it's a nice conversation with great minds i'm joined by david rothkopf president of the sea and c.e.o. of garten rock cop and international advisory firm specializing in transformational trends associated with energy choice climate change emerging markets and global risk is the visiting scholar at the carnegie endowment for international peace was formerly a u.s. deputy undersecretary for commerce for international trade policy it is also the c.e.o. and editor at large of foreign policy magazine and the author of multiple internationally acclaimed books including power inc the epic rivalry between big business and

government and the reckoning lies ahead they welcome leslie thanks thanks for having us what's the story of care of the goat and store a cop or burger pope or heard pope or berg and how does that relate to current conditions of international tensions well it's interesting you know i have a sense that our system had gotten out of balance and that the scales of american democracy had a big thumb up and were tilting towards. special interests corporate interests financial interests and i wanted to go back and see if this was new or if it really had roots deeper in the past and so i started digging and digging and digging and it took me all the way back to this goat in sweden in the time of the vikings. which wandered away from its master found its way to a stream returned back to its master with red horns the master thought there was

a law. back and they discovered copper in the stream and it became the biggest copper mine in europe and it became the oldest corporation it's still in existence today wow and so what i did was i traced the story of the growth of private power and as a kind of an actor as a star in that story there is this every company that starts out like most companies did back then as a servant of the state designed to advance national interests and that involves grows more powerful changes its form several times over the years and ultimately breaks away from the state becomes a multinational and is now although you've probably never heard of the company. round the two thousand biggest company in the world with annual sales that would

rank about. ahead of the g.d.p. of say seventy or eighty countries controls land about half the size of belgium or better. has intervened in corporate politics around the world in a way that you might only expect the state to do and it's one of the small ones that you've never heard of and it allows me to illustrate the point that global affairs today is not just between countries it's between public actors and private actors and our system isn't really designed to deal with between government actors and corporate actors to kind of dumb down the language a little because i think it's astounding the number of i do a radio talk show as well a number of people who call in and don't want to use a private they don't know if you're talking about corporate you know or you say public you don't know you're talking about government and and well with one exception i think you're absolutely right but the with the one exception is when we

talk about the public sector we talk about the government our assumption is because this is what we are supposed to believe that the public sector represents the public interest but if the public sector gets koach tick in the eyes it does in the united states where we have a political system that is as corrupt as can be because of money and private interests are allowed to drive that system in the direction that they drive it it stops representing the public interest part of the green here in the united states the eighteen eighteen nineties and a lot of this got kicked off one and ohio said to so to john rockefeller that what he was doing was an illegal trust and and he said ok so what state wants to change their laws and we have a charter ma green arrow this twelve year period where all the states competed. each other to drop their corporate charter laws and piano got a new jersey but prior to that a corporation couldn't exist for more than forty years in any state the united

states had to reboot every forty years and basically go through probate a corporation couldn't own stock in another corporation a corporation had to have as its first statement of existence that it was here to serve the public good and then secondarily to build railroad cars. i forget the whole list you know but it was a corporation oh in and on the average around two thousand times a year corporations were given the death penalty states they were basically put out of business. how has the change from that pre robber baron era to this post proper bear or do you identify a different turning point the united states a bit you know brought us to here well first of all i think the evolution goes back to the sixteenth century i mean it goes back to the british east india company and some of these companies that grew up and he you can go back to the seventeenth twenties of the south sea island where there was

a company created to sort of take advantage of what was seen as an economic opportunity the south sea it blew up and it got bailed out by the british parliament and if you pick up the paper and read what was written about how the parliament got bought it sounds like it's out of today's papers so you know the roots of this are are pretty old in the us round early part of the nineteenth century the dartmouth college decision you know eighteen fifteen yeah right right would so that was it on john marshall decision essentially said that once a charter is given it can't be taken back that started the wheels turning you're right about the charter mongering era but you know before that the fourteenth amendment was passed in order to guarantee protection under the law to people right to african-americans who just been free and. in the first fifty years of the fourteenth amendment the vast majority of cases brought before the supreme court for it were from companies seeking the rights of people and over the course of one

hundred years in suing at least five of the ten rights in the bill of rights have been ascribed to companies and because companies are different right because they're immortal because they reach a size bigger than other people it's not that they're artificial people in the rights of people it's that they're artificial people that now have greater rights than people and when you take something like citizens united where. the supreme court has presented this purpose and i think under the democratic idea that money is speech well it implies that any actor worth more money has more speech and clearly corporate actors have the most money of all and therefore have the biggest thumb on the scale of american democracy right now we're in december of sixteen zero one when queen elizabeth first chartered the bridge east india company all of

the stockholders were members of parliament for a family that's that's a little different than the early corporations in america that kind of grew up out of nothing politicians were involved there's no you know wealth from them with their own hancock family so there were some you know and i and i would say that you know you have a hamilton and jefferson battle and jefferson became the first in a long line of american presidents to publicly worried about the concentration of corporate power and when you look at the list it's jefferson lincoln teddy roosevelt woodrow wilson franklin roosevelt people like justice brandeis it's people from both parties from the eighteenth century the nineteenth century the twentieth century the twenty first century there has been a concern that when you get to. it's concentration of wealth in the hands of too few people it is anti-democratic and you know some surprising people felt that

not just american presidents adam smith who you know alan greenspan practically went to worship at his grave. you know and say you know this is the champion of free markets he saw what happened with the british east india company and he said this is not capitalism capitalism is small companies. with real opportunity competing in an open market and he especially wrote about the theory of moral sentiments right and that was his so there is an arc that arguably you could draw from from arbor versus madison or the supreme court first took on the power to declare laws and constitution which is not given to the constitution through dartmouth through through the first dash or so the pacific railroad versus santa clara county. and then into buckley versus plato and and first national bank versus bill oddie all the way to citizens united none of these decisions grover cleveland one thousand nine hundred eight in the state of the union address

your corporations have become the masters of the people the iron heel is on the throat of the people throughout this entire arc there has never been a legislature that has voted for this and there has never been a president who advocated it in fact to the contrary there have been laws against it and there have been presidents who have decried it. what do we do with this doctrine that the supreme court has been slowly and steadily building over almost two hundred year period. to get out of this well look i mean that first of all it's so institutionalized now it's so ingrained in our system that it really would take big steps because you have to do citizens united you have to change campaign finance you have to have publicly financed elections you have to have elections of limited duration you've also got to get out of some of the bad habits where i'm in democracies so so for example the gerrymandering that we have has led the wein that suit each party to dominate the process because people don't run really in

competitive general elections they only run a competitive primaries the only people who vote in primaries are the extreme right the extreme left and this allows the special interests special leverage you've got to deal with the lobby and. you also have to start pushing back on some. the modern myths the myth that you know all government is bad or have four legs good two legs bad kind of reasoning that you know you sort of hit ron paul if we push government out of the way what will sweep in and it's places freedom you know will sweep in it's place is the robber right because it nature abhors a vacuum who steps in you know the people with the power to seize that opportunity and that's that's what happens every time that's why the argument of small government is not only an argument against the people who need government the most the most helpless people in society but it is

a an argument for giving additional elbow room to the people who need and want government the least big economic actors i always find it amazing i get to have people that i would debate on the show and whatnot who would come in and say well you don't want the government determining you know what you can have for health care and my response and i think a lot of people never had this response back well i don't want steven j. hemsley the billionaire c.e.o. of united health care telling me either and those are the two choices except that they're not you know i mean one of the points that i make in the book is this is not the only game this is not the only form of capitalism in town and around the world there are other forms of capitalism and you know we thought at the end of the cold war that we had sort of zeroed in on this sort of. this when francis fukuyama wrote about the end of history we had resolved all the problems anglo-american capitalism had won we leave it to the markets state capitalism soviet communism excuse me sir so soviet cap was communism have lost big state of lost what do we

end up with instead we've ended up with competing capitals and almost monopolies i want to continue this conversation is this is this is more of tonight's conversations with great minds or david rothkopf coming up right after the break. you know sometimes you see a story. is if you understand it and then. some other part of

it and realized. what you. can be alone if you know the real headline which none of them are the problem with the mainstream media today is that they're completely disconnected from the viewers and what actually matters to those that's why young people don't watch t.v. anymore if they want news they go online and read it but we're trying to take those stories that people actually care about and transfer them back and.

back to conversation with david rothkopf david is the president and c.e.o. of garten rothkopf an international advisory firm specializing in transformational trends associated with energy choices climate change emerging markets and global risk it is also the c.e.o. and editor at large of foreign policy magazine and the author of multiple internationally acclaimed books including power. the epic rivalry between big business and government and the record that lies ahead let's go back to it you were

saying you were talking about we thought capitalism won this kind of laissez faire american all american for but there are alternatives we thought anglo american capitalism live and you know what we've been hearing since the eighty's is leave it to the markets small government let's get out of the way but what happened well. we i was in the clinton administration we went along with it we got rid of glass steagall we you know pushed things to the point where wall street was able to take advantage of the situation do what it markets always do overreach blew up demonstrate their power by first saying get off our backs then pick up a phone call in washington and say you know what we say about small government we could use a little bit bigger government right now help us out then when they get back up on their hind legs what do they do they call up again and say get off our backs again and we did you know the dodd frank financial reforms not only were they kind of

weak grueling but we didn't fund their enforcement so it was kind of a fraud so we have more too big to fail banks than we did before we have bigger riskier derivative markets than we did before and we you know now of the situation where our form of capitalism has become so discredited that i was talking to a very senior obama official and going right in the book and he said you know the chinese think they won the financial crisis why because our system became discredited and people started looking for other models and whether it's. you know capitalism the chinese characteristics euro capitalism democratic development capitalism in india or brazil. the entrepreneurial capitalism is small states like singapore or israel or the united arab emirates but all the other forms of capitalism out there are different from ours and one key respects they have a bigger role for government whether it regulate it regulated governments play

a big role in helping their countries compete they realize that their job is to advocate for their workers even some of those that you would consider pro-capitalist really out there sort of on the edge singapore for example when i sat with the finance minister what he said to me was look our role in government is to empower our people to seize opportunity that was a very clear role of what is in me an education directing assets towards comparative advantages within the country infrastructure all the things that not only are essential to making a country competitive in the market today but where actually the underpinnings of american capitalism back in the day because perjuring you know most of history. during the jackson administration you know i mean yeah canals railroads highways air traffic control the internet a space program these are all public private partnerships those people who say

government has to get out of the market essentially want to shut down the formula that's worked to build america into the biggest economy in the world and. in things like germany saying in their constitution that any company that has more than a thousand employees must have fifty percent of its board of directors made up of members of organized labor and it is that a different formula one that produces a more just outcome one that reduces labor tension and the society and that has effects that you know maybe surprising in northern europe where they have much bigger social safety nets. where we would disparage that form of capital. for years it's as socialism what happened when saab went bankrupt at the same time g.m. that we had to step in and bail out g.m. because a million people would have been put into the street they let saab go bankrupt because there was a social safety net to take care of the piece so those people still had money in their pocket to spend so there was still demand in the economy so the economy never crashed and they had health care and they had pensions and they knew they weren't

getting so who's more capitalist them for letting the market take its course with or us for having to step in they embrace globalization more than we do because the dislocation doesn't hurt as much even though we benefit more you know in absolute terms from globalization so these other forms work and i think the final and most important point here is we're having a debate united states right now about how do we stay number one but the question is what do we want to be number one why do we have government why do we have a society we are asked that anymore it's not to create wealth it's to create a better quality of life which means security and justice and other kinds of things and if you look at northern europe just to take an example you know one that really is under mitt romney's skin at the moment europe seems to be his the worst thing he can call anything but if you look at northern europe. they topped the charts in quality of life yes they topped the charts in education and health care and in r.

and d. spending in infrastructure spending but you know what else they topped the charts on fiscal responsibility so there are formulas where you can spend the right way and when you're not focused on being the world's biggest military power you can spend on the right things. build a society that comes together is just there and there's also a thriving capitalist system i find it remarkable that people who say government should get out of the way of the marketplace and just about everything happen would never in their wildest dreams imagine going to a football game where there were no referees and either team could move the goalposts whenever they wanted and whichever team had the most money could decide how many downs they get and you know with the wall street guys who came to us in the clinton administration and said deregulate. would never dream of getting into deregulated taxicab or brushing their teeth with deregulated toothpicks so

a core of the argument is we are special we went to certain schools we wear certain kinds of suits we you will take care of things leave it to us or don't have a counter bailing seat at the table for everybody else and yet we've seen is when the big institutions blow up. what happened to cause a social catastrophe and when the system is tilted towards them what happens the government bails out the big institutions and leaves the rest of people to fend for themselves how. these concepts are are at their core really quite fundamental in this very forward and yet there is a fair amount of complexity associated with this it doesn't reduce well to a bumper sticker how do we inform the average american how do we answer you know thomas frank's question what's the matter with kansas how do we wake people up to the possibility that we could make actually capitalism or some variation on our

economic system work better by having a stronger social safety net and reducing inequality say what you don't do it by shutting out public schools you don't do it by saying we're going to shut down the system of educating america lifted it up you might want to teach civics in the schools again just like you might want to teach geography schools again these are skills that are useful but at the end of the day what we need is leaders who are going to go out and who are going to articulate the simple message that was so popular during the glorious revolution in england in the seventeenth century and the american revolution in the eighteenth century and throughout american history and throughout world history sense which is we're in this together and we need a system where everybody in our society has a voice and where there is appropriate balance and where we don't allow some people some entities to gain so much power that they start dictating to the system

and you know we've been talking this whole time about what happens within a national system but in some respects the bigger problem is that on the global stage we don't have global governance mechanisms to regulate financial markets to deal with global climate issues to deal with global health issues to deal with the public private come. tonet associated with w m d proliferation to deal with all of these things and so we're at it we're in an era now it's like that here that you talked about earlier in the late nineteenth century where there is a national economy and national companies but no national regulatory structure where we have a global economy we have global economic entities but we don't have global governance structures that give people a seat at the table sort of fractal how do we. talk about inequality and the damage that inequality does and james well over seven k. pickett done a brilliant research on this equality trust in the u.k.

. what. what are the consequences of inequality in the united states and around the world and how should we best interest. it's socially destructive in the most fundamental way and you know we're just coming out of the first decade in american history for job creation went down median incomes went down social mobility went down inequality went up as it's been going up for a while and is a relationship between the two and there's a direct relationship between the two and if we don't fix that that's our system we have a recovery last year ninety three percent of the benefits the recovery went to the top one percent seven percent table scraps with the rest of us that's not sustainable because what happens is the people at the very bottom they fall out completely no education the majority of minority students in cities in america drop out of high school well you drop out of high school in the global economy if today you are done you are out of the system you are

a burden to society you are angry and when people start feeling that they can't achieve their goals within the system then they start working outside the system and so we have got to recognize that inequality is a greater threat to american prosperity then. some of the threats we articulated during the war on terror so in a minute or so we have love what is the best way to it he mitt romney would say what you're saying you're saying take money from me and give it to some poor guy. well first of all yes you know throughout american history the top tax rate in the biggest period of growth the twentieth century the top tax rate tended to be about seventy percent we have pushed it down in the name of creating jobs we've now seen for ten years it doesn't do that biggest tax cuts in history and the reverse of the system so that of what it was supposed to produce so yes we have adjust your tax

code absolutely should we pull back the leverage that people with money have in our political system yes absolutely should we recognize the question is not should we have government or no government but how do we have affective government yes we should do that and these these need to be the the bumper stickers as they were the slogans the messages that we need to get across right and we need leaders to say the problem we've got right now in the united states is the leaders of both political parties are beholden to the moneyed interests and both political parties are serving an agenda that is not it really in the interest of the public at large . and this is a structural problem thanks so much for being a realist and brilliant brilliant analysis general for sure if you'd like to see this or other conversations with great minds go to our website conversations from great minds dot com. that's it for the big picture tonight don't forget democracy begins when you get out there and get active tag you're it will see if you're next

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