Episode 697: (1) Can government save capitalism from itself? CHRIS HUGHES, Facebook co-founder, (...

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.

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.

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?

Okay. So, 2012. Go ahead. Thanks.

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.

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.

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.

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.

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.

Because I'm gonna ask you afterwards to tell us where Europe is, but even in the US, Google...

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.

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.

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.

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.

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?

Yeah. No, it was interesting. I watched your interview with Jon Stewart in The Daily Show.

No, it was a fun one.

I was going to say just sort of you even called your book, I think, a kind of a hidden history of government market crafting.

Hidden history because, as you've said, we have a sort of public-facing thing of this is the way we operate, and you look behind the curtain and there's other stuff going on. And is that your sense as well, kind of, that where we lag is in what you called the good, where it expands the common good rather than a particular industry?

Yeah. Let me just cut in for one second, Chris, and say this is where you can shift to give me some Jesse Jones, maybe give me some Bill Simon, some Lina Khan. And I'll let you rip for about as long as we've got left and I'll just break in when I need to.

Well, and I would think housing, housing, housing, housing.

Yeah. And I had never heard of him, you know, Ida Tarbell, Frances Perkins, Harold Ickes, I think those were the people whose names I remembered from history in high school or whatever. But Jesse Jones, not a word. Okay. Just to go with a completely very different idea. Bill Simon, who is interesting to me because he would have sworn he wasn't gonna do what he did and then circumstances demanded that he do.

Right. Right. Right. And you also add another point, say for a market crafting policy to be effective and progressive it must have three features and I expected that's what you were going to do there but it's a different three features. It's a clear mission and then sound implementation and robust accountability.

Exactly. And then accountability obviously. And when you point out an industry like healthcare or certain aspects of housing these days, accountability would say, you know, we're falling very far short. I believe you've got to go very shortly. You have said that one of the purposes of this book and of all your work right now is to be ready, as I mentioned in the introduction, is to be ready to market craft the next time progressives get the chance or the next time Trump is not in office. I'll make this your last question, but looking now and of course events can go crazy between now and the time. What would be your sort of sense now of how to go about it? What would be the biggest priorities? That sort of thing.

Yeah. And I'm like a guy who's got plenty of resources and should be relatively unfazed about it, but I still don't want to pay more than something's worth.

Okay. And I'll put just this addendum on that last question which is are you finding people open to this? Are there people you're talking to? Are there organizations that you think that this is not you crying in the wilderness but the beginning of some sort of movement?

Very good. Very good. Thank you very much.

Yeah, Chris, keep up your good work.

Talk to you soon.

Thank you.

I'm back. And as I mentioned at the top, I'm going to read a speech that I gave June 9th, 1989, 36 years ago at my 20th college reunion, Harvard class of 1969. Now, in 1989, I was fully involved in the entertainment industry as an actor. I was a recurring character on the nighttime soap Knots Landing and a film that I co-written and co-produced and actually produced some of the music for and written some of the songs, Earth Girls Are Easy was actually playing at the Harvard Square Theater that week. In the speech, I asked whether we were living up to our youthful ideals, and I've often said, 'I'm not sure whether it affected anyone else, but I came back home and got much more involved in causes setting me on the path really on which I found this show 7 years later.' So, here goes. Thank you for this opportunity. This is my first reunion. I'm glad to be here. I spent the last couple of years at Harvard and the first couple afterwards teaching and counseling chronic schizophrenics and Boston area school kids from Lincoln to Roxbury. And at some point I decided to leave that work because I didn't want to spend the rest of my life creatively responding to people's problems. Looking back now, I realize that's all we can ever hope to do. For an independent study in 1969 on Marshall McLuhan, I wrote a paper in which I put forth the notion that the entertainment and image industries might be our only hope, referring to the establishment as the system I called us, the revolution, and I felt there was no way we could ever compete with them on their terms. And perhaps we could outcreate them. Samuel Goldwyn said some years ago, 'If you want to send a message, use Western Union.' Preston Sturges, self-questioning director in Sullivan's Travels, eventually learns that laughter is a worthy contribution. And much of what I've created is comedy, some of it satire. And I try to do all my work, whatever the material, in front of or behind the camera, with some essence of quality, which I hope communicates itself. But I now found myself committed really to an industry which I feel is the prime culprit in our society's addiction to distraction. I could recite for you a lot of Harper's Index facts and figures about things like the greenhouse effect and depletion of the ozone layer. The bottom line for me is that our species and perhaps the entire life force seems to be committing gradual global suicide. Their senses constantly barraged by stimuli, by messages, images, facts, excuses, temptations. People are numbed. In the classic addictive model, they distract themselves to deny their experience and their condition. Politics, education, religion, or the arts might once have equipped us to deal with our current moral, social, environmental crisis. But USA Today, Entertainment Tonight, Action News, tabloids, sound bites, intentionally trivialize, sensationalize, and package our best impulses. The last presidential election campaign seemed more a long-running TV show than an actual referendum on the leaders and policies of this powerful nation. For years in entertainment, there have been in essence two industries. There were the actual products, plays, films, radio, television. There's also a side industry which consists of personalities, gossip, trivia, scandal. Now, as media replaces community, everything is show business. Attention is focused more on the celebrity than on the beliefs or actions of public figures. As a global tribe, I believe we have some very serious work to do. I want to use this moment to share with you a vision that I've seldom been able to fit into my music videos, movie scripts, or characters I play on prime time TV. I had been off campus teaching the day of the takeover of University Hall in '69. When I arrived in the yard and heard what had happened, there was no question in my mind what I would do. Although I hadn't had a hand in removing the deans, I immediately went inside to stand with those who did. I slept that night under a table on one of the upper floors and just before dawn the buzz went through the building that they were coming. We all masked down in the central room on the main floor and waited. I tied my long hair back, got a bandana ready to protect me from tear gas and joined arms with those around me. The campus press actually ran a photo of me taken at about that moment and I look scared shitless. The police arrived in their powder blue uniforms with jumpers, high black boots, and shiny helmets. I knew we were engaged in civil disobedience. I assumed we would go limp and let ourselves be arrested and let out. I'll never forget looking over my shoulder as the rear doors opened and troopers came in swinging three-foot long billy clubs. I'll never forget the screams of my fellow students or the sounds of those clubs smashing heads. Turning away, I saw that it was possible to get out of that room into an office and jump a floor and a half to the ground. I jumped. I thought often over the years about that choice, what it meant that I was there and that I jumped rather than get beaten for what I believed. But today, the central truth of our situation is there's no window for us to jump out of. I think we're in a unique moment in human history in the history of this planet. It seems we have until recently been able to move in a constant progression of growth and acceleration. The only limits might be the limits of human imagination. The truth we must now face is that we live on a physically finite planet. Our production and consumption of goods is outstripping the earth's ability to replenish our resources or absorb our waste. Our place in the universe has changed. There have been other such moments. The discoveries of Galileo and Copernicus, for example, but we cannot afford the luxury of years of resistance before gradual acceptance of the new truth. Another event unique to this time is a positive one. Spurred on by the threat of nuclear destruction and by the emergence of instant communications in global markets, we are now seeing an end to the cold war. We face not merely an immense crisis, but also an immense opportunity. Never before has it been as necessary to look at life in the long term. And yet, I think never before have we shared as short a view. In the past, when the extended family seemed to have more permanence and more resonance, when we were less mobile, when neighborhoods and towns seemed to last, even when the captains of industry dominated whole industries with family-owned companies, I suspect that our culture took a longer view. Now, the locus of decision-making, where values come from, is no longer in family or religion or in nature. Values seem now to come from business. Our whole society seems infected with the kind of thinking born of an overpowering fixation on short-term profits, quarterly dividends, year-end statements. There is lag time between the changes in our actions and the corresponding changes in the global environment. But we cannot wait to find out the exact ramifications of the greenhouse effect or of ozone depletion based on the possibility and probabilities of catastrophe. We have got to begin now to change the way we think, the way we make decisions, the way we live. As Soviets and Chinese move to adopt market capitalism, we see the emergence of a single global economic model. Free enterprise has proven to be the most successful mechanism for harnessing human energy toward innovation and productivity. And yet, there is something terribly wrong. Not with the concept of capitalism, but with our bookkeeping. The true costs of goods and products, the environmental cost, the social costs, the costs in quality of life are nowhere reflected in current economics. Only when real costs are taken into account will the market impulse truly serve us and our planet. We also need to value true productivity and reverse the pervasive trend to reward speculation and money manipulation out of all proportion to the human benefits they create. We can no longer act as adversary nations or adversary alliances. We cannot look at the immense debt of poorer nations as their problem. The US practice of restricting the distribution of environmentally unsafe or toxic substances within our borders and then freely dumping these same goods in other markets can no longer be tolerated. We are all in this together. I imagine it sounds as if I'm focused primarily on environmental issues. And I must admit that is the perspective that most calls for the radical shifts in culture that I feel are essential to our survival. Yet the same solutions, long-term thinking, accurate cost accounting are just as necessary to deal with our deteriorating infrastructure, health care systems, the emergence of permanent urban underclass, drugs, AIDS, you name it. When we take the long view, our priorities change. Security is no longer national security but rather global security and security is no longer solely military. Education, preventive and prenatal health care, research, energy conservation emerges top priorities. So-called primitive peoples of our land knew that we do not inherit the earth from our parents. We borrow it from our children. Last night at the buffet in the tent in Radcliffe yard, there were alumni from perhaps 1919 to 1989. And late in the evening, I looked up and found that everyone had left except the four tables of the class of 69. And that showed me that our shared experiences forged a bond between us that still exists. We were part of a unique moment, not just at Harvard, but also in American history. Our contribution has been minimized by revisionists. But we and others like us caused the US to resign from a war that was wrong. And we forced a criminal president to resign from office. We had three basic virtues that empowered us to act as we did. We had faith and hope. There was purpose to our actions. We believed we could actually achieve things that had never before been possible. We believed we could change the world. And we had love. As angry and passionate as we were, we also acted out of love for the innocents on both sides who were dying in Vietnam. For the poor and the minorities in this country, for ourselves, and for ideals that we felt were being shamed and ignored. We need these same virtues. Now, one reason people don't face what's happening is that they lack the faith or the hope that we can save ourselves. I think a lot of people secretly believe we're already doomed. So they cocoon themselves around their home computers and their VCRs, blind to the environmental crisis and the explosive inequities of our society. We must again generate the faith and the hope and the love of our children and our grandchildren, of our planet and of life itself. It will take that energy to begin to direct our own evolution, to shift our culture and our values, and ultimately to save ourselves. People have asked me which environmental area I'm most concerned about. Endangered species, greenhouse gases, toxic wastes. I answer the area of human consciousness. It is in our culture and in our values that the greatest change must take place. I don't yet have a lot of specific suggestions on how to do that. I believe, however, that such change is an absolute necessity and that it is going to take the best minds of our generation in the service of deep passion and dedication. I want to challenge our class, myself included. Do we have it in us to take this on? I don't want to seem glib, but I don't believe we can depend on those 10 years older or those 10 years younger to lead us. I am confident, however, that we can challenge those 10 years older and we can inspire those 10 years younger. We've done it before. And I ask, if not us, then who? And if not now, when? Let us come together again in 5 years and in 20 and 25 and know that we have done everything in our power to leave the world better than we found it. Thank you.

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