Good morning, Hank, it's Sunday. It's news day and the news around here is that
my house is a construction zone and most of the electricity is turned off
and we don't have any place to sleep
and, unrelated to the incredibly expensive home renovation,
my basement flooded on Friday, so now I have to take out all the carpet
and fixing it is gonna cost a billion dollars
and I'm cranky.
And when I get cranky,
I put Willy in his tiny elephant costume.
[Intro music]
Oh hey, two quick things:
I will be reading and signing and hanging out with fellow, made-of-awesome Nerdfighters
this Tuesday at a bookstore in Lagrange, Illinois
and next Tuesday at the library in Columbus, Ohio.
Both events are totally free.
Please come.
More info in the doobly-doo.
And now, back to your regularly scheduled intro.
[intro music]
Okay, Hank today, I want to talk about elephant puppies and capitalism,
because capitalism has had a bad go of it recently.
Like failure to regulate the free market is being blamed for the great recession,
and for the screwed up American healthcare system and a lot of other things.
And I happen to think that the free market is in many ways a great thing
so for one news day, at least, the giant squids of anger are going to stop screaming about how
I'm a left-wing communist
and start screaming about how I'm a right-wing fascist.
Off-topic but Hank, do you remember that band the Left Wing Fascists that we liked when we were kids?
They were awesome.
Right, okay, let's say you have a dollar
and let's say you decide to spend that dollar buying fabric and thread, needles and whatever else you need
to build a puppy-sized elephant costume for a puppy.
Then you sell the puppy-sized elephant costume for $5.
You go out, you buy enough fabric for five costumes,
which you sell for $25,
giving you enough money to make 25 costumes,
which you sell for under $25,
and so on until you're rich,
at least, until you lose all your money in the great basement flood of 2009,
although then, thanks to the free market,
you'll be able to get competing bids from multiple contractors,
so that solving your basement problem,
while it will cost you so much money that the only way to cope
will be to dress your puppy up as an elephant,
will be as cheap and efficient as possible.
Anyway capitalism isn't actually that simple,
because the actual functioning of capitalism
is based on debt.
In the real world,
you probably won't be able to scale up the production of your puppy-sized elephant business
without, at some point, borrowing money.
Maybe you don't have the dollar you need to build the first costume
or maybe you need money to build a highly automated factory
that will produce puppy-sized elephant costumes cheaper and more efficiently.
At some point,
you will have to borrow money,
which you'll have to pay back with interest.
But if your business idea is a good one
like say, elephant costumes for puppies
or say, penicillin,
you'll be able to pay back the loan with interest
and still make a profit.
And the weird thing about that is when loan capital flows freely,
wealth gets created.
Now of course, an unregulated free market can also lead to decreased economic activity
like say, if the sight of a puppy in an elephant costume
is so transfixing that people who own such costumes
find it impossible to leave their houses in order to go to work;
which is basically why heroin is illegal, but that's another story.
The story today is that,
on average, people who live in countries with freer markets get richer over time
because those markets create wealth.
That's why microfinance works.
Through websites like 
(link in the doobly-doo)
people like me are able to loan money to entrepreneurs in the developing world,
who live on less than a dollar a day
and then those people get the capital to start a small business
and then pay me back with the revenue that business generates.
Loaning money to poor entrepreneurs almost never costs the lender anything,
the loans are repaid 99% of the time,
so you can loan the same $25 over and over and over again
and you get to watch the free market work,
and it does work.
Hank, money can't buy love,
but it can buy longer, healthier, more secure lives
and ill-fitting puppy costumes.
It's an amazing feeling to watch these tiny loans bring people out of poverty all over the world
and because it's a loan and they repay me,
it doesn't even cost me anything.
So Hank, that's Willy's defense of the free market.
Nerdfighters, if you want to see a made-of-awesome, free market in action,
you can go to 
and Hank, I'll see you on Tuesday.
