Thats how it started our intention was to lounge around cuba. We wrote a chapter, sat around with friends we went to venezuela, china, the border of north korea russia, ukraine, georgia is up in chicago and ch, but we just traveled to different sociadifferentdifferef the socialist, former socialist countries. It is a very anthony ordained pj orourke style book. I think if we say that on a second line isnt our normal academic book. We have been good friends for a long time and we are both in texas now, so its easy to collaborate. He was at san jose state and before. What did you find in cuba . At first it feels like any sort of other. Until you start noticing like youre walking down the streets and restaurants or bars that way, looked in other streets you can tell fully residential strt from a business street. One of them is the absolute absence and the other is the prices are just completely dont make sense and i dont know if youve traveled it is a tradeoff between quality and price. A very nice restaurant on the square overlooking the fountain. Its expensive. Sometimes the food is very good. In cuba place overlooking the fountains at prices are the same as a whole in the wall so you dont get the normal price you get any normal functioning economy. They are little matter where you were everything is the same so you are used to voting places to get good prices guide your decisions. In cuba it didnt really matter. They were all the same staying at nice restaurants and because why not, there was no difference between them. But you also talk about the lack of variety and seasoning. It wasnt bad. We had lobster and things. I was asking for tabasco at every meal. There were only going to be two types. One is dark, one is light into the resolve import, so thats it. The absolute lack of variety is another thing. You walk into a Convenience Store and there is actually they things on the shelves. The storefronts that have been government state owned. That would have to be a government owned store. And it would be the equivalent of 711. The entire shelf of one type of canned beans were type of toilet paper, what have you, so the lack of variety is also shocking. You go to a poor country you are going to find all these varieties of products available you just dont find that in a socialist country like cuba. Its very strange when you start noticing those little differences it becomes all you can note around the country. Did you stay at the well regarded hotel tax ca we avoided that. They cant do everything well or hardly anything well but they can do one thing the soviet union can put cosmonauts in space and the cuban government a lot of resources into posting and it is vital regards a world class without. We went to the hotel in the suburbs of havana. Iit on the beach, sort of. Most of the windows were blown out. Its not only a three star hotel on the shower tiles water didnt run a second day we were there. If the government run hotel and by all accounts we were recommended this without. So by all accounts the sort of middle tier hotel and other were locals staying there. And it was terrible. This shocking actually. You chose that hotel for what reason . We wanted to stay at a normal place. We knew we could afford them that we wanted to see what it would be like, whats with a cuban who saved up some money if they were going to go from another part of the island to go to havana and whats he up to beach hotel and we want to sort of get a feel for what that experience would be like when we dont overtly stay at a average place we also stayed in private hotels. We will get to that in just a minute as soon as your description that you did stay at, the pool got the elevator, the room one over four elevators works we ended up walking up the stairs. The pool was fun. We got there. There was a broken mirror that cleaned up the broken glass. Was anyone using the pool . We were the only people there. There was a snack stand and people were working there and we ordered a beer from them, but the place was completely empty. And the beach. It was a half sunken oil tanker, half submerged in the sand. It was rocky. But it was certainly not a resort hotel. Although i think for havana, it was. There are good hotels that cater to canadians and so forth, but this would have been woeful functioning hotel. People who go to havana to talk about walking along the seashore in havana . Several things are weird about it. Its one of those gorgeous real estate that you will see in the whole planet. The sunset, teenagers walk and hold hands. The buildings looked uninhabit uninhabited. You see half a dozen here or there, whatever, but can you imagine the kind of real estate in any sort of capital in the planet, it would be a highend clothing and restaurants and cool things to do and see if it was just complete rubble. If you look to the ocean, which is beautiful, theres nothing out there. There are no sailboats, jet skis, no airplanes trailing, advertising, it is quiet for what should be one of the worlds great destinations in the view. But its a very eerie experience unlike anything that ive experienced. I dont think humans are different on that front. But you talk about that there is some private enterprise in cuba. There are two that are really big but the two established private enterprises how people can rent out rooms they even have many hotel type of operations or a restaurant. And the experience with the air b b they are private rooms airconditionings, no mold 25 a night. Perfectly fine. I would pay 100 in the united states. And the people they are working hard to invest with light fellows and all those that you would expect like an operation but the restaurants varied a lot and there are state owned restaurants and privately run it really wasnt different because they all buy from the same supply chain which is mostly government run with all the black market and thats who they buy from but the variety was limited on both sides but the service and the amenities if you could find them so then say take me to a restaurant there would be a wall it would be broken down there is nothing in this building but you go win and it is a beautiful restaurant with modern Kitchen Equipment this is like applebees. Was a very nice place so there is a lot of that and that is for the tourist industry because i cannot imagine going to cuba because the government restaurants are pretty shabby. Host why are they . Why do you find the government run enterprises as opposed to the private is that basic economics quick. If you get paid by doing a good job with a clean restaurant and good service i speak spanish but if my server can speak english that is a bonus for the tourists but it is a state run enterprise you do things you work really hard english is a very valuable skill so now your pay is exactly the same if not so if your pay will be the same whether you do a good job or not then most will not do a good job. The private establishments personally profit when they do a good job and attract customers and as a result they are pretty good operation. Its not much different the dmv versus mcdonalds. You mentioned the cuban medical system. It has gotten high marks . Yes and i would say it was a state of disrepair i was hoping we wouldnt get sick or hurt. But it is pretty rough but its free and widely available but you read other peoples accounts that you have to bring your own sheets. Life expectancy is higher in cuba than the united states. My colleague has an article that looks at one of the main reasons we could have high Life Expectancy is because they have no cars. Cars are really bad for Life Expectancy and Young Americans tend to die every year if you kill a young person it hurts the average Life Expectancy if they are 80 doesnt change much but a 20 yearold, that has a big effect on the Life Expectancy but there is no cars in cuba. They are all Walking Around or the post one the horse drawn cart and there are very few Car Accidents and so almost the entire gap from cuba is just because they are too stupid to have cars. Because the government wont let them come into the country is not the us embargo but the cuban government that prevents them from being imported. It is one of the most greatest risks of dying especially at a young age. Host how much would you pay for a 1991 . Here in america . Nothing maybe 400 in china but it cuban would pay 3000 because there are no cars. Supply and demand. They are not allowed to import the cars more or less at all that is why you see so many 1950 cars they are left over from the revolution there were a few cars that were allowed to come in a few chinese cars sometimes they get put out as a taxi but if you dont allow import so if you restrict loan restrict over 60 or 70 years you will drive prices up so then use or restrict the supply that much so as poor as they are the car is one of the most valuable assets you could have. If you have a car you are a taxi de facto. Everybody uses their car to rent out for rides people on the streets are waving and then they take them to wherever and they can negotiate a price that is one of the few ways unless you can rent out rooms in your home or have a private restaurant to have a car is one of the few ways you can raise private mone money. Host so some of the rules regarding having a private restaurant are limiting. The seating limitation that we walked in. What is the reasoning . They were against the rules for any restaurant but people can rent out their houses so there were three or four tables but then if you get 50 now you are in establishment we asked them they are very reluctant to talk but the gist is or what they are doing he said they were combining they had four licenses when they have them in a contiguous area so now its like a restaurant of a few hundred. So it was pretty ingenious so they will try to find a way around it. They are very entrepreneurial people. Host what is the short economic history of venezuela . Like a lot of south american countries went populist long ago and that for the most part failed growth was slow. And some of the countries turned to one extreme to the other. Argentina, and then they promised to fix things but they should have turned to the right but the failures of the populist economics that they were going to be the great savior and do what socialist do to nationalize the ministry with price controls putting in a penalty and so than the opposition could not get reelected it is a pattern we have seen in other places. People like me, economists were worried about venezuela going bad for a long time. But for a long time the price of oil was sustaining it and 100dollar oil can mask a lot of economic dysfunction. There is no way a country can nationalize the industry to the extent venezuela has done and control prices and have it turn out well. Sure enough as soon as oil dropped the veil was off and it is a sad situation. Host on your drinking tour of socialist countries around the world. American airlines they dont let the flight attendants are the pilots get off the plane. We went to columbia because the Border Crossing is where the action is. There is a town there it is a large city right on the border of venezuela in the middle of nowhere. Nowhere near the coast it is in the interior and mrs. One of the main crossings there are two main bridges we went there before the crisis and it was horrific it look like disneyland thousands over the course of a day 10000 people were crossing to the colombian side to buy groceries like sugar and deodorant or aspirin or shampoo. Everything we talked about in the book that stuck with me the most was talking to ana maria and they came from the western side to the eastern side of venezuela all the way to the western border so a sixday round trip in a car and rice and beans they were not poor people they worked in a hotel. Middleclass who live in a state where its a good idea to get in a car like me being in dallas driving to vancouver for groceries. This is crazy they have family back there and now its a dangerous trip. So what would it be like to live in a world i had to live one leave my family and drive three days to buy beans . That was a moving experience for me. It was something else. There is nothing over there. There used to be. Colombians would go to venezuela to shop they say that you made fun of us for years but now you are coming over but basically there was a gas station there was no attendant but the roads are closed to cars if no cars are coming across how is the gas station still leftdoublequote so we walked half a mile we were reluctant to go further we didnt have visas but we would see one venezuela car stealing stuff from passersby so then we turned around and went back to columbi columbia. Host everything in columbia . Pallets and pallets of sugar and everything you would ever want. They were a makeshift operation. A village has spontaneously erupted on the border to cater to the venezuelans and then their packages were arriving to take that to the big city but a few buildings that were concrete buildings most of those that were shacks set up by the vendors. Can you explain why as a vendor Government Printing money like the venezuelan government has done in your view is bad form . Do you just create massive hyperinflation. More money chases at the same time you have the economy with a bunch of paper more money and then prices will go up. And then with these notes which is a largest denomination at that time. If you want to buy a car, you would have to have a truck. So at this level of inflation when we saw the venezuelans coming into the country or coming into columbia, they are carrying baggage like luggage. And it was heavy but you could tell because they were dragging it and then when they go back to venezuela they are taking back the food. Its heavy because the bags were filled in and they exchange it for colombian pesos. Host so the venezuelan currency today is relatively worthless . Yes. Thousands of percent per month you cannot even post a price because the prices are changing faster than you can post a pric price. Host then what we have read about venezuela as president maduro still says he is president then why is he still president . He controls the military and at this point they are in cahoots with the maduro regime. These businesses have been taken over by the government to Nationalize Industries and nationalize hotels, shoe factories, restaurants, if you are marriott or sorry you dont get a check we just take it then they turn that over to their favorite friends and say run this for the government and they turned over to a general or a kernel so the individual offices at the highest level are actually now owners of these businesses and they are making big money on this. So the one institution for better or worse the one that says that the military is now on the inside. And there hasnt been any other entities the media has been shut down by the government. Academics they have been fired. There are very few people left. And those which have been done and that was pretty serious resistance and everybody wants to hit the streets but you go first because it is very hard to organize a streetlevel protest and now they have corrupted media i dont know who does what but. With your drinking tour of socialist countries were you surprised with their beer . It is normal. They have run out of it. But prices are bad because they mispriced it and then the government sets the price wrong. But in this case the Venezuelan Company ran out of hard currency even malted barley. They have to import that item so they did not allot the company enough hard currency dollars so without the ingredient they could not run. And then nobody would accept it. No but they are having trouble now because the company that makes them literally the Printing Company it is an venezuela it expects their money and they dont have it so that is hilarious so they are too poor to print money. Host when you get to china how is that different from cuba and venezuela . Every chapter has something about socialism and cuba with arriving socialism and venezuel venezuela. But if not for cuba the state socialism if you get off the plane just from the airport you say oh my gosh. Chase manhattan. Look at the signs they are advertising everywhere. This isnt a socialist country it is a capitalist country is not with the state owning all the Economic Activity because i know this is not the state. It is a vibrant market oriented economy. They are not sitting there at the federal halls of Government Society to decide how many how much land is planted it is a market economy they let the farmers decide what they grow and the businesses decide how to produce it. Now on the Civil Liberties side of things they are limited but the economy is pretty much free and it is immediately obvious when you are there and the chinese are benefiting tremendously but the Economic Growth is real and the chinese are elevating their standard of living because now they can engage in commerce with the rest of the world. Host you spoke at an ayn rand conference while you were there. How did that go quick. We had no intention of really working but a friend of ours said we are doing a conference in beijing we will send a car and you can come over. He said just come for an hour and you can talk. Okay. Then we will go drink and have dinner. So we go to this event Friedrich Hayek and ayn rand it was from beijing it was so surreal we are in the middle of a police state with communist china we were journalist and academics and professors and they are talking about ayn rand. But the punchline that you knew still it was a socialist state but the next morning the very conference was shut down. The government showed up and padlocked the doors to the building they had thugs to show up that were muscle and prevented the people that we were with the night before from going in. So now it shut down by the government they lost their lease they pressured the landlords to sell their lease it is a tough experience. So as popular as beijing is right now it looks like paris or london it really is that vibrancy you get from new york or that manhattan type of experience that is a stark reminder it is still a police state if you get out of line with the regime they will hammer you hard. Host is private property respected quick. It is. There are mortgages we live in an economy a banker will give you money for 20 or 30 years so anyplace with a credit marke market, technically a lot of the land is still owned by the government and they have 99 year leases. The buildings are private and contracts are enforced if you have a private contractual disagreement the chinese courts are good in terms of enforcing contracts and thats why International Lenders are willing to invest. China borders north korea. We didnt go to north korea. We could see it. That us and china is just the Allegheny River and it is 100 yards away. There are little river cruises then you are just 20 yards away you could see people on the industrial side with workers people were dredging up river there is farmers we saw one tractor actually was trying to get up a very mild incline that you could hear it chugging and then it would go backwards and could not make it. It is two cities really if you look one way on the river no lights at night now vietnam is not shanghai but it is a modern chinese city with skyscrapers lining the city. Saw the north korean side and the chinese side many of them are wealthy they would come there for the same reason to say what is it like over there . They were basically tourist to see what north korea was like. It wasnt working there was a ferris wheel at the water park im not sure if it ever worked or the waterslide. There was nobody on it. Even the people say it is long dead. Host us policy toward china today in north korea has flipped a little bit from the previous position. Yes. It is true. We think we should trade free with every country. We think the cuban embargo is a terrible folly on the part of the Us Government it does seem like we have gone from friendly toward china i like to be friendly with everybody. When it comes to buying and selling thats one of the greatest things they can do with the American Vision of buying and selling to wheel and deal i think we should start all over. Host from Southern MethodistUniversity Call author of this book socialism sucks. We left some of the countries out and they can read them for themselves. Thank you for being with us