Good morning, ladies and gentlemen.
I'm Arthur
Brooks, president of the American Enterprise
Institute and it is a distinct pleasure and
honor to be with all of you today, and with
His Holiness the Dalai Lama, as well as a
panel of distinguished guests in this session
and the session that follows with the Mind
and Life Institute.
This is a historic day for the American Enterprise
Institute.
We're joined with one
of the most respected religious leaders in
our world to talk about the issues that are
pressing against us in the wake of the international
financial crisis in a session entitled
"Moral Free Enterprise: Economic Perspectives
in Business and Politics."
Why are we here?
We're here to talk about what matters to us
the most.
Right
now, we have an opportunity at this historic
juncture in world economics to talk not about
money -- just about money, not just about
business practices, but what concerns us the
most.
Our friends at the Mind and Life Institute
have shown us very clearly that there are
certain things that are most concentric to
human happiness that His Holiness the Dalai
Lama has talked about for many years.
What are they?
Faith, family, community, work --
not money, interestingly.
Now, as the president to the American Enterprise
Institute, as an economist, it
hurts me to tell you that money's not on the
list.
Yet, it's true.
It's true.
Why is that?
Why
is work on the list of the most important
things for human happiness when it's not
money?
The answer is earning our success, the belief
that we're creating value with our
lives.
We're creating value in the lives of other
people.
If we can earn our success, if we
have the dignity as individuals to do this,
nothing can hold our world back and there
is no
greater exemplar for this set of ideas than
His Holiness the Dalai Lama.
Yet, the system
that we believe can make this most possible,
the free enterprise system, is under question
today.
It's under question because people feel, legitimately,
that they have been left
behind in the wake of the great recession.
So here's the question.
Is the free enterprise system still the best
system to pursue
our happiness, to lead a good life?
Have we become too materialistic?
Do we need to
reorder our priorities toward higher ends?
We have a panel of experts to discuss this
with His Holiness.
Now, to begin with,
of course, we are joined by none other than
the Dalai Lama.
You're all aware of that.
The
Dalai Lama -- the 14th Dalai Lama became the
leader of the Tibetan Buddhist faith in
1950.
In 1959, he was forced to leave Tibet because
of persecution.
And since that time,
he's maintained the Tibetan government in
exile in Dharamsala, India.
He travels the
world almost all year round, advocating for
the welfare of the Tibetan people, a noble
cause, teaching Tibetan Buddhism, and talking
about the importance of compassion as
the source of a happy human life.Tashi deleg,
Your Holiness.
We're also joined by three leaders in academia
and business.
You know the meaning of "tashi deleg?"
(Laughter.)
Hello and good morning.
(Laughter.)
I think not only that.
(Foreign language.)
A literal meaning of the phrase "tashi deleg."
"Tashi" stands for
auspiciousness and "deleg" stands for wellbeing
and happiness.
So being happy and well
through auspiciousness.
(Laughter.)
I love that.
This is such a good day.
I just can't tell you, people.
Anyway, but I digress.
We're joined on our right by some of the most
distinguished members of our
academic and business community.
Glenn Hubbard, right to my right, is the dean
of
Columbia Business School and the former chairman
of the president's Council of
Economic Advisors.
Next to him is Dan Loeb, the founder of the
hedge fund Third Point
Capital, and on the far end is Jonathan Haidt,
the Thomas Cooley Professor of Ethical
Leadership at New York University's Stern
School of Business.
All three of these men have done foundational
work in their respective areas of
administration, policy, academia, and business
about the nature of human happiness and
the morality of the free enterprise system
and each one will give their perspectives
in
about five minutes of the work that they've
been doing, followed by comments from His
Holiness the Dalai Lama interspersed with
questions along the way, and if we have time,
some questions from the audience.
Now, that's not necessarily the case, but
don't be disappointed because we're
going to follow this with a second session
from our wonderful friends at the Mind and
Life Institute, an extraordinary organization
that has completely changed the debate about
the conjunctions between psychological life,
the human brain, and the nature of a truly
flourishing existence.
So we have a lot in store for you today and
we're delighted to be with you and His
Holiness.
Your Holiness, would you like to start with
some opening remarks?
Nothing.
(Laughter.)
For me, new day start, so I'm looking
forward about sort of serious discussions.
I think I told the very purpose of such meeting
is to try to seek the right method to bring
happy life, happy individual, then automatically
happy family, happy community, happy nation.
Then ultimately happy world.
We are
part of the world.
So happy world from where start?
From government?
No.
From United
Nations?
No.
From individual.
Humanity is combination of 7 billion individual.
So
change of construction -- constructive work
must start from individual.
Then, we make --
we can make little contribution.
Then from here, from there, from all sides,
no matter
what their profession, what their sort of
nationality, what their religious faith.
We are
human beings.
That I think most important.
That -- and we are coming.
He asked me what
you see Washington?
But I say good.
Then, he say, some people not very happy because
there are too many politicians.
(Laughter.)
So then, I responded, politicians also human
beings.
On that level, not -- (inaudible).
So I always look on human level.
Then, no demarcation, no differences.
If you too
much sort of emphasis on secondary level of
differences, then, there are lot of things
--
different nationality, different belief, different
-- even same belief, same nationality, but
difference of family background.
Some are richer.
Some are poorer.
Some are better
positioned.
Some are little.
That -- even within the family, there're differences.
Even one individual there're always the differences.
Morning, thinking something
different.
Afternoon, you see, due to certain sort of
I think new knowledge or new
experience, have differences.
So difference always there.
So I think that essentially we need cooperation.
Humanity facing some problems,
including nature disasters because climate
change, due to global warming, so more major
disaster I think come.
And then also, the population increasing.
So there are, I think, not
like ancient times.
Ancient times, firstly, American Native people
and they remained
peacefully.
Then, some people come from outside, OK, America,
I think like multi --
Multiracial --
-- multiracial like that -- that built this
new wonderful nation, but
modest is that the America is often not -- is
surrounded by sea.
So safe, not -- (inaudible) --
concern about other world.
But that situation completely changed.
Now, reality East
needs West.
West needs East.
South needs North.
North needs South.
It's reality.
So our central world thinking, we and they,
is actually unrealistic.
We must think
entire 7 billion human being.
We must consider part we.
That's my fundamental belief.
So no problem -- (laughter) -- that the politicians
are that, you see, a little bit sort
of strange person.
Strange person a human being.
(Laughs.)
Clear?
Clear.
(Laughter.)
So the main purpose, you see, we have to sort
of look seriously
about the future of humanity, at least this
century.Now, we already enter 21st century.
Now remaining the century.
I think like past
20th century become very, very turning points
century.
Now, this century also should be.
So in past century, a century of violence,
a century of war.
Now, this century now should
be century of peace.
Peace doesn't come from the sky since we created
violence.
So
peace, we must to create it.
Peace only comes through our action, not through
wishful
thinking or prayer.
I'm Buddhist, in my daily life, about four,
five hours prayer, meditation, but all
your wishes will materialize through prayer,
I don't think.
(Laughs.)
Buddha -- as a
Buddhist -- Buddha says your action is more
important.
Buddha cannot give you what
you want.
You must make effort.
So as Buddhist -- Buddha says, you are your
own master.
Of course then, those --
regarding those believer who believe in creator,
wonderful.
So my friend, since we all
created by God, so we all have some way of
spark -- a spark of God.
So that sort of
concept really gives us courage, self-confidence.
And then, what's the nature of God?
Infinite love.
So if you really believe that, you must be
more compassionate person.
Nobody say creator is full of anger.
No.
Full of compassion.
Creator is such.
Therefore, we creatures, you see, must, you
see, follow creator's sort of example.
So
wonderful.
But then non-believers, whether we believe
religion or not, we are human beings.
Biologically we equipped human affection and
also, we everybody, come from our
mother.
So in our life -- the beginning of our life,
the mother's affection is so important.
I
always telling those people who received maximum
affection during childhood, early
life, I think deep inside much happier.
That those individuals who early sort of age
lack
of affection from parent, particularly from
mother, then I think that experience remained
whole life deep inside some sense of insecurity.
So in any way, so believer or non-believer,
we all have the same potential of
becoming more compassionate person.
So our life starts that way.
Now, for that, I think our scientists or friends,
I think through their own
experiment they have to say more -- more things
to say.
So I'm also learning from them.
(Laughs.)
So I'm looking what -- looking forward to
our discussions.
That's all.
Thank
you.
Thank you, Your Holiness.
(Laughter.)
We're going to turn now to our panel to provoke
some of the wisdom of His
Holiness on the basis of what their work is
showing to them today about our economic
system, about the world economic crisis, about
the morality of our system, and a better
world.
And we're going to start with Glenn Hubbard.
Glenn Hubbard is the dean of the
Business School at Columbia University.
He has been the chairman of the president's
Council of Economic Advisors under President
Bush.
He's held a number of
distinguished positions and is the author
of many books.
Glenn Hubbard.
Thank you very much, Arthur.
And, Your Holiness, I know
I speak for the entire audience, we're grateful
to you for this engagement.
And Arthur,
I'm grateful to you as well because, frankly,
your work is taking economics out of the
dismal and bringing it back to happy, so that's
a good thing.
I wanted to talk about really a five-step
argument that I have made, at least, in my
professional career and research for the morality
and the economic success of the free
enterprise system.
My charges in the university are largely young
businesspeople, but I confess to
you that my favorite teaching is to slip into
freshman principals of economics and talk
to
the youngest students.
And I always say to them I'm coming with two
questions.
And
they were the questions that drew me to economics.
The first is, why isn't the whole
world rich?
It's a very deep question.
It's easy to say.
And the second is what can we do
to achieve mass prosperity in any society.
And I tell them if they hang with me, we'll
answer those questions together.
The first point I wanted to make was that
free enterprise economies have
demonstrated both absolute and relative success
in both generating prosperity and
alleviating poverty.
Economists will tell you that the first, second,
and third industrial
revolutions were made possible by economic
institutions, by the support of property
rights and the defense of individual economic
freedom.
We've seen that extreme poverty alleviation
in China, in India, in Sub-Saharan
Africa has been made possible not by government
action, but by an opening of markets
and the restoration of individual freedom
in commerce.
And on the negative side, we, of
course, have the spectacular economic failure
of the Soviet Union's collapse and the clear
case study of North Korea's ongoing failure
having started essentially in the same place
as South Korea.
Second point I would make is that free enterprise
is critical for the economic
success that can fund both the market goals
that many in this room work on and the very
important social goals that His Holiness brought
up in his remarks.
Entrepreneurs are not
people who are directed.
They are people who have an uncoordinated
search for
opportunity and market oriented financial
systems do two great things.
One, they advance
prosperity by vesting in firms that become
successful and frankly, by allowing weak or
outmoded firms to fail, they advance society.
This is about dynamism.
Economists often talk about creative destruction,
the
new replacing the all, but I like to talk
about non-destructive creation -- brand new
things
that create visions.
That is the source of innovation and wealth.
It's also about happiness.
My Columbia colleague and Nobel laureate in
economics, Ned Phelps, has noted
many times that satisfaction in an economy
is highly positively correlated with measures
of its dynamism.
Third point is that I've many concerns for
status economies today.
The lack of
incentives for innovation, for entrepreneurship
leave both consumption possibilities and
living standards lagging.
Traditional approaches to foreign aid in those
societies relative
to encouragement of business or of entrepreneurship
have largely failed.
And large
government roles invite rent-seeking and corruption.
And by the way, that is a lesson that
this country needs to take heed of as well.
But I would also say that capitalist economies
face a number of cautions.
We have
been very good at generating average growth,
but not everyone is average.
Economic
inclusion by which I would mean the ability
to obtain meaningful work is an objective
that has to be maintained with dynamism.
A social safety net is important, but what's
all
the more important is the ladder to get to
work.
Work is the symbol of advancing
economic mobility.
It's also the symbol of advancing social mobility.
And free enterprise
societies need to contemplate a Marshall Plan
almost within themselves to advance the
work opportunities of the least well off.
The final point I would make is that while
economists like myself often talk about
economic efficiency or prosperity in economic
terms, I think one can go back to Adam
Smith and classical writers in my profession
to make the defense a moral one.
Smith
called natural liberty the power to buy and
sell, take or leave a job, and make a deal
with
whomever you like.
That's not just a feature of commerce.
It is a feature of a moral
society.
Dignity is also a symbol of a free enterprise
society.
Markets promote mutual
respect for each other's talent, for each
other's energy and hard work.
Arthur has said many times and said it well
that earned success or the fruit of your
own creativity is an important moral and satisfaction
objective, not just about GDP.
And I would leave you with a couple of thoughts.
Free enterprise societies tend to
be societies that have more dispersed power.
The power is spread out evenly in the
population and not with a single controlling
government or central planning.
Central
planning systems are less likely to reform,
to adapt, to be present in the modern world.
And a free enterprise economy has that natural
buffer.
To close where I began, our goal ought to
be to celebrate the success of free
enterprise economies, but stretch that goal
of success to an idea of mass prosperity.
I
think that goal is morally right.
I also think it's economically achievable.
Thank you, Glenn Hubbard.Your Holiness, Dr.
Hubbard has told us that the free enterprise
system is naturally
the most moral of economic systems, but that
we have much more to do to include more
people in its blessings around the world.
Do you agree with this and how can we make
it
more effective?
Yes.
I think -- first, when you mentioned the -- (foreign
language).
One of the questions that you asked your students,
one was why
--
You mentioned at the beginning.
Yeah, why aren't everybody rich.
Why haven't we been able to
make everybody rich?
So His Holiness was wondering what sort of
criteria are you using
there in terms of someone being rich?
All I meant by the statement was the idea
that why isn't the
whole world as prosperous as the most prosperous
country?
So why is it that the United
States is a rich country, but other countries
are not?
What is -- it's a hard question.
You used the word "rich" as a -- meaning rich,
billionaire, then
impossible.
Everybody to be billionaire impossible.
Then, perhaps millionaire, I think
difficult.
(Laughs.)
So in the basic -- now basic point, yes, every
human activities you see
the individual initiative is very, very essential,
as I mentioned it before.
So therefore, I
think we -- and whole world witness centralized
economy, no matter how much the effort,
fail -- former Soviet Union and then also
the Republic of China.
So then, you see, they're
compelled to all of them want to use sort
of pattern, but that's -- (inaudible) -- capitalist
system.
I think Deng Xiaoping very, very realistic
leader.
So he accepts the reality.
So he
has courage, you see, to change the economic
system.
So that really brought lots of
prosperity or economy development.
At the same time, the capitalist country,
United States, is the richest, but you also
see a big gap between rich and poor.
So nowadays, I usually have some headache.
I
don't notice these things.
India -- (inaudible) -- Nehru, he emphasizes
democratic socialist
country, little bit of control, but government
not really successful.
Then, some change.
It
helps.
So that as a fact, reality shows, you see
the just socialist thinking are certainly
not
efficient and just simply, you see, the only
-- the capitalist way, also has some down
--
drawbacks.
So now, we have to sort of find more sort
of --
Assist -- -- or discussions.
That we need more sense of concern of others'
wellbeing as I mentioned before.
And finally, a sense of humanity, concern
of humanity
on the basis of sense of oneness of humanity.
Then, of course, all our activities with that
kind of motivation, then everything, you see,
become constructive.
I think if there's some
sort of negative side things happen, then
immediately pay attention and change, modify.
So this is it.
I myself, I don't know.
(Laughs.)
Unless I spend, you see, I think at least
a few
years to study about the world economy.
(Laughter.)
And become student of you.
(Laughter.)
Otherwise it's impossible, you see, to make
a precise comment.
Thank you, Your Holiness.
You see the beginnings 
of a joint op-ed here.
(Laughter.)
We turn next to the perspective of business
and Dan Loeb, who's
the founder and chief executive officer of
Third Point Capital, which is a hedge fund
deeply involved in the finance system here
in the United States.
He's done work on both
Eastern and Western thought and practiced
it extensively in his own life.
He's going to
give us his perspectives on what we see in
America's business community today.
Dan Loeb.
Thank you, Arthur.
And I just want to say, Your Holiness, it's
an incredible honor to be here, with you here
today, the leader -- the spiritual leader
of the
Tibetan people.
I grew up with my dad, who would have been,
you know, about your age
today had he still been alive.
He'd be so proud to see his son up here with
you.
It's really
incredible.
I carry that spirit with me.
It's also incredible to be here with the spiritual
leader of the capitalist people,
Arthur Brooks.
(Laughter.)
And truthfully, I'm honored.
I'm not sure my dad would be
quite so proud of that, but he would -- (laughter)
-- would certainly be happy.
So I started my fund in 1995 with $3 million
under management, run a bit over
the years, but I started in June of that year
and I started practicing yoga, Ashtanga Yoga,
a few months before that.
In fact, my yoga teacher, Eddie Stern, is
here in the back of the
room.
And about five months after starting my business,
fiduciary I had other people's
money under management, my yoga teacher convinced
me to go to India to study yoga
with a master of Ashtanga Yoga, Pattabhi Jois,
for a month.
It was unusual decision.
In fact, I got a call from one of my friends,
a competitor
in the business.
He said, don't do that.
That's a huge mistake.
Everyone's going to think
you're a flake for leaving your business,
going to India, studying yoga for a month.
And
mind you, there were no Internet connections
then.
Cell phone service was nonexistent.
But you know, concerns were well founded.
So I went anyway.
I had a great month there.
And it really -- it launched me into really
a lifelong passion for spirituality, for contemplation,
meditation.
And I'm -- you know, I just want to say that,
you know,
contemplation and mediation, these things,
they're not just for monks and for hermits.
They're really for people -- I think it can
really improve all of our lives and it can
really
improve us as businesspeople as well.
So I'm going to talk a little bit about some
specifics around that.
I'm going to talk
about how contemplation makes us better decision-makers
and why that's important in
our system.
And then I'm going to close talking a little
bit about my experiences on the
front lines of the financial markets and how
this all kind of goes together.
So just a couple of quick lessons from yoga
for me and why it's been crucial as an
investor and being a better decision-maker.
One of the first lessons you learn in yoga
-- I think was in Yoga Sutras, it says,
Yoga chitta vritti nirodha, which means yoga
quiets the fluctuations of the mind.
I think
this is consistent with what His Holiness
says, that you can't be a happy person if
your
mind is not at ease.
The second thing that's very important that
we learned from yoga is to put
ourselves into difficult positions and to
deal with -- to be able to create a sense
of
equanimity in those difficult decisions -- in
those difficult -- sorry -- situations, so
that you
can persevere and emerge from those situations
making good choices.
You know, I was with a Navy SEAL last night
and he told me about his BUD/S
training and how it forges them like steel.
Now, that's probably the appropriate training
for someone who's a warrior.
But certainly in life there's other types
of training and
certainly what the Dalai Lama teaches and
what I learned from yoga is applicable for
all
of us to be better decision-makers.
Now, it is interesting question getting to
the right outcome.
One of the other
things that we learn from yoga, and this is
in the Upanishads is that, you know, life
in the
Upanishads is described as a wheel with many
spokes that come out of it, and at the
center of it is your heart, which should be
your moral grounding.
And I think for all of us,
certainly for all of us in our society, that
is critical so that when we make choices,
they
come not just from a standpoint of what's
going to create a favorable outcome, but as
Dalai Lama said yesterday, make sure that
we make decisions that do no harm.
Make
sure that we make decisions that are consistent
with our moral framework, whatever that
might be.
So how's this helped me as a businessperson?
So, you know, on the one hand, we
have the -- I look at like three types of
decisions that we make.
One is the very core,
foundational decisions, which are easy.
You know, you're honest.
You don't hurt people.
Treat people as you would like and whatever
your framework is.
The second are decisions which we can turn
to a framework.
It might be in sports.
You're going down the hill.
You know, that there's a framework for how
you ski, bend your legs, distribute your weight
a certain way.
Or in business, you may have things that
you've seen time and time again and you can
do things consistent with that pattern.
Then, there's the third type of decisions,
you know, in my -- we all have them in
our own world.
For me it's trading decision.
There is -- some of them they might fall into
very consistent pattern that we've seen before,
but a lot of times, it's just all-new territory
for us.
And that's where this practice is -- practice
that enable us to be more creative, to
be intuitive, to make these better decisions
is really important.
So why am I spending all this time talking
about decision-making?
We're really
lucky.
As the Dalai Lama said, we live in a system
that favors the individual.
Not all
systems, not all countries give us those choices.
So Glenn talked about the dispersion of
power.
That's key.
Having a system in which power is dispersed
and pushed down to the
individual makes for a more effective country,
makes for more effective organizations,
and it's really important.
But you also have to trust individuals to
make good decisions.
So I'm going to pivot here to capital markets
and why this relates.
Obviously, I'm
in the business of making many decisions,
all day long, about people, about markets,
about stocks, about all kinds of different
things.
Now, I want to talk about the markets
themselves and how they relate to this discussion
of prosperity and flourishing and why
the markets actually make the world a better
place.
I think -- I think there's a common view that
financial markets are good in the
sense that, well, if somebody has a new idea
and there's the venture capitalists, they
can
invest in the idea, and that manner a woman
can create a business around that.
There'll be
innovation and growth and new things will
come -- you know -- you'll get iPhones out
of
that type of system and you'll get medical
advances and everything from FedEx to you
name it or business that have been started
from this type of framework.
And that's key.
And I think everybody kind of appreciates
the importance of a robust venture capital
market, IPO market for that to happen.
But that's just the tip of the iceberg.
Without a system that also provides for credit
-- that's another part because once you start
your business, you need credit, but you also
need -- these shares don't come out of thin
air and credit isn't issued out of that, of
thin
air, it's not just by banks.
Institutions run by people make decisions
to invest in equity, to
invest in credit.
So we need a couple of conditions for that.
One, we need robust financial
markets, where there's liquidity.
And so that person who invests $10,000 or
$20,000, a
few hundred thousand dollars in that start-up
knows there's the potential for the IPO and
for it to go public.
And down the line, the person who buys the
shares needs to feel
comfortable that there's rule of law and that
there's corporate governance.
And you
know, sometimes these things -- people look
at these things in isolation and they miss
the
importance of all of this.
And this is key and I'm going to talk about
two key concepts.
One is liquidity and
one is the available -- the availability of
low cost capital.
And all -- and those two things are critical
ingredients to the system that we have.
And they only exist if you have the
rule of law and if you have people that feel
confident in the system that we have.
So sometimes you'll see situations where creditors
are treated badly.
And you
might feel like, well, who are those creditors?
They're a bunch of vultures.
They really
don't deserve to get their money back.
Let's just change the rules now.
And you know,
you might say, well, those are unappealing
people who are buying the credit, let's just
hang them out to dry.
The problem is the people who suffer are not
just investors in that
particular credit situation.
It's the entire system because the entire
system relies on the
rule of law and the dependability and the
knowledge that if they don't get their money
back, there's a system where they can rehabilitate
and restructure whatever is that they've
invested in.
There's also the benefits of people who invest
their capital.
For example, the
people that we invest -- on whose behalf we
invest, the pension plans, the retirement
funds, individuals who are providing for their
future.
So you know, it's a great system.
There's no other system that can create the
sort of prosperity that we have, the kind
of
innovation.
It isn't perfect, though, and there're folks
left behind.
So I just want to close by saying what -- Glenn
had mentioned like how important
it is like we should have a Marshall Plan
for this.
The most important thing I see out there
is education to get people included in the
system.
And you know, for me personally, my
philanthropic energy is directed towards how
do we get a broad base of less privileged
people, folks that have been -- kids and families
who've been written off by the system.
I'll tell you one thing.
It's a myth that poor people can't learn and
can't achieve at
the same level as white rich kids.
We have a school -- I'm on the board of Success
Academy Charter Schools.
We
have a school in the Bronx, in the poorest
congressional district in the country, where
our
children just scored number three in New York
State out of 3,528 schools, in math.
And
one in two were gifted and talented schools.
So it is possible.
We need to work hard on educating kids.
There's a lot of things.
We can all do different things.
Mine is education.
I think that will help.
We need a great
safety net, but we need to -- as Glenn said
-- bring as many people as possible into the
system so they can all flourish along with
us.
Thank you very much.
(Applause.)
Your Holiness, Mr. Loeb has covered a lot
of territory.
But one
of the things he talked about is that for
the free enterprise system to create blessing
for
the most people, we require government regimes
that protect the property rights of
individuals.
I know you travel all over the world.
You talk to people in oppressed
countries and in free countries.
What do you think that our nations can do
more to protect the property rights of individuals
so that our systems can bring more poor people
out of
poverty?
See, your presentation seems, I think, as
I mentioned more
holistic, comprehensive, wonderful.
I think basically things are interconnected
or
interrelated, interdependent.
So if things -- something independent, then
we only concern
about that, usually we call expert, only that
thing.
But reality, everything is interrelated.
So the proper way to pursue that, you see,
we have to look more holistic --
From a larger picture.
Larger picture.
So now, here, firstly, I think individual
initiative,
that also entirely depends on the self-confidence.
Self-confidence also sometimes blinds
with over self-confidence.
That is dangerous.
So education -- education also is more
holistic education.
Then, as you mentioned, I think the whole
system.
I think here the
judiciary system, the rule of law very, very
important.
And anyway, among people, some
little bit of strange people or wicked people
--
Mischievous --
So the protection from the law.
So all this I think the
combination --
So you can see many factors that are really
intertwined.
And then, as both I think mentioned the trust
even in the
business field, ultimately trust important.
So trust very much in order to develop trust,
honest, truthful, transparent, very, very
important.
So in these -- in that respect, I think the
more self-centered attitude, then some sort
of -- always possible to develop differences
or gap appearances in reality, saying
something nice, but thinking something different.
Then immediately destroy trust.
So
honest, transparent.
So long you really take care about others
wellbeing, then no room to
cheat because you take care about their -- sort
of their wellbeing.
So here, ultimately, all these things depend
on rest of the community or rest of the
group, so therefore trust very, very essential.
Trust, first, you see you remain strange
person, hoping more trust from others is illogical.
First we must sort of show sincerity,
honest, truthful.
So these cannot produce my mission or -- (inaudible).
(Laughs.)
But through, I
think, as I mentioned earlier, the human nature
affection, sense of human brotherhood,
sisterhood.
Biologically potential is there.
Now, through education further nurture these
quality.
That I really believe, you see, exist, as
I mentioned yesterday, existing modern
education is something lacking in that respect.So
usually, when we sort of -- and when the point
about love, compassion, these
things, every -- always just rely on one religious
faith.
Some people -- I think yesterday I mentioned
some people feel moral ethics must
base on religious faith.
Then, it becomes very (damaged ?), like that.
So I told I think the
human -- for human being, for humanity, you
see, we really need more sense of universal
responsibility and commitment.
So wonderful presentation.
Thank you.
Now, after sort of listen yesterday and
also today, particularly today, I develop
more respect about capitalism.
(Laughter.)
(Applause.)
Otherwise, just my impression, capitalism
only takes the money, then
exploitation.
(Laughs.)
But we've learned from Your Holiness over
the past two days
that -- (audio break) -- truly can be and
should be a blessing in the lives of all people,
especially the poor, but every single one
of us in this room.
Notwithstanding that fact, it
will not be if it's not on the basis -- if
it's not executed in practice from the basis
of
brotherhood, of compassion, and of moral living.
And that's, of course, what we're
learning from you these last two days.
So our respect for capitalism was very solid
coming in, but our respect for the
underlying principles that can make it live
up to its promise, of course, are coming from
you.
We move on now to Jonathan Haidt.
Jonathan Haidt is a professor of ethical
leadership at New York University Stern School
of Business.
He's also the world's
leading experts on the science of morality
and has given these ideas from a moral
dimension a great deal of thought.
Jon Haidt.
Well, thank you, Arthur.
Thank Your Holiness.
This is
such a wonderful day when a religious leader
-- revered religious leader, who is
particularly beloved on the Left, comes to
a free market think tank run by a man who
seems every day to be arguing -- your most
recent argument was that conservatives
should start fighting for social justice.
Before that it was declare peace on the safety
net.
So this is scrambling all the categories.
This makes me so excited that we might finally
break out of the rut we've been in for so
many years in our arguments about the role
of
business and government.
In my remarks today, I'd like to tell you
three stories about capitalism.
His
Holiness -- well, His Holiness embraced the
first story until I guess about five minutes
ago I just discovered maybe he's moving on
to the second story, which was told by Glenn
and Dan.
What I'd like to urge is that he then devote
his efforts to helping us write the
third story.So here they are.
The first story is that capitalism is exploitation
and it goes like
this.
Once upon a time, work was real and authentic.
Farmers raised crops.
Craftsmen
made goods.
People traded these goods locally and that
trade strengthened the local
communities.
But then, one day, capitalism was invented
and darkness spread across the
land.
The capitalists developed ingenious techniques
for wringing more work and wealth
out of the workers.
Then they sucked up all the surplus wealth
for themselves.
They used
this wealth to buy political power, making
the rest of us their pawns forever.
The end.
(Laughter.)
Now, in the wonderful recent book, "Why Nations
Fail," Daron Acemoglu and
James Robinson show that there's actually
a great deal of truth to this story in most
nations and at most times.
Economic institutions have really been extractive,
not
inclusive and generative.
This exploitation story activates many of
our deep moral psychological circuits.
One of those is that we judge people based
on their intentions.
And people do something
for us without intending to help us, we don't
tend to give them much credit.
This is
certainly what happens to business people
who enrich our lives.
But are we grateful?
Well as Adam Smith put it, it is not from
the benevolence of the butcher, the baker
-- the
butcher -- what's happening here?
Let's see.
Let's be grateful for better technical
equipment.
OK, it seems to be steady now.
All right.
It's not from the benevolence of the
butcher, the brewer, or the baker that we
expect our dinner, but from their regard to
their
own interest.
We may praise their skills, but we never praise
their virtue.
In fact, we see
them as selfish.
And this, I believe, is the view that His
Holiness held, again, until five
minutes ago.
I first met His Holiness at the University
of Southern California three years ago,
and at that time, at that conference, I asked
him what kind of government would you like
to see in Tibet if you could advise on a new
government for Tibet, what would it be?
And
his response was this, quote, "between socialism
and capitalism, I'm a socialist.
And
furthermore, I always describe myself as a
Marxist, but not a Leninist.
In my mind,
Marxism is the only economic theory that expresses
a sense of concern about equal
distribution, and that is a moral thing.
Whereas capitalism is about how to make a
profit,
only that.
And in order to get more profit, there is
no hesitation to exploit."
But what if we were to judge people and ideologies
not by their intentions, but by
their effects?
Well, that would take us to the second story,
which was told so ably by
Glenn and by Dan.
I can therefore abbreviate it.
It might go like this.
Once upon a time and for thousands of years,
almost everybody was poor and
most people were serfs or slaves.
Then, one day, some good institutions were
invented in
Britain and Holland and these democratic institutions
put checks on the exploitative
power of the elites, which led to the creation
of economic institutions that supported
private property rights, risk taking, and
innovation.
Free market capitalism was born and
it spread across Europe and to many of the
English colonies.
In just a few centuries, poverty disappeared
from these fortunate countries; not only that,
but people got dignity
and safety and longevity.
Free market capitalism in this story is our
savior and Marxism is the devil.
In the
last 30 years, dozens of countries have embraced
our savior and kicked out the devil.
And
if we can spread the gospel to the rest of
the world, we will soon enter a golden age.
The
end.
Right.
So that, of course, was told much more ably
with much more detail by the
two previous speakers.
But I think it's important to note that these
are sets of ideas that
have been circulating through the intellectual
class and through political discourse for
centuries now.
Let's see.
Free markets really are miracles.
I've come to see this as I joined the
Stern School of Business just a couple of
years ago.
And suddenly I'm seeing how
miraculous it is that you really can turn
water into wine, vast quantities of wine at
low,
low prices, as long as the vineyard owners
can get access to cheap credit and
transportation networks and have property
rights, et cetera, et cetera.
I mean, it really
accomplishes miracles.
But because free markets are so astonishingly
good, people
sometimes come to worship them.
One of the basic principles of moral psychology
is that morality binds and blinds.
What this means is that when people come together
around a shared worship of some
sacred object, it makes them cohesive.
It makes them able to work together.
But it blinds
them to the faults and flaws.
It blinds them to nuance and subtlety.
Pope Francis pointed this out in his controversial
exhortation, last November,
when he said, quote -- he was criticizing
those who embrace the second story.
He said,
quote, "a crude and naïve trust in the goodness
of those wielding economic power and in
the sacralized workings of the prevailing
economic system."
And this brings us to the
third story about capitalism, which is a story
that isn't written yet, but it's one that
we'll
be writing in the 21st century.
It begins like this: In the 1990s or once
upon a time in the 1990s, capitalism
triumphed over all other forms of economic
organization and the entire planet began
moving towards prosperity.
But we didn't live happily ever after.
In fact, this period
marked the beginning of a new chapter where
we discovered a bunch of problems that we
didn't really see before or didn't appreciate
before.
The gap between rich and poor within
nations began to shoot up.
Economic gains went mostly to the rich, who
began
increasingly to use their wealth to buy legislators
and laws, just as was charged by the
first story.
The problem of global warming was first recognized
just as Asia was beginning
to industrialize, making it so much harder
to solve and leading to apocalyptic forecasts
of
submerged cities all around the world.
The crash of 2008 shook our shook our confidence
in capitalism's ability to regulate itself
without strong government oversight.And as
market values expanded beyond the marketplace
into medicine and
education and family life, many people began
to feel somehow cheapened as though
something valuable had been lost.
So this is our challenge for the 21st century.
We celebrate the fact that more than a
billion people have been lifted out of poverty
in recent decades by free markets.
Yet, we
know we can do better, as both of the prior
speakers pointed out.
If we can strip away the
anger, the worship, and the ideology, we can
look more clearly and openly at capitalism
and its ethical challenges.
And I take it that's what our panel today
is really about.
We can see that the supply chains that keep
our shelves stocked originate in the
dangerous sweatshops of Bangladesh.
We can measure the polluted air and the empty
oceans that we're bequeathing to our children.
And we can have a more nuanced view of
the quality of opportunity, particularly here
in America, where wealth buys your children
a much, much better starting line in the race
of life.
So let us be grateful to the butcher, the
brewer, and the baker even when they are
corporations.
Let us look back in awe at the political -- the
political and economic
changes that brought us from the first story
to the second story at least in many of the
most advanced nations economically.
And then, let us work together to write this
third
story, a story that must draw on insights
from the political Left and Right and that
must
draw on insights from secular thinkers and
religious leaders alike.
Is there a story about capitalism that could
be embraced by Pope Francis, by His
Holiness, and by the rest of this panel?
Let's find out.
Thank you.
(Applause.)
Thank you, Jon.
Your Holiness, Dr. Haidt has told us stories
about the capitalist system that are at
odds and that are common -- all three are
common in America today.
And his -- and
around the world, for that matter -- and his
conclusion is that the capitalist system can
be
the greatest blessing economically in the
history of mankind, but that it has certain
dangers.
And these dangers come from ignoring, once
again, as we've talked about again
and again today, those who are being left
behind.
Now, we understand that in theory, but to
understand in practice those who are
more vulnerable than we are, those who are
weaker, such that when we each of us
examines our conscience tonight before we
go to sleep we can say, did everything I did
today helped those who were weaker than me?
Such that we can answer that question in
the affirmative, what practical advice do
you give us for helping the poor to enjoy
the
blessings of the free enterprise system that
every person in this room is enjoying today?
I don't know.
I am Buddhist, as I mentioned earlier.
And my
daily -- (inaudible) -- practice four, five
hours some meditation.
The meditation means
here analytically meditation.
Analyze, analyze.
Analyze the outward nature of oneself and
also the nature of phenomena, nature of whole
world, whole universe, all these
things.
But that's something typical to Buddhist -- (inaudible)
-- practice, so not much that
relevant.
Then, these sort of complicated philosophic
views, you see, they finally -- you see,
since the things are heavily interdependence
-- interdependent, therefore, you see, for
your own interest, you see, you have to take
seriously about others' wellbeing.
You think taking care more about others is
not selflessness.
Best thing for your
future is taking care about other.
Basically, we are social animal.
One individual's future
depends on the community.
Community now (exists in a) modern time.
The community's
future depends on the nation.
This individual nation's future depends on
humanity.
So
you see, use sort of our intelligence.
The reality, then not blind sort of selfish
way, but
see, usually I -- since many years, I usually
go, you see.
We are selfish.
It's very
important for our own survival.
Without self-care, we cannot survive.
So therefore -- but
that selfish should be wise selfish, rather
than foolish selfish.
So many problems we just think oneself and
don't care about others' wellbeing.
Ultimately you yourself, taking care more
about others, then you get more benefit.
So that's the, I think, all major religious
tradition, you see, talking that, the same
message, message of love, compassion, and
different -- message of tolerance, message
of
forgiveness.
And also, you see, in order to sustain -- go
too much sort of the extreme
selfish or sort of now the greed, too much
greed also is -- go extreme.
So therefore,
practice of contentment, all major religious
tradition, you see, talk that.
Now, we -- these -- I think, not just the
-- some mysterious things.
Simply are this
life, are this sort of very life, comfortable
life, peaceful life.
These are very much related.
So now we need -- I think religious field,
you see, in order to promote these
practice, we are using some mysterious sort
of things about the next life, about sort
of
heaven, these things.
Now we must find a way.
Don't talk these things, but this very life,
very world here.
I think everybody who want more peaceful,
more happier, more friendly
world.
Everybody, you see, agree that, isn't it?
Yeah.
But nobody I think -- (inaudible) -- nuclear
weapon or war.
Every
day you're seeing the television bleeding,
killing, dying.
Our response (should be)
different.
Now, for example, I think response, one cup
of blood or a cup of milk.
I think
my nature the milk is more close.
Blood, like that.
This is our nature.
So therefore, you see, these things, you see,
we -- everybody, you see, loves
peaceful life, friendly life, friendly community.
Every minute -- (inaudible) -- sort ofappreciate
trust.
Someone trusts you, you feel happy.
And that also automatically
develops some kind of response --responsible
to help them because they trust me.
This is our nature, not come from religious
faith, not talking about next life, not
talking about heaven or hell -- (laughs) -- out
of fear of hell.
That's not very good.
To
reasoning, thinking more about positive, then
develop enthusiasm.
Out of fear, some
enthusiasm is not very good.
So in any way -- so in any way, I think we
can teach.
We can educate people for
best way to fulfillment of self-interest is
taking care of rest of humanity.
I think modern
education -- I think modern day, I think education
so important.
Now, through education,
I think we can --
Bring these ideas.
We can promote the conviction about these
value.
Take time, 10
years, 20 years.
So that's my view, whether realistic or not,
you should judge.
(Laughter.)
Ladies and gentlemen, we have a lot more in
store for you, but I
want to sum up in four points what we've learned
from His Holiness this morning.
And
then I want to take a moment for some gratitude.
The four points that we've learned from His
Holiness on the basis of the wisdom
that we've gotten from our colleagues here
and his reactions are number one, each one
of
us, notwithstanding the differences that we
have, including each one of us who's not even
here today, those who are rich and poor in
other countries around the world, each of
us is
one in 7 billion.
And understanding our common humanity is the
basis on which we can
spread the blessings of all the things that
we do.
The second lesson that we learned today is
that the free enterprise system that we
came here to discuss is itself a blessing,
but it has to be predicated on moral living
from
each one of us.
The third is that moral living is a practice
and it's a practice of compassion and a
sense of shared humanity.
The fourth lesson is really the good news
that we've gotten
here today, which is the principles and practices
of global brotherhood and global
sisterhood are in each one of our hands to
practice and to teach, which is an affirming
lesson and something that we can go away from,
from this important session today in
each one of our lines of work, in everything
that we do to make a better world.
This is our
charge, our sort of privilege.
This is our obligation in a very joyful sense.
This brings us
back to the subject of happiness, which is
going to be our next session from our friends
at
the Mind and Life Institute.Now, a quick moment
of gratitude.
These programs that we've had over the past
two day didn't come about spontaneously.
They never do.
We first have to start by
thanking His Holiness's just amazing team
with special thanks to Chi Mei Rinsing (ph)
from Tibet, from Tibetan administration from
the Dalai Lama and his own
administration.
Is he here with us today?
He's here.
Thank you so much.
(Applause.)
Second, we have to recognize the Central Tibetan
Administration and especially,
the Sikyong, the prime minister of Tibet,
Lobsang Sangay.
He's not here.
The Prime
Minister is not with us today.
As well as Cador Alkatsang (ph), who's with
us here today.
(Applause.)
AEI's collaboration with His Holiness the
Dalai Lama came about because of the
vision of Radio Free Asia.
They contacted AEI more than a year ago with
just a concept.
Nobody had ever thought of this collaboration.
They thought of that.
We want to
recognize them, particularly Libby Liu, the
president of Radio Free Asia, and Calden
Lodo (ph).
(Applause.)
The intellectual collaboration you're going
to see here today is between AEI and
the Mind and Life institute.
And you're going to be hearing from our friends
at the Mind
& Life Institute.
We're going to follow up this program with
their own session,
Unlocking the Mind and Human Happiness.
In just a minute, I'm going to turn the
moderator's role over to my counterpart, Arthur
Zajonc, another Arthur, who will be
working with His Holiness the Dalai Lama and
has done so for several decades.
So we'll
do that in just a minute, but we're so grateful
to them for joining us and for their
professionalism.
Intellectually, this could not have happened
if it not were for Glenn Hubbard, Dan
Loeb, and Jon Haidt.
(Applause.)
Our program today has been made possible by
Third Point Capital and other
supporters of AEI, including AEI supporters
who are throughout the audience, our
wonderful trustees, our scholars, and our
staff, and our entire community.
And especially
today, my deep gratitude for all of his work
for many decades that has changed all of our
hearts is to His Holiness the Dalai Lama.
(Applause.)
Thank you, Your Holiness.
Stay with us.
We're just getting started.
Please stay seated and we're going to
change up the program and the audience.
