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Review: “Big Business” by Tyler Cowen

“Pulling from history, economic data, and even psychology, Dr. Cowen explains why the anti-business sentiment is mistaken, how it originated, and what we should do about it.”

Some ideas permeate the collective consciousness of our society so thoroughly that it is hardly conceivable to even question them. For example, some on the American political right take for granted that the United States must be the policeman of the world, since, of course, America is morally superior. Similarly, many on the American political left—and, increasingly, some on the Right—assert that big business must be a net negative for society, since obviously so much power concentrated in corporations is bad news for the little guys (whomever those may be). In Big Business: A Love Letter to an American Anti-Hero, economist Tyler Cowen of George Mason University challenges this idea without apology. Pulling from history, economic data, and even psychology, Dr. Cowen explains why the anti-business sentiment is mistaken, how it originated, and what we should do about it. More than that, he focuses on all of the positives that are so often ignored—the innumerable benefits that companies have brought to humanity in virtually any sector one might imagine.

Early in the book, Cowen notes that, although Democrats favor socialism over capitalism according to some polls, even Republicans, “while they pay greater lip service to business ideals, are not in practice much better. Many of them have quite readily followed President Donald Trump into…fundamentally anti-business stances.” And so immediately, Cowen signals to the reader that he’s not on a team—the ideas in Big Business are his, untainted by party politics. His commitment to ideals, whether one agrees with them or not, is apparent throughout the book, and it’s a refreshing change of pace in an era of glaring political tribalism.

Cowen goes on to assert that, in the United States, business is more virtuous and harmonious than government. Anticipating the charge that both are immoral, he provides examples that no one can deny, such as the fact that McDonald’s, General Electric, Procter & Gamble, and other companies were providing benefits for same-sex partners before same-sex marriage was federally legalized. And to those moderate critics who appreciate small business but not large corporations, Cowen resorts to the numbers—that big business tends to pay greater wages to its employees than do smaller firms. In a provocative sentence that should give the reader pause, he concludes, “…the biggest problem with American business is the politically incorrect truth that too often it simply isn’t big enough and successful enough.”

While he concedes that fake news is a bad thing, he goes on to employ age-old question of economists—compared to what? Cowen reminds his audience that “there are also plenty of misrepresentations on television, in tabloids, in forwarded emails…”

Politically incorrect facts aside, Cowen exposes psychological shortcomings that cause people to hold business to the wrong standards. For example, in a section focused on social media, he engages with the hot-button issue of Russian interference in the 2016 U.S. presidential election. While he concedes that fake news is a bad thing, he goes on to employ age-old question of economists—compared to what? Cowen reminds his audience that “there are also plenty of misrepresentations on television, in tabloids, in forwarded emails…” This kind of argument is found throughout the book and can be generalized to something like the following:

“Yes, big business makes mistakes, both ethical and economic. But so does any other institution that’s ever existed. And compared to most other institutions, big business has offered far more benefit than cost.” If the reader takes away nothing else from the book, he or she should remember this compared-to-what mode of reasoning.

Zooming into the banking sector, Cowen notes that big banks are a popular target of criticism from those who are hostile to corporations. The professor calmly and carefully takes the reader on a brief history tour, writing about the parallel and interdependent developments of civilizations and their financial systems in ancient Sumer, in the cities of Renaissance Europe, and in Britain during the Industrial Revolution. As societies grow ever more complex, banking and other financial institutions are needed to aid the exchange of capital among people. More efficient movement of capital begets further economic development, which allows for ever more innovations in banking and finance. In an American context, Cowen asserts that banks were required to fund the massive and multifaceted infrastructure that, “served to knit America together and make this country one of the wealthiest and freest in the world.” Never so passionate that he loses objectivity, Cowen records many of the legitimate grievances people have with modern financial institutions, such as the fact that some brokerage houses recommend investments to clients that they know to be bad. He even writes that, “…the list of misdeeds [of the financial sector] is growing.” But following a tour of all of the benefits that finance and banking bring to the world, he concludes that, despite its problems, the financial sector has been a wonderful creation for humanity.

Another widespread belief about big business is that it controls the U.S. government from the shadows. Cowen pushes back against this, though he admits that there are plenty of examples of corporate influence on government policy. He provides the reader with plenty of data, anecdotes, and recent trends for arguments both in favor of and against the proposition that big business distorts public policy away from what the voters prefer. He also raises the perhaps ineradicable concern that big business will tend to spend resources lobbying for tariffs, subsidies, and restrictions on competition, rather than on better satisfying their customers. Whether this is an argument that businesses should be weaker—or that government should be too small for businesses to exploit in the first place—depends on one’s political orientation.

After spending well over a hundred pages defending big business against all of the typical charges, Cowen ends the book with some conjecturing about why business is so disliked in the first place. Pulling from psychology, he thinks that people demonize business because they anthropomorphize it, or attribute human-like qualities to it. As such, judging corporations by moral standards to which we hold our fellow man is a categorical mistake. Instead, we should recognize them for what they are without moralizing, much as we already do with natural sources of potential benefits, such as the sun or bodies of water. We don’t label the sun immoral for burning our skin. Instead, we recognize that the star isn’t going away anytime soon, and come up with ingenious ways to exploit its properties for our advantage (i.e., solar panels).

Tyler Cowen’s Big Business: A Love Letter to an American Anti-Hero reads like a two-hundred-page letter from a learned grandfather who wishes to pass down some knowledge to those who haven’t yet been exposed to it. His tone is never even close to zealous; rather, the book is written in a friendly and approachable style. Cowen merely tries to prod the reader into considering an alternative perspective on all matters to do with big business. In an age of ever-hardening dogma, and with the market economy coming under fire from all sides, the book is a humble attempt to stimulate readers into questioning their gripes against corporations. With data, history, and economic lessons, Big Business offers people of all political stripes something to learn about a world that humanity has created.

Logan Chipkin is a freelance writer and PhD candidate studying evolutionary theory. His writings can be found at AreoArc DigitalMedium, and Quillette. He can be followed on Twitter @ChipkinLogan.

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