Hello, I'm Terrence McN. Welcome to Free Forum, a world that just might work. And I'm going to be speaking today with Chris Hughes, economist, entrepreneur, and a co-founder of Facebook about his new book, Market Crafters: The Hundred-Year Struggle to Shape the American Economy. And you can learn more at marketcraftersbook.com.
This conversation was recorded Wednesday, June 25th, and not long before recording, Chris learned that he could not be with us for the full hour, that he was going to have to go after about 45 minutes. Due to time being tight and events unpredictable, I did not write something new for you for the last 15 minutes. Instead, I'm going to read a speech I gave June 9th, 1989, 36 years ago, at my 20th college reunion, Harvard class of 1969. Ours was the class, the year of the building takeover and the strike.
Hello, I'm Terrence McN. Welcome to Free Forum, a world that just might work. And I'm going to be speaking today with Chris Hughes, economist, entrepreneur, and a co-founder of Facebook, about his new book, Market Crafters: The Hundred-Year Struggle to Shape the American Economy. And you can learn more at marketcraftersbook.com.
This conversation was recorded Wednesday, June 25th. And not long before recording, Chris learned that he could not be with us for the full hour, that he was going to have to go after about 45 minutes. Due to time being tight and events unpredictable, I did not write something new for you for the last 15 minutes. Instead, I'm going to read a speech I gave June 9th, 1989, 36 years ago, at my 20th college reunion, Harvard class of 1969. Ours was the class, the year of the building takeover and the strike.
Hello, I'm Terrence McN. Welcome to Free Forum, a world that just might work. I'm going to be speaking today with Chris Hughes, an economist, an entrepreneur, one of the co-founders of Facebook, about his new book, Market Crafters, the hundred-year struggle to shape the American economy. And you can learn more at marketcraftersbook.com or at his nonprofit, which is the economicsecurityproject.org.
Okay. On Free Forum, we explore the lives, the work, the ideas of individuals that I suspect have pieces of the puzzle of a world that just might work. We look at politics, economics, environment, science, health, culture, all based on the fact that I believe we can do better. And I want to find out how. The show streams weekly on the Progressive Voices Network on tunein.com and podcasts are available of course anytime anywhere on Apple Podcast, Spotify, most major podcast sites and at my site terrencemcnally.com.
As a co-founder of Facebook who left the company in 2007 and called for the breakup of Facebook or Meta in 2019, Chris Hughes has a fairly unique perspective on our relationships with technology, screens, data, and I'm going to ask him a few questions at the top to tap that perspective. And then we're going to spend the rest of our conversation talking about the people and the ideas in his new book, Market Crafters. And I'm telling Chris this for the first time right now, but I'm going to ask Chris to introduce the premise of the book. And I'll say briefly, it's a kind of a hidden history of what he calls government market crafting to reveal how it works, examine when and why it succeeds and fails, to learn our lessons, and then the real goal, I think, is to prepare us to use market crafting effectively to recover from the Trump years as soon as we get the chance. And he does this by telling 12 stories. But these aren't simply 12 stories of government actions or interventions. He tells those stories through the personal stories of 12 individuals who found themselves in the middle of those actions and those interventions. So the power of personal history and narrative is definitely at play in what you might think was going to be dry stuff, but he brings a lot of humanity to it and I think makes it much more interesting that way. And I want us to build most of our conversation around his telling a few of those stories. And Ira Glass tells us that every This American Life story has a certain format. And if you go back a little you'll see it's really true. It's then this happened, then this happened, then this happened. This is what it means. Or then this happened, then this happened, then this happened. This is what we learned. And he basically says, you've got to add that meaning or lesson every few moments as you go through every five minutes maybe as you go through a long anecdote to make it really have the impact you want it to have and to make it stick. And so I'm going to invite Chris to as he's telling these stories of these individuals and their role in these interventions to pull the lessons and the meanings that he did. And I will also break in now and then to ask questions. Okay. Chris Hughes co-founded Facebook as a student at Harvard and later led Barack Obama's digital organizing campaign for president in 2008. He's co-founder and chair of the economic security project, a nonprofit that advocates for economic power for all Americans. His writing has been published in the New York Times, Time, the Wall Street Journal, the Financial Times. He's the author of Fair Shot: Rethinking Inequality and How We Earn. And his latest, the one we're talking about today, Market Crafters: The Hundred-Year Struggle to Shape the American Economy. Welcome, Chris Hughes, to Free Forum: A World That Just Might Work.
Well, that was an amazing introduction. Thank you, Terrence.
Oh, you're very welcome. And let me tell listeners, we're recording this conversation Wednesday, June 25th. These days it's very easy for our conversations to be taken over by events. So I want to put a little round and say we didn't know about the thing that happened next Tuesday. And I also want to say that Chris and I recorded a previous conversation, but it wasn't on this podcast. This is his first time here. It was as a Live Talks LA event in the public on his book Fair Shot. And I want to throw the first question, Chris, to you. I like listeners to get a feel for the people behind the work, the ideas we talk about. So tell us briefly in your words how you see your path to the work you're doing today. And feel free to go back, mention mentors, turning points, inspirations, those sorts of things.
Well, I love economics and politics and government today. And I think a lot about why that is and where those interests came from. So I grew up in a small town in North Carolina, Hickory, North Carolina. My mom was a public school teacher and my dad was a traveling paper salesman. And we had a, you know, pretty middle class kind of life. I was a good student. I did well in school. And I was curious about the world and ambitious. And so I ended up leaving to go to boarding school in Massachusetts and then I was accepted to Harvard. And it was there that while I was studying social studies, history, literature, a little bit of economics that my life took a big turn. We in my sophomore year Mark Zuckerberg, Dustin Moskovitz and I were roommates and we tinkered a lot. We were interested in a lot of different projects and ideas and one of those things was the early Facebook.com website which exploded in size and scope after we started it in February of 2004. And then for the next three years I did a lot of different things. I was at once the spokesperson for the company doing communications work. I ended up doing some work with public policy and politicians. I was a what we call product developer. What do you actually see on the website? What do you do? And I did that for a little over three years. I enjoyed it, but didn't feel it was my life's work. It wasn't a mission in the same way it was for Mark. And I ended up leaving, as you were saying in the introduction, to go work for Barack Obama and work in digital organizing. I won't take you through every moment of my career, but I think the upshot of what I'm trying to say is, you know, my life was profoundly transformed by the financial success that came with Facebook's commercial success. I made more money than I could have ever imagined. And I was still that kid who grew up in a middle-class family in North Carolina on the inside.
How old? Just a quick question, Chris. How old were you in 2007 when you left with that more money than you could have ever imagined?
Well, the money I was 24 when I left, but the money didn't come until Facebook IPOed and that I was 29 then.
Okay. So, 2012. Go ahead. Thanks.
Yeah. 28, 29. And you know that whole journey made me increasingly interested in political economy. How come we have some people who have these blockbuster wins and so many others who don't? Why is the cost of housing and health care so high when it shouldn't be? How can we still have poverty in the United States when we're the richest country in the world with hundreds of billionaires? I mean, these kinds of big political questions, big economic questions. So I started working in economics a little bit about 10 years ago and first as an activist and then I turned towards research in academia and so now I'm completing a PhD at Wharton. I've written this book that I'm very proud of and I spend all the time that I'm not with my kids or my husband thinking about economics and government and how we can use the tools that we have to create a more prosperous and fair country.
This idea of going back and getting your PhD. Just tell me a little bit about that decision because the motivations for some people I would think might be that they could use it to make a fortune or use it so that they could write books on economics. You've done both of those things.
Yeah. No, it wasn't about either of those things for me. So you know I around 20 I guess right about the time that I had my first child I had spent a few years working in economics and I had a lot of every time I learned something in economics I had more questions particularly because the economics field often wants to tell you that there's a math, a science, that there's truth with a capital T about how markets work. I'm a little suspicious of that as an idea of any quote unquote natural law. Where does this come from and is it really natural and how does it change over the course of history? So and I wanted a structured environment to do that learning. So I first started and got my masters in economics here in New York at the New School for Social Research and I loved the learning process and that really lit a fire. And so then I decided after I got the masters that I wanted to do the PhD and that's offered me the opportunity to go very deep on a lot of very technical questions but to do that with a fantastic adviser and a community of other scholars who are interested in similar topics that I am and that helps sort of not just point my course of study but also reinforce a lot of the values of scholarly inquiry and I learn more from the experts to be honest and I get the chance to spend the time with it.
That's what I was thinking is that it isn't just head down looking at that paper and that paper and all that peer-reviewed good stuff. It's the community you're in.
Yeah. No, I'll tell you, I've toyed with it myself a couple of times of going back and getting an advanced degree.
Never too late, Terrence.
There you go. Never too late. Um, okay. So, as I said, we're going to start with a few things. What are you thinking these days? I wrote this down as like the broad-ass question. What are you thinking these days about tech? What, if anything, do you see as good news? What should we be most concerned about? What are you most concerned about? There's so many problems that I'm just sitting here shaking my head.
Yeah. Thinking about where to start. Maybe I should try to start on a hopeful note. You know, I think that there are real frontier-breaking technologies that often create a sense of awe in me at least and I think in others particularly the AI and what we call the LLM models not just from OpenAI but also from Anthropic's Claude, Google's Gemini, etc. I think these are really pathbreaking technologies which have the potential and I put a big underline under that word potential. We've seen that to really positively shape our lives, our economy and our world if we steer them in the right direction. Okay. So that's I'm trying to start hopeful. You know, the number of problems that come, you know, not just with Meta but with so many of the tech companies. I think as a parent I worry, I have deep concerns about the use of social media and screen time on the mental health of children, of my children and children across the country. I think we have not solved many of the privacy needs that people feel. They often feel like their data is harvested and exploited with relatively little control over it. Misinformation abounds. Every time there's a new event in the news, you know that everybody's going to get their own customized version of it, often in a way that's packaged to please them, not to tell the truth or to irritate them so that anything that'll boost your neurotransmitter. Yes. To boost rage. Absolutely. And none of that is to discuss the problems of corporate concentration and how the power of some of the biggest companies not just in technology but in our country across the globe is really remains outsized. These companies have meant these are trillion-dollar companies and there are many of them and you know there's nothing wrong with economic success. I've had it and many other people have. But there is something I think suspicious about an economy in a country that creates hundreds and hundreds of billionaires and still has millions of people living in poverty. Something there is broken. And so I think that is more of a broader problem and not just a problem specific to tech but the corporate concentration leads to outsized power for many of those voices. So I think we should all be profoundly concerned about it.
Very good. Very good. Let me just remind people just it's one sentence but it's worth remembering. If the service is free you're the product. So, anything that you do online that's free, it's because the data you're supplying them is what really is driving their economic model.
Well, and the attention that you're providing. So, even if the data isn't harvested, nonetheless, capturing your attention can be very valuable.
Right. Right. Right. Right. Okay. Briefly, you, as I mentioned, back in 2019 in an op-ed in the New York Times, advocated for the breakup of Facebook, Meta, that is actually now being contested. Mark Zuckerberg has testified. What has happened and what's the status of that? It, you know, it's one of those things that would be big news in another era.
Yeah. Well, just to so I wrote that piece in 2019 and you know the Federal Trade Commission and many states attorneys general were all investigating some of the decisions that then Facebook, later Meta, had made. And a year later the FTC of the first Trump administration filed suit against Meta claiming that it had illegally snuffed out competition by acquiring WhatsApp and Instagram and then effectively underfunding them, not supporting them as competitive in a way of neutralizing competition rather than improving services for customers. So that case even though it was filed 5 years ago took a long and winding road. It was initially dismissed. Lina Khan's FTC reformulated it, strengthened the case significantly, refiled it and then as you said it just went to trial this spring a couple months ago. Mark Zuckerberg and others were on the stand and both sides have now concluded in the courtroom and the judge is considering the evidence. So you know I don't have any crystal ball. I don't know where that case will go, but I think what's important is that it's part of a family of cases against some of the other tech giants. Some of which have resolved and have been won by the government and some of which have not. So Google has been declared a monopoly not once but twice in the past year in the United States.
Because I'm gonna ask you afterwards to tell us where Europe is, but even in the US, Google...
Yes. First on its search monopoly, illegally cornering that market by using its profits, the rents that it's secured to shut down other entrants and competition and then later in the online advertising market and then of course there's a case against Amazon we could go through all the cases but the upshot of all of this is that there's actually bipartisan interest in a reinvigorated antitrust that says, you know, we want free competitive markets in the United States. We just want them to be structured in a way so that they're open and fair, so that the best company can win instead of having markets where a single company uses its market power to grow so large that it effectively shuts down competition, you know, hurting innovation. And I think one of the takeaways that I've asked a couple people in the past few months is, you know, for those folks who use Instagram today and who use WhatsApp today, how different are those products from when you started using them 10 years ago? Instagram has stories, which is a meaningful change. That was a Snapchat idea that was, you know, effectively lifted, if not stolen. So that's a meaningful change. Outside of that, how different are those? Those products have not meaningfully evolved. They have been effectively frozen. And I think that, you know, when people ask, well, why what is the problem here? Why do we need competitive markets? It's because when you don't have competition, not only do you get a few very, very, very wealthy individuals, but you also get a market where the products just sort of become more static, if not even atrophy. And that's, you know, we're gonna have a kind of structured capitalism like we do. The whole point of the competition is to engender productivity gains and innovation and that competitive energy has fizzled in a lot of these markets.
Very good. And it seems to me I want to hear also just a little hint of where Europe is ahead of us in this.
You know, the Europeans have passed several pioneering pieces of regulation. You know, some pieces of it are good, some I think I would quibble with. They have a regulatory regime for artificial intelligence which will go into effect over the coming years. They passed something called the Digital Markets Act, which has come into full force this spring. They're already applying pressure on Apple and Meta potentially impacting some of their revenues and potentially Google. And so they are bringing certainly their own oversight to bear but I wouldn't say that theirs is you know there's a lot happening in the United States at the same time so this is one of those moments where there seems to be a global set of concerns about reigning in some of the power of the most powerful companies in tech. And there are differences in the way that different countries approach it.
Yeah. And one thing I was thinking as you were describing the situation and the problems we face is I couldn't help but see in my mind's eye Trump's inauguration and billionaires lined up behind him.
Yeah. But that is also you know when I saw that I thought wow this is going to be the image that haunts him. And But I also think there are competing strands in the Republican party and there is this strand that is about providing access to some of the wealthiest men in the country as we saw with Elon Musk and also the inauguration. There's also a strand of desiring antitrust reinvigoration. You know, not only like it is the Trump it's Trump's FTC that is in court every day prosecuting Meta and you know Mark Zuckerberg went to the White House several times to try to settle that case and it didn't work yet. You never know. But yet it didn't. I mean even the FTC filed suit against Uber two months ago. And that's Trump's administration doing that.
Yes. Exactly. And the case against Amazon, other things continues to. So, by the way, that's not to deny that there's all kinds of corporate influence in this White House. Okay. You know, that is also true. But it's this is a kind of transitional time. I think I'd say.
I was going to say actually the competing strands actually reinforces why they would be at the inauguration if you follow me. That they know that it's not a slam dunk yet.
Okay. I have questions about Fair Shot and guaranteed income and that sort of thing, but I'm going to pass on those and just refer people to Chris's book, Fair Shot. He does a deep dive into ways to I think you don't call it guaranteed basic income because you sort of means test it a little.
I call it guaranteed income, not the you know it's a very different idea than the universal basic income which I think is for everyone.
Right but if that's an idea that interests you Chris has written about it you can find articles about it and the book Fair Shot goes into it deeply. Okay so let's switch to this book. How did it happen? What did you set out to do?
