to do, and so as [0:02:53.4] ____ and others figured out in the 20th century, and really even before that with the Margin revolution in the 1870s, money is… Monetary prices are a way of conveying information about how rare something is and how valued it is to other people, it wraps… It basically signals to other people what’s important for them to do, and it gives them incentive to work on that.
0:03:14.7 Jason Brennan: So it turns out… None of this is all original to me, I’m recording whether to say, but I’m holding a number two pencil in my hand right now and we ask how many people went into producing this pencil, the answer is maybe like 50 million people, something like 50 million people helped coordinate with one another to produce this pencil. The overall majority of them had no idea that they were producing a pencil, and the way that they’re able to work on this mass scale and cooperate on a mass scale is through monetary prices and the information contained where they’re in. So if you like cooperation, which I assume you do, if you’re a nice person, you have to love money, because it’s the only mechanism we know about that allows widespread economic cooperation on that kind of scale. Without money, we would be operating on a much smaller scale. Our level of cooperation would be much, much lower, so yeah, fire and shelter and money, it really is right up there with the top five greatest inventions of all time.
0:04:07.1 Aaron Ross Powell: Your book’s title is not why it’s okay to want money, it’s why it’s okay to want to be rich, and is there then a difference between wanting money? Obviously, if I have it, I can do certain things with it. And wanting to be rich or filthy rich.
0:04:23.8 Jason Brennan: Yeah. That’s a good point. So one of the, I do really spend a lot of time thinking about the question of not just having some money, but being rich, and we have to ask what does it mean to be rich too. And so one thing I try to say to people early on is you, the reader of this book almost certainly are rich, and that seems weird because when we think of rich, we think of Oprah Winfrey or Elon Musk or Bezos or someone like that, but actually, the typical American is not only in the top 1% of income earners worldwide… Throughout history, throughout most of history, almost everyone lived, on about a dollar a day in extreme poverty, and I mean not just pre‐civilization history, but during civilized history when we started becoming farmers and be living in cities, most people live in extreme poverty, but even by recent standards, the average American is living off of maybe about $4000 or $5000 a year in the year 1900 in current dollars, where the typical American today is in the top few percent of income earners worldwide, if you’re living at the poverty line in the United States, you’re in the top 15% of income earners.
0:05:28.5 Jason Brennan: So if you have this attitude that being richer than other people is bad, well, anyone who’s gonna read this book, you’re one of those people, you should feel guilty about how much you have given how little other people have around the world. So it’s not just that, but also I’m here to defend the idea that wanting to have a crap ton of money, that there’s something reasonable about that, I basically would like everyone to be incredibly rich. I would like to live in a world in which everyone is the equivalent of a trillionaire. I mean, a trillionaire in real wealth, not a trillionaire in inflated wealth.
0:06:00.5 Trevor Burrus: But it’s interesting because we think about our attitudes toward the rich, which you write about… And I was struck by is, think about Mr. Burns a lot… And there’s an episode of The Simpsons where Mr. Burns wins the lottery, and they ask him like, “Oh, Mr. Burns, what are you gonna do with your money now?” and he’s like, “Well, throw it on the pile, I guess,” and this idea that… And there’s another one where Mr. Burns gets up out of his bed and there’s a lever that says like a big canopy bed, this is a make bed, and he just pulls it in the bed falls into a pit and it burns, and then another new bed comes out of the wall, like, okay, let’s imagine such people do… Maybe that’s something Elon Musk would do. Is that something we should endorse, is that a value system, that kind of destruction, that kind of like having so much money, you don’t care about it, and that kind of destruction is something that would be something we should be endorsing?
0:06:49.6 Jason Brennan: Yeah, absolutely. I think we should be endorsing that. Interestingly, I just got an gonna email from Porsche of Chantilly trying to get me to buy a Porsche as we’re talking, but I’m probably not gonna do that. Yeah, here’s the thing, when we’re not wasting stuff, we’re wasting time, that’s something that economists always like to push that when we’re conserving things, we’re always giving up something, and so that doesn’t mean that I think we shouldn’t conserve objects, it doesn’t mean that even as someone who collects a lot of guitars, I don’t do the thing where I play guitar once, throw it out and get a new guitar, but time that you spend cleaning and repairing and maintaining and washing out, you’re recycling and waiting in line to distribute your recycling to the recycling center or something like that.
0:07:28.7 Jason Brennan: Mike Munger, our mutual friend, Mike Munger, has this wonderful story about watching some woman wait in line with her car on for half an hour to can a couple of cans to the recycling center. We’re wasting our own time and we’re all dying. So one of the things I try to emphasize in the book is that there is a trade‐off between money and time and what are the stuff in our time, and so for someone like Mr. Burns, I don’t know if he’s actually doing anything useful, I’m not sure if he’s actually a good entrepreneur, good industrialist, I suspect he’s not only watching Simpsons, but my understanding is he’s not a good guy.
0:08:00.3 Jason Brennan: But in a way, I’d love to live in a world in which the things that we find tedious, we don’t have to do because we’re so wealthy that we can find a way to get rid of that, and we’re all actually doing some variation of that with things like dishwashers and vacuum cleaners are hiring people to come and clean our house for us or doing other things like that, where you went away strongly attempting to conserve on our time, because as we get richer, what ends up happening is the monetary value of our time becomes higher and higher… And I don’t mean Mr. Burns in particular, I mean, all of us listening.
0:08:32.8 Jason Brennan: So I spend a lot of… There are a lot of things where… I don’t mow my own lawn anymore. I pay a company to come and do it and they do it very quickly, they can mow the entire thing much faster than I can, so it’s not just I’m simply redistributing the chore to them but they do it faster ’cause it makes sense for them to buy bigger and better machines to do it, and that’s one of the first things I did when I got to be higher income is to stop doing that, but that means that I have freedom and time to spend with my kids or time pursuing art or time doing some other things that I care about. So yeah, there is a way in which Mr. Burns is an extreme and cartoon example, but there’s a light beer version of that that we all should drink.
0:09:08.6 Aaron Ross Powell: But when you’re doing that, you’re having someone else mow your lawn, so you can spend more time with your kids and you have the luxury of making enough money to pay for that, aren’t you, to some extent, exploiting those people, like your wealth is an exploitation of them, because if they’re coming and mowing your lawn, that’s time they can’t be spending with their kids. They’re basically giving up their available time in order for you to have more of it.
0:09:34.7 Jason Brennan: Yeah, in a way you could say that. And there’s things like that that happen the other way too. The way that I earn a wage is like these posh people in New Jersey exploit me by sending their kids to come learn policy economics strategy and ethics at Georgetown. They could just learn that stuff themselves, I know how they could do it. I could tell you it’s stuff they can read, how to learn that, but they don’t, and they have me come and do all these shortcuts for them so that their kids can learn that stuff and learn how to apply it to their future careers really quickly. I get paid a pittance for that, but maybe not as much as the students are getting out of it after all they think is worth buying.
0:10:08.2 Jason Brennan: So yeah, in a way, we’re all exploiting one another or an alternative way of putting it is we’re not really exploiting one another, the people that are getting paid to mow the lawn, they’re getting paid a fairly high wage, they’re getting paid more than I was getting paid to do some of the crappy jobs I have in the past, and they’re using machinery and so on in order to do it at a higher rate. They think that this is their best available opportunity or they would be doing something else. What we end up doing when we have trade on a wide scale and hiring one another on a wide scale is we specialize, we become more productive and we all get to enjoy more stuff and do more stuff, and our money gets us more.
0:10:43.8 Jason Brennan: So I suspect that in a world in which we all agree we’re just gonna mow our own lawns and we’re never gonna hire, we’re never gonna go to a restaurant and have people cook for us, and we’re never gonna go to university and have people teach us. We’re just learning ourselves. We’re never going to hire anyone to do services for us. We definitely won’t be exploiting one another, but we’ll spend a lot more time doing things that we suck at and having all of us together, including those very people that we’re talking about hiring would have less time to spend with their families and less time for leisure, and we know this, this is not speculation because we have data on this, and I put it in the book that in the year 1870, America is maybe the third richest country in the world, maybe the first, it depends on which stats you look at, but it’s somewhere up there, definitely top five, and not only the richest country in, one of the richest countries in the world at the time, but easily one of the richest countries ever in human history, and at that time, the typical person, the average person is working over 3000 hours a year in paid labor and working almost 2000 hours a year in unpaid labor. Now it varies from person to person, women might be doing a little bit more unpaid labor, men might be doing a little bit more paid labor, even the upper class people are working incredibly high hours.
0:11:50.2 Jason Brennan: You fast forward to the year 2020 and what you get is the typical American who is considered to be working full‐time is nevertheless working full‐time, only about 1700 hours a year, and they’re doing maybe about 1200 hours a year working in their… Outside of… For unpaid labor, somewhere in their home or something, cleaning up. And the result of that is things like these sorts of statistics in the year 1955 or so, the typical stay‐at‐home mom spends about 10 hours a week actually interacting with her children, and now, the typical working dad spends something like 20 hours a week interacting with his children and that’s… So we know that this is actually buying us all more time, so us all, if we wanna call it exploiting each other, this mutual exploitation we’re all doing by buying each other’s services is a really good invention and we should do more of it.
0:12:39.0 Trevor Burrus: But isn’t the question of exploitation, a little bit more nuanced than that? So if we take where the person who mows your lawn, where they came from, and let’s sort of aside for the imminent question, let’s just say that they went to a relatively poor public school compared to you because of various problems in their family, and so their ability to learn and become more as productive has been hampered from the beginning through no fault of their own. So at that point, their brain hasn’t become a sort of charges your house for the use of knowledge work, but they’re… They can mow a lawn, who can’t do that. And so that puts you in a way of somehow taking from this person what was essentially their bad lot in life and using it to make your life better.
0:13:30.6 Jason Brennan: Right, so I’m certainly not here to say that, there are things that are genuine exploitation, I definitely don’t think the people mowing my lawn are exploited, but there are cases of people genuinely being exploited. The classic case in philosophy is Trevor is on, his boat sinks in the middle of a large pond, and I come over and I say, I’m willing to save you, but only if you give me half your future income, and suppose this is an enforceable contract and you agree, now you probably benefit from me saving you, than I benefit from your income but nevertheless it seems like I’m taking pernicious advantage of your misfortune, so there are cases where we’re talking about people in desperately poor places who only get, their only options are really crappy jobs, and because of the bad job market, you’re able to give them a really awful job that pays them far, far lower than their actual marginal productivity. Those are the kinds of people I would feel bad about.
0:14:20.5 Jason Brennan: And if you care about that, what do you want… If you actually care about exploitation and actually want to solve it, I have the solution for you, it’s defended in another book called ‘Indefensive Openness’ where I explain how the way to solve this is through open borders, and if you’re not in favor of open borders, you are and you vote accordingly, you are the instrument of world exploitation. You’re the bad guy. But the nice thing about the first world is we have very competitive labor markets, especially in unskilled labor. Unskilled labor markets are not monopsonistic. So in fact, people who are unskilled labors, generally speaking, receive very close to their marginal contribution, they receive something very close to their marginal product, so they’re not getting an unfair deal, we can ask about whether it’d be nice if we had a system where people had more and better opportunities and so on, and I certainly support that, but that’s… We don’t have reason to think that that kind of exploitation that might attach to someone working in a factory in Bangladesh is happening to people, generally speaking, working in the first world.
0:15:17.0 Aaron Ross Powell: But is there a degree of, if not exploitation, at least, something that ought to be concerning to us in terms of how wildly different compensation is between people? So you work the same amount of hours as the person who’s mowing your lawn and you make substantially more money than they do per hour of work, and it’s the case that maybe your level of happiness is higher because of the wealth that you have, but you could also be… There are lots of people who make less than you do, make less than I do, make less than Trevor does, who are pretty happy, they don’t seem to need the extra wealth and luxuries to be happy. And so there’s something wrong with just kind of the notion that whatever it is that you do, you writing philosophy books, deserves to get all of this money and let you buy all these guitars when the person who’s mowing the lawn like we’re valuing that less. We’ve baked in a kind of devaluing of people or professions.
0:16:24.3 Jason Brennan: Yeah, you’re right, there are these complicated things here, and it’s hard to give a quick answer to all of them ’cause there are so many pieces, but one thing I say in the book too, is that if you really are concerned about that, you should stop looking at poor people in the first world anyways, the real question… Because even again, people in the first world who are considered poor, if you’re at the poverty line in the United States, you’re in the top 15% of income earners worldwide, and that’s adjusting for the cost of living and the fact that it’s more expensive to live here. So those are not… If you’re a good bleeding heart, those aren’t the people your heart should bleed for, your heart should be bleeding for people living in the undeveloped world who have very poor opportunities, so if you want to donate your money to them or something, I definitely encourage you to do some of that… And one of the things I talk about at the end of the book is exactly how strong our obligations to give, but I think the more important thing is rather than equalizing things, it’s better to make everybody better off, that’s the more important issue, so here’s a way of illustrating that GDP per capita worldwide right now, I think works out to be about $16,500 in current US dollars, that’s the highest…
0:17:32.7 Jason Brennan: It’s probably, maybe it’s actually a little bit lower now because of COVID, but the last time I checked, it was roughly around that, and that was the highest it had ever been, this is all adjusting for inflation, so don’t… And using what’s called purchasing price parity indexing, so that where you basically adjust the prices in every other country to be equivalent to that of the United States, so that a dollar in the US equals a dollar in the UK equals a dollar in Uganda on this kind of measure. So what if we could equalize all possible income? Well, in a way, you would think if I could just wave a magic wand and convert all production into current income, everyone would get 16,500. For everyone, almost everyone in the United States would be worse off.
0:18:09.7 Jason Brennan: Almost everyone in Sweden would be worse off, but most of people in the world would be better off because most people make under that. It’s highly unequal worldwide, 16,500 puts you in the top, say 13% or 14% of people because of just inequality. The problem though is you can’t really equalize it even in principle, because a large percentage of that income or stuff that’s being produced is in the form of money going towards restoring capital or maintaining capital or buying seed for next year’s crop or government expenditures and building roads and things like that. So maybe of that 16,500, maybe only like 8000 of it is in principle, some liquid, something liquid that you could in principle distribute to all people worldwide. And so, that’s imagining I could just give everybody exactly the same amount of money, $8000 a year worldwide, and then that has no effect on their productivity, it has no effect on coordination, it gives you basically… Which is completely implausible. So, it gives you an upper‐bound.
0:19:07.9 Jason Brennan: What I basically say to people is, I think equality is a luxury good, which is why you see rich people working at fancy ivy league universities complaining about it so much because they’re posh and it’s a luxury good. The actual issue is eliminating poverty, which requires massively increased production. I think in 300 or 400 years where the even poor people, like what we consider poor people in the world are living on a Canadian standard of living, then I think we can start asking that really interesting question, if we should try to make everything more equal, but I just… I think it’s not an interesting question now, because what we really need is to create more production. And one thing we know is people refusing to trade with other people because they’re so… People refusing to trade with anyone who’s poor and only trading with other people that are rich is a really good way to make sure the poor people stay poor. So, I often use this example with guitar stuff in class. I have a bunch of American guitar products. I never try to buy American on principle because I don’t buy that kind of stuff, I’m not a nationalist at all, but it turns out that for the music industry, guitar and amplifiers, American stuff actually tends to be the best. The gap between American stuff and other stuff is lower now than it was 20 years ago, but it still tends to be the best.
0:20:19.9 Jason Brennan: However, if I buy… I have a bunch of Mesa Boogie amplifiers made in California, those people making that, they’re getting paid $50 or $60 an hour in some cases, they’re like rich people living in Petaluma, California. At one point, I had an EVH amplifier that was at the time made in Vietnam, I have at least one Korean guitar, it was made Seoul, though Korea is a rich country. So, Vietnam’s a relatively poor country, those people are being paid a lot less. If I said, “I don’t wanna exploit any Vietnamese people, so I’m gonna refuse to buy any EVH amplifiers.” Well, what happens to them? It’s not like, oh, because I refused to buy the amplifier from them, they get to go work at Apple and make $120 an hour, it’s… They go do something even crappier than that. And we know from what happened after World War II and elsewhere, the reason that Korea went from being a poor country in, say 1969 to a rich country now, is because Americans were willing to buy a bunch of things like VCRs and phones and other things they didn’t need. But if they just said, I’m only willing to buy from rich people, then what happens is the rich people trade with each other, they all get a little bit richer and the poor people stay poor. So this “I don’t wanna exploit anyone worldwide” is a recipe for retaining poverty.
0:21:28.0 Trevor Burrus: Well, aside from, when we talk about the rich people, and over the last 20 years or so, I would feel like since the WTO protests in Seattle. But the 1% Occupy Wall Street, we see the numbers of 500 people make as much as the other six billion or whatever the numbers are, you see different ones. And probably in the last 10 minutes, Jeff Bezos’ wealth has gone up or down by a billion dollars possibly due to fluctuations in the stock market. And at the same time, you have these people… Especially due to the pandemic, I ordered a lot from Amazon and you see more and more people, these people delivering packages at like 9:30, and last night, I saw this woman deliver a package at my door, she’s about 60 years old, who now is driving around trying to just… Meanwhile Jeff Bezos is going up and down a billion dollars. We just adjusted that slightly, aside from being rich, we’re talking about being… Not Jason Brennan rich, but I’m talking about Jeff Bezos. We just adjusted that slightly and said, “Alright, Jeff Bezos, your wealth is gonna go up and down by 500 million rather than a billion and we’re gonna pay her more money,” that seems to be something we should be promoting.
0:22:40.9 Jason Brennan: Well, not her and not… Maybe him, but not her. Again, I just, I don’t have that big of a heart to bleed for people in the first world, I’m just not capable of doing it, ’cause I’m not empathetic enough because they’re just so damn rich compared to everybody else, that person delivering packages is still… Statistically speaking, going to be richer than almost everyone who’s ever lived over the past 200 years, and almost everyone alive today.
0:23:02.1 Trevor Burrus: Okay, so, we do the same thing for, take down Jeff Bezos money and send it to someone in Bangladesh.
0:23:07.4 Jason Brennan: Yeah, that’s the interesting question, is like, should that kind of thing take place? And I deal with that in the last part of the book, ’cause there’s this thought experiment from Peter Singer that everyone’s heard about. “If you could save a kid from drowning and it would ruin your $500 shoes, should you do it?” And almost everyone says, “Yes.” And then he’s like, “Well, then why not take $500 right now and save a life?” And everyone’s like, “You’re right, I should.” And he’s like, “Okay, well, repeat that, now that you agree to give a $500, let’s just do it again, you should give another $500 away and another $500 and another. And why not just keep giving away money ’til you get to the point of you’re actually as poor as the people that you’re trying to give the money to?”
0:23:45.9 Jason Brennan: There’s something to that, though it’s a bit misleading in certain respects. So, one thing is we have to think about all the hidden costs, and one has to do with moral intuitions, and one has to do with the hidden cost. Let’s talk about hidden cost first. Jeff Bezos has a lot of wealth. I bet he has a really nice place to live, and he probably drives really cool cars, and if you play his guitar, I bet he has even better guitars than I have, and I have nice ones. But most of his wealth is in the form of productive capital. He doesn’t have a Scrooge McDuck money pit, and I guess Burns has a money pit too. He doesn’t have a giant money pit, like his money is kept in the form for productive capital. It’s in Sterling, Virginia, that’s a warehouse that he mostly owns, that’s where his money… That’s his wealth. It’s this productive stuff that’s serving people like you and me. And if some of us are complaining about how much better off he’s gotten during the lockdown, it’s like, well, if you institute a law that says you can’t… All these mom and pop stores can’t stay in business, and you have to buy from Amazon, of course, Amazon’s gonna get richer. So if you’re in favor of those laws, that’s your fault, like maybe it’s worth it, but you have to acknowledge that you did that, so don’t blame Jeff, blame yourself, blame your senator, blame your votes.
0:24:55.7 Jason Brennan: So then we get in this issue of like how much of that liquid capital could we in principle liquidate? Sorry, how much of this physical capital, the stuff, the airplanes, the factories, the warehouses, could we liquidate? Who would buy it? And we liquidate it, how much of that could we then transfer to other people, what does that cost us in the long run? Because we always have this dilemma between investing in capital in the long‐term makes us all much, much richer. The reason that we in the first world, are as rich as we are and can make so much money doing the kinds of things we do. Let’s be clear, the people in this virtual room right now, we basically talk for a living, and we get paid to do that way more than almost anyone else on earth has ever gotten paid. Right? That’s just kind of weird about, why do we get to do that? Because of past investments in capital that we benefit from, that we did not engage in. On the other hand, we also ourselves engage in some capital investment which will make people in the future even richer than we are.
0:25:51.5 Jason Brennan: So when we have this dilemma between investing and stuff that makes it so people don’t need help in engaging in trade, that makes it so people don’t need help. The reason that… The reason that Korea, as I mentioned before, is rich, is because Americans and Europeans, and others bought a bunch of crap they didn’t need from them, and as a result, now Koreans are in the position of being the kind of people that Peter Singer might ask to give away their money rather than to be given money. Or versus helping people in desperate need right now. Now I believe in charity, I believe in Effective Altruism, I do give money to certain charities and people in desperate need, but there is actually a dilemma between saving someone who need… Who’s gonna starve now versus putting people in a position to not even have to worry about starvation in the future, that’s where the moral stuff… The thing that’s illusory about Peter Singer’s thought experiment is, he has you imagine one drowning child, and you’re like, “Yeah, I should save the kid,” and then you kind of imagine moving on with your life.
0:26:44.9 Jason Brennan: But the real thing that would be analogous to us would be something more like, imagine you’re walking across campus or something, and you see not one kid drowning in a pond, but a giant ocean and children are continuously falling into it, and when you save children from that drowning, for the most part, anyone that you save will remain saved, they won’t fall back in, but no matter how many you pull out, there’s always gonna be more people falling in. Now ask yourself, what’s your intuition about how much of your life you have to spend saving children? One intuition is, I now have to dedicate my entire life to saving children, I’m only allowed to eat and sleep when doing so allows me to save even more children. Another intuition is, which I think, which is what most people have is, this is a horrible tragic thing, but… And I should save a bunch, but at certain point I’ve done enough and I can say I get to move on with my life, even though it is genuinely regrettable. Singer denies that, but he doesn’t really give us a reason to think that that’s false.
0:27:40.8 Trevor Burrus: And also, maybe you should work to keep people from falling in the ocean would be better than actually saving.
0:27:45.9 Jason Brennan: Yeah, and that’s where the stuff about the trade‐offs comes back in, because again, why are we in this room talking about saving people rather than being saved, it’s because in the past, people decided not to save people and instead made these capital investments, which makes it so now we’re the savers rather than the people who need being saved. That’s where that happened. So in the end, it’s a terrible dilemma. I don’t wanna say it’s not a terrible dilemma, like if you’ve put $50 in a bank account, then… Or you put $50 in a 401k… 503c or 401k plan or something, you are making it so in the future people don’t need to be saved, and you’re also choosing not to save someone who needs it right now, that’s your dilemma. You face it all the time with everything you do. But it’s different, it’s a different dilemma than what people say, which is just, you’re just buying crap you don’t need and ignoring the fate of others, you’re not. It’s just some of it’s invisible to us.
0:28:36.4 Aaron Ross Powell: A lot of this argument, a lot of the argument you make in the book is based in money as having instrumental value, that we make money or want to have money, because, not because money itself is inherently valuable, but because it allows us to attain other things, whether that’s food on the table, or guitars or Jeff Bezos’ house. But it does seem like a system like ours, a heavily market‐oriented capitalist system, and our culture often encourages us to treat money as having inherent value or at least symbolic value, that we’re told the way that you measure the… Not the monetary wealth, but like the moral wealth of a person is like getting money, that your success is through achieving that extra dollar on top of the dollars you already have, the chasing wealth, and that seems to be the driver for a lot of people. And that seems potentially corrupt or corrupting, in that it has us… The person who says, I only want to work as a barista and be able to afford my studio flat so that I can put the rest of my time into reading poetry or something, is looked down upon compared to the entrepreneur or the Wall Street banker, or the CEO who is just constantly aggregating even more and more money to themselves. So, is there a concern there that giving this primacy to money makes us think money is primary?
0:30:18.9 Jason Brennan: Yeah, that’s a great question. And I think that that attitude exists, ’cause I think Americans are of two minds about this, but I also think simultaneously among the rich and including the riches in the upper middle class, especially the educated upper middle class, which frankly is often the same people, there’s not that much of a difference at this point. You also see a lot of anti‐money attitudes. We’re all in the DC area, and what we see is we’re surrounded by posh rich people who pretend not to be posh and rich. It’s like, we all pretend we hate money, even though everyone has a lot of it, which I often think it has something to do with when you’re used to having money, you sort of get this luxury of pretending it doesn’t really matter.
0:31:00.3 Jason Brennan: So, one of the things I do in the book, in the second chapter, is try to explain all the things money does for us that are worth loving. I say “Money, what’s not to love? It buys us love.” And I go explain the statistics behind that, people with more money tend to have better relationships and more stable and happier marriages, and explain why. It buys us light and literacy, over time we’ve gotten richer, the price of light, as William Nordhaus has shown us is vanishingly small now, compared to even 100, 200 years ago, which means we spend more time awake and reading that prices literacy ’cause books are cheaper.
0:31:30.6 Jason Brennan: It buys us like friendship and companionship and the ability to express ourselves, it buys us leisure and the time to spend on art and things. All this time that I can spend playing guitar that… I have played a few gigs over the past few years, but frankly, there’s not a massive demand out there for people who wanna hear me play guitar and… But I get to do it anyway because I get money to spend on it. So, it’s buying us all this other stuff.
0:31:54.3 Jason Brennan: Now, does that mean it should be the single minded thing that we pursue? No, and there are some people who do that to their detriment, there are people that are corrupted by money, there are people that the pursuit of money makes them worse off, but you know what I’d also say, there’s a lot of people who the pursuit of other things is very corrupting. I won’t name names, but I can picture people that are like… Hipsters living, like that I know personally that are hipsters living in the cool part of Brooklyn, who spend all their time like being “I don’t really care about money. I’m just gonna make art and make, write theater and do all these other things.” And guess what? No one wants to hear it, no one wants to see your play.
0:32:28.1 Jason Brennan: Does that mean that you’re really above it all? Because here’s the thing about the fact that someone is willing… There’s this attitude among the French supposedly, and I don’t know if this is actually true. I think this is a stereotype. I don’t know if it’s really true. But there’s a stereotype of the French, that they’re like, “Oh, Americans they just care about their work and they wanna [0:32:44.8] ____ what the work is. But I want to know about what makes you you.” It’s like, well, here’s the thing about your work: What you do for a living is a thing that people care so much about they’re willing to pay you to do it, and your hobbies are things that people care so little about, they’re not willing to give up anything to have you do them.
0:33:01.4 Jason Brennan: What does that tell you about the value you’re creating for other people when you do these things? It tells you a little, at least something, right? If you’re an artist and no one wants to buy your art, are you really adding value to the world? Maybe, maybe you’re brilliant, and no one recognizes. I think there are unrecognized geniuses, I think there are people that are undervalued, but that might be a sign that you’re just a selfish person doing something that you think is fun and no one wants to buy it ’cause it sucks and it doesn’t do anything for them. So if people are willing to help have you pay to deliver a pizza but not pay you to make a painting, that might tell you something about your paintings.
0:33:34.6 Trevor Burrus: So on that point, it seems crucial to your thesis that, and also from a libertarian standpoint, that it somewhat matters how you make your money. So say… Okay, well, for just say, Jason Brennan, you do teach at a private university, but a lot of your students are getting federal student loans, which are essentially a subsidy. So, some part of your money comes from a subsidy, at least I would say you could argue, you wrote a book with Phil Magness on how much this inflates the cost of education, or you could take a more extreme example, like Archer Daniels Midland, like the CEO of Archer Daniels Midland, which is essentially an ethanol company, I think it still is, that pretty much all of his money or her money, I’m not sure who this person is, it comes from a government rule, a mandate.
0:34:24.2 Trevor Burrus: And there’s a ton of people like that, and a lot of people complain and say “Wall Street is protected by the government, all these businesses are protected by subsidies.” I’m a lawyer, I have a legal license that keeps people out of the market in an easy way, so inflating the cost… And it seems like that might be more rich people are essentially being subsidized in some way than maybe not, but doesn’t it matter to some extent how you’re making your money in terms of wanting to be rich? So, your title should be like, why it’s okay to want to be rich, earned fairly. Or something like that.
0:34:54.0 Jason Brennan: Yeah, that’s right, the title could really be a lot longer and really even want to be rich, it’s about why it’s okay to want money, why it’s okay to make it… If you make it the right way and why it’s okay to keep a pretty high portion of it, even if it’s more than you really need. But we couldn’t fit all that on the cover. But we went through a long time of debating what the title would be, it’s for a series of books on why it’s okay, where every book is about something that ordinary people do, but the intellectuals tend to look down upon and the books are like defending them. But I absolutely agree with you, and there is a section in the book about the business ethics of making money that basically says what you said, it’s like part of whether you have your money legitimately depends upon the way that you made it, and there are a lot of rich people who made it illegitimately, there are also a lot of poor people who make money illegitimately as a result of rents, and there’s also a problem here that we face that… Look, we live in the environment that we live in.
0:35:49.1 Jason Brennan: What’s his name? There’s a… Is it Risse? Yeah, I think it’s Mathias Risse at Harvard, who, he and I don’t share the same politics, but we both agree that free trade is what we should have, there shouldn’t be tariffs and subsidies and so on. And free trade should be basically open between all countries, but he brings up this good point where he’s like, what do you say about… When we’re about to, let’s say, we have liberalization of trade and we’re eliminating certain tariffs and protectionist barriers, and then you’ve got the average person who’s invested their time and their skills into developing a business or something or some sort of skill that exists only because they were reacting and doing the best they can with the corrupted environment they have, which included protectionist things.
0:36:27.4 Jason Brennan: So, as they recognize like, I’m gonna grow corn, even though I might recognize that we wouldn’t be buying corn in this country from me if there were no protectionism. And then now we open it up, do we really wanna point to that person and say that “you’re corrupt, you don’t deserve it, you are benefiting from a rent?” So, there is a way in which a lot of the gains that we’re getting are ill‐gotten, but sort of not necessarily with evil in our hearts, because we might be doing the best we can given the corrupt environment that we’re in. That doesn’t apply to Archer Daniels Midland, they’re actively lobbying for increased ethanol subsidies and that kind of thing.
0:37:04.6 Jason Brennan: Does it apply to me? I try not to engage in much rent‐seeking as a professor, and I did try to blow the whistle on a lot of the stuff that’s going on that students are invisible for, but I definitely think that my price is inflated because of the way that government meddles in education. This apply to you as a person with a law degree? Yeah, the American Bar Association does a lot to restrict trade and restrict competition. So, we all suffer a little bit from that, some of us are more blame‐worthy than others, but even with all of that, it’s not like if we eliminated all protectionism, all rents and so on then it would be like, all the people who are rich would just be like the equivalent of low class, lower class, low income earners, they would still make a premium if not as much.
0:37:45.3 Aaron Ross Powell: Related to that, when you look at the way that Americans talk about the very rich and the way that they… So many people sneer at how much gets made by various wealthy people, there seems to be a disconnect in the kinds of wealthy people that we get mad at. So we talk about how much CEOs or investment bankers make, and lots of people, the Occupy Wall Street people pick it and camp out on Wall Street, but I just quickly look this up, The Rock made $87 million in 2019. Patrick Mahomes signed a 10‐year, $45 million a year contract. That’s a lot of money. And in fact both those guys are making a lot more money than a lot of high paid CEOs are. But we don’t tend to get… We don’t camp outside of Arrowhead Stadium and declare that this is against all income inequality. So what’s different there?
0:38:47.6 Jason Brennan: Yeah, thanks for asking that. I wrote a blog post about that very point the other day wondering about this as well. It’s worth noting, by the way, that the typical person who has the title CEO is really only making about $300,000 or $350,000 a year. So, when people like CEOs make millions of dollars, that’s kind of like saying, “Well, musicians make millions of dollars,” no, most of them make nothing, but some people make a lot, and those are the ones that you know about. And I also wanna add, one time we sponsored a book workshop, and we had Roemer, John Roemer, who’s a pretty left‐wing guy, wants to equalize all income, and a person said, “Oh, CEOs have captured all these rents and they’re overpaid,” and he said, “No, no. From an economic perspective, they’re actually quite underpaid,” the marginal productivity of a typical CEO, we have data and research on this, there actually is really, really high and he’s like… And if you wanna understand why that is, think about this in an intuitive fashion.
0:39:37.4 Jason Brennan: Imagine that you’re the captain of the Titanic, 500 miles back, you tilt the steering… I don’t know about ships, so whatever the hell, the helm or something, you tip that like a tiny… A second to the left, and you don’t hit an iceberg, that’s kind of what it’s like to be the CEO of a company, even small decisions that you make have marginal effects that it can be in the billions of dollars, and then you as a CEO end up capturing a very small percentage of that. So, someone like me, maybe my marginal productivity might be in the few hundred thousands per year, and I capture almost all of that, whereas a CEO of Walmart, their marginal productivity is easily in the billions and they get paid maybe tens of millions. So it turns out actually CEOs are typically speaking underpaid given their marginal productivity. Now Roemer then says, “I still wanna equalize incomes, but it’s not because I think that they’re getting overpaid in terms of the standard economic theory of wages. It’s because of other stuff.”
0:40:32.2 Jason Brennan: Now, as far as why we resent them and don’t resent others, here are some things: Celebrities tend to be attractive, and we know we have all of these biases towards attractive people, you can go online and watch videos where they run an experiment and a beautiful nubile blonde woman will go up to men and be like, “Hey, I’m trying to steal this bike, will you help me?” And they’ll be like, “Sure.” But if a less attractive person says that, they’re like, “What the hell are you talking about?” So, we’re biased towards beautiful people, I think also because celebrities manipulate our emotions in various ways. Like Trent Reznor someone like sings about heartbreak, and I’m going through heartbreak at the same time, and I feel like he’s giving a soundtrack to my life, so then I kinda don’t resent his money, because I feel like he really did a service to me, whereas bankers and others, most people don’t understand what they do and how they add value, they’re like, “I don’t get what they’re doing, it must not be valuable,” and very few people have the wherewithal to think maybe it’s, “I don’t understand what they’re doing ’cause I just don’t understand very much.”
0:41:34.4 Jason Brennan: So there’s that kind of thing. There’s just a status thing. When everyone loves Kim Kardashian, then you’re supposed to show that you’re one of us by loving Kim Kardashian too. Even though she’s someone who’s kind of rich for being rich and famous for being famous, she can’t sing, she can’t dance, she doesn’t do like cool karate or anything, but somehow she’s like a celebrity, she can’t play football like Mahomes. So I think we have all these weird little biases which make us love celebrities and fail to resent their wealth. Bono has $700 million. Think of… You can basically cure someone from Trachoma and thus save a blind person for about 30 bucks. Sightsavers, go to sightsavers right now and donate some money to them. You can cure someone of blindness. If you’re gonna order pizza tonight, you can cure someone of blindness instead. Think of, he could personally stop Trachoma, he could just decide to make it go away next year, and he doesn’t. Every year he doesn’t. So maybe he’s the worst asshole who’s ever lived, or we just… We don’t feel bad because he wrote all those cool songs and they made us feel good about ourselves. And when he was younger, and even now that he’s older, he was so pretty, so we don’t hold it against him.
0:42:46.6 Jason Brennan: And one thing that goes along with that is as evidence, I notice is that the Wall Street bets people, a lot of them are motivated by this, soak the rich… I don’t care if I lose money on this, I just wanna screw over these hedge fund managers, I went and I read it, I saw it and I went to the thing, I was reading it while it was happening, and they were like, I know I’m gonna lose $5000 but I’m willing to do that to make these people hurt, they were ecstatic when Elon Musk and Mark Cuban got on their side and notice that these are the celebrity billionaires and they’re not resenting them, but they’re resenting lesser billionaires who aren’t celebrities.
0:43:19.7 Trevor Burrus: Seems like the fundamental problem that people probably thinking now is that Jay is just saying that money indicates more about value than most people think it does, and that at the end of the day, Jay is very much endorsing, essentially, your net worth is an indication of your quality as a human being, which sounds like the classic Ayn Rand capitalist who thinks that rich people are better than poor people. So, if that’s not the message of your book, what would be… Or maybe that is the message of your book, what would be the kind of bottom line of that?
0:44:04.2 Jason Brennan: That’s a great question, and I should say the message of my book is, it’s okay for you as a typical person to want more money and to want to be rich, it’s okay for you to make money in a wide range of things that a lot of people think are shameful, turn out to actually be okay, and when you make that money… Yeah, you should give to people in need, and I can help you do that, I can teach a whole class about how to figure out whom to give to. But you don’t have to give it all away. And if you don’t give it all away, you don’t have feel shameful. That’s the bottom line. But as far as this stuff about productivity, I’m not a big fan of Ayn Rand, but she got some stuff right. One of the things she got right was that her villains were usually rich people too. She was always like the ill‐gotten gains rich people that were loafers that never contributed anything versus the rich people who actually made stuff, and a lot of her heroes were people who weren’t rich, but were actually productive. Our mutually beloved friend, Will Wilkinson, he said that the book, ‘The Fountainhead’ was a great anti‐capitalist screen.
0:45:01.5 Aaron Ross Powell: In a way, he’s right about that because we have a person who stays poor through almost the entire book because he’s not willing to compromise for money, I think there’s… That’s all correct. At the same time, I’m gonna say something that’s really gonna hurt people’s feelings and they’re gonna get so mad at me, and it’s absolutely right. Jeff Bezos is going to contribute more to humanity today than any elementary school teacher is going to over her entire life, or his life, but I say her ’cause they’re mostly women. That’s true. It’s absolutely true. If that makes you feel bad, sorry. And granted, there’s some luck that gets involved there, there’s some… And all this other stuff, but it’s just true that he is going to do more for other people today than I am gonna do over the course of my life. Now, he gets rewarded a lot more for that, than I get rewarded for what I do. Now should he? He doesn’t… By the way, his welfare is not at all higher in proportion to how much more he contributes to other people.
0:46:02.7 Jason Brennan: William Nordhaus who won a Nobel Prize in Economics a few years ago, I mentioned it before talking about light, he figures out that big entrepreneurs, they end up getting maybe 2% of the value they create and the other 98% goes to other people. That’s what happens. Someone like Edison, we all hate Edison because we know Tesla was better now. But nevertheless, someone like Edison, he gets to be rich, and he gets about 2% of the value he creates, and the other 98% goes to the rest of us. Jeff Bezos does a lot more for people around the world than any teacher ever has, any one of them. So, stop looking down on Jeff Bezos, you ungrateful assholes. What’s wrong with you? So when Ayn Rand’s like “You’re a bunch of ungrateful assholes,” she’s right about that. She’s also an asshole too, but still she was right about that complaint.
0:47:02.9 Aaron Ross Powell: Thank you for listening. If you enjoy Free Thoughts, make sure to rate and review us in Apple Podcast or in your favorite podcast app. Free Thoughts is produced by Landry Ayres. If you’d like to learn more about Libertarianism, visit us on the web at www.libertarianism.org.