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 copper 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 u.s. deputy undersecretary for commerce for international trade policy it is also the c.e.o. and editor at large for 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 of lies ahead david welcome nice to be here thanks thanks for having us what's the story of care of the goat and sturrock copper or burger. berg and how does a related current conditions of international tensions well it's interesting you know i had 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 in the past and so i started digging and digging and digging and it took me all the way back to this go 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 it was

little i followed it 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. as a kind of an actor as the star of the 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 or ahead of the g.d.p. of say seventy or eighty countries controls land about half the size of belgium gutter. has intervened in corporate politics around the world in a way that you might only expect at 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 that or between government actors and corporate actors to 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 number of people who call in and don't want to use a private they don't know that you're talking about corporate you know where 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 that

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 co-opted in the as it does in the united states where we have a political system that is as corrupt as could be because of money and private interests are allowed to drive that system in the direction that they drive that it stops representing the public interest right part of the charter mark green or in the united states the eighteen eighteen nineties and a lot of us got kicked off when ohio said to said 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 had the charter modern era this twelve year period where all the states competed. each other to drop their corporate charter laws and peter griffen jersey but prior to that a corporation couldn't exist for more than forty years in any state united states

you had to reboot every four years and basically go through probate a corporation couldn't own stock in a 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 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 robber baron error or do you identify a different turning point the united states a bit you know brought us to here but first of all i think the evolution of those back you know the sixteenth century i mean it goes back to the british east india company and some of these companies that grew up and eat you can go back to the seventeenth twenties in the south sea island bubble where there was

a company created to sort of take advantage of what was seen as an economic opportunity see 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 this isn't it you know eighteen fifteen drive right woods was i was on george 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 of modern era but you know before that the fourteenth amendment was passed in order to guarantee protection under the law to people to african-americans have just been freed right 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 the

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 with the rights of people it's that they're artificial people there now are greater rights than people and when you take something like citizens united where. the supreme court has presented this perverse and i think democratic idea that money is speech well it implies that any actor with 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. when in december of sixteen zero one one queen elizabeth first trotter the british east india company all of the stock

holders were members of parliament of her 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 the public it was hancock family so while there were some you know not and i would say that you know you have the hamilton jefferson battle and jefferson became the first in a long line of american presidents to publicly worry about the concentration of corporate power and when you look at the list it's jefferson and lincoln and 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.

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 up and that was his so there is an arc that arguably you can draw from from marbury vs madison or the supreme court first took on the power to declare was unconstitutional which is not given a constitution through dartmouth true through the first dash or so the pacific railroad for santa clara county. and then into. verses for laid away and and first national bank versus palladio all the way to citizens united none of these decisions and grover cleveland eight hundred eighty eight and state of the

union are a said 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 they 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 to get out of this well look i mean 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 undo 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 in a democracy so for example the gerrymandering that we have has led the wing nuts of 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 lobbying was you also have to start pushing back on some. the modern myths a 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 hear ron paul if we push government out of the way what will sweep in in its place is freedom you notice we're going to this place is the robber 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 argument for giving additional elbow room to the people who need and want government the least make economic i always find it amazing i get to have people that i would hate on the show and whatnot who would come in and say oh you don't want the government to terminating 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 healthcare telling me either and those are the two choices well 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 it 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 other problems anglo-american capitalism had one we leave it to the markets state capitalism soviet communism excuse me sir so soviet cap was communism had lost

a big state had lost one we end up with instead we've ended up with competing capital and most monopolies but 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 the story. is if you understand it and the.

other part of it and realized. there's a big. bump in the loan if there's a 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 viewers and so that's why young people don't watch t.v. 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 in t.v. .

back to conversations with great minds with david rothkopf it is the president and c.e.o. gartner 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 ethnic rivalry between big business and government and the reckoning lies ahead let's go back to it you were

so you were talking about we thought capitalism won this kind of laissez faire american all american form but there are alternatives we thought anglo-american capitalism of mind and the you know what we've been hearing since the eighty's is leave it to the market small government let's get out of the way. of 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 situation do what it markets always do overreach blew up demonstrate their power by first saying get off our backs then picking up the phone call in washington and say you know what we say about small government we could use a little bit bigger government right now to 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 rules 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 i have the situation where our form of capitalism has become so discredited that i was talking to a very senior obama official and went 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 with chinese characteristics euro capitalism democratic development capitalism in india or brazil or. the entrepreneurial capitalism the small states like singapore or israel or the united arab emirates all the other forms of capitalism out there are different from ours and run the risk they have bigger role for government whether

it regulate that regulated the 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 eps singapore for example but 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 were actually the underpinnings of american capitalism back in the day because you know most of the structure. during the jackson administration a good idea an owl's railroads highways air traffic control the internet the 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 just a different formula one that produces a more just outcome one that reduces labor tension in 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. went back 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 so those people still had money in their pocket to spend so there was still demand in the economy the economy never crashed had 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 us 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 at night do we have governments do we have a society we are asked that anymore it's not to create wealth it's to create a better quality of right which means security and justice and other kinds of things and if you look at northern europe just to take an example you know when it really is under mitt romney's skin in recent europe seems to be his the worst thing he can probably figure but if you look at northern europe they topped the charts in quality of right 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 is also a thriving capitalist system i find it remarkable that people who say government should get out of the way 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 look you know when the wall street guys who came to us in the clinton administration and said deregulate. would never dream of getting in a deregulated taxicab or brushing their teeth with the regulated base 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 baling seat at the table for everybody else and yet what 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 do you know these concepts are are at their core are really quite fundamental and straightforward 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 in reducing inequality and you don't do it by showing our public schools you don't do it by saying we're going to shut down the system that educated 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 are going to articulate the simple message that was so popular during the glorious revolution in england in the seventeenth century in the american revolution in the eighteenth century and throughout american history and throughout world history sense which is we are 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 can. conant associated with w m d proliferation to deal with all of these things and so we're at it we're in an era much 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 a fractal how do we. talk about inequality and the damage that inequality and james were racin in cape could have done a brilliant research on this the quality of trust in the u.k.

. what. what are the consequences of inequality in the united states around the world and how should we must address. it 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 out as it's been going up for a while and there's a relationship between the two there's a direct relationship between the two and if we don't fix that that's our system we had a recovery last year ninety three percent of the benefits of the recovery went to the top one percent seven percent table scraps for 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 while 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 and i we mitt romney would say why you're so 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 revenue in the biggest period of growth for 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 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 effective 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 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 realistic and really brilliant analysis general issue if you'd like to see this or other conversations of great minds go to our website conversations with great minds dot com. that's it for the big picture tonight don't forget we're from ocracy begins with you get out there and get active

for your it you'll see it here next week. first. of. all.