>> tonight i'm pleased to contribute tyler, he's a bloomberg opinion columnist, has written regularly per "the new york times" and contributes to a wide number of newspapers and periodicals. previous books include the complacent class and great stagnation n new book, examines the tension between lack of trust in big business and argues

that corporations despite americans are essential in balance, productive and progressive society by spurring innovation, rewarding talent and hard work and creating on which tech come to dependent. tyler cowen with finance and tech industry, both critics and defenders will benefit from reading the book, cowen will be joined by edward, u.s. national editor for financial times and author of the retreat of western liberalism. please join me in welcoming tyler cowen. >> thank you very much for the introduction. delight to be here with tyler.

i've met tyler a million times, have met many years, we don't always agree with each other. disagreeing without being disagreeable and far more manageable at the end of it. we do agree on some things. i am going to get into productivity. let me quickly emphasize tyler's productivity. wonderful book in 2011. we've had your complacent, we couldn't have -- >> no, about every 3 years. things speed up as we get older. >> but, anyway, that is a lot of books, one thing i will say is tyler is unusual economist, most

economists wait for the baiter and they wait, they wait for the data. they torture it sufficiently in whatever case, he uses intuition which i know a lot of economists it's quite rare. let's start by imagining let's say 20th century in pennsylvania and ohio, most of the jobs have gone to china. shopping at wal-mart and out of town and wal-mart now, everybody is beginning to shop at amazon.

used to work at wal-mart, not paid very well. they can't join a union. they have need permission to take off, why should the people of 20th century of pennsylvania love big business. >> if you look at per capita in west virginia, we are here, think of middle america, completely devastated, that's not quite true for the entirety of it. but most distressed areas are those lacking big business. a lot of the regions will never come back, i don't think there's an answer. west germany never solved the east germany problem, migration

does work. i'm all for better policy to encourage migration. so i think people -- if they can, they want to move to areas where there's a lot more business and that's the case for big business for them. >> what would you say to those that are running main street, not just people but people who ran them, they may have cost a bit more. wal-mart and now amazon and is there another issue of what makes a community. >> keep in mind, most society face choices, they can do things and we see many countries that stay put. lower prices for all consumers,

as time passes, probably politically more secure country. transition costs, the shina shop, there's recent studies, overstated. some of it is automation, of course. some of it is regional rebalancing. california, new york. you mentioned strong economy. even though there's -- you make more case that although there's no market concentration you don't see signs of behavior in

terms of companies. let me mention a few statistics that might not be exactly precise but roughly. in home supply market, you have office depo, staples, 80% of the market. you have 50 brands. airlines. the markets are set. you do mention in your book health insurance, but the market, the american economy is getting more concentrated and quite severely concentrated, nike, 86%, you're seeing real concentrations.

why isn't that market, why isn't that a thing? >> you look at prices, quantity by consumers and you find in individual markets there's more competition, not less, bigger international brands, amazon and wal-mart, other examples, larger examples are lowering prices. it's not like the old monopolies. what are the sectors of the american company which prices have been somewhat out of control, it's simply health care and higher education each of which is fairly business impoverished. we have allowed hospital mergers if you like at airlines, just as many carriers as before. number of air miles traveling is going up.

we could do better yet by allowing airlines into domestic u.s. markets, that's government restriction on trade which i would remove, more and more americans are able to fly each year, so health care aside, i don't think it's story of rising monopoly. >> we will get back to that in a moment. let's get to the heart of the book. when i looked at your number about trust in business in america, i was delighted to see that it's lower than the trusted media. [laughter] >> i think it's 2%, 8% of americans trust business and 10% trust media. that might be a false distinction. it is only exceeded by congress? >> that's correct. >> how did that happen and talk us through a little bit what the things mean about big business,

what they hate about it and why. >> distrust in big business comes in ways, people are trusting many institutions left, not just business, as a mentioned and business is a kind of collateral casualty and the financial crisis, income inequality, i think the role of business or the responsibility is often overstated that you cannot say and social media culture, you see the vulnerabilities of everything, everything is talked about, every joke made at someone's expense and highest trust rating is the military and it's striking to me we're in a time where military is not in the news that much.

it's very easy to trust. >> it's gone down quite a lot. >> that's true. is mistrust purely the technological story or there's element to that? >> i think we rely on business to do more things, simply the more you talk about something the easier it is for that something to acquire a negative tag and also we evaluate businesses by the standards of people, so lessons and businesses are not your friend. they might sell you wonderful books. they pretend to be your friends but you need to evaluate them on in-personal terms.

i think resentment and growth. >> you mentioned airlines being much less where you might propose looking at at the -- >> individual roots? >> yeah, individual, i'm sure everybody can share american united shares or delta stories. the feeling is this is not certainly competition in terms of the quality of service and maybe because we as individuals, because of technology and discovery, drive costs lower, that's what we are after. >> perfectly competitive markets.

airports do not have real markets. my colleague has written about this in great length, airlines have created transportation ever, we now take that for granted. used to be relatively dangerous for a long time in driving and i think it's amazing what we have and don't quite appreciate anymore. >> it's ideal that's european allies. more people flying. unlikely to be very important. but i think the american airport system is one of the world's greatest transportation networks really ever revised but works

well. corporations aren't people, don't personalize them. companies themselves they try to trick you, we are your friends, buy from us, you're a frequent flyer, frequent buyer, those are sense of collusion. you feel loyal to them and they're not actually that loyal to you, right? again, cold-blooded and ruthless ask yourself the bottom line question in different areas how did job or corporations doing you will find sector abasal, for profit higher education has been total train wreck but for most of goods and services we consume, the record of companies are excellent.

>> what is it, why is it a train wreck? why is it acting badly? what does think think about that market? >> i don't think we understand what for profit higher flawed lent. some are easily government loans. truly that can't be all of it. you're learning policy trade, trying for decades, attempt to for profit higher and give people 4-year degrees, hasn't caught on and it's been worrisome and mediocre seems to me. >> and trump university. >> i don't have to but i would also stick for profit education is concept, higher education,

it's even higher than high. works wonderfully, your ipad is for profit higher-ed, apple, plenty of knowledge-base service that is you pay for and work perfectly well. i reasonably don't understand like 2 or 4-year degrees, that seems to go better for nonfor profit. >> you mentioned in your book, silicon valley created conformity. unicorn, big-tech name, and this is for many places but also impact of technology in our lives, the sorting we do has created a risk, conformity.

is silicon valley increasing -- >> if it's easy to use that or mediocre or destructive ways you can spend days manipulating facebook page. that's a negative spillover. you look at how it connects people with common interest. you have whatsapp groups, people getting ideas to start companies all technology, typically we learn how to use them better as they get older, that doesn't happen automatically, it's through the exercise and to some

extent, not all radio is wonderful, i think to stay focus on the idea to be communicated, recognize that intellectual battles have to be refought all of the time, don't blame companies and companies that sell you the radios, just realize you can't take for granted that your favorite idea will reign supreme and when new technology comes along, you to make your case all over again. the number of people about 1 and 7 americans, 1 and 10. >> correct. >> quite a mass decline. >> yes. >> we haven't gotten older at that.

>> correct. >> the reason i'm asking, for big business creation occurs with entrepreneurship. >> biggest formation by far is areas of retail. you're much more likely to buy retail from a brand and brands that are much longer list. those things are because of data. a company as nordstrom they have good data on what people want and they can adjust relatively compared to 1980 where it's much more a stab in the dark, some dynamic new company eats their lunch. now the established companies with much, much better data they

are just keeping up with the market. i don't think that's necessarily bad for consumers. you might think erosion of unvaitiveness. that's completely new and remarkable in terms of choice and price, i'm not worried that retail hasn't progressed at all. >> a lot of sales, which is innovation, i like it. i carry it on my ipad. i'm not complaining about that at all. touched the trillion dollar valuation in the last year or so, massive, very powerful country whatever the president says about the amazon and washington post and jeff bezos, very powerful company, google. and search is equally powerful.

facebook in social media, equally powerful. i guess twitter, am, of course. they are not for the most part competing with each other. they are absorbing whatever technology and innovation tends to stop with acquisition to get challenge. there's no abuse in power going on. >> we can talk about this company by company. you look at google, 10 other searches you can go. duck, duck, go. >> duck, duck, go. >> correct.

i prefer google. i use google. if i'm in china -- it's fine. many search engines. google has not stopped i -- innovating. g mail, widely used e-mail service. you get it there. google took it over and upgraded it and made the comment sections and tried to get as many copy right. google hasn't stopped innovating at all. i'm not against google, absolutely not. >> what about facebook? >> first it's actually knocking on your neighbor's door, there's fortnite which out of nowhere

caught the attention of tens of millions, snap, you can vi a vlog. there's twitter, you interact with twitter sometimes. different ways of social networking with people is highly contestable, probably seen facebook. i wouldn't split them up. >> is amazon good for america? >> unconditionally no. has amazon to date been good for america, absolutely. i have spent so much money in amazon and whole foods it's embarrassing. >> i typically buy on amazon because i'm sitting in my softa in fairfax. the number of bookstores have been going up.

used to be barnes & noble. barns&noibl wind lg, independent stores are making comeback, i'm happy about that. social faces, independent bookstores. yes, i'm happy with amazon. is the state of virginia and maryland and others spending taxpayer money to get amazon to move, was that a good idea? >> no, the subsidies shouldn't have been offered. i'm open'sed to them. my, goodness.

unique upgrade, i think that starts and we probably should do that anyway. whasht is subsidiary for big business. >> sure. >> you pushed back really strongly against that. proctor&gamble spends that in advertising. >> policy voters approved of. keep in mind.

dominated by business, a lot of defense procurement sometimes nominated by business. in that way clearly numerous case that is you can point to but most of the money spent is spent on voter's desire and you look at the white house, donald trump, what he's doing on trade, i very much disapprove. most american businesses disapprove. what he's doing in terms of rule of law, most businesses are against, what he's doing on trying to do on immigration most people are against, what i would say, the idea that business is there putting all the strings, is trump trying to appeal to his base but trump keeps it all, demonizing them, of course, this doesn't approve of that either. it's a mix complex picture. >> business spent a lot of money on tax cut.

he's made a lot of noise. the one area that's concrete connecting was massively beneficial to business. they spent a lot of money. >> we cut business tax rate to 21%. keep in mind average is 22, 23%. we brought ours in the range of that. our administration wanted to cut tax from 28%, in my opinion, 21% is probably too low. 23, 24%, but it's the one major thing business did is push in the direction, democrats also wanted to move them, mostly right direction and, yes, you can blame business for the overshoot to 21%, even trump ice advisers, people being lobbied by 21% is too low and trump is stubborn and wanted it to be low. trump feeling stubbornly would have had been very low. >> you mentioned treaty wrote in

1970, corporations with shareholder value. the argument that you make which i agree with is that profit is like happiness, if you own for that -- >> that's right. >> you're likely to be by-product and happy with long-term company as by-product. have we reached a point where shareholder capitalism must be reformed? >> well, it depends what you mean by reform. what i say competition, you have consciously capital. i don't think there's any single right company for all companies. i mean, if you're producing to wal-mart, you know, probably your goal is capture market share. if you're doing something where you interact more with the environment, physical world, then i think we need broader

range of conceptions of what a business should be about. make money, to stay in business, i think it was overreacting to people who wouldn't even do that. >> in a momently -- moment i will get to questions. >> absolutely. >> one question getting back to trump. fortune 50 companies strike me as being different creatures to the trump organization or the koch brothers or private-held companies and are not listed don't have quarterly returns, hr about concerns, interaction of social media. all things hr department do.

trump hangs out with people with trump. if you look at mar-a-lago list, not many fortune 500. very different creatures. should we be using different terms, should we be incentivizing what we mean by business? >> i think we've made it too costly to be publicly traded for a lot of companies. some of that is regulation, some of that is perhaps the demands of investors or shareholders who focus on impartial numbers and as you know, more companies have been going private and at times this is in accelerating rate. i think the companies more than before are very concerned with diversity and hr departments. some of the differences are blurring at the same time. help companies grow larger and more in public eye are nonetheless becoming a bit more like the public-traded companies

and liquidity of the markets for the private shares and the private hi-held companies, they have real markets, they are not publicly traded on stock exchange but they are actively traded before they go public n. some ways we are seeing merging, no some ways we are seeing differentiation, the important thing sometimes competitive framework for a lot of different kinds of companies have chance to compete. underrated or overrated and you mentioned something, are you going say overrated and underrated and give quick explanation as to why. comcast? >> i love comcast, gives me internet service, cable tv which i don't have the time to watch, nba finals are approaching, i do think there's crony capitalism,

lobby to charge higher price, maybe one optimal or desirable. for a long time legal descriptions, also satellite television, the future as we have 5g and much more active satellite supply, that market becomes more competitive or in some ways you can say that how many other companies do you more bid than other companies and that's a short list, you don't have to buy it. people who grew up without cable tv and they turned okay. [laughter] aye mostly been a skeptic all along.

maybe first in china, the rocket launchers and, my goodness, that's remarkable. i don't know if it's underrated but very impressive. >> alibaba. >> i've never used alibaba. integrating the physical world with the online world and seems to me quite remarkably what they've done, they are in some ways ahead of that and americans underrate them, i'm not sure the chinese do. >> pete buttigieg. [laughter] >> i'm not sure how he's rated. i like what i've seen of him. i like the idea having mayor be president, someone who is used to solving problems and realizing it's not just voters of party they are working for, i would like to see him be rated. a lot that i don't know.

i've seen encouraging signs. >> game of thrones. [laughter] >> you know, my wife just sat down, so long, we have to try one episode, better than most movies. too complicated. i didn't care. i didn't love it. i think someone could get into it but for now it's overrated. >> let's go to questions, if you could state who you are and speak clearly into the mic. >> my question is you have been talking about people as

consumers, people who consume, they have to have an income, do you think it's reasonable that jeff bezos pays his workers nothing at fulfillment center, $10 an hour, $12 an hour, very limited benefits, they're supervised with all the cameras, they have supervised to how many boxes they fill, if they don't fill enough boxes for 2 hours in a row they are fired. when an amazon fulfillment center comes to an area, sometimes it lowers the wage. >> still the richest man in the world? i'm just joking, most of the people who work for amazon get better total offer from amazon. amazon hired a lot of people, some are high-wage jobs and others are low-wage jobs. for the most part higher than

before. >> i've never heard of workplace. >> yeah. >> a lot of people don't work for contractors. >> they are paying jobs better than the jobs they have had. okay. >> s&p 50 index funds are in virtually every 401(k), but the product in some cases are using artificial intelligence to erode privacy or are being used to increase divisions in, you know, social division, political division and they're all running on devices that are electric and

are fueling demand for probably more coal-fired electricity. i'm wondering about the tension between betting retirement incomes on future profitability of these industries and the other risks that they present and whether solving thor's risks will be slowed down as consequence. >> many issues behind your question, i would say our industry is dying in any case and they are also not there. they allow a lot of things to happen. i'm open to the notion of regulating that more. i don't see a good plan that does it effectively.

most users don't give a damn about online privacy and hard for regulation to work when people themselves don't care. people also have the common sense that the greatest threats to their privacy, not detect, maybe that common sense to you is correct, so i would consider surveillance on widespread basis. i do think concerns about privacy should be respected. what are the threats to my privacy, very low on the list, concrete people in the world i live in. so there's a lot more we could say about all the issues but that's just a few points i would offer as response. >> my name is ben miller, how do you see generational trends of perception of big business? >> currently the data show young people are especially skeptical. some of that may stem from having come of age in a time

where wage growth is slower. some of it is internet age and skepticism. young people today, i think, they also care more about things, that's largely a positive, if you care more about more things, you are more easily alienated and negative, norotic opinion and i think we are correcting a lot of social injustices at pretty rapid rate largely because of younger generation but does mean you'll have targets coming in, it's a trade-off. becoming too powerful and the institutions that are working. >> so this could be a question

for the two of you if you like, if that's okay -- >> ask the question. >> well, so i believe -- >> not quite exactly. >> so one of the names floating around for next candidate for the federal reserve under trump's presidency i believe is steven moore, you recently said something along the lines that capitalism, more important system than democracy in work in this country, i was wondering if this is something that you agree with and if so why and why not. >> my view is capitalism and democracy go together. democracy at higher rate of economic growth. the most successful capitalist nations tend to be democratic and nondemocratic wealthy nations they have a lot of oil, wouldn't want to live there, weather it's too hot and maybe not to stable.

it's really about wage and growth together. democracy works better, canada, australia, the united states. george mason. [laughter] >> virginia state law that prohibits from commenting on people -- [laughter] >> let me forget real issue is what he thinks about democracy because he's not being put on democracy, it's going to be independent then you better make sure that the people running are very qualified and competent.

i suspect he's a very good economist. >> thank you very much. >> you mentioned trade, ongoing trade war between united states and china, you see huge massive enterprises coming on china, huawei, for example, supported by very well reasonable driven technology espionage and other anticompetitive measures come to america with very genuine security concern, would you still say free trade approach which would not be doing much or even doing nothing would be appropriate in beating this kind of challenge especially when our

nation security experts and agencies tell us we should be doing something. >> i think it is a national security issue. i agree with president trump that we should not be using huawei to build 5g network and many other things. i'm greatly disappointed that much of europe is not supporting that move. i think they are making an enormous mistake. challenging the foundations of the western alliance. you to wonder if they're serious about the western alliance. i believe completely in free trade and economic grounds, i would entertain exceptions for reasons of national security. i think that's one of them. but absolutely, i don't think we should have huawei being part critical segment of communication's infrastructure. >> i'm a lawyer and --

[laughter] >> is there a way to explain lack of trust in big business, complacent class, showing the kinds of group of people that then spend a lot of energy protecting own good place in society and that way makes sense that people think, well, businesses have provided good so far but they are getting position to create something good for themselves and can't trust and keep doing what they are doing. >> this is a hypothesis. i have to think about it more. i find it striking that small business are popular, pays lower wages, lower benefits, most likely to be bias towards minority or not able to accommodate them. at the end of the day, there's still something about that i just don't quite get. any comment on that? >> no, no. [laughter]

>> my name is claire, i'm college student in dc. my question is this reminded me of a letter that the ceo of blackrock wrote around last year about how it's more and more necessary for companies to create a sense of purpose and socially conscious idea of the company and greater public. i think you said something like purpose is now ties down to bottom profit margins and you mentioned that as well, are you thinking, do you see something like seek work, benefit's corporation or more socially-conscious businesses as a way to combat what you're describing as anticapitalist sentiment growing for people my age. >> i would like to see more experimentation, maybe in the old days it didn't quite work well that was the internet. all things are possible.

but corporations say that and it's very cynical. must be from fossil fuels. they want to be more green. be aware of hypocrisy. a lot of businesses genuinely do care, but the ratio want to say they do and the ones they do, you need to be aware. >> my name is brandon, i work here in federal government. i wanted to touch on the comment about how cheap it is to buy washington and metrics of lobbying in terms of dollars spent, maybe not the best metric to see how successful that is, i guess i wanted to push back a little bit on the idea that stun

broadly as popular. mostly that's done, mostly unknown, i guess the question would be when you look at various financial services bill that come through congress every year, it doesn't make much money for the wall street lobby to basically compete against consumer groups, shouldn't be surprising and push more on one bill that was pretty well known, banking bill that rolled back in dodd-frank, that was widely popular and obviously passed overwhelming. >> that might be a good idea, might be economic growth. people have preferences of policy but don't always assume politicians are doing something unpopular. i would say this, here is the best way to limit the use of

business, far more money to congress and congressional staff , but scarcity of resource and business comes in and expertise and sometimes much of the bill and i think that's bad system, many countries, much more money to ask of congress itself, congress would have more expertise and strong advocate of that limit influence that is we have. good evening, professor. i was curious pentagon has big push with small business, particularly with high-tech r&d in early stage, data rights, what have you, is it worth making push to small business or have the market be part of

itself? >> i don't think i have the expertise to even address that question much less answer it, that seems to me there's something fundamentally broken, the technology sector 3 years, china is doing better than we are. i don't know how to fix it, seems to me it's one of the most important problems that we fix, but the ratio of how to see small verse business, i couldn't say, i guess, you will figure that out. >> i'm rob, i have a question about sort information and hiring practices, seems like big business as a whole know a lot more about how much people are paid than strong businesses o employees themselves, seems like there's something -- something

like collusion but between big businesses when they are setting wages, sort of the idea of paying for a market price limiting employees from being able to really negotiate, having norms in place where staying at a company for shorter than a year is like a bad look on resume. do you have a thought on whether that represents some kind of real collusion or insufficient market or whether that's contributing to wage growth slowdown? >> it might. i think it should be looked into. i don't know what the final correction is. keep in mind, companies paying much more than other companies to start at top tech company, earnings 3 to $400,000 a year if you have strong skills. there's some element of collusion that we should consider fixing that, but in terms of where that list on

problems, otherwise getting 380 in third or fourth year, it's just to me not that tragic. it may be happening. >> across wider range of businesses than just collusion like a few tech companies. >> by far, they are the strongest in the country and most of the world in rural areas, the best antimonopoly policy is make it cheaper to more people can move into big cities in the retail sense, virginia, maryland, to some extent, most policies i would change. that would be more monopoly than whatever you think antitrust policy should do. >> thank you. >> i'm steve, employment lawyer and i represent workers and big business. i have always been bothered by ethics or nonethics of business that i don't want to see black and white but if government

didn't stop business from colluding, would they just collude away because it takes them money, if unions stop from paying own wages, would they take into account social factors and you say that they pretend to be your friends but not really, are they more socially conscious than they were and bottom line profit maximization -- >> by orders of magnitude. current margins is issue which we should regard but even air pollution, very easily cross benefits. so, you know, my point is if

you're looking at performance of big business, how much would the company fund and so on, the actual reality is much more positive than often the public rhetoric. >> is it because they are forced to do it? >> that's part of the system. you want institutions that are strong enough to stand up and help us clean up the air like toyota has done and so on. one of the reasons like big businesses do, in so far as government has policy goals, readily available, highly capitalized, easy to spot, fulfilling certain goals is better result. >> rhonda, retired labor lawyer. my question is, if corporations are more productive than ever,

why are wages still back and i'm not talking about the small, very small business population that earns over 300,000? >> wages are growing at a slower rate than they used to. i think the greatest criticism of american business is it's too bureaucratic and not innovative enough. innovation has slowed down in the country. i think we need more competition. business is partly at fault there. i don't view it as grower but that's absolutely a genuinely criticism of businesses. >> we have about a minute each. i wanted to comment on income

inequality, you said it doesn't have responsibility for income inequality. are there opportunities for business to work on that problem or should the solution to the problem be government through income transfers or, income transfers? >> huge point. i point two kinds of income inequality, one in the middle, education which i hope business to do a better job, but a lot of that rests on actual fields which are not businesses. the people at the very top earn so much more. a lot is globalization. what i -- i don't think income inequality is bad, minute

response. obviously much more -- >> i had a question about health care, you mentioned that health care and capitalism don't seem to work very well. at the same time we see every single democratic candidate coming up with their own medicare for all plan, can you talk more about how you see the market and what can be done. >> easy to answer in a minute question. [laughter] >> my favorite healthcare system is singapore's, i don't think we will ever get there. i don't think they'll ever get single payer period, americans with health insurance don't want to give it up. we need to fix what we have and much greater policy control and innovation much greater to achieve. i am willing to pay for to do

that. right now we have healthcare crisis obviously, 18% of gdp. depending on your income and education. >> final question. >> my name is vito, i read book last year, one of the 12 books of the year. >> yeah. >> and well, i want to give you two statistics and ask you to comment on them. the first india, has been growing about the fastest rate in the world, 7, 8% for several years now. 2, 3 days ago statistics just came out and collapse in india. 160 countries. so the question -- the first question is the link between

growth and happiness. you comment on west virginia implying that, you know, economic growth has say with well-being. other statistics come from washington, even more shocking than that. and between chevy chase, steps from where we are, the difference in living -- it's absolutely shocking. we did the same with rich city 9 miles apart. now, the question to you, in relation to those statistics. >> 30 seconds. >> let me take money and happiness. first, don't trust the data, second, they are hardly correlated, third they are

massive correlated. people want to move to wealthier countries. people want to go to u.s., denmark, canada, not the other way around. thank you, ed, thank you all for coming. [applause] >> let me point out that china is deserving of small business. [laughter] >> thank you. >> copies of the book available at our register, if you can please buy one, pull up and fold your chairs.

>> hello. good evening welcome to barnes & noble for go thank you for coming out tonight we have joseph with us tonight who is an economist of public policy analyst and the recipient of the 2001 nobel prize in economics and a former senior vice president and chief economist at the world bank german at the council of economic advisers also the author of several books many of which are on this table