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Big Business: A Love Letter to an American Anti-Hero
An against-the-grain polemic on American capitalism from New York Times bestselling author Tyler Cowen.
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 corporations 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.
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 corporations 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.
272 pages, Paperback
First published April 9, 2019
138 people are currently reading
1055 people want to read
About the author
Tyler Cowen
101 books853 followersTyler Cowen (born January 21, 1962) occupies the Holbert C. Harris Chair of economics as a professor at George Mason University and is co-author, with Alex Tabarrok, of the popular economics blog Marginal Revolution. He currently writes the "Economic Scene" column for the New York Times and writes for such magazines as The New Republic and The Wilson Quarterly.
Cowen's primary research interest is the economics of culture. He has written books on fame (What Price Fame?), art (In Praise of Commercial Culture), and cultural trade (Creative Destruction: How Globalization is Changing the World's Cultures). In Markets and Cultural Voices, he relays how globalization is changing the world of three Mexican amate painters. Cowen argues that free markets change culture for the better, allowing them to evolve into something more people want. Other books include Public Goods and Market Failures, The Theory of Market Failure, Explorations in the New Monetary Economics, Risk and Business Cycles, Economic Welfare, and New Theories of Market Failure.
Cowen's primary research interest is the economics of culture. He has written books on fame (What Price Fame?), art (In Praise of Commercial Culture), and cultural trade (Creative Destruction: How Globalization is Changing the World's Cultures). In Markets and Cultural Voices, he relays how globalization is changing the world of three Mexican amate painters. Cowen argues that free markets change culture for the better, allowing them to evolve into something more people want. Other books include Public Goods and Market Failures, The Theory of Market Failure, Explorations in the New Monetary Economics, Risk and Business Cycles, Economic Welfare, and New Theories of Market Failure.
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August 5, 2023
Tyler Cowen’s writes what he calls a “love letter to an American anti-hero”. But it is more honest and balanced than most love letters. This is embodied by his discussion of a book Bad Pharma: How Drug Companies Mislead Doctors and Harm Patients. Cowen says he agrees with just about everything the book documents about, for example, kickbacks to doctors, overprescribing, and keeping trial results secret. His cheeky objection, however, was that the book was titled Not Nearly as Good as It Could Be Pharma: How Corruption Is Diminishing One of Our Great Benefactors and did not include all the good that prescription drugs have done for us.
Similarly his chapter on competition has a lot in common with Thomas Philippon’s book The Great Reversal: How America Gave Up on Free Markets, which was an argument about the problems stemming from increased concentration in the US economy. He identifies much the same areas where competition is insufficient and consumers are hurt, including health care, cellular and cable. But he also spends much more space on the parts of the economy where competition has increased, especially retail, and the many ways in which we have more choices and better ability to compare than ever before.
Other topics get similar treatment: Cowen documents the evidence that larger corporations tend to be more honest because they have reputations at stake while also discussing cases of dishonesty as well as industries built on it and he describes the wonders of the tech industry while expressing substantial concerns about privacy (some of which go well beyond my own personal tastes for privacy0. He is much more unqualified in his defense of CEO pay (it is linked to firm size and the scarce pool of talent) and finance (critical not just for economic development but also global power).
Cowen’s most creative but perhaps least convincing chapter was his speculation that the reason people hate businesses is that they anthropomorphize them. This has the advantage of making them more relatable but the disadvantage that we judge them by the same standards we judge people, something they can never live up to because they are not in fact our cuddly friends.
At the root of some of the book is an alternative theory of the firm to the Coase-Williamson minimize transaction costs view, instead it is businesses as social capital bundling trust, relationships and culture. This leads him to criticize Milton Friedman’s view that corporations should just maximize profits and instead argue that they need to imbue their workers with a sense of mission and purpose that goes beyond profit maximization.
Overall I found myself largely in agreement with the book. It is a good reminder that the average contribution of corporations is enormously beneficial—they make the goods and services we rely on and love (including the Kindle I read the book on and the MacBook I’m typing this review on) and they also employ most of us (not me, I work for a nonprofit and previously worked for the government). The book does not shy away from the many negative marginal contributions corporations make, and in fact endorses holding them to account and making them better, it just does include them to the exclusion of everything else.
Similarly his chapter on competition has a lot in common with Thomas Philippon’s book The Great Reversal: How America Gave Up on Free Markets, which was an argument about the problems stemming from increased concentration in the US economy. He identifies much the same areas where competition is insufficient and consumers are hurt, including health care, cellular and cable. But he also spends much more space on the parts of the economy where competition has increased, especially retail, and the many ways in which we have more choices and better ability to compare than ever before.
Other topics get similar treatment: Cowen documents the evidence that larger corporations tend to be more honest because they have reputations at stake while also discussing cases of dishonesty as well as industries built on it and he describes the wonders of the tech industry while expressing substantial concerns about privacy (some of which go well beyond my own personal tastes for privacy0. He is much more unqualified in his defense of CEO pay (it is linked to firm size and the scarce pool of talent) and finance (critical not just for economic development but also global power).
Cowen’s most creative but perhaps least convincing chapter was his speculation that the reason people hate businesses is that they anthropomorphize them. This has the advantage of making them more relatable but the disadvantage that we judge them by the same standards we judge people, something they can never live up to because they are not in fact our cuddly friends.
At the root of some of the book is an alternative theory of the firm to the Coase-Williamson minimize transaction costs view, instead it is businesses as social capital bundling trust, relationships and culture. This leads him to criticize Milton Friedman’s view that corporations should just maximize profits and instead argue that they need to imbue their workers with a sense of mission and purpose that goes beyond profit maximization.
Overall I found myself largely in agreement with the book. It is a good reminder that the average contribution of corporations is enormously beneficial—they make the goods and services we rely on and love (including the Kindle I read the book on and the MacBook I’m typing this review on) and they also employ most of us (not me, I work for a nonprofit and previously worked for the government). The book does not shy away from the many negative marginal contributions corporations make, and in fact endorses holding them to account and making them better, it just does include them to the exclusion of everything else.
February 5, 2019
Poor misunderstood corporations
For whatever reason, I never expected economist Tyler Cowen to show up as a bleeding-heart apologist for Big Business. His book of that very name is a fawning, treacly adoration of corporations and extremely highly-compensated CEOs. The syrup fairly drips from the pages.
He loves to compare corporations’ behavior to individuals, with all their deficiencies (but then gives an entire chapter to how corporations are not people). His diversions include: “Just look at the individual lies and misrepresentations in online dating profiles,” and, “We moralize about companies instead of trying to understand them.”
Cowen:
-deals with sexual harassment at work by announcing women are better off than staying home with an abusive spouse.
-is against raising taxes from the rich: “We should not tax CEO salaries into oblivion,” he says. (Not to put too fine a point on it, Cowen considers modern CEOs to be philosophers.)
-spends a great deal of effort showing that work is better for you mentally and physically. It is a stress-reducer, and provides satisfaction. He doesn’t touch on the fact that more than 40% of jobs pay minimum wage or less, while the CEO makes an average $18.7 million, or that workers have stress just making it to the end of the month. Nor does he mention work suicides, nervous breakdowns, burn out or mental health issues.
-says online companies post so much content, that maybe we shouldn’t “be surprised that some of their take-down decisions turn out to be mistaken.”
-thinks the mainstream media are unfair in their coverage of Facebook and Google because they are competitors. (Which shows only that he has never been a journalist.)
-says Americans’ pathetic savings rate (4-5%) “reflects too little engagement with financial intermediaries, not too much.” (No, what it shows is the total lack of disposable income.)
Cowen can find a heart-warming excuse for every abusive corporate practice. His method is to name the practice without showing how damaging, penetrating or pervasive it is, and turn right back to how wonderful corporations are. This was particularly evident in the chapter on lobbyists, who he made out to be tiny, ineffective, and dismissed by their own clients. (As I write this, Donald Trump has nominated a lobbyist for Secretary of the Interior. He already has one running the EPA.)
Cowen completely ignores lobbies writing the very legislation that electeds present for passage (which is why laws are becoming identical from state to state), that they spend virtually every night in the company of lobbyists, and that lobbyists are the backbone of fundraising, either directly or by holding events for the member.
He says companies have little or no effect on state governments and that most state actions are at voters’ behest. He ignores the “right to work” legislation, anti-organizing laws, cutbacks at schools, privatizing prisons and endless other issues that allow companies to step in and take over. Lobbyists will work a state over until it passes some repressive law (or a giveaway to companies), then threaten adjoining states with loss of business if they don’t at least match it. Please don’t tell us companies don’t operate at the state level.
His rah-rah, gosh golly fandom gets cloying. In apologizing for Facebook, he says Russian fake news ads were “at the time about 0.1% of Facebook’s daily (his emphasis) advertising revenue at the time.” (So imagine the ill effects of the other 99.9% on unwary users.)
He says of Android that Google promoted it to “the most commonly used cell phone software in the entire world.” (He likes saying entire world) and “The United States has been proven to be one of the most significant financial havens in the entire world.” He never mentions that Google buys up small innovators before they can become familiar brands, helping stifle innovation. Or how many trillions have been squirreled away in secret tax havens by innocent CEOs and their innocent companies. He likes to think it’s after-tax money.
Incredibly, Cowen assumes right from the first page that the reader is anti-business, presumably because “everybody” is. This is rather ironic, as precious few people who think corporations are too big and heartless and bad will plunk for a polemic telling them corporations are wonderful, generous and misunderstood. So I don’t know who Cowen wrote this for. Maybe billionaire CEOs will hand it out as Christmas gifts.
He concludes with “The social responsibility of business is to come up with new and better conceptions of the social responsibility of business (His italics).” In other words, total, hands-off, self-regulation.
At least he’s consistent.
David Wineberg
For whatever reason, I never expected economist Tyler Cowen to show up as a bleeding-heart apologist for Big Business. His book of that very name is a fawning, treacly adoration of corporations and extremely highly-compensated CEOs. The syrup fairly drips from the pages.
He loves to compare corporations’ behavior to individuals, with all their deficiencies (but then gives an entire chapter to how corporations are not people). His diversions include: “Just look at the individual lies and misrepresentations in online dating profiles,” and, “We moralize about companies instead of trying to understand them.”
Cowen:
-deals with sexual harassment at work by announcing women are better off than staying home with an abusive spouse.
-is against raising taxes from the rich: “We should not tax CEO salaries into oblivion,” he says. (Not to put too fine a point on it, Cowen considers modern CEOs to be philosophers.)
-spends a great deal of effort showing that work is better for you mentally and physically. It is a stress-reducer, and provides satisfaction. He doesn’t touch on the fact that more than 40% of jobs pay minimum wage or less, while the CEO makes an average $18.7 million, or that workers have stress just making it to the end of the month. Nor does he mention work suicides, nervous breakdowns, burn out or mental health issues.
-says online companies post so much content, that maybe we shouldn’t “be surprised that some of their take-down decisions turn out to be mistaken.”
-thinks the mainstream media are unfair in their coverage of Facebook and Google because they are competitors. (Which shows only that he has never been a journalist.)
-says Americans’ pathetic savings rate (4-5%) “reflects too little engagement with financial intermediaries, not too much.” (No, what it shows is the total lack of disposable income.)
Cowen can find a heart-warming excuse for every abusive corporate practice. His method is to name the practice without showing how damaging, penetrating or pervasive it is, and turn right back to how wonderful corporations are. This was particularly evident in the chapter on lobbyists, who he made out to be tiny, ineffective, and dismissed by their own clients. (As I write this, Donald Trump has nominated a lobbyist for Secretary of the Interior. He already has one running the EPA.)
Cowen completely ignores lobbies writing the very legislation that electeds present for passage (which is why laws are becoming identical from state to state), that they spend virtually every night in the company of lobbyists, and that lobbyists are the backbone of fundraising, either directly or by holding events for the member.
He says companies have little or no effect on state governments and that most state actions are at voters’ behest. He ignores the “right to work” legislation, anti-organizing laws, cutbacks at schools, privatizing prisons and endless other issues that allow companies to step in and take over. Lobbyists will work a state over until it passes some repressive law (or a giveaway to companies), then threaten adjoining states with loss of business if they don’t at least match it. Please don’t tell us companies don’t operate at the state level.
His rah-rah, gosh golly fandom gets cloying. In apologizing for Facebook, he says Russian fake news ads were “at the time about 0.1% of Facebook’s daily (his emphasis) advertising revenue at the time.” (So imagine the ill effects of the other 99.9% on unwary users.)
He says of Android that Google promoted it to “the most commonly used cell phone software in the entire world.” (He likes saying entire world) and “The United States has been proven to be one of the most significant financial havens in the entire world.” He never mentions that Google buys up small innovators before they can become familiar brands, helping stifle innovation. Or how many trillions have been squirreled away in secret tax havens by innocent CEOs and their innocent companies. He likes to think it’s after-tax money.
Incredibly, Cowen assumes right from the first page that the reader is anti-business, presumably because “everybody” is. This is rather ironic, as precious few people who think corporations are too big and heartless and bad will plunk for a polemic telling them corporations are wonderful, generous and misunderstood. So I don’t know who Cowen wrote this for. Maybe billionaire CEOs will hand it out as Christmas gifts.
He concludes with “The social responsibility of business is to come up with new and better conceptions of the social responsibility of business (His italics).” In other words, total, hands-off, self-regulation.
At least he’s consistent.
David Wineberg
April 30, 2019
First the good: Cowen is effective at debunking some of the small brained hot takes against big business. Much of the critiques of big business, as he rightly points out, are sentimental and ill founded. It is always chic to say “break up the big banks!” but is it smart? Cowen does a decent job of explaining why it is not. He made some generalized pro-finance arguments that I do not agree with but found creative and interesting.
But the bad: first, Cowen repeatedly reverts to explaining why Bad Orange Man is bad, corrupt, doesn’t “understand business” (despite making roughly a billion more than Cowen himself) and is anti-business etc. What I found pernicious about this was not the merits of his arguments. It was instead that he seemed to insert them to signal his purity to the neoliberal elites who read these books (not me), that he was one of them. Attacking the President of the United States, even if it is deserved, made this book smaller than it needed to be. It seemed low to stoop to the petty partisan whims of this particular moment. And it was done in such a lame, self-congratulatory way, as if he was performing a sacramental rite for his Acela-corridor readers.
Cowen also does not engage with Nicholas Carr’s argument that the internet makes us stupid. He instead evades this question by saying “we don’t have enough data on this” and sharing some lame anecdote about how Carr himself used Google to research Cowen when the two were debating. “People said the novel would make us dumber!” is the kind of argument some trust fund kid from Westchester would make in his freshman econ class. Alas.
Cowen just *assumes* that all socially liberal initiatives of big business are by their nature good, without ever laying a foundation for what good really is.
The problem with this book, and with libertarianism in general, is its essentially reductive character. Everything, whether Cowen admits it or not, ultimately comes down to profit. CEO’s are talented and smart, and people who think they make too much money are stupid, resentful, and unprofitable. Libertarians like Cowen never stop to consider what is good? What is human life worth? How should we organize society? How should we live? These are thorny questions, and rather than engage with their difficulties the libertarian nearly always eschews them for one simple metric: the almighty dollar. Anyone who disagrees can be dismissed with amateur psychologizing: “you are resentful”, “you are not smart”, “you do not create value”. You see traces of the dehumanizing aspect of Cowen’s philosophy through the book. You can size a person’s contribution to the world by one single number. It is no surprise that Cowen was influenced by the failed novelist and faux philosopher Ayn Rand.
I read Cowen because I know he is intelligent. He reads widely and has nuanced views. This makes his book all the more frustrating.
But the bad: first, Cowen repeatedly reverts to explaining why Bad Orange Man is bad, corrupt, doesn’t “understand business” (despite making roughly a billion more than Cowen himself) and is anti-business etc. What I found pernicious about this was not the merits of his arguments. It was instead that he seemed to insert them to signal his purity to the neoliberal elites who read these books (not me), that he was one of them. Attacking the President of the United States, even if it is deserved, made this book smaller than it needed to be. It seemed low to stoop to the petty partisan whims of this particular moment. And it was done in such a lame, self-congratulatory way, as if he was performing a sacramental rite for his Acela-corridor readers.
Cowen also does not engage with Nicholas Carr’s argument that the internet makes us stupid. He instead evades this question by saying “we don’t have enough data on this” and sharing some lame anecdote about how Carr himself used Google to research Cowen when the two were debating. “People said the novel would make us dumber!” is the kind of argument some trust fund kid from Westchester would make in his freshman econ class. Alas.
Cowen just *assumes* that all socially liberal initiatives of big business are by their nature good, without ever laying a foundation for what good really is.
The problem with this book, and with libertarianism in general, is its essentially reductive character. Everything, whether Cowen admits it or not, ultimately comes down to profit. CEO’s are talented and smart, and people who think they make too much money are stupid, resentful, and unprofitable. Libertarians like Cowen never stop to consider what is good? What is human life worth? How should we organize society? How should we live? These are thorny questions, and rather than engage with their difficulties the libertarian nearly always eschews them for one simple metric: the almighty dollar. Anyone who disagrees can be dismissed with amateur psychologizing: “you are resentful”, “you are not smart”, “you do not create value”. You see traces of the dehumanizing aspect of Cowen’s philosophy through the book. You can size a person’s contribution to the world by one single number. It is no surprise that Cowen was influenced by the failed novelist and faux philosopher Ayn Rand.
I read Cowen because I know he is intelligent. He reads widely and has nuanced views. This makes his book all the more frustrating.
April 14, 2019
I'm normally a big Tyler Cowen fan, but this book seems much more like an op-ed piece than an analytical work. Most of the arguments are opinions that don't seem to be supported by data or reality. Anecdotal, cherry picked data is everywhere. I've got to admit that I agree with most of what he says in this book, but I also realize that i agree for emotional reasons rather than rational reasons. It seems like too much of the current literature, academic works and media pundit views are all driven by cognitive biases and the problem is getting worse rather than better. I listened to the book on Audible. That may have influenced my view. Perhaps if I had read it instead, I would view it a bit differently. I don't think so. I was kind of disappointed by this book.
May 20, 2019
A little meandering at parts but overall a great book with a lot of good information. Bottom line, capitalism really is an amazing idea that is the source of all the privilege, prosperity, and freedom and we have in America. People are flawed, and so the people that make up business naturally make the businesses flawed too... but on the whole larger corporation are better at driving towards fairness and equity. We are better off because of big business and it is in the interest of everyone to encourage business and to work to keep the govt out of regulating. Capitalism is good and need freedom to work its best.
May 25, 2019
Big Business : A Love Letter to an American Anti-Hero (2019) by Tyler Cowen is a short, clever, interesting book where Cowen makes a strong argument about why corporations are actually very good for us.
Cowen writes a pro-business manifesto, writes how CEOs are not paid too much, writes on how the US is not subject to new monopolies, praises the big tech firms, praises finance, makes the point that control of congress by corporations is a myth and then tries to explain why corporations are disliked even though they are so good for us.
I have a lot of sympathy with Cowen. I'm writing a review on a machine powered by Intel and running software from Microsoft and on a browser paid for by Google. I read the book on a device from Amazon. These devices, the car I drive and the planes I fly on are built by big corporations and the plane is run by them. These complex items require big entities to create them. The real alternative mechanism, government has almost always done poorly in trying to do these things. Ladas were not fine cars.
A lot of the points Cowen makes in the book are very well made and are interesting. He's on very strong ground when he points out that large tech firms have done the world a great service. He spends less time on firms that build our cars or make planes and make them affordable, but the point is the same.
The weakest part of the book is the part praising US finance. Here Cowen quickly switches to talking about US Venture Capital Firms, which are worthy of praise. But the US financial sector's record has some serious problems that Cowen glosses over. The contribution to the GFC and other crashes is overlooked. As is the huge gifts that the US government made to failed financial firms.
Overall the book is well worth a read. It is, sadly, contrarian but it's well written, short and makes many good points.
Cowen writes a pro-business manifesto, writes how CEOs are not paid too much, writes on how the US is not subject to new monopolies, praises the big tech firms, praises finance, makes the point that control of congress by corporations is a myth and then tries to explain why corporations are disliked even though they are so good for us.
I have a lot of sympathy with Cowen. I'm writing a review on a machine powered by Intel and running software from Microsoft and on a browser paid for by Google. I read the book on a device from Amazon. These devices, the car I drive and the planes I fly on are built by big corporations and the plane is run by them. These complex items require big entities to create them. The real alternative mechanism, government has almost always done poorly in trying to do these things. Ladas were not fine cars.
A lot of the points Cowen makes in the book are very well made and are interesting. He's on very strong ground when he points out that large tech firms have done the world a great service. He spends less time on firms that build our cars or make planes and make them affordable, but the point is the same.
The weakest part of the book is the part praising US finance. Here Cowen quickly switches to talking about US Venture Capital Firms, which are worthy of praise. But the US financial sector's record has some serious problems that Cowen glosses over. The contribution to the GFC and other crashes is overlooked. As is the huge gifts that the US government made to failed financial firms.
Overall the book is well worth a read. It is, sadly, contrarian but it's well written, short and makes many good points.
January 18, 2020
Cowen prides himself on being an even handed contrarian, but at times his arguments were too cute for my taste. For example, does big business lie more than the average person?
On his blog, Cowen will often accuse his detractors of mood affiliation, which is a form of motivated reasoning. Cowen sees CEOs as highly productive innovators and value creators, and yet "CEO" is almost a pejorative for some people. If a group of capable people that you admire is treated poorly, this might seem ridiculous. So Cowen argues that even very highly paid CEOs are creating value for their shareholders and are being paid fairly. He considers their pay as a percentage of overall profits so that it seems less ridiculous. This is an interesting argument. And yet, it's almost as though he feels any criticism of exorbitant salaries is a form of envy. He is OK with ineffective CEOs being overpaid millions of dollars because no system bats a thousand, but he is consistently critical of any inefficiency on the part of less powerful classes.
The value of Big Business is that it points out that not every corporation is like Mr. Burns pouring "toxic sludge" into the water supply. The weakness of the book is that it seems to suggest that no corporation has ever poured "toxic sludge" into the water supply. This defense of the powerful and the wealthy starts to come across as willfully obtuse trolling rather than even handed, calm consideration.
Cowen has become a very strong oral communicator so don't read Big Business and instead just listen to a podcast interview from this book's promotional tour.
“Personally, I would be hard-pressed to find a big business that lies to me as much as—presumably—my friends, family, and closest associates do. […] Shell may send me misleading information on a few big things—say, about climate change—but in my regular interactions with them and their retailing agents they are telling the truth, as indeed it is usably gasoline that comes out of the pump and goes into my car. […] When it comes to Shell in their commercial interactions with consumers, they try to be very honest and straightforward, even if some of their lobbying is more problematic.”Maybe I should re-evaluate my priors, or maybe Cowen should read Merchants of Doubt. It's not obvious that my partner lying about how much a bag of chips cost is equivalent to the fossil fuel industry's lying about anthropogenic climate change, even if my partner lied ten times to one. And when Cowen considers the title of Ben Goldacre’s Bad Pharma: How Drug Companies Mislead Doctors and Harm Patients. He would prefer the title Not Nearly As Good as It Could Be Pharma: How Corruption is Diminishing One of Our Great Benefactors. Given that the title of this book is Big Business: A Love Letter to an American Anti-Hero, I interpret these arguments as a sort of coy playfulness, but the jokes didn't always land for me.
On his blog, Cowen will often accuse his detractors of mood affiliation, which is a form of motivated reasoning. Cowen sees CEOs as highly productive innovators and value creators, and yet "CEO" is almost a pejorative for some people. If a group of capable people that you admire is treated poorly, this might seem ridiculous. So Cowen argues that even very highly paid CEOs are creating value for their shareholders and are being paid fairly. He considers their pay as a percentage of overall profits so that it seems less ridiculous. This is an interesting argument. And yet, it's almost as though he feels any criticism of exorbitant salaries is a form of envy. He is OK with ineffective CEOs being overpaid millions of dollars because no system bats a thousand, but he is consistently critical of any inefficiency on the part of less powerful classes.
The value of Big Business is that it points out that not every corporation is like Mr. Burns pouring "toxic sludge" into the water supply. The weakness of the book is that it seems to suggest that no corporation has ever poured "toxic sludge" into the water supply. This defense of the powerful and the wealthy starts to come across as willfully obtuse trolling rather than even handed, calm consideration.
Cowen has become a very strong oral communicator so don't read Big Business and instead just listen to a podcast interview from this book's promotional tour.
November 22, 2019
I have enjoyed many of Tyler's podcast interviews and found him to be thoughtful and interesting. I did not expect to agree with everything in a book celebrating big business, but I did expect it to have some coherence. I like to read things that challenge my views even when I end up disagreeing more strongly. Here I was just shaking my head at irrelevancies and wondering what the editor was possibly thinking.
As an example, Tyler goes totally off the rails when discussing whether work is fun. He occasionally remembers that he is supposed to be focused on defending big business but mostly defends the idea of work. He is right, but it is irrelevant - a defense of big business is not to use a line of reasoning that applies equally to working for a small nonprofit organization. He somehow considers it a point in favor of big business that the U.S. federal government has the Earned Income Tax Credit.
He credits big companies with the success of government food regulation. As in here
People don't wait because of government regulations, not because big businesses have themselves found a better process for preparing and delivering food (though they probably have in ways that are significant from inventory management, but it is government that has more forced the improvements in health and safety). I mean seriously, is there any evidence that people wait a year to try a local independent restaurant? How would any of them stay in business ever?? Insanity!
When he does focus on comparing small business to large, I think he is flat out wrong.
Where I work in telecom, for instance (where Tyler makes several good, if unorthodox among his brethren points), there is strong evidence that the larger the company, the less people like it. True of banks and many other areas of commerce too. Perhaps because Tyler does not have any meaningful distinction between big business with significant market power and those that don't (such as McDonalds, perhaps).
On the question of whether CEOs are paid too much, he dances around easy arguments while ignoring more important points, like why US CEO pay has diverged so much from successful CEOs around the world and what we can learn by comparing such companies and leadership.
There are definite bright spots that show his wit ... though I don't think my amusement at his point of how much Americans spend on penis-enlargement justifies the time I spent on this book. I expected something that was baked, not to read what seemed like a stream of consciousness from an author sitting on a bar stool.
As an example, Tyler goes totally off the rails when discussing whether work is fun. He occasionally remembers that he is supposed to be focused on defending big business but mostly defends the idea of work. He is right, but it is irrelevant - a defense of big business is not to use a line of reasoning that applies equally to working for a small nonprofit organization. He somehow considers it a point in favor of big business that the U.S. federal government has the Earned Income Tax Credit.
He credits big companies with the success of government food regulation. As in here
When a new fast-food chain opens, say Shake Shack, and advertises some kind of better food experience, people by the millions are willing to try it. Not many people would feel they had to wait a year to see if other consumers were harmed by the product.
People don't wait because of government regulations, not because big businesses have themselves found a better process for preparing and delivering food (though they probably have in ways that are significant from inventory management, but it is government that has more forced the improvements in health and safety). I mean seriously, is there any evidence that people wait a year to try a local independent restaurant? How would any of them stay in business ever?? Insanity!
When he does focus on comparing small business to large, I think he is flat out wrong.
You’re more likely to be ripped off by your local TV repairman, your local doctor, or maybe even your cousin than you are likely to be cheated by McDonald’s or Walmart. McDonald’s and Walmart, quite simply, have valuable national and international reputations to lose, and they will act to preserve their brand identities. Big businesses have more to lose from fraud, they are monitored more closely, and they are more likely to depend on the commercial value of a respected national or international brand name.
Where I work in telecom, for instance (where Tyler makes several good, if unorthodox among his brethren points), there is strong evidence that the larger the company, the less people like it. True of banks and many other areas of commerce too. Perhaps because Tyler does not have any meaningful distinction between big business with significant market power and those that don't (such as McDonalds, perhaps).
On the question of whether CEOs are paid too much, he dances around easy arguments while ignoring more important points, like why US CEO pay has diverged so much from successful CEOs around the world and what we can learn by comparing such companies and leadership.
There are definite bright spots that show his wit ... though I don't think my amusement at his point of how much Americans spend on penis-enlargement justifies the time I spent on this book. I expected something that was baked, not to read what seemed like a stream of consciousness from an author sitting on a bar stool.
May 3, 2019
Could have equally been titled: "Choosing Better Baselines for Evaluating Big Business". CEOs should not be compared to the average worker within their firm, but to the performance of their firms: "the sixfold increase in average CEO pay over the 1980–2003 period can be explained in large part by the roughly sixfold increase in average market capitalization over those same years." Satisfaction from work should be adjusted for the amount we have to do it: "If people prayed 6.9 hours a day, most of them probably would find it less intrinsically rewarding". Financial fees are falling and more Americans own stock than ever before. Much of financial sector growth results from pensions being managed as a financial service, rather than corporation paying them via future revenue streams.
Validates a lot of my resistance to the doom and gloom mongers. But still it felt like a clunky monograph - a series of rebuttals - at times. Almost like the article had been crowd sourced and hastily put together.
I would be interested to see how this is received by anti-business types.
Validates a lot of my resistance to the doom and gloom mongers. But still it felt like a clunky monograph - a series of rebuttals - at times. Almost like the article had been crowd sourced and hastily put together.
I would be interested to see how this is received by anti-business types.
August 5, 2019
Being the devoted neoliberal that I am, I thought I would would stand up and cheer for all of Tyler's arguments here. Yes, I did agree with most of what he says, but it was just not a very enjoyable or convincing read. I wanted something more persuasive and fun.
February 13, 2025
I cannot believe I wasted my time reading this book. I checked it out from the library, knowing full well it’d be one of those books that’s so dumb I can’t help but binge it. I didn’t read it, but I decided to renew it and torture myself. I do my best to read books with premises I disagree with to see if they can sway my opinion, and if nothing else, I can better understand their POV. With that being said, the author is either insanely disingenuous or one of the most ignorant people to write this many books. I’m leaning toward the former.
You read the title right. This author is sticking up for big business. You know. Because these companies and CEOs have it so rough. Not only is it just as insane as you’d assume it would be, but the Cowen either cherry picks data or flat-out lies. For example, one of the things he starts the book with is that more Americans favor socialism than capitalism. As someone who favors socialism, I knew this must be BS. The first study that pops up is from Pew Research (a very credible organization), and as you’d expect, socialism is not favored anywhere near as much as capitalism.
Throughout this book, Cowen makes the craziest arguments. He dedicates and entire chapter to why CEO pay is justified, and glorifies them as these renaissance men who have to know how to do everything and understand every aspect of the business. He completely neglects the fact that these CEOs have teams of people helping them and coming up with products and ideas for the company. Instead, he focuses on Steve Jobs who was one of the few innovators, and he even had a ton of help. When arguing how CEOs “deserve” their insane compensation packages, he doesn’t mention a single time how employees are getting screwed out of living wages.
I could write 10 more pages about how dumb this book is, but I won’t waste my energy. Just know that any knowledgeable anti-capitalist who debated this guy would make him look really, really stupid. I wouldn’t be surprised if he wrote this book just to get some of those insanely high-paying speaking gigs at large corporations.
You read the title right. This author is sticking up for big business. You know. Because these companies and CEOs have it so rough. Not only is it just as insane as you’d assume it would be, but the Cowen either cherry picks data or flat-out lies. For example, one of the things he starts the book with is that more Americans favor socialism than capitalism. As someone who favors socialism, I knew this must be BS. The first study that pops up is from Pew Research (a very credible organization), and as you’d expect, socialism is not favored anywhere near as much as capitalism.
Throughout this book, Cowen makes the craziest arguments. He dedicates and entire chapter to why CEO pay is justified, and glorifies them as these renaissance men who have to know how to do everything and understand every aspect of the business. He completely neglects the fact that these CEOs have teams of people helping them and coming up with products and ideas for the company. Instead, he focuses on Steve Jobs who was one of the few innovators, and he even had a ton of help. When arguing how CEOs “deserve” their insane compensation packages, he doesn’t mention a single time how employees are getting screwed out of living wages.
I could write 10 more pages about how dumb this book is, but I won’t waste my energy. Just know that any knowledgeable anti-capitalist who debated this guy would make him look really, really stupid. I wouldn’t be surprised if he wrote this book just to get some of those insanely high-paying speaking gigs at large corporations.
September 9, 2019
These days big business gets a bad rap across political spectrum, and I liked that Cowen’s love letter pushes back against left and right flavors of the critiques. I don’t buy all of his arguments, but I’m sympathetic to most.
In particular, I thought that CEO compensation and Crony Capitalism chapters were very tightly argued. Elsewhere, I enjoyed his framing of business as being more honest (less fraudulent) than either the government or our fellow citizens. I didn’t buy the idea of big tech bringing about more privacy, but Cowen’s definition of privacy gives him wiggle room to maneuver. I thought that his view of Facebook as “the universal substitute” that indirectly makes markets more competitive was thought-provoking.
The final chapter attempts to diagnose the cause of anti-business attitude, and is the least convincing. Cowen suggests that we tend to anthropomorphize firms, and that the firms themselves are complicit by running marketing & PR campaigns that give off “caretaker” and “friend” image. This alleged anthropomorphization seems like a marginal effect at best, since the causes of anti-business rhetoric are simpler and more fundamental – and that brings us to why the book ultimately fails.
The book’s ostensible goal is to shift the public opinion towards a more favorable view of business, and Cowen approaches that goal by providing a careful and nuanced analysis of numerous studies and their various effects. And yes, that nuance will undoubtedly entertain the ever-shrinking pool of centrists, but it won’t you get you far in forestalling the ever-increasing leftwards drag of the Overton window (Bernie and Warren are anything but subtle). Conversely, the chunks of political right that embraced the anti-business sentiment as a hedge in culture wars won’t be swayed by classic liberal economics. Some revolutions may be marginal, but this is not one of them.
In particular, I thought that CEO compensation and Crony Capitalism chapters were very tightly argued. Elsewhere, I enjoyed his framing of business as being more honest (less fraudulent) than either the government or our fellow citizens. I didn’t buy the idea of big tech bringing about more privacy, but Cowen’s definition of privacy gives him wiggle room to maneuver. I thought that his view of Facebook as “the universal substitute” that indirectly makes markets more competitive was thought-provoking.
The final chapter attempts to diagnose the cause of anti-business attitude, and is the least convincing. Cowen suggests that we tend to anthropomorphize firms, and that the firms themselves are complicit by running marketing & PR campaigns that give off “caretaker” and “friend” image. This alleged anthropomorphization seems like a marginal effect at best, since the causes of anti-business rhetoric are simpler and more fundamental – and that brings us to why the book ultimately fails.
The book’s ostensible goal is to shift the public opinion towards a more favorable view of business, and Cowen approaches that goal by providing a careful and nuanced analysis of numerous studies and their various effects. And yes, that nuance will undoubtedly entertain the ever-shrinking pool of centrists, but it won’t you get you far in forestalling the ever-increasing leftwards drag of the Overton window (Bernie and Warren are anything but subtle). Conversely, the chunks of political right that embraced the anti-business sentiment as a hedge in culture wars won’t be swayed by classic liberal economics. Some revolutions may be marginal, but this is not one of them.
May 21, 2019
"A contrarian book that ought not to be contrarian"
This book is a good exploration and rebuttal of common anti-business and anti-capitalist themes that go around. Examples include "Big business control Washington" and the exaggerated claims on monopoly and market power.
Given the current state of young people professing their interest in socialism (mentioned in the book), I think a chapter of the benefits of the for-profit institution and system was the biggest miss of this book.
Also, I don't think he stressed enough how Big Business (and the industries in general) are more progressive than government. The Western World is currently dealing with a wave of Right Wing populism while corporations run ads with same sex couples while eating vegan food, using social media accounts that let you select non-binary genders. Not to mention the current (rightly needed) purges of sexual harrasers in many domains, while the President boasted of his ability to touch women without their consent.
The biggest plus is just the remainder of how business do everything we love, how they provide lots of meaning through work, and a particular defense on Big Tech. This one is probably the best part of the book while also being the only easiest to defend. Big Tech is more concentrated than ever before they have no indication of monopoly power: they don't reduce output, and they are the biggest source of innovation. Just take a look at a 90's TV show like Friends: everything is pretty much the same, except for technology.
Furthermore, the explanation of why we would see more criticism of Big Tech than normal is on point: they disrupted the media environment (that was in many ways monopolistic), it's only natural that they responded with such harsh treatment. A common criticism of Big Business is they are greedy; then it basically follows that a lot of criticism emanes from envy, if one were to involve feelings into the discussion.
Overall a good book that was sorely needed, in a time when there are influential politicians trying to dismantle one of the comparative advantages of the United States.
This book is a good exploration and rebuttal of common anti-business and anti-capitalist themes that go around. Examples include "Big business control Washington" and the exaggerated claims on monopoly and market power.
Given the current state of young people professing their interest in socialism (mentioned in the book), I think a chapter of the benefits of the for-profit institution and system was the biggest miss of this book.
Also, I don't think he stressed enough how Big Business (and the industries in general) are more progressive than government. The Western World is currently dealing with a wave of Right Wing populism while corporations run ads with same sex couples while eating vegan food, using social media accounts that let you select non-binary genders. Not to mention the current (rightly needed) purges of sexual harrasers in many domains, while the President boasted of his ability to touch women without their consent.
The biggest plus is just the remainder of how business do everything we love, how they provide lots of meaning through work, and a particular defense on Big Tech. This one is probably the best part of the book while also being the only easiest to defend. Big Tech is more concentrated than ever before they have no indication of monopoly power: they don't reduce output, and they are the biggest source of innovation. Just take a look at a 90's TV show like Friends: everything is pretty much the same, except for technology.
Furthermore, the explanation of why we would see more criticism of Big Tech than normal is on point: they disrupted the media environment (that was in many ways monopolistic), it's only natural that they responded with such harsh treatment. A common criticism of Big Business is they are greedy; then it basically follows that a lot of criticism emanes from envy, if one were to involve feelings into the discussion.
Overall a good book that was sorely needed, in a time when there are influential politicians trying to dismantle one of the comparative advantages of the United States.
June 27, 2022
As is growing more true of Cowen's works, I really enjoyed this book. And while I didn't buy all of it, I did find it a useful challenge to my kneejerk assumptions about big business.
At heart, much of the book was a repeated challenge to the kinds of thinking I had often applied to big business. In particular, that thinking was too idealistic and theoretical. It is easy to describe business as corrupt, inefficient, greedy, monopolistic, etc. in the abstract; the actual test though is to compare big business to any other approach for organizing or operating, particularly governmental or nonprofit approaches, and see if it's better or worse. Issue by issue, Cowen does this.
This reframing helped highlight for me that so much of what I dislike in regards to big business is really an indirect way of my disliking human nature. Greed, corrupting, selfishness, wastefulness, in practice these things exist in all forms of organizing, and Cowen is fairly convincing that Big Business is not substantially worse than the alternatives, and that there's often even a case that it's better. I didn't always find that case convincing, but far more often than I'd have expected.
That leaves me with a view of big business that's not exactly positive in the end, but rather normalized my view of it as one among alternatives that can be better or worse by situation, and far less of a generic all-encompassing bogeyman than I'd previously thought.
At heart, much of the book was a repeated challenge to the kinds of thinking I had often applied to big business. In particular, that thinking was too idealistic and theoretical. It is easy to describe business as corrupt, inefficient, greedy, monopolistic, etc. in the abstract; the actual test though is to compare big business to any other approach for organizing or operating, particularly governmental or nonprofit approaches, and see if it's better or worse. Issue by issue, Cowen does this.
This reframing helped highlight for me that so much of what I dislike in regards to big business is really an indirect way of my disliking human nature. Greed, corrupting, selfishness, wastefulness, in practice these things exist in all forms of organizing, and Cowen is fairly convincing that Big Business is not substantially worse than the alternatives, and that there's often even a case that it's better. I didn't always find that case convincing, but far more often than I'd have expected.
That leaves me with a view of big business that's not exactly positive in the end, but rather normalized my view of it as one among alternatives that can be better or worse by situation, and far less of a generic all-encompassing bogeyman than I'd previously thought.
May 16, 2021
[Imported automatically from my blog. Some formatting there may not have translated here.]
Another likely candidate for whenever next I do a "Ten Best" list for books. Tyler Cowen attempts to earn respect for an institution that gets way too little admiration and respect in modern America. Case in point:
A lot of giant companies refer to themselves as “American.” But let’s face it, they only have one real loyalty: Their shareholders. A Warren administration will halt the hollowing out of American cities and create good American jobs. Here’s how. pic.twitter.com/pX0VpRXqqR— Elizabeth Warren (@ewarren) August 25, 2019
A lot of giant companies refer to themselves as “American.” But let’s face it, they only have one real loyalty: Their shareholders. A Warren administration will halt the hollowing out of American cities and create good American jobs. Here’s how. pic.twitter.com/pX0VpRXqqR
So Liz and her fans would be a great target audience for this. Unfortunately, I'm not sure how realistic it would be to expect that to happen.
In my case, however, Tyler's pushing on an already-open door. But I found it still worth reading, because of his contrarian takes, useful statistics, and unexpected insights. (He's a polymath, and it shows.) He's not a Pollyanna about corporations; he points to attitudes and trends that that should change. But on the realistic whole: big business is a massive plus for the USA.
He conveniently takes up, analyzes, and (mostly) refutes common criticisms, one chapter devoted to each:
Are businesses more fraudulent than the rest of us? Tyler lists some biggies right up front: Volkswagen, Theranos, Wells Fargo. Bad actors, no doubt. But a good question to ask in reply is: Compared to what? Are CEOs paid too much? Most of such criticism is based on envy and resentment. There's also commonly bad faith involved: the critics are simply using the argument to bolster their own goals, typically political. (Tyler doesn't make this argument much, but I will.)But Tyler notes that good CEOs are expensive; you can't just promote a middle-management schlub and expect him to have the necessary skill set. Supply of CEO-grade execs is limited. And the value of an excellent CEO is extreme.
Is work fun? This one's easy: no matter how we complain about our jobs, people without jobs are, on average, undeniably worse off. And the psychology is pretty unequivocal: a job done well, no matter how menial, is rewarding to the doer, even over and above his take-home pay. How monopolistic is American big business? Outside of a few limited areas (health care, cable TV, cellular providers) there's not a lot to worry about here. Whatever the theoretical market dominance in an area might be, prices stay low, service remains fine; that's what really matters. Are the big tech companies evil? They're not great, but evil is a stretch. What is Wall Street good for, anyway? The preeminence of American financial service companies is too little appreciated. And it's little known (at least I didn't know it) how America is a tax and banking haven for the rest of the world.People demonize Wall Street largely because they don't understand finance. (I don't demonize Wall Street, even though I don't understand finance; I'm just happy with the performance of my retirement and non-retirement funds.)
Crony capitalism: How much does big business control the American government? This one was a little eye-opening, because crony capitalism has been a big bugaboo for me. Tyler agrees with the problem, but simply convinces me that it's not a huge problem, because the magnitude in comparison with the total economy is small. If business is so good, why is it so disliked? Or: what is Elizabeth Warren's deal anyway? Tyler's answer revolves around the idea of "corporate personhood"; even the people who deny corporate personhood in one context can act as if it were a real thing in another. (Business doesn't help when it markets itself in anthropomorphic terms: "Like a good neighbor, State Farm is there." "If you can't afford your medication, AstraZeneca may be able to help.)But Tyler notes that good CEOs are expensive; you can't just promote a middle-management schlub and expect him to have the necessary skill set. Supply of CEO-grade execs is limited. And the value of an excellent CEO is extreme.
People demonize Wall Street largely because they don't understand finance. (I don't demonize Wall Street, even though I don't understand finance; I'm just happy with the performance of my retirement and non-retirement funds.)
You really need to read the book to get the full weight of Tyler's arguments, and if you're at all interested (you read down to here, anyway) I strongly recommend you check it out.
May 1, 2019
This book is timely! I enjoy a good contrarian book and this is certainly that. The arguments are different in a good way. I was glad to see he tackled all the usual tropes about big business being bad.
November 30, 2019
Five star content, three star excitement. The chapter on tech companies and the final chapter are worth the price of admission.
February 24, 2023
The arguments are great. People naively blame business for too much. People should check out this book before they complain too much about big business.
September 23, 2019
Cowen usually walks a very good contrarian but evenhanded line. No exception here.
October 6, 2019
Tyler Cowen does a good job of exposing a lot of the fallacies surrounding the common dislike of big business. Highly readable. Definitely recommend.
May 13, 2019
I read Cowen’s other books and they were usually quite ok. This one is however unique.
1. Cowen posited that Big Business can do no wrong, and had been vilified by progressives, Occupiers, Millennials and Democrats. They actually want socialism!
2. Big Business provides jobs for us, and service and products for us. Even if some frauds are discovered, it is only because businesses are run by people who commits fraud and tax evasion. Of course he did not mention that multinationals pay minimal tax, such as the Apple headquarter in Ireland. If an individual does that, that person would be sent to jail straight.
3. He thinks that Big Business is under more moral constraint because anyone can write negative feedback for them. So they must react promptly to complaints or scandals. He thinks it is much harder for politician to be responsible. I however find that politicians are often held at the same level of scrutiny.
4. Cowen does not think much of non-profits; he thinks they kept throwing good money after lost causes, and doctor their accounts to make it look as though a higher proportion of donation goes to help their clients. He does not think non-profits are managed any differently than for-profits. Wow what a statement; I am sure everyone who has ever worked in a charity before would feel very discouraged if they read this book.
5. Cowen thinks that American CEOs do fantastic jobs and they really really deserve their pay. The job of a CEO is tougher and broader than before, thus firms need to compete for the best, thus pay them high salaries. One study found that successful CEOs take ‘only’ 45% of their additional contribution to their company’s revenue which is about 5%. No mention of the ones who are not successful; granted their stock options will be worthless, but their base salary would still be substantial. He thinks severance payment for an under performing CEO is good because it allows them to go peacefully and not dig in or mess up further. Wow. If any person other than the CEO underperforms he would have been sacked immediately!
6. Monopoly according to Cowen will not last forever, so it is no problem. Monopsony (power over labor and supplier) is no problem because he loves working for his University. No, really. According to him, firms always provide the best deals to attract workers. Maybe that is true to the Elite; to the workers in Amazon who are monitored second by second, or to fast food chain workers who only learn of their weekly schedule a few days before the week, it is very difficult.
7. Privacy: Cowen thinks it is a problem but he thinks that despite the fact that companies do sell our data and let other companies such as Cambridge Analytics free access to our facebook persona, they are good. He fears data in the hand of our government...
8. It gets better. Cowen writes that the finance industry is good because it provides liquidity, and 55% of Americans have funds invested in the stock market, either directly or through their retirement funds. He thinks that off shore haven is good because it protects the people who put money there. He made no mention of the bailout of the financial market by the ... government. This is pure hypocrisy.
9. Cowen does not think that the Citizen United judgement affects the power of corporations at all. According to him, firms just want stability.
10. The book ended with his opinion that we are just expecting too much from corporations. Often times we have to endure long waits at company hotlines because companies choose to ignore them. That is because they cost too much to fix. Anyway there are lots of scamming customers anyway. Wow!
This is is an excellent book on the libertarian manifesto: government and regulations are almost always bad, and firms are almost always good. A solid 2 stars book!
1. Cowen posited that Big Business can do no wrong, and had been vilified by progressives, Occupiers, Millennials and Democrats. They actually want socialism!
2. Big Business provides jobs for us, and service and products for us. Even if some frauds are discovered, it is only because businesses are run by people who commits fraud and tax evasion. Of course he did not mention that multinationals pay minimal tax, such as the Apple headquarter in Ireland. If an individual does that, that person would be sent to jail straight.
3. He thinks that Big Business is under more moral constraint because anyone can write negative feedback for them. So they must react promptly to complaints or scandals. He thinks it is much harder for politician to be responsible. I however find that politicians are often held at the same level of scrutiny.
4. Cowen does not think much of non-profits; he thinks they kept throwing good money after lost causes, and doctor their accounts to make it look as though a higher proportion of donation goes to help their clients. He does not think non-profits are managed any differently than for-profits. Wow what a statement; I am sure everyone who has ever worked in a charity before would feel very discouraged if they read this book.
5. Cowen thinks that American CEOs do fantastic jobs and they really really deserve their pay. The job of a CEO is tougher and broader than before, thus firms need to compete for the best, thus pay them high salaries. One study found that successful CEOs take ‘only’ 45% of their additional contribution to their company’s revenue which is about 5%. No mention of the ones who are not successful; granted their stock options will be worthless, but their base salary would still be substantial. He thinks severance payment for an under performing CEO is good because it allows them to go peacefully and not dig in or mess up further. Wow. If any person other than the CEO underperforms he would have been sacked immediately!
6. Monopoly according to Cowen will not last forever, so it is no problem. Monopsony (power over labor and supplier) is no problem because he loves working for his University. No, really. According to him, firms always provide the best deals to attract workers. Maybe that is true to the Elite; to the workers in Amazon who are monitored second by second, or to fast food chain workers who only learn of their weekly schedule a few days before the week, it is very difficult.
7. Privacy: Cowen thinks it is a problem but he thinks that despite the fact that companies do sell our data and let other companies such as Cambridge Analytics free access to our facebook persona, they are good. He fears data in the hand of our government...
8. It gets better. Cowen writes that the finance industry is good because it provides liquidity, and 55% of Americans have funds invested in the stock market, either directly or through their retirement funds. He thinks that off shore haven is good because it protects the people who put money there. He made no mention of the bailout of the financial market by the ... government. This is pure hypocrisy.
9. Cowen does not think that the Citizen United judgement affects the power of corporations at all. According to him, firms just want stability.
10. The book ended with his opinion that we are just expecting too much from corporations. Often times we have to endure long waits at company hotlines because companies choose to ignore them. That is because they cost too much to fix. Anyway there are lots of scamming customers anyway. Wow!
This is is an excellent book on the libertarian manifesto: government and regulations are almost always bad, and firms are almost always good. A solid 2 stars book!
April 16, 2020
# Review
The end of my Tyler Cowen binge. This is a decent book, and provides counter arguments against typically complaints about business. In my experience, one of the best things about business, compared with other institutions, is that it goes through a 'market-test'. The market test is important because, at the end of the day, people either buy the, or they don't.
You can say this type of test happens elsewhere. But in business, the market test is direct from product to consumer, and it's optional. No one forces you to buy an IPhone; you buy one if you want one. In short, if you're working on something people are willing to pay for, then you're probably doing something useful. That doesn't mean the **only** way to be useful is by doing something someone will pay for (obviously not true). But it's a good indicator.
Other notes:
- I came into it with many strong biases against the financial sector. But after reading, Cowen makes an interesting case as to why it's not as bad as I originally thought
- I guess finance does facilitate a lot of business activity. Though I still don't think finance **creates** anything tangible
- Makes the key point that "corporations", at the end of the day, are run my humans, and humans are imperfect across many institutions
# Quotes
All of the criticisms one might mount against the corporate form—some of which are valid—pale in contrast to two straightforward and indeed essential virtues. First, business makes most of the stuff we enjoy and consume. Second, business is what gives most of us jobs. The two words that follow most immediately from the world of business are “prosperity” and “opportunity.”
“The fault, dear Brutus, is not in our corporations, but in ourselves.”
"Given the higher trustworthiness of business and the lower trustworthiness of politics, I find it strange how many people look at the data and think it is a good idea to bring business more and more in thrall to government."
"Legally imposed restrictions on building make rents and home prices much higher, and that is a serious economic and social problem. Still, it is not a market power problem, and most of the villains are local homeowners who push for NIMBYism and building restrictions, not big businesses. It ought to be much easier to put more high-density, lower-rent housing into America’s major cities and suburbs, since San Francisco, Oakland, Boston, and New York City are by no means entirely built out."
"Whatever problems these developments may have brought in their wake, they are unparalleled achievements and arguably the greatest advances of the contemporary world. And, speaking on a purely personal basis, I find that the existence of a well-functioning, searchable, shareable, and mobile internet has given me public audiences far greater than anything I ever expected to have. The internet and the ease of use enabled by the big tech companies drove the single biggest revolution that ever has come to my career."
The end of my Tyler Cowen binge. This is a decent book, and provides counter arguments against typically complaints about business. In my experience, one of the best things about business, compared with other institutions, is that it goes through a 'market-test'. The market test is important because, at the end of the day, people either buy the, or they don't.
You can say this type of test happens elsewhere. But in business, the market test is direct from product to consumer, and it's optional. No one forces you to buy an IPhone; you buy one if you want one. In short, if you're working on something people are willing to pay for, then you're probably doing something useful. That doesn't mean the **only** way to be useful is by doing something someone will pay for (obviously not true). But it's a good indicator.
Other notes:
- I came into it with many strong biases against the financial sector. But after reading, Cowen makes an interesting case as to why it's not as bad as I originally thought
- I guess finance does facilitate a lot of business activity. Though I still don't think finance **creates** anything tangible
- Makes the key point that "corporations", at the end of the day, are run my humans, and humans are imperfect across many institutions
# Quotes
All of the criticisms one might mount against the corporate form—some of which are valid—pale in contrast to two straightforward and indeed essential virtues. First, business makes most of the stuff we enjoy and consume. Second, business is what gives most of us jobs. The two words that follow most immediately from the world of business are “prosperity” and “opportunity.”
“The fault, dear Brutus, is not in our corporations, but in ourselves.”
"Given the higher trustworthiness of business and the lower trustworthiness of politics, I find it strange how many people look at the data and think it is a good idea to bring business more and more in thrall to government."
"Legally imposed restrictions on building make rents and home prices much higher, and that is a serious economic and social problem. Still, it is not a market power problem, and most of the villains are local homeowners who push for NIMBYism and building restrictions, not big businesses. It ought to be much easier to put more high-density, lower-rent housing into America’s major cities and suburbs, since San Francisco, Oakland, Boston, and New York City are by no means entirely built out."
"Whatever problems these developments may have brought in their wake, they are unparalleled achievements and arguably the greatest advances of the contemporary world. And, speaking on a purely personal basis, I find that the existence of a well-functioning, searchable, shareable, and mobile internet has given me public audiences far greater than anything I ever expected to have. The internet and the ease of use enabled by the big tech companies drove the single biggest revolution that ever has come to my career."
August 15, 2019
Good start for a love letter, but descends into fan drivel
Cowen attempts to write a reappraisal of “big business”, i.e. multinationals. Much deserved in my opinion, because American businesses have been a whipping boy of press and politics in general, and big tech and banks in particular. So far so good: for all the criticism, say, Google, Facebook and Amazon get, we must never forget how much their products and services have improved our lives.
Cowen does make some weird comments defending big tech, though. He argues that companies tend to become more conscientious, as an example he mentions PayPal cutting off extremists and racists. Cowen doesn’t go into what makes someone a racist or an extremist, nor does he seem to realize PayPal has gone a lot further than just cutting off racists and extremists. Hundreds of mildly controversial people and regular conservatives have been blacklisted, memoryholed, delinked, thrown off services, demonetized, banned, censured, etc., etc. This is not a small thing to quickly pass by: big business is acting like a moral policeman -- and that's dangerous territory.
When “big business” does things we disapprove of, Cowen argues that we’re actually angry at ourselves, because companies are staffed by people. Cowen does not refute the notion that some business functions might cause people to behave badly, worse than they would have if they had not been working in a business. I wonder if Cowen has himself ever worked in a business, instead of academia, because he would have experienced this himself.
I genuinely liked how Cowen stands up to leftist demagoguery. He defends high CEO pay by explaining that their high pay corresponds with the scarcity of their talents; leadership and vision are rare character traits – and good CEOs create more value than they cost. He also correctly emphasizes that MeToo-type workplace harassment is not limited to big business, but happens in non-profits, Churches, academia and politics. Also, Cowen correctly points out that all the “Russian interference” brouhaha was a total nothingburger and that, especially, Facebook became victim of an unfair witchunt by leftist nutjobs.
The latter part of the book should have been called “I <3 Big Tech”, because here things changed from an objective defense (and admiration) of big business into fanboy drivel. I can’t say much about it, because it’s infotainment.
All in all, not bad, but disappointing.
Cowen attempts to write a reappraisal of “big business”, i.e. multinationals. Much deserved in my opinion, because American businesses have been a whipping boy of press and politics in general, and big tech and banks in particular. So far so good: for all the criticism, say, Google, Facebook and Amazon get, we must never forget how much their products and services have improved our lives.
Cowen does make some weird comments defending big tech, though. He argues that companies tend to become more conscientious, as an example he mentions PayPal cutting off extremists and racists. Cowen doesn’t go into what makes someone a racist or an extremist, nor does he seem to realize PayPal has gone a lot further than just cutting off racists and extremists. Hundreds of mildly controversial people and regular conservatives have been blacklisted, memoryholed, delinked, thrown off services, demonetized, banned, censured, etc., etc. This is not a small thing to quickly pass by: big business is acting like a moral policeman -- and that's dangerous territory.
When “big business” does things we disapprove of, Cowen argues that we’re actually angry at ourselves, because companies are staffed by people. Cowen does not refute the notion that some business functions might cause people to behave badly, worse than they would have if they had not been working in a business. I wonder if Cowen has himself ever worked in a business, instead of academia, because he would have experienced this himself.
I genuinely liked how Cowen stands up to leftist demagoguery. He defends high CEO pay by explaining that their high pay corresponds with the scarcity of their talents; leadership and vision are rare character traits – and good CEOs create more value than they cost. He also correctly emphasizes that MeToo-type workplace harassment is not limited to big business, but happens in non-profits, Churches, academia and politics. Also, Cowen correctly points out that all the “Russian interference” brouhaha was a total nothingburger and that, especially, Facebook became victim of an unfair witchunt by leftist nutjobs.
The latter part of the book should have been called “I <3 Big Tech”, because here things changed from an objective defense (and admiration) of big business into fanboy drivel. I can’t say much about it, because it’s infotainment.
All in all, not bad, but disappointing.
April 21, 2019
His thoughts on everything are always interesting, but this one felt a bit overextended. Still, I read it in one sitting.
September 3, 2019
Quick read. Nothing really I did not know, but Tyler makes a positive case of large companies and their benefit to society. He doesn't see transaction costs as the main driver for large companies. Another positive expectation for the future.
This entire review has been hidden because of spoilers.
November 17, 2019
I prefer the podcast (conversations with Tyler) the YouTube lectures (MR Univ) and the blog (marginal revolution dot com) to this book. The book is fairly one sided - most examples are about government failures and not market failures. Recommended read if you are into this stuff though.
June 10, 2019
Controversially moderate? It's a sign of the times that Cowen's contrarian opinion is in support of big business, but here we are.
Cowen uses inductive reasoning to argue that big business and it's many flavors have been and continue to be a force for good. He gives loads of examples for how they appear to be less corrupt, are more fair tax payers, compensate their employees well and their CEO's justifiably, and are not too short-term oriented.
There's interesting ideas throughout:
- The financial sector's growth is actually in line with the growth of American wealth, averaging at 2% of wealth for decades. This is a more fair comparison than vs GDP growth
- CEO high pay is warranted when one studies the influence that the top CEO's have on businesses. The majority of CEO's may be riding the coattails of the best ones, but since the best are so hard to spot, companies are justified in paying for their aspirational hires. A useful analogy is when sports teams hire hopeful all-stars like Carmello Anthony, who sometimes under-perform
- Since 1926, the entire rise of the US stock market can be attributed to the top 4% of corporate performers
- Price-Earnings ratios are historically high, which suggests we are not in a world of excess short-termism
- Major companies are paying out to shareholders ~22% of their net income today, which is not unusual to other decades
- workplace perks are not taxed. at the margin, bosses will pay more to employees in forms of perks than salary
- Cowen has some ideas on how to pull down the cost of healthcare. He likes the competitive prices and service that retail health clinics have introduced, and suggests Medicare starts reimbursing medical tourism as well
- foreign carriers by law cant service domestic routes
- the average conservative person on the internet is exposed to ~60% conservative sources. Much more segregation is face-to-face
- 11% of private sector jobs came from venture backed companies, only ~1,000 of 500,000 new businesses started every year receive venture capital funding, over 60% of IPOs have venture capital origins
- The US may actually be the largest off-shore financial center. State governments have loads of asset secrecy provisions. South Dakota domiciles $226 billion in trusts, up from $32.8 billion in 2006
Cowen uses inductive reasoning to argue that big business and it's many flavors have been and continue to be a force for good. He gives loads of examples for how they appear to be less corrupt, are more fair tax payers, compensate their employees well and their CEO's justifiably, and are not too short-term oriented.
There's interesting ideas throughout:
- The financial sector's growth is actually in line with the growth of American wealth, averaging at 2% of wealth for decades. This is a more fair comparison than vs GDP growth
- CEO high pay is warranted when one studies the influence that the top CEO's have on businesses. The majority of CEO's may be riding the coattails of the best ones, but since the best are so hard to spot, companies are justified in paying for their aspirational hires. A useful analogy is when sports teams hire hopeful all-stars like Carmello Anthony, who sometimes under-perform
- Since 1926, the entire rise of the US stock market can be attributed to the top 4% of corporate performers
- Price-Earnings ratios are historically high, which suggests we are not in a world of excess short-termism
- Major companies are paying out to shareholders ~22% of their net income today, which is not unusual to other decades
- workplace perks are not taxed. at the margin, bosses will pay more to employees in forms of perks than salary
- Cowen has some ideas on how to pull down the cost of healthcare. He likes the competitive prices and service that retail health clinics have introduced, and suggests Medicare starts reimbursing medical tourism as well
- foreign carriers by law cant service domestic routes
- the average conservative person on the internet is exposed to ~60% conservative sources. Much more segregation is face-to-face
- 11% of private sector jobs came from venture backed companies, only ~1,000 of 500,000 new businesses started every year receive venture capital funding, over 60% of IPOs have venture capital origins
- The US may actually be the largest off-shore financial center. State governments have loads of asset secrecy provisions. South Dakota domiciles $226 billion in trusts, up from $32.8 billion in 2006
August 29, 2020
Makes good points, but only within an American context. For example, Cowen loves to champion capitalism because it has been the economic system of 21st century America and its liberal allies. First, we must ignore the fact that this prosperous status quo has only come through significant centralization and nationalization from the time of laissez-faire capitalism of the 19th and early 20th centuries, a point that Cowen is painfully unaware of as he lambasts "crony capitalism" while simultaneously praising an economic system that has more centralized oversight and state efforts against equality than at any point in human history. It makes no sense to combat the proposed reforms of people like Bernie Sanders and Elizabeth Warren, when the basis of your argument is praising a system that is incredibly egalitarian, statist, and progressive by historical standards.
Secondly, his scope is fundamentally limited to the United States, and only looks at the prosperity that corporations have brought to the United States. This is all well and good, but this will certainly not convince any progressives or socialists, given that anyone with a functioning brain is well-aware that the United States is the primary beneficiary of neoliberal capitalism. Supporting neoliberal capitalism based on the benefits it has brought to the United States is like supporting Juche on the basis of Pyongyang's wealth, or Belgian rule in the Congo on the basis of how rich it made King Leopold. I imagine that, had Cowen looked at the matter from the perspective of Latin America, or West Africa, or Eastern Europe, or Indochina, the moral conclusions he reaches would be FAR different.
So, overall, while the information present is all factual and informative, and he proves quite well that America greatly benefits from neoliberal capitalism (What a shocker!), he still faces to turn this information into any sort of relevant point about global capitalism as a whole, which essentially stunts his attempts to make a moral stand with this book. Can't say I'm impressed, by any means.
Secondly, his scope is fundamentally limited to the United States, and only looks at the prosperity that corporations have brought to the United States. This is all well and good, but this will certainly not convince any progressives or socialists, given that anyone with a functioning brain is well-aware that the United States is the primary beneficiary of neoliberal capitalism. Supporting neoliberal capitalism based on the benefits it has brought to the United States is like supporting Juche on the basis of Pyongyang's wealth, or Belgian rule in the Congo on the basis of how rich it made King Leopold. I imagine that, had Cowen looked at the matter from the perspective of Latin America, or West Africa, or Eastern Europe, or Indochina, the moral conclusions he reaches would be FAR different.
So, overall, while the information present is all factual and informative, and he proves quite well that America greatly benefits from neoliberal capitalism (What a shocker!), he still faces to turn this information into any sort of relevant point about global capitalism as a whole, which essentially stunts his attempts to make a moral stand with this book. Can't say I'm impressed, by any means.
August 5, 2019
A great book, although not as good as "Average is Over" or "The Great Stagnation".
I like the idea of how we should stop seeing companies as "people", thereby being "loyal" to them and being disappointed when they "let us down". However, he also explains how this is difficult because we, as humans, tend to anthropomorphize because we've been dealing with other humans for our entire existence, but corporations have only existed for around 100 years.
I'm not sure if I agree with his criticism of loyalty programs. I'm sure some people follow them in the manner he describes. I know plenty of people who are members of many loyalty programs, and just pick whichever suits them the most, rather than "show loyalty" to any one brand, as one would to a friend.
He also claims that Trump was elected purely with a promise of jobs. Maybe I'm too influenced by events since his election, but I feel like that wasn't his rallying cry at all (I seem to remember the wall, 'crooked hillary', badmouthing John McCain, and some other incoherent ramblings)
Some of my notes:
Corporations are:
a collection of assets
a nexus of reputations
carriers of legal and contractual responsibility
transactional efficient (and inefficient) relationships.
In terms of words, Republicans are more pro-business, but in terms of Actions, this isn't true. While Republicans pay lip service to business, they are against free trade, market solutions, immigration, outsourcing, etc.
Interesting to hear how the US, and not Switzerland, has now become a banking haven, since I remember hearing the same thing from people in Switzerland over the past couple of years.
Our tendency to anthropomorphize also gives rise to more conspiracy theories.
I like the idea of how we should stop seeing companies as "people", thereby being "loyal" to them and being disappointed when they "let us down". However, he also explains how this is difficult because we, as humans, tend to anthropomorphize because we've been dealing with other humans for our entire existence, but corporations have only existed for around 100 years.
I'm not sure if I agree with his criticism of loyalty programs. I'm sure some people follow them in the manner he describes. I know plenty of people who are members of many loyalty programs, and just pick whichever suits them the most, rather than "show loyalty" to any one brand, as one would to a friend.
He also claims that Trump was elected purely with a promise of jobs. Maybe I'm too influenced by events since his election, but I feel like that wasn't his rallying cry at all (I seem to remember the wall, 'crooked hillary', badmouthing John McCain, and some other incoherent ramblings)
Some of my notes:
Corporations are:
a collection of assets
a nexus of reputations
carriers of legal and contractual responsibility
transactional efficient (and inefficient) relationships.
In terms of words, Republicans are more pro-business, but in terms of Actions, this isn't true. While Republicans pay lip service to business, they are against free trade, market solutions, immigration, outsourcing, etc.
Interesting to hear how the US, and not Switzerland, has now become a banking haven, since I remember hearing the same thing from people in Switzerland over the past couple of years.
Our tendency to anthropomorphize also gives rise to more conspiracy theories.
August 1, 2019
The premise of this book is a little absurd: An unabashed defense of corporations. After all, why would the most dominant collective enterprise legal structure need defending? It feels a bit like advocating for a "White History Month" or a defense of Christianity in the US. And in practice, this book does feel like this at times.
But at the same time, I felt like I needed this book. It's too easy to forget that corporations and markets are in fact responsible for the vast majority of the goods and services we use. And, perhaps I am not speaking for everyone here, but I mostly like the goods and services I use. I also happened read this alongside This Changes Everything: Capitalism vs. The Climate, which makes for a depressing juxtaposition but I can't help but think that Cowen is in some ways right. The casual and assumed anti-corporate bias in most of my conversations with friends, family, and in the culture generally is naive. For anyone who seriously disagrees I welcome the conversation because I'm trying to work this out myself.
There is so much that is ignored in the pages of this book. Cowen doesn't do nearly enough to acknowledge or validate many of the criticisms of business, but that's not his mission here. This is not a balanced or comprehensive review of the role of big business. As he says in the subtitle, this is a love letter, and it's one that I really appreciate having read.
But at the same time, I felt like I needed this book. It's too easy to forget that corporations and markets are in fact responsible for the vast majority of the goods and services we use. And, perhaps I am not speaking for everyone here, but I mostly like the goods and services I use. I also happened read this alongside This Changes Everything: Capitalism vs. The Climate, which makes for a depressing juxtaposition but I can't help but think that Cowen is in some ways right. The casual and assumed anti-corporate bias in most of my conversations with friends, family, and in the culture generally is naive. For anyone who seriously disagrees I welcome the conversation because I'm trying to work this out myself.
There is so much that is ignored in the pages of this book. Cowen doesn't do nearly enough to acknowledge or validate many of the criticisms of business, but that's not his mission here. This is not a balanced or comprehensive review of the role of big business. As he says in the subtitle, this is a love letter, and it's one that I really appreciate having read.
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