Big business A love letter to an American anti-hero

Tyler Cowen

Book - 2019

We love to hate the 800-pound gorilla. Walmart and Amazon destroy communities and small businesses. Facebook turns us into addicts while putting our personal data at risk. From skeptical politicians like Bernie Sanders who, at a 2016 presidential campaign rally said, "If a bank is too big to fail, it is too big to exist," to millennials, only 42 percent of whom support capitalism, belief in big business is at an all-time low. But are big companies inherently evil? If business is so bad, why does it remain so integral to the basic functioning of America? Economist and bestselling author Tyler Cowen says our biggest problem is that we don't love business enough. In Big Business, Cowen puts forth an impassioned defense of corpor...ations and their essential role in a balanced, productive, and progressive society. He dismantles common misconceptions and untangles conflicting intuitions. According to a 2016 Gallup survey, only 12 percent of Americans trust big business "quite a lot," and only 6 percent trust it "a great deal." Yet Americans as a group are remarkably willing to trust businesses, whether in the form of buying a new phone on the day of its release or simply showing up to work in the expectation they will be paid. Cowen illuminates the crucial role businesses play in spurring innovation, rewarding talent and hard work, and creating the bounty on which we've all come to depend.

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New York : St. Martin's Press 2019.
Main Author
Tyler Cowen (author)
First edition
Physical Description
259 pages ; 25 cm
Includes bibliographical references and index.
  • 1. A New Pro-Business Manifesto
  • 2. Are Businesses More Fraudulent Than the Rest of Us?
  • 3. Are CEOs Paid Too Much?
  • 4. Is Work Fun?
  • 5. How Monopolistic Is American Big Business?
  • 6. Are the Big Tech Companies Evil?
  • 7. What Is Wall Street Good for, Anyway?
  • 8. Crony Capitalism: How Much Does Big Business Control the American Government?
  • 9. If Business Is So Good, Why is It So Disliked?
  • Appendix: What Is a Firm, Anyway, and Why Do So Many Workers End Up So Frustrated?
  • Acknowledgments
  • Notes
  • Selected Bibliography
  • Index
Review by Choice Review

Cowen (economics, George Mason Univ.) is not completely uncritical of big business capitalism. He recognizes the financial and emotional costs generated by bureaucratic processes. Nevertheless, he argues that these innovative enterprises improve the quality of life over time by generating greater product diversity and availability. He makes the social argument that big business capitalism is the basic source of monetary wealth and social health: it generates income and creates environments of social interaction with an increasingly diverse set of colleagues. Customer relations and advertising (branding) have also trended to socially inclusive imagery. Cowen argues that these positive financial and social impacts more than mitigate negative bureaucratic effects. Big Business is, in part, a response to Bernie Sanders's democratic socialism, which Cowen sees as misguided, and to Milton Friedman, who opposed the notion that corporate executives should deviate from profit maximization. Cowen believes that corporate executives should care about social responsibility. Social responsibility enhances the firm's brand, which impacts its customer base, its present and future stockholders, and its employees. The nature of corporate branding is such that future profit growth is impacted by the perceptions of all stakeholders about underlying firm objectives, including social responsibility. Summing Up: Recommended. All readers. --Satyananda J. Gabriel, Mount Holyoke College

Copyright American Library Association, used with permission.
Review by New York Times Review

anti-business feelings in America now run so strong that even some leading bankers and hedge-fund bosses want capitalism reformed. Socialism (of some kind) is espoused by a growing number of Democratic politicians. A Harvard University study found 51 percent of 18- to 29-year-old Americans do not support capitalism. The business bashing is not solely from the political left; Donald Trump has tweet-attacked plenty of companies for offending his populist instincts. Voices demanding higher taxes and tougher regulations grow louder. Echoing the vigorous trust busting of the Progressive era, there are calls to break up Facebook and Google, the increasingly dominant tech platforms, while the titans of Silicon Valley are rebranded as 21st-century robber barons, heirs to what the Progressive president Teddy Roosevelt lambasted as "malefactors of great wealth." Amid so much criticism, who would dare dispute that there is something rotten about the state of corporate America today? Enter Tyler Cowen, an economics professor who has written a determinedly positive book about business that he subtitles "A Love Letter to an American AntiHero." Cowen did not become one of the world's most-read bloggers on economics without understanding the value of a welltimed contrarian blast. He showed this to great effect in 2011 in a best-selling e-book, "The Great Stagnation," arguing that the rate of increase in median income had slowed since the early 1970s as a direct consequence of a falling rate of innovation in the American economy, which was thus likely to continue to struggle to grow for the foreseeable future. Now he is back "to speak up for business, to persuade you that it deserves more of your love and less hate." If you are hoping for a billet-doux to set your heart aflutter, remember that the author is a practitioner of the dismal science; the romance in his love letter is less Harry Met Sally than Demand Meets Supply. Still, there is no shortage of passion from Cowen. His beloved is the source of "most of the stuff we enjoy and consume" and gives "most of us jobs." Business may not be the face that launched a thousand ships, but it built them; indeed, he enthuses, without business we would not have ships, trains and cars; electricity, lighting and heating equipment; most of our food supply and lifesaving pharmaceuticals; clothes for our children; telephones and smartphones; books; and access to the world's online information. Cowen also argues, persuasively, that America tops the world in the quality of its corporate management - if Chinese firms were managed equally well, they would be up to 50 percent more productive. American business is also the leading innovator globally in many areas. So, as Cowen poses in his concluding chapter, "If business is so good, why is it so disliked?" He dismisses the familiar complaints made by critics of corporate America: that it is too corrupt and fraudulent to be trusted; that greedy executives are paid too much; that it hurts consumers by wielding too much monopoly power; that cronyism gives it too much influence in Washington; and so on. Some of his defense of business is more nuanced and less certain than his positive headline message suggests. He devotes a chapter to refuting accusations that Big Tech companies are evil, only to confess to worrying about the threat they pose to personal privacy, which he fears will get dramatically worse as facial recognition and voice-recording technologies become ever more ubiquitous. (Still, perhaps business will rescue us even from this, he reassures himself: "In the future privacy-protecting technologies will outrace privacy-denying ones" - well, maybe.) He argues that business should be trusted more, despite so many high-profile scandals, because it is less prone to lying and cheating than governments or nonprofits, or indeed than regular people going about their everyday lives. This could be read not as a ringing endorsement but as damning with faint praise. For Cowen, the real reason business is so unpopular, despite all it does for us, is that we humans tend to anthropomorphize companies, turning corporations "into people in our minds, and also in our hearts" (and even writing love letters to them). We take on this illusion, that business really cares about us, "to make our lives feel bearable and to help us feel more in control." Companies play along in this charade, because it pays them to do so, branding themselves with human characteristics like being friendly and listening to our concerns. Inevitably, we feel let down when they turn out instead to be "abstract, sharklike legal entities devoted to commercial profit." In reality, Cowen says, "we, as consumers or workers, are never really quite as much in control as we might like to think. And thus we are perpetually disappointed in corporations." Thus writes a man who knows, deep down, that his love is doomed to be unrequited. Cowen's explanation is not particularly convincing. Nor is his two-part advice for clearing the current atmosphere of distrust. First, the public should accept that business will always fall short of our unreasonably high expectations, and get over it. Second, rather unexpectedly from a member of the famously libertarian and pro-capitalist economics faculty at George Mason University, he wants business to try harder at being socially responsible. In 1970, The New York Times Magazine published an extraordinarily controversial article by Milton Friedman, titled "The Social Responsibility of Business Is to Increase Its Profits." At the time, this shocked even much of corporate America, never mind the regular New York Times reader. The article was intended to defend business against heavy-handed government regulation, including of prices and wages, that threatened to squeeze dynamism and innovation out of corporate America. Yet over the years, as deregulation and market liberalization spread across America and then the world, Friedman's words were, I believe, twisted by many investors and business leaders into a simplistic justification for doing anything that increased profits - and their pay packets - regardless of the consequences for society and the planet. Risking the ire of his colleagues at George Mason, Cowen rejects Friedman's definition, arguing instead that the "social responsibility of business is to come up with the magic of a vision that will help us trust it more, whether as consumers or workers." The great Nobel laureate's article reflected "significant ideological blinders," he says; "goals other than simple profit maximization often end up boosting both business and social profits." For Cowen, business at its best is a "fundamentally ethical enterprise" and (preserving his libertarian credentials by citing Ayn Rand in support of it) "can be a vehicle for the achievement of heroic goals." This would have been a far better book had Cowen focused more on how to overcome the negative consequences of the spread of the Friedman Doctrine, which I believe has clearly helped socially irresponsible, greedy, unheroic business leaders flourish at the expense of the heroic kind. As a result, the rise of corporate profits to historic highs as a share of America's G.D.R has been due not just to the much needed productivity improvements and innovations celebrated by Cowen, but also to shortsighted, selfish decisions that have harmed society and heated up the planet. Happily a new generation of more socially responsible business leaders is emerging, like Marc Benioff of Salesforce, the Chobani founder Hamdi Ulukaya and Indra Nooyi (until recently at the helm of PepsiCo). If only Cowen had shown less unconditional love for corporate America as a whole and instead concentrated on its best bits, and on what needs to be done to ensure that being ethical and heroic becomes business as usual. That "love letter" would have left most readers hopeful that there might yet be a Happily Ever After. For Cowen, business at its best is a 'fundamentally ethical enterprise.' MATTHEW bishop was a writer for The Economist for 26 years, many of them as New York bureau chief.

Copyright (c) The New York Times Company [June 30, 2019]
Review by Booklist Review

Economist and professor Cowen (Average Is Over, 2013; The Complacent Class, 2017) tackles the general public's misperceptions of big business in his latest. He explores a variety of issues relating to how consumers have viewed corporations over the years, including today's soaring salaries for CEOs, the growth of the tech industry and Wall Street, and the implications of all of the above. He argues persuasively that big businesses are in fact necessary and integral to our society, and also that we must shift the thinking of businesses as people but rather as legal entities driven by profit. Cowen writes conversationally, making for relatively fast reading about these timely and complex economic issues ranging from globalization, social media, and national politics. Readers seeking information about the relationship between the government and businesses and the role of free enterprise in labor economics and in politics will find many insights in Cowen's arguments.--Raymond Pun Copyright 2019 Booklist

From Booklist, Copyright (c) American Library Association. Used with permission.
Review by Publisher's Weekly Review

Cowen (The Great Stagnation), an economics professor at George Mason University, counters complaints of fraudulent corporate behavior, excessive CEO pay, invasions of privacy, oppressive work culture, and corporate influence on government in this spirited defense of big business. He creatively mines polls, economic data, and even social psychology to argue that big business has, on balance, been unfairly judged. Disarmingly, he acknowledges that it's not perfect-he criticizes the health care industry, notes that corporate cultures have not responded well to sexual harassment, and recognizes threats to privacy from the technology sector-but then he hedges: health care consolidation, he says, is at least partly the result of government regulation; corporations are now responding to sexual harassment; and traditionally generated gossip may well be a bigger threat than breaches of data privacy. Cowen is a smart, original thinker with a knack for reframing criticisms in the context of a larger, utilitarian perspective (drugs produced by pharmaceutical companies save lives, Google Maps gets us where we want to go) that implicitly endorses the current economic system; he comes off more like a lawyer than an ideologue. This analysis is unlikely to convince readers skeptical of big business of its virtue, but it provides food for thought. Agent: Teresa Hartnett, Hartnett Inc. (Apr.) © Copyright PWxyz, LLC. All rights reserved.

(c) Copyright PWxyz, LLC. All rights reserved
Review by Kirkus Book Review

A paean to large business corporations.Many Americans are anti-businessespecially young people, Bernie Sanders supporters, the media, ordinary (distrustful) citizens, and Trump supportersbecause they have "negative misconceptions," writes Cowen (Chair, Economics/George Mason Univ.; Stubborn Attachments: A Vision for a Society of Free, Prosperous, and Responsible Individuals, 2018, etc.). In viewing corporations as "apparently selfish, profit-maximizing, even sometimes corrupt entities," writes the author, such critics underrate the benefits of American business, which "makes most of the stuff we enjoy and consume" and "gives most of us jobs." Indeed, "we don't love business enough." A popular blogger ( and free-marketeer who admires Ayn Rand and Milton Friedman, Cowen offers a highly accessible polemic touting the wonders of corporate America, which has "never been more productive, more tolerant, and more cooperative" and provides "a ray of normalcy and predictability" at a time of "weirdness" in government. He continues, "business helps carve out spaces for love, friendship, creativity, and human caring by producing the resources that make our lives not just tolerable but comfortable." Beyond such praises, the author offers chapters on specific areas"Are Businesses More Fraudulent than the Rest of Us?" "Are the Big Tech Companies Evil?" and "Crony Capitalism"in which he dismisses concerns about business monopoly, political power, and fraud, insisting that "limitations of human nature" (not inherent flaws of capitalism) drive corporate behavior. "The propensity of business to commit fraud is essentially just an extension of the propensity of people to commit fraud," he writes. Cowen makes some concessions to critics, noting the "problematic" invasion of privacy by tech giants like Google and Facebook and the "ripping off" of consumers by entire sectors of the corporate economy. But on the whole, business remains "one of the most beneficial and fundamental institutions in American life."A 2016 Gallup survey ranked big business as second only to Congress as the country's least-trusted institution. This fawning book won't change many minds. Copyright Kirkus Reviews, used with permission.

Copyright (c) Kirkus Reviews, used with permission.