Big Business: Recasting the Anti-Hero

Tyler Cowen’s previous book, Stubborn Attachments, is right in general, but wrong on particulars.  His latest book, in contrast, is largely right on both.  The world needed a new book to be pro-market and pro-business at the same time, and Tyler’s Big Business delivers the package.  I’m almost tempted to quote Keynes:

In my opinion it is a grand book … Morally and philosophically I find myself in agreement with virtually the whole of it: and not only in agreement with it, but in deeply moved agreement.

Highlights include:

1. A popularization of Bloom and van Reenen’s work on the power of management:

We must take a moment to appreciate the particular character of American business. By global standards, its overall performance is remarkably impressive. Stanford economist Nicholas Bloom and a group of co-authors studied and compared management practices in some of the major economies, including the United States. Their survey assessed how well a workplace uses incentives, the quality of performance measures and reviews, whether top management aims at long-term goals, whether top creators are well rewarded, and whether the firm attracts and retains quality employees, among other relevant metrics…

So at the end of all of these measurements of management quality, which country comes out on top? The United States is a clear first…

Management really matters. Let’s say we take two American plants producing comparable wares, but one of those plants is in the 90th percentile in terms of productivity, while the other is in the 10th percentile. The former plant will have a productivity level four times higher than the latter plant, due to superior management practices. It has been estimated that Chinese firms could increase their productivity by 30–50 percent and Indian firms could do so by 40–60 percent merely by improving their management practices up to an American level of quality.

2. Business practices and promotes good manners and civility.  Despite modern political hysteria…

the world of American business has never been more productive, more tolerant, and more cooperative. It is not just a source of GDP and prosperity; it is a ray of normalcy and predictability in its steady focus on producing what can be profitably sold to customers. Successful businesses grow dynamically, but they also try to create oases of stability and tolerance in which they can perfect their production methods and which help to attract and retain talent…

American big business in particular has led the way toward making America more socially inclusive. McDonald’s, General Electric, Procter & Gamble, and many of the major tech companies, among many others, were defining health and other legal benefits for same-sex partners before the Supreme Court legalized gay marriage… This push for tolerance shouldn’t come as any surprise. Big business has lots of customers and relies on the value of brand names. It doesn’t want any group of those customers to feel put out or discriminated against or to have cause for complaint…

3. Some deliberate (?) understatement on fraud:

Most of all, business is criticized for being fraudulent and ripping us off. While there is plenty of fraud in business, the commercial sector isn’t any more fraudulent than individuals in other capacities, and it may even be somewhat less fraudulent.

I’d say there’s no “may even be somewhat less fraudulent” about it!  Who wouldn’t trust Amazon or Uber or Airbnb over a random American who promised to provide the same product?

4. Business thinks long-term, usually:

It can be very difficult to distinguish between short-termism and an inability to see into the future. The failed Netflix competitors were mainly not venal rip-off artists; rather, most of them genuinely did not see that providing massive amounts of streaming content would prove to be a winning strategy. If half of the time businesses think too short-term and the other half of the

time too long-term, there will be thousands of valid examples and anecdotes about excessive short-term thinking and planning, and they aren’t necessarily related to CEO dishonesty.


Of course, markets also think long-term when it comes to successes, and that long-term mentality is encouraged through CEO pay structures. Consider Amazon, which has a stratospherically high share price, even though the quarterly earnings reports usually fail to show a sizable profit. Whether you think that valuation has been justified or not, it is a clear example of how markets can consider the broader, longer-term picture. Circa 2018, Jeff Bezos ended up as the richest man in the world, and he achieved that status by sticking with some long-run goals.

5. Employment may not be fun, but it’s meaningful and prevents misery:

Another way to think about the non-pay-related benefits of having a job is to consider the well-known and indeed sky-high personal costs of unemployment. Not having a job when you want to be working damages happiness and health well beyond what the lost income alone would account for. For instance, the unemployed are more likely to have mental health problems, are more likely to commit suicide, and are significantly less happy. Sometimes there is a causality problem behind any inference—for instance, do people kill themselves because they are unemployed, or are they unemployed because possible suicidal tendencies make them less well suited to do well in a job interview? Still, as best we can tell, unemployment makes a lot of individual lives much, much worse. In the well-known study by economists Andrew E. Clark and Andrew J. Oswald, involuntary unemployment is worse for individual happiness than is marital divorce or separation.

6. Even much-maligned low-skilled jobs have unsung psychological benefits:

In contemporary American society, poorer individuals are more likely to have problems with divorce, spousal abuse, drug addiction in the family, children dropping out of school, and a variety of other fairly common social problems. These problems plague rich and poor alike, but they are more frequent in poorer families and, furthermore, very often wreak greater devastation on poorer families, which have fewer resources to cope with them. The workplace, however, is a partial equalizer here. At least in this sample, the poorer individuals found relatively greater solace in the workplace than did the richer individuals.

7. Employers’ alleged mistreatment of individual workers is often for the greater good of their whole team:

Along these lines, I hear so many criticisms that companies do not give workers enough personal or intellectual freedom. For instance, many critics have noted that companies have the right to fire workers for their Facebook or other social media postings. Surely that sounds like an unjustified infringement on freedom of speech. But on closer inspection, the stance of the companies is often quite defensible. Unfortunately, a lot of workers put racist, sexist, or otherwise discomforting comments and photos on their Facebook pages, on Twitter, or elsewhere. When employers fire them, very often it is to protect the freedom of the other workers—namely, the ability of those other workers to enjoy the workplace environment free of harassment and threats. It’s not always or even usually a question of the employer versus the workers, or the old story of a struggle between worker and boss struggle. Rather, the boss is trying, sometimes in vain, to adjudicate conflicting notions of workplace freedom among the workers. In other words, the firings are in part an employer attempt to take the overall preferences of the workers into account.

8. Big business is often the cure for monopoly rather than the disease:

[Y]ou can think of Amazon and Walmart as two big reasons a lot of collusive and price-fixing schemes don’t work anymore or don’t have a major impact on consumers. Amazon and Walmart are the two biggest retailers in America, and both compete by keeping prices low—permanently, it seems. Their goal is to become dominant platforms for a wide variety of goods and to use low prices to boost their reputation and their focal status as the place to go shopping. By now both companies are old news, and it is increasingly difficult to argue that their strategies are eventual market domination and then someday super-high monopoly prices. Instead, their strategies seem to be perpetually low prices, followed by taking in insanely large amounts of business and using data collection to outcompete their rivals on the basis of cost and quality service.

My main criticism: Tyler is so pro-business that he often forgets (at least rhetorically) to be pro-market.  He spends minimal time calling for moderate deregulation – and even less calling for radical deregulation.  So while he effectively calls attention to everything business does for us, he barely shows readers how much business could do for us if government got out of the way.  Above all, Tyler mentions the following only in passing – or not at all:

1. The evils of housing regulation.  Business is ready, willing, and able to build mega-cities worth of affordable housing in the most desirable places in the country – the moment land-use regulations permit.

2. The evils of immigration restriction.  Perhaps to broaden his audience, Tyler fails to mention the eagerness of business to provide international workers with the opportunity to use their talents for the enrichment of mankind.  If I were him, I would have highlighted (a) how much business has done to increase immigration, and (b) how much business has engaged in righteous civil disobedience by hiring workers despite our unjust immigration laws.

3. The evils of labor market regulation.  Tyler barely mentions the many awful side effects of much-loved labor market regulations.  This was a mighty missed opportunity to lambast the horrors of European labor market regulationBig Business was also a great opportunity to explain why discrimination is usually bad for profitability, making anti-discrimination regulations superfluous at best.  Indeed, Tyler could have used the ubiquitous employment of illegal immigrants to illustrate these truths.

Fortunately, it’s not too late for Tyler to correct his unfortunate omissions on his blog.  Big business has been miscast as an anti-hero, but populist regulation is a Thanos-level supervillain.

P.S. Exercise for the reader: Name a better book cover than Tyler’s!

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More Bang for Your Buck; or, Better Ways to Buy Your Happiness

Money has little effect on happiness.  Ancient Greeks like Epicurus said it, and modern empirical psychology confirms it.  Why do we have so much trouble accepting this?  In part, because our immediate reaction to money is highly favorable – and that sticks in our minds.  Before long, however, hedonic adaptation kicks in.  We start to take our good fortune for granted… and then we largely forget that our fortune is good.

But there’s probably another important reason why we have so much trouble accepting the weak effect of money on happiness.  Namely: There are so many ways to buy happiness with money!  The fact that “Money doesn’t buy happiness” clashes with the equally obvious fact that “Money can buy happiness.”  The simplest reconciliation, of course, is that most people spend their money poorly.  And in my experience, this reconciliation is entirely correct.  Most people stubbornly spend lots of money on hedonic dead-ends, while ignoring omnipresent opportunities to turn cash into smiles.

So what are these alleged “omnipresent opportunities”?  Here are my top picks.

1. Buy your way out of unpleasant chores by hiring other people to do them for you.  Start with cleaning, laundry, yardwork, auto repair, childcare, and tax preparation.

2. Buy your way out of unpleasant chores by buying different products.  Most obviously, switch to disposable plates, cups, and utensils.  It’s very cheap, and saves lots of time.  If this gives you environmental guilt, compensate with some Effective Altruism.

3. The leading source of happiness is pleasant social interaction.  Use money to get more of it – and make your interaction more pleasant.  If you have to spend hours preparing for and cleaning up for any gathering, you probably won’t enjoy it much.  So cut down on both preparation and clean-up using #1 and #2.

4. Don’t buy products to impress strangers or casual acquaintances.  They’re barely paying any attention to you anyway.  Indeed, even your close friends probably don’t pay that much attention to the details of your possessions.  So if you and your immediate family won’t durably enjoy an expensive product (such as… granite countertops), save your money.

5. Entertainment spending is one of the best ways to convert money into happiness.  That’s why they call it “entertainment.”

6. If you live with other people, soundproof your house – especially if you have kids.  Other people’s music, t.v., and phone conversations (not to mention children’s crying) don’t just get on your nerves; they create needless conflict.  But you don’t have to choose between isolation and serenity.  Solid wood doors aren’t exactly cheap, but they’re affordable.

7. Put less effort into finding a job that pays better than your current job.  Put more effort into finding a job that is more enjoyable than your current job.  First and foremost: Look for jobs with lots of pleasant social interaction.

Overarching doubt: Won’t these attitudes alienate more conventional people?  My answer: Only mildly, as long as you’re friendly.  So be friendly!  And don’t forget that these attitudes also attract people who are eager to actually enjoy life.

Finally: You can and should use your money to build and maintain your Beautiful Bubble!

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Focus as an Antidote for Wanting to Do Everything

I have a problem, and I think most people do as well: I want to do everything.

OK, not actually every single thing, but I want to do more than I possibly can:

  • I want to do everything on my long to-do list, today
  • I want to take on every interesting project
  • I want to say yes to everyone else’s requests, even if I know I’m already too busy
  • I want to travel everywhere, and see everything that’s interesting
  • I want to try every delicious food, and I always want more of it (and I always eat too much)
  • I want to watch every interesting TV show and film
  • I want to read everything interesting online
  • I want to take on a lot of interesting hobbies — each of which would take me many hours to master
  • I want to spend time with everyone I love, with every friend — and also have a lot of time for solitude!

Obviously, this is all impossible. But I bet I’m not alone in constantly wanting all of this and more.

There’s a term for this in Buddhism that sounds judgmental but it’s not: “greed.” The term “greed” in this context just describes the very human tendency to want more of what we want.

It’s why we’re overloaded with too many things to do, overly busy and overwhelmed. It’s why we’re constantly distracted, why we overeat and shop too much and get addicted to things. It’s why we have too much stuff, and are in debt.

Greed is so common that we don’t even notice it. It’s the foundation of our consumerist society. It’s the ocean that we’re swimming, so much a part of the fabric of our lives that we can’t see that it’s there.

So what can we do about this tendency called greed? Is there an antidote?

There absolutely is.

The traditional antidote to greed in Buddhism is generosity. And while we will talk about the practice of generosity, the antidote I’d like to propose you try is focus.

Focus is a form of simplicity. It’s letting go of everything that you might possibly want, to give complete focus on one important thing.

Imagine that you want to get 20 things done today. You are eager to rush through them all and get through your to-do list! But instead of indulging in your greed tendency, you decide to simplify. You decide to focus.

Let’s talk about the practice of complete focus. It can be applied to all of the

The Practice of Complete Focus

This practice can be applied to all of the types of greed we mentioned above — wanting to do everything, read everything, say yes to everything, go everywhere, eat all the things.

Identify the urge: The first step in this practice is to recognize that your greed tendency is showing itself. Notice that you want to do everything, eat everything, and so forth. Once we’re aware of the tendency, we can work with it.

See the effects: Next, we need to recognize that indulging in the greed tendency only hurts us. It makes us feel stressed, overwhelmed, always unsatisfied. It makes us do and eat and watch and shop too much, to the detriment of our sleep, happiness, relationships, finances and more. Indulging might satisfy a temporary itch, but it’s not a habit that leads to happiness or fulfillment.

Practice refraining: Third, we can choose to refrain — choose not to indulge. The practice of refraining is about not indulging in the greed tendency, and instead pausing. Noticing the urge to indulge, and mindfully noticing how the urge feels in our body, as a physical sensation. Where is it located? What is it like? Be curious about it. Stay with it for a minute or two. Notice that you are actually completely fine, even if the urge is really strong. It’s just a sensation.

Focus with generosity: Then we can choose to be generous and present with one thing. Instead of trying to do everything, choose just one thing. Ideally, choose something that’s important and meaningful, that will have an impact on the lives of others, even if only in a small way. Let this be an act of generosity for others. Let go of everything else, just for a few minutes, and be completely with this one thing. Generously give it your full attention. This is your love.

Clear distractions: If necessary, create structure to hold you in this place of focus. That might mean shutting off the phone, turning off the Internet, going to a place where you can completely focus. Think of it as creating your meditation space.

Practice with the resistance: As you practice focus, you are likely to feel resistance towards actually focusing and doing this one thing. You’ll want to go do something else, anything else. You’ll feel great aversion to doing this one thing. It’s completely fine. Practice with this resistance as you did with the urge: noticing the physical sensation, meditating on it with curiosity, staying with it with attention and love. Again, it’s just a sensation, and you can learn to love it as you can any experience.

Let go of everything, and generously give your complete focus to one thing. Simplify, and be completely present.

You can do this with your urge to do all tasks, read all things, do all hobbies, say yes to all people and projects. But you can also do it with possessions: choose just to have what you need to be happy, and simplify by letting go of the rest. You can do the same with travel: be satisfied with where you are, or with going to one place and fully being there with it.

You don’t need to watch everything, read everything, eat everything. You can simplify and do less. You can let go and be present. You can focus mindfully.

If you’d like to train in this kind of focus, train with me in my Mindful Focus Course.

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Why I’m an Economic Optimist but Happiness Pessimist

Seven years ago, my mentor Tyler Cowen did an interview with The Atlantic entitled, “Why I’m a Happiness Optimist but Economic Pessimist.”  His point: Though GDP growth has been disappointing low for decades, the internet does give us tons of free, fun stuff.  The more I reflect on the Paasche price index, though, the more I’m convinced that Tyler’s picture is exactly upside-down.  At least in the First World, the sensible position is economic optimism combined with happiness pessimism.

How so?  To repeat, we shouldn’t take the ultra-optimistic Paasche calculations of GDP at face value, but neither should we dismiss them.  The judicious position is that U.S. growth has been excellent, though not astronomical.  Even so, we’re way richer than we were in 1990. Yet sadly, Americans’ measured happiness has barely changed.  We have abundance, but not bliss.

What’s going on?  Well, we already knew that income has a very modest effect on happiness.  But when you upwardly revise your estimate of prosperity, you automatically downwardly revise your estimate of the effect of prosperity on happiness.  Such is life.

When I insist that standard measures sharply underestimate economic growth, it’s easy to accuse me of motivated reasoning.  Before you make this accusation, however, consider the whole picture.  What possible agenda could I advance by simultaneously claiming that GDP has greatly increased, but brought us little joy?

So what’s the real story?  Simple: I look at the world and see great economic growth.  I take a second look at the world and see that money doesn’t buy happiness.  Then I report my observations.  This picture isn’t ideologically convenient for me.  But when I put ideology aside and stare at the world, this picture is what I see.

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Reward Someone’s Faith

Wouldn’t it be nice to live in a world in which humans had faith in other humans?

Wouldn’t it be nice if people had faith that good wins out over evil, that virtue leads to happiness, and that freedom creates the best kind of society?

Answer: it would be very nice.

But the faith – the core *trust* – in all of these notions is something that gets put to the test every day. And we’re often the ones doing the testing.

When we fail to keep promises, we don’t just make ourselves look bad. We actually *punish* the faith of people who trust that people keep their words. We make trust a liability.

We do the same thing when we condone evil people (cough, politicians, cough), or when we punish people for being better than us (see: all envy or “Puritan” name-calling, ever).

We punish people’s faith in the good all the time.

Why don’t we reward it for a change?

Let’s keep our words. Let’s use our freedom well. Let’s call out the evil around us. Let’s restore victims. Let’s reward excellence and virtue.

We all know we need to better with our lives. But there is a special power to just knowing how our actions shape the faith of those around us. In doing virtuous things, we will be doing more than just meeting some requirements, or pleasing some people. We will be giving a gift.

So many people out there long desperately for truth, goodness, and beauty. They’re caught in a desert. And we have the option to give them the water they’ve been seeking.

When we reward faith, we will be giving them hope. When they have hope, they will act.

And then maybe – one day – they’ll reward our faith, too.

Originally published at

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Mandatory National Service: “Strengthening American Democracy” by Ignoring Americans’ Rights

On January 23,  the US National Commission on Military, National, and Public Service released its “interim report”  following up with hearings for public comment in February.

The Commission’s motto, or at least the sentiment expressed in large font at the top of its web site, is “Strengthening American Democracy Through Service.” But the report itself bespeaks a working definition of “American democracy” completely at odds with both long-held American standards of freedom and basic rule of law.

The commission reports that it is “considering ways to implement universal service, such as …. Establish[ing] a norm for every American to devote at least a full year to either military, national, or public service; and Requir[ing] all Americans to serve, with a choice in how to satisfy the requirement.”

As a matter of law, that last suggestion was — or at least SHOULD have been — settled in 1865 with the ratification of the 13th Amendment to the US Constitution: “Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.”

As a matter of the values for which Americans rose up and fought their revolution, they are clearly laid out in the Declaration of Independence: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness …”

Put differently — and this is a universal, not merely American, moral claim — your life belongs to you, not to the state.

The state has no legitimate power to take your life, or any portion of it, from you, nor any legitimate power to force you to serve its goals rather than seeking after your own happiness.

“Mandatory national service” is slavery, full stop. It’s a moral abomination with no conceivable justification in anything resembling a free society, and under the US Constitution in particular it is clearly and unambiguously illegal.

And yes, that includes the military draft, contrary to the sophistry of the US Supreme Court’s Chief Justice Edward Douglass White, Jr. in 1918’s Arver v. US ruling upholding that institution in World War One.

If anything, a military draft is even more repugnant than non-military “mandatory national service” insofar as it goes beyond deprivation of liberty and pursuit of happiness and, as a matter of policy, places the draftee’s very life in danger.

The full brief of any legitimate National Commission on Military, National, and Public Service, properly understood as a matter of both morality and law, would be to  recommend that Congress abolish the Selective Service System and its mandatory draft registration scheme.

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