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RS 232 - Tyler Cowen on “Defending big business against its critics”

Release date: April 29th, 2019

Tyler Cowen

Economist Tyler Cowen discusses his latest book, "Big Business: A Love Letter to an American Anti-Hero." Why has anti-capitalist sentiment increased recently, and to what extent is it justified? How much are corporations to blame for wage stagnation, climbing cost of living, or the slow response to climate change? Tyler and Julia also explore their various disagreements: on how to communicate, whether people should bet on their beliefs, and whether we should increase public optimism about technology.


"Big Business: A Love Letter to an American Anti-Hero" by Tyler Cowen

Marginal Revolution blog

Conversations with Tyler podcast

Axios Harris 2019 poll on people’s attitudes about corporations

"The Complacent Class: The Self-Defeating Quest for the American Dream" by Tyler Cowen (2017)

Tyler's 2008 Bloggingheads interview with Will Wilkinson

"On Bets and Bullshit," a round-up by Adam Gurri of the debate over betting, between Tyler, Robin Hanson, Bryan Caplan and others

Tyler's "prisoner’s dilemma-style" podcast interview with Brink Lindsey and Steven Teles

Rob Wiblin's 80,000 Hours podcast interview with Tyler Cowen

Edited by Brent Silk

Music by Miracles of Modern Science

Full Transcripts 

Reader Comments (21)

Just did a quick google search for per capita income in Sweeden and one for West Virginia. Google said Sweeden's per capita income was about 20,000 usd more. What's up with that?
April 30, 2019 | Unregistered CommenterBrangus
Question for anyone - the intro to this episode names a new website - All I find is window replacement sites. Anyone?
April 30, 2019 | Unregistered CommenterDoug Cowles
@Brangus - When you search for Sweden per capita income, you get lots of results for GDP per capita, and pretty much nothing for Sweden's per capita income. Sweden has a much higher GDP per capita than West Virginia. I couldn't find per capita income, but you can find media income, and that is closer: 30k for Sweden, 24k for West Virginia.
May 1, 2019 | Unregistered CommenterMarion
Awesome interview with and awesome guest !!

Wikipedia lists West Virginia with per capita income of $23,450 (2015). US Census lists West Virginia with Median Household Income
$ 44,061 (2017).

OECD lists Sweden with "Household net adjusted disposable income is the amount of money that a household earns each year after taxes and transfers. It represents the money available to a household for spending on goods or services. In Sweden, the average household net adjusted disposable income per capita is USD 30 553 a year..."

Not sure if these metrics really compare directly. However, it appears that after taxes, Swedes have a lower income than ppl in West Virginia.

The Cost of Living in Sweden also greatly exceeds West Virginia. The cost of a home in Sweden costs about 400% more than in West Virginia.

Big Business actually does a lot more for society than Big Philanthropy. Big Business creates industries that provide products ppl want, employs ppl, giving them incomes and job skills, and these industries sustain themselves and grow to create even better new products, efficiencies, and more jobs that allow employees to support themselves.

Many US "Intellectuals", particularly the ones found in the news media and at universities, actually favor and promote Marxism and simply hate the fact that Capitalism works well, and that Socialism ALWAYS fails.

The extremely low interest rates in place since 2008, and in fact since 2000, have led to asset price inflation. Archaic and onerous environmental regulations have made construction of new housing tremendously difficult, and thereby constrained supply. Rent control has made matters worse yet by disincentivizing new investment. So government meddling (socialism) has made housing unaffordable.

Large Financial Institutions did play a role in the 2000 dot bomb crash, 2002 recession, and especially in the 2008 Great Recession. However, the Government financed, guaranteed, and ultimately insured the misconduct of those Financial Institutions.

The federal student loan program has actually led to a terrible increase in the cost of university, and also led to a massive increase in university bureaucracy. PPL with degrees, or even just training or on the job experience, in IT and other technical fields earn very good incomes. So the govt should provide grants, not loans, of reasonable amounts, for the degrees and training programs that lead to good incomes.

Wage Growth did stagnate since 2009, but in 2019 Wage Growth finally recovered to 3.4% with a low inflation rate of 1.6%.

When comparing health care outcomes amongst various countries, we should include guns and car crashes. The fact that US citizens have greater access to guns means that they choose guns as their weapon of choice more often than ppl in other countries, and excluding guns inflates the mortality rates in those other countries. Deaths from car crashes result not only from the car crash, but the quality of medical care given after the crash.

Some really big businesses (nuclear, solar, wind, carbon credit markets, ... ) benefit from climate change alarmism.

Reputation works fine as a currency for verification of social and academic claims. If someone hedges their prediction with conditional language, then they gain less if correct and lose less if wrong. Even with monetary bets, ppl hedge their positions with spreads. With real bets, investments, ppl hedge their positions with trading strategies, options, and other financial mechanisms.
May 1, 2019 | Unregistered CommenterJameson
Saying that US healthcare is somewhat terrible for some people seems to be more than a slight underselling of its downsides.
May 1, 2019 | Unregistered CommenterSneaky
Good interview.

Cowen said that "anti-big business sentiment is on the rise", but I didn't find this when I looked for polling data. A long-running Gallup poll question asks if a person trusts big business "a great deal", "quite a lot" , "somewhat":, "not very much" or "not at all."

Here are the percentages over the years of those who say they trust big business either "a great deal, "quite a lot" or "somewhat": Notice that last year trust went up a lot for some reason but apart from that there has been no change in anti big business sentiment for 13 years.

2018 68%
2017 59%
2016 61%
2015 62%
2014 59%
2009 58% <-- the Great Recession
2008 63%
2007 57%
2006 58%
2005 67% <-- same as 2018
2000 74% <-- right before a recession
1995 71%
1990 65%
May 1, 2019 | Unregistered CommenterTodd Kreider
May 1, 2019 | Unregistered CommenterJ Smith
Unless I misheard the interview, I thought I heard frustration in Julia’s voice more than once, which she handled very well. I certainly couldn’t have remained as diplomatic at some points as Julia did, and I doubt there are many who could have. I’m disappointed that some chose to use the interview as a jumping-off point for their own cheerleading for big business, and attack on “socialism” as allegedly promoted by “intellectuals,” who are ignorant of the fact that it “always fails.” I wish people would understand terms before they throw them about in service to their own pet peeves. The Scandinavian-style social safety net being promoted by some Democrats is not Soviet-style autocratic communism. Having recently spent 3 hours reading every word in the Prague, CR Museum of Communism, I feel confident that stymying competition as the communists did stymied innovation as well. But totalitarianism is not the same as communism, as much as communism is doomed to fail economically; nor is it socialism. Economic systems are separate and distinct from forms of political rule.
I also did not understand Tyler’s insistence that, while he has no interest in religion in his own life, he is very glad that there are religious people in the world who continue to promote religion. I remain unclear on precisely which benefits he thinks religion offers that could not be provided just as well without the superstitious mumbo-jumbo.
May 1, 2019 | Unregistered CommenterRichard Schloss
Great interview Julia! I really appreciate you creating a space for ideas to be discussed in a productive manner, but man this guy... it's really hard to stay objective with his subtly supercilious attitude and contrarian stance that is clearly meant to stir up emotion. I mean he starts off immediately by attacking Bernie Sanders and Elizabeth Warren... what does that say about him? The Anti-Socialist boilerplate argument espoused by conservatives is getting tiresome and exposes their fear of any real social democracy taking root. Gratitude for Big Business? A Love Letter to America's Anti-Hero? I don't see how framing his arguments with this type of language engenders earnest discussion when it's obviously a snarky dig on those who deign to take a liberal stance. Where are the empirical augments? Whining about "negative polemic" in the media isn't much of a fact? How dare people take a critical stance on big tech! Accusing the public of fomenting a war on big business? A war? Is he serious? How out of touch is this man? Maybe he needs to wake up one day as an overweight 12 year old going to woefully underfunded West Virginia public school with parents who work 2 jobs and can barely afford a mealy apple from Walmart, never mind the insulin required for their type 1 diabetes, which they have because they can't buy fresh food working minimum wage jobs.

"Determined to be original" but ended up being an ass instead, which is probably what he really wanted all along.
May 2, 2019 | Unregistered Commenterllugubriouss
So the guy admits that he's a troll, and Julia argued that trolls like Milo Yiannopoulos don't deserve a platform.
May 2, 2019 | Unregistered CommenterMax
If you're going to compare Sweden with West Virginia, then compare poverty rates, life expectancy, suicide rates, quality of life, etc.
May 2, 2019 | Unregistered CommenterMax
The guest seems to have been acting in bad faith in that there was a lot of cherry picking and straw manning in his arguments. He is promoting neoliberal capitalistic clap trap and I can’t believe he doesn’t know better.
May 2, 2019 | Unregistered CommenterFredbo
Every single country that attempts socialism fails. Just look at Venezuela.

Scandinavia has a capitalist system with an extensive welfare system. Many Scandinavian countries have no minimum wage, have school choice, and have business friendly environmental and labor regulations. Scandinavian countries have highly regressive taxes, the poor pay a much higher rate than the rich and businesses. The leftist Democrats certainly DO NOT promote a Scandinavian style economy for the US. Essentially all of the Democrats running for President in 2020 have called for MORE regulation, but Scandinavia has less regulation than the US does now.

Communism employs an authoritarian political system with a socialist economic system. It always fails the ppl.

18% of University Professors in the US self identify as Marxist. That's certainly not from the engineering and science departments, so the US probably has 40% PLUS of its sociology, political "science", and gender/ethnic/environmental/cultural studies departments full of Marxists.

Socialism, state control of the means of production, stymies competition just like communism does.

Tyler Cowen "trolls" with class and genuine intellect. He is NOT a mere insult troll/abuser.

Religious ppl moderate their conduct to increase civility and take up charitable works in the name of religion, just as secular ppl do so in the name of reason. So religious motivations certainly can benefit society. Obviously, both religious and secular motivations of the wrong type can certainly harm society as well.
May 2, 2019 | Unregistered CommenterJameson
10 years ago the biggest bailout in history occurred when the Wall Street bankers were bailed out and made whole by the U.S, government, These institutions failed in a system that was largely OF THEIR OWN DESIGN since their capture of both political parties with the ascendancy of the Clintons. This implicit backing of the finance class greatly empowered those with access TO THE CHEAPEST MONEY strengthening the position of those with assets versus laborers.

You let this guy of the hook by not bringing up the huge influence big business has over government policy.. You sounded like a fawning graduate student interacting with a dean. I’d like to see Cowen peddle his crap on the Jimmy Dore Show or even Joe Rogan’s Program.
May 4, 2019 | Unregistered Commenterkevin moore
this is hilarious, I guess it's true what they say about "rationalist" being code for soulless neoliberal drones. It's obvious that you're an amoral reactionary, but thanks for finally coming out of the closet as a literal shill for the fascist corporate state.
May 5, 2019 | Unregistered CommenterJ
Large international investment banks did indeed capture both political parties in the US. They did indeed repeal Glass-Steagall, circumvent the FDIC and CFTC, and thereby allowed themselves to take limitless amounts of risk while the US taxpayer paid the bill. However, Large international investment banks make up only 2% of the Fortune 500 largest businesses in the US. Most "Big Business" has a much better record of service. Most Big Business exists since it treats its employees fairly thus retaining a competent workforce, complies with environmental regulations and other laws thus operating in a socially responsible manner, and produces products that people really want to buy thus adding value to the economy.

Big Business generally benefits society, but Corporatism, Corporate Socialism, also called "Capitalism" by John Stossel, hurts society. When corporations buy the favor of politicians and then those politicians buy useless products from corporations with tax revenue, or give those corporations monopolies, or otherwise subsidize those corporations, or regulate their small business competitors out of business, THAT ruins the economy and hurts society.
May 6, 2019 | Unregistered CommenterJameson
Are there billionaires in, say, Ukraine who are NOT considered oligarchs? Or are they all assumed to be oligarchs? I think Americans generally don't equate billionaires with oligarchs.
May 6, 2019 | Unregistered CommenterMax
Julia, I have been listening to every episode of your podcast for more than three years with great admiration.

I admire your typically clear and ruthless insistence on consistent arguments based on evidence and solid or at least explicit premises. This episode stood out in that hairy arguments and unfounded claims were left hanging and did not receive attention and necessary sanity check. I think I don't need to make a list since it's rather obvious and others here are making a similar case. Maybe an idea would be for interviewing people with such strong ideologies that are not directly discussed to balance them with another guest. Letting those stand like that does not do rationally speaking justice.
May 7, 2019 | Unregistered CommenterTobias Donner
Ha! This was comical. This man sounds very out of touch with the average life experience out there. People have issues with Big Business because they live in a world where Big Business controls all of their livelihood putting its own agendas ahead of the well-being of society. The Corporate bottom line does not and never will harmonize with the health and security of the people and Planet. That's the true bottom-line! And that's why Capitalism always fails for most people because the agendas, incentives and goals for one are the burdens, limitations and disadvantages for another. Stop sounding like a Robot and remember that before anything and any of these constructs(Big Business) we create are even possible, we need thriving Human Beings and secure Environments to make them work.
May 24, 2019 | Unregistered CommenterErnesto
This topic is very interesting and I am interested but do not know where to find, thankfully you create this topic, hope everyone will help me
May 29, 2019 | Unregistered Commenterwings io
John Stossel refers to Corporatism (Corporate Socialism) as "Crapitalism". I omitted the "r" in my earlier post.

Of course Corporatism fails. It fails for reasons quite similar to the reasons that cause Socialism to consistently fail. Corporatism, just like Socialism, distorts the free market and interferes with the proper functioning of capitalism.

In Corporatism, the Government subsidizes, regulates, taxes, and finances industry to the advantage of certain market participants with political clout (special interests), and to the disadvantage of all competitors to these special interests. This creates a semi monopolistic or semi oligopolistic marketplace wherein the special interests leverage their legal and financial advantages to provide inferior products at higher than market prices.

In Socialism, the Government takes control of the means of production, controlling the marketplace through direct ownership, regulatory control, and preferential taxation and subsidisation of industry. This creates a government monopoly wherein quality declines due to lack of competition and consumer choice, and the government spends as much as it pleases since no one has the legal or financial ability to compete with the Socialist Government Industry.

Both Corporatism and Socialism fail miserably. You want a free market Capitalist economy regulated by a neutral, independent, and competent government. Free market Capitalism requires honest regulators and a capable judiciary. Unfortunately, due to regulatory capture and the revolving door of bureaucracy, industry has taken control of much of the regulatory apparatus of government and manipulated it to give special interests monopolistic advantages. Politicians have now even started to politicize the Judiciary, and if that trend continues, it will have disastrous consequences.

The Fascist Benito Mussolini actually described Corporatism and Socialism as synonymous.

If you don't like Tyler Cowen's views then fine. But don't blame Julia just for giving him an interview.
June 3, 2019 | Unregistered CommenterJameson

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