The author and American Enterprise Institute Fellow answers the Big Question “Does the free market corrode moral character?”

Ayaan Hirsi Ali : Ayaan Hirsi Ali, and I’m a Resident Fellow of the American Enterprise Institute.

Question: Have you always been a classical liberal?

Ayaan Hirsi Ali : No, I was not always a classical liberal. I would say, from the time I started to think independently of my parents that I started out as a radical Islamic fundamentalist.

Then I came to the Netherlands and I was very much taken, and I’m still impressed by the system that the Dutch put in place. I’ve now come to see its weaknesses. But I started out as a social democrat after I finished, after I graduated from university. When taking the theory of politics, it all added up, it all made sense. It’s only in practice that I realized the weaknesses of social democracy. People become apathetic, depend on the government, and the system tends to be vulnerable when confronted with external effects, such as immigration, globalization. The system tends then to become very weak.

Question: Can America learn from the Dutch economic system?

Ayaan Hirsi Ali : When I came to the Netherlands you wouldn’t see them because, like I told you, if you don’t have work, you’re provided for. The mentally ill are housed. When I came to the Netherlands the first time, I got a place to live. I got… My health was taken care of. I mean, I got so much, and I don't know how I would have responded to the reality of the United States where you have to, you know, do it all by yourself. Having lived in Africa, having lived in the Netherlands and now in the United States, I think if you use heterogeneity as a measure, meaning a mixture of people from many different cultures, different ages, heterogeneity in its most broad form that the American system of a free market is not a perfect system, but it’s the best system.

Question: Has the current economic crisis altered your views about the free market

Ayaan Hirsi Ali : I don’t see this crisis as anything that will lead me to change my mind about the superiority of the system of free markets. The alternative would be a government run and planned by the government. Look at Russia. By the way, a number of other European states, in my country, Holland, the government has kind of nationalized all banks. Again, it takes away… The Dutch participant in the market who was irresponsible isn’t going to be punished as much as the American irresponsible Wall Street trader, and the difference is the American economy will come out of the slump, at one point, and those lessons of the past few months are so well learned that I think it’s going to stay in the memories of Americans for generations to come, whereas I fear that for people in Holland, for instance, they would forget it because it’s easily taken care of by the government and there’s going to be a time when welfare states in Europe will not be able to pay for that amount of government intervention.

Question: Is the free market responsible for class warfare?

Ayaan Hirsi Ali : I will give you the example of the man who murdered Theo van Gogh, who was on welfare. Based on that principle, a 26-year-old, healthy young man, and what I took from that and I think what many Dutch people learned from that is he had the time to plot a murder, which in the United States he would not be.

He would be busy trying to feed himself and find a roof over his head. And so the idea that the free market makes the rich richer, the poor poorer, that creates a class antagonism and that that will become a showdown between the two classes and you’re going to have the crime rate go up, and anyway the rich people deserve it. Why don’t they share? I think it’s too simplistic and it’s been tried all over again. It shows that that’s not really how it works.

Question: Should private philanthropy replace government?

Ayaan Hirsi Ali : Not only does it replace government, it’s also far more efficient. If a philanthropic organization, say the Gates Foundation, fails in its stated mission, it will correct itself much faster than if this were a government, you know, if that mission statement was run by a government. What you get in programs provided by government, very often, is an entrenched interest comes about for the people who are supposed civil servants and any other group of people who have an interest. And so, there’s no point in solving the problem, the social problems, because if you solve those problems, you don’t have that income from government.

There’s no reason for you to exist, and so I tend to agree more with the Americans who are suspicious about government and who say, hey, we are going to take care of whatever social issues that our country is facing by collecting money and then by allocating that money much more efficiently than if it were government. Government in the United States and anywhere else has been running public schools, and just read the history of public schools and I come out thinking if these were, I mean, from, say, by the Gates Foundation, that would have made much, much more sense.

Recorded on: November 10, 2008