Ron and Ed welcome economist Art Carden, co-author of Leave Me Alone and I'll Make You Rich: How the Bourgeois Deal Enriched the World, with three-time Guest Deirdre McCloskey to the show. He is a Professor of Economics at Samford University’s Brock School of Business. In addition, he is a Senior Fellow with the American Institute for Economic Research, a Senior Research Fellow with the Institute for Faith, Work, and Economics, a Senior Fellow with the Beacon Center of Tennessee, and a Research Fellow with the Independent Institute.

Ed Kless

Welcome to The Soul of Enterprise: Business in the Knowledge Economy, sponsored by Sage, transforming the way people think and work so their organizations can thrive. I'm Ed Kless with my friend and co-host, Ron Baker. And folks, on today's show, we are privileged to be interviewing economist Art Carden. Hey, Ron, how are you doing this week?

Ron Baker

I'm great, Ed, this year is starting off with a blast.

Ed’s Questions: Segment One

Well, the best meme I saw was the 2021 saying to 2020, “Hold my beer.” This is where we are. We have a lot to talk about with Professor Carden, so let's do the Bio. Art Carden is a Senior Fellow at the American Institute for Economic Research and Associate Professor of Economics at Samford University in Birmingham, Alabama, and a Research Fellow at the Independent Institute, and he is the co-author, with Deirdre McCloskey—a [two] time guest here on The Soul of Enterprise—of the book, Leave Me Alone, and I'll Make You Rich: How the Bourgeois Deal Enriched the World. Welcome to The Soul of Enterprise, Art Carden.

Well, as I was telling you before we got on the air, Professor McCloskey was our first ever guest [Episode #6, and Episode #293]. And what I want to hear is the story of how your partnership with her came about.

Wow, what brought it about? She wanted a summary of [her trilogy], because that's effectively what you were able to do here.

Yes, a 1700 page trilogy with about 500 pages of endnotes. The first question I have for you coming from the book now is you use the word innovism, if I'm even saying that right, and when Professor McCloskey was on our show, the first time she talked about something called “market tested innovation and supply. Is innovism the new distillation of that concept, or is it a little bit different?

So it incorporates all of those things because I think what a lot of people miss is that the market testing part of it, that's what shakes all of this out.

And then, of course, the supply part is then also important, too. No more interesting than the supply of, let's say, COVID vaccines.

Yeah, it's really been interesting, because I'm sure you've seen this, too. The vaccine from Moderna was developed within 48 hours of them getting the virus genome, and the rest of this time has been delayed from a supply standpoint. Really?

I've said, and you probably have heard this, too, that if we had put Amazon and Chick-fil-a in charge of vaccine distribution, it would be done. And, they would do it with a smile on their face and tell us it's their pleasure.

And then of course, I think it was announced either yesterday or today that Biden has tapped the ex- FDA chief to lead Operation Warp Speed now.

The pigs are now in charge of farm production. Kind of scary. I've got a few minutes with you and I want to get back to the book a little bit. I want to hear your take on this, because I've heard Deirdre’s. What is The Great Enrichment?

I wanted to take a quick side trip on this, because you mentioned this, Thomas Malthus was the one in 1798 who predicted gloom and doom. He does get a particular bad rap, though, doesn't he? I mean, given what he was given at the time, his hypothesis sort of made sense, at the time.

To that end, I want to ask you this. You write in the book, “Will it continue? [talking about The Great Enrichment]. And people are always saying, ‘No.’ Well, you're mistaken. You may be cherishing as you imagine sophistication and good hearted pessimism, more than the scientific fact fullness from realistic [Hans] Rosling, or the historical economic truth of the mindful McCloskey and candid Carden. But let me ask you this, is it in danger with the restrictions that we've seen imposed by what we like to call The Great Suppression that we've seen in the last year?

Yes, and of course, we won't know, right? That's one of those things that's going to be an unseen thing as we approach it. I would like to get your thoughts on this, we have got about a minute left in this segment. What was so interesting, I thought, was the governmental reaction to this crisis treated it as if it were a demand problem, like it always has. But the reality was it was a supply issue, we were restricting, suppressing supply. And that's really, to use a word from to 2020, unprecedented. We've never restricted supply?

I guess you could say it's the equivalent of a war, which effectively creates a supply problem as well. Interesting stuff. Well, we're up against our first break.

Ron’s Questions: Segment Two

Welcome back, everybody. We're here with Art Carden, Senior Fellow at the American Institute for Economic Research, and co-author, along with Deirdre McCloskey, of the book Leave Me Alone, and I'll Make You Rich: How the Bourgeois Deal Enriched the World, which is just a fantastic book, Art, I thoroughly enjoyed it. As you said, as we were talking before the show went live, it's a distillation of Deirdre’s trilogy, which I think you guys just did a great job doing. Towards the beginning of the book you say, “We're not talking about anarchy here. We accept that some government is necessary. McCloskey thinks so at any rate, but [Art] Carden is more sanguine about the viability of a sort of anarchy.” We had David Friedman on [Episode #117], and of course his book, The Machinery of Freedom. Are you an anarcho-capitalist?

I love thinking about those alternate world that David posits in his book. I would love to see it enacted as an experiment. So you talked about The Great Enrichment with Ed, and you made a comment, I just wanted to ask you real quick, you said it was one of the two most important things in history. What was the other one?

The Great Enrichment, just to put some context around it. You cite a statistic that in 1800, worldwide, consumption was about three bucks per person per day. In the United States, Holland, and Britain it might have been six bucks per day. And now we are at $130 per day in the US and $33 worldwide. This doubles every generation. And this is a 3,000% increase. I mean, this is massive. The whole of wealth creation is relatively new in human history.

Right, and I want to ask you about that, because you wrote an article that 2020 was not the worst year ever, not even close. It’s so true when you think about it from a historical perspective. You know, we've had George Gilder on the show, and he's been a longtime mentor of mine as well. And he wrote in one of his books that the notion that people get rich at the poor’s expense is popular in two places: prison and Harvard. And you write in the book that isn't the West rich, because other countries are poor. In other words, we took it from poor countries, we exploited them, colonialism, slavery, whatever. And yet, as you point out, if predation could cause a Great Enrichment, it would have happened millennia ago.

You mentioned Neil Ferguson, the historian, and he talks about these “killer apps” that you need to achieve this Great Enrichment: property rights, work ethic, consumer society, competition, modern medicine, and science. And you guys are like, No, that's not it, you have another argument for why the Great Enrichment took off when and where it did.

And you say what is sufficient to do that is a change in ethics, rhetoric and ideology. I mean, it's ideas, and to some extent, even language. And that's just so powerful. We talk about business a lot on this program, because it's a business show, but we have a lot of economists on. And we talk about how if you want to change something, that all change is linguistic, change your language and you change the conversation, and that can certainly happen inside of an organization. But then the example I love is this happened in the world, this was what caused The Great Enrichment. That's just really powerful.

And innovation was in some respects illegal. The king would shut it down or cut your head off, right? That’s a big deal.

I think it was Matt Ridley who pointed out in his book, How Innovation Works, that one of the reasons they didn't like the coffee houses was people gathered there and talk about how bad the king was doing.

Art, this is fantastic. I can't wait to dive in a little bit more when we go out in the last segment.

Ed’s Questions: Segment Three

And today we are on with Art Carden, co-author of the book, along with Deirdre McCloskey, Leave Me Alone, and I'll Make You Rich: How the Bourgeois Deal Enriched the World, highly recommended by both Ron and I. It's a terrific book, great, great, read, funny, laugh out loud in some places, which is just terrific. And Art I want to turn our attention to the middle section of the book where you talk about the pessimisms. I'll, leave it to the readers to read about the seven old pessimisms on their own, and they absolutely should read through those chapters carefully. But let's talk about the three new ones. And I'll just read them: That environmental decay is an existential threat; that humanity is being ruined by a new era of inequality; and that technological unemployment from artificial intelligence is the general fate. Let's talk first, environmental decay is an existential threat.

Ironically, part of that is the people who were No Nukes back at the time when you and I were growing up that scared the crap out of us because of nuclear weapons, and we won't allow nuclear power plants to be built, which is one of the answers to the problem. I'd love to go down that path, we could spend a whole hour on that, but I want to get to other topics. You write in the book that “material equality is not an ethically relevant goal.” What do you mean by that?

Absolutely. And by the way, the math doesn't work even if you do just redistribute it anyway, right? It's not even close. Lastly, turning our attention, this is something our audience is particularly attuned to, is this whole artificial intelligence argument. And here's from the book again: “But artificial intelligence is different, you say, stupid technologies like railways always replace sweat and manual labor. But smart technologies are going to replace the problem solving and mind work, my work,” we're all going to die, Art.

Because the artificial intelligence doesn't ask new questions, right? It just helps us answer your questions. It doesn't come up with new and better questions.

There was a big over the summer with that Netflix mockumentary-documentary kind of thing on artificial intelligence, and how it was manipulating us, and I just thought it was a load of garbage. George Gilder, who Ron mentioned earlier, in his book, Life After Google, talks about how the fact that all of these things might come to pass, we might have driverless cars, and drones, and people that do accounting bots, and all of these things. But, the human species is incredibly adaptive at figuring out ways to serve one another. And this gets back to your Baptist line that you said during the break. There’s a marriage there, which is one of the reasons why this show is called The Soul of Enterprise because we believe that business has a spiritual component.

That's right. As Gilder puts it, innovation always comes as a surprise to us. Art, thank you so much for appearing today. Ron's going take you the rest of the way home on the fourth segment. But thanks again, I want to say for me, hopefully you’ll come on again sometime. There's so much more in this rich book that you have. The book again is Leave Me Alone, and I'll Make You Rich: How the Bourgeois Deal Enriched the World. But right now a word from our sponsor and my employer, Sage.

Ron’s Questions: Fourth Segment

Welcome back, everybody. We're here with Art Carden, the co-author of Leave Me Alone, and I'll Make You Rich: How the Bourgeois Deal Enriched the World. And Art, Ed and I are big fans of Charles Dickens’ Christmas Carol and his other books. He was a fantastic writer. I just read an article in The Economist that he developed over 1000 characters, if you look at his Wikipedia page, and we're still talking about these characters. Yet, he was a lousy economist. You talk about one of his books, Hard Times, as muddle-headed in its understanding of industry and capitalism. He really didn't get it, did he?

There's a defense of the miser. I think Walter Block wrote the book, Defending the Undefendable. Another question I have to ask you, because this certainly has become, I think, more salient during COVID. This whole movement of eating and buying local. I think about even my local coffee shop, say as opposed to Starbucks, buys internationally. I mean, I doubt their espresso machine was made within 100-mile-radius, or even the coffee. And you guys quote a friend of yours, “What will be next, 100-mile-sourced medicines, 100-mile-sourced ideas. I mean, this is a ludicrous idea and movement, isn't it?

You were talking about jobs and artificial intelligence with Ed, and we all know that jobs isn't the right way to measure an economy—it’s not about producing jobs, right, otherwise, Milton Friedman’s line about give everybody spoons. But, are you in favor of a universal basic income, or some type of adaption thereof?

So you would support more of the Charles Murray idea where he gets rid of everything, including Social Security, Medicare, and gives everybody 12 grand [per year], and he even wants to pass a Constitutional amendment to make sure that all this other stuff goes away.

Right, I couldn't agree more. They should apply that same logic, I think, to the distribution of this vaccine. They seem to be botching that up as well. Art, on December 19, I think it was for the Independent Institute [and AIER], on their websites, you wrote an article, “2020 Was Not the Worst Year Ever. Not Even Close.” Would you defend that.

You guys quote Thomas Babington Macaulay in the book, and he says, “On what principle is it that when we see nothing but betterment behind us, we are to expect nothing but deterioration before us.” That such a good point.

Like you said, we've eliminated poverty and wealth creation did that because it's the only antidote to poverty. Art, this has been fantastic. Again, thank you so much for coming on. We love the book and we’re going to recommend it highly all over the place. And folks we will post full show notes. Ed what do we have up for next week?

Ed Kless

That's a great question. I do not have my spreadsheet open. So…

Ron Baker

Well, I'll tell you, it's Anne Janzer, author of Subscription Marketing.

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