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Most Americans like big businesses.

Tyler Cowen asks:

Why is there so much suspicion of big business?

Perhaps in part because we cannot do without business, so many people hate or resent business, and they love to criticize it, mock it, and lower its status. Business just bugs them. . . .

The short answer is, No, I don’t think there is so much suspicion of big business in this country. No, I don’t think people love to criticize, mock and lower the status of big business.

This came up a few years ago, and at the time I pulled out data from a 2007 survey showing that just about every big business you could think of was popular, with the only exception being oil companies. Microsoft, Walmart, Citibank, GM, Pfizer: you name it, the survey respondents were overwhelmingly positive.

Nearly two-thirds of respondents say corporate profits are too high, but, “more than seven in ten agree that ‘the strength of this country today is mostly based on the success of American business’ – an opinion that has changed very little over the past 20 years.”

Corporations are more popular with Republicans than with Democrats, but most of the corporations in the survey were popular with a clear majority in either party.

Big business does lots of things for us, and the United States is a proudly capitalist country, so it’s no shocker that most businesses in the survey were very popular.

So maybe the question is, Why did an economist such as Cowen think that people view big business so negatively?

My quick guess is that we notice negative statements more than positive statements. Cowen himself roots for big business, he’s generally on the side of big business, so when he sees any criticism of it, he bristles. He notices the criticism and is bothered by it. When he sees positive statements about big business, that all seems so sensible that perhaps he hardly notices. The negative attitudes are jarring to him so more noticeable. Perhaps in the same way that I notice bad presentations of data. An ugly table or graph is to me like fingernails on the blackboard.

Anyway, it’s perfectly reasonable for Cowen to be interested in those people who “hate or resent business, and they love to criticize it, mock it, and lower its status.” We should just remember that, at least from these survey data, it seems that this is a small minority of people.

Why did I write this post?

The bigger point here is that this is an example of something I see a lot, which is a social scientist or pundit coming up with theories to explain some empirical pattern in the world, but it turns out the pattern isn’t actually real. This came up years ago with Red State Blue State, when I noticed journalists coming up with explanations for voting patterns that were not happening (see for example here) and of course it comes up a lot with noise-mining research, whether it be a psychologist coming up with theories to explain ESP, or a sociologist coming up with theories to explain spurious patterns in sex ratios.

It’s fine to explain data; it’s just important to be aware of what’s being explained. In the context of the above-linked Cowen post, it’s fine to answer the question, “If business is so good, why is it so disliked?”—as long as this sentence is completed as follows: “If business is so good, why is it so disliked by a minority of Americans?” Explaining minority positions is important; we should just be clear it’s a minority.

Or of course it’s possible that Cowen has access to other data I haven’t looked at, perhaps more recent surveys that would modify my empirical understanding. That would be fine too.

P.S. The title of this post was originally “Most Americans like big business.” I changed the last word to “businesses” in response to comments who pointed out that most Americans express negative views about “big business” in general, but they like most individual big businesses that they’re asked about.

48 Comments

  1. Sebastian says:

    I think that’s not quite right. _Business_ in the US is popular, individual firms are often popular, but “big business,” which Tyler writes about, is not. E.g. if you look through the Gallup items on big business (https://news.gallup.com/poll/5248/big-business.aspx )only 20-25% of respondents have “A great deal” or “Quite a lot” of confidence in big business and a solid majority are dissatisfied with their level of influence (you can find a breakdown of that elsewhere, but unsurprisingly most people think they have too much, not too little, influence).

    I’m not a public opinion specialist, but the fact that people like individual firms but not big business as a whole seems in line with other things such as public schools, government programs, or members of Congress. Not sure what to make of that, but I think asking “Why do Americans hate Congress” would be reasonable even though individual, especially local, members generally do pretty well in surveys.

  2. Adam Schwartz says:

    Gallup would seem to disagree: https://news.gallup.com/poll/5248/big-business.aspx. Although as you scroll down, Americans seem to like the idea of big government even less.

    • Clyde Schechter says:

      Thanks for the link.

      As a tangent to the thread, let me voice my strongly held opinion that asking a question like whether there is too much, too little, or just the right amount of regulation of business is a stupid question that, in fact, can only be answered by expressing what Tyler Cowen calls emotional affiliation.

      If you spend any time at all thinking about and looking into regulation it is quite apparent that there are both many petty and outdated regulations that serve no socially useful purpose now (though some of them may have at one time) while there are also clearly areas of egregious behavior that are entirely unregulated or inadequately regulated.

  3. Andrew says:

    Sebastian, Adam:

    Fair enough. I’ve added a P.S. and changed the title of the above post to “Most Americans like big business” to “Most Americans like big businesses.”

  4. Dan F. says:

    Some academics conflate “most Americans” with “most of the people in my social circle”.

    • Terry says:

      Bingo.

      “Big business” is a convenient shortcut for shallow thinkers who want to believe they see deep and powerful forces at work in society. Vague, disembodied, sinister, anthropomorphized entities that roam society doing evil. Academia is full of these thinkers.

      As Andrew points out, when given actual examples, big businesses look like just a bunch of people who got together to cooperate to do something, usually to make and sell something to other people. That’s a whole different viewpoint. Just a bunch of people. Imperfect people to be sure with all the vices and shortcomings of people, but when you look at what they accomplish, they are usually useful people.

      Understanding how these groups of people interact with all the other people in the world is hard work. It’s much easier to assume that “big business” is a coherent concept we can casually toss around.

      • > when given actual examples, big businesses look like just a bunch of people who got together to cooperate to do something, usually to make and sell something to other people.

        Well, if you’re a consumer of their product you might like their product, but there is *plenty* of non-consumer-visible bad stuff that large companies do. Here are just a few:

        1) Large telecom companies have gotten states to pass laws to make it illegal or excessively costly for municipalities to offer broadband services to their residents.

        2) Pharma companies have raised the regulatory bar on manufacturing drugs to make them more expensive so that smaller companies can’t afford to compete. This is how Pharma Bro Shkreli was able to raise the price of his off-patent drug, since no-one had the manufacturing certification to produce it legally for sale in the US.

        3) Patent law has been largely subverted entirely. Apple won huge settlements from Samsung on the basis of what exactly? For the most part things like using rounded rectangular shapes for their phones and soforth. You can see how this works as many large corporations license wide swaths of their patents freely to anyone who doesn’t sue them…

        4) Amazon got where it is currently in large part by just subverting sales tax laws for over a decade, even lobbying to get them special exemptions, keeping the courts tied up for decades. Eventually they gave in and collect sales tax, but not before basically pocketing the equivalent of 5-10% extra on each sale times 15 years.

        etc etc. People hear about these kinds of things, and they’re not happy about “big business” but when you ask “do you like to buy electronics from Amazon” of course they do, the service is useful. It’s perfectly possible for large organizations to do multiple things, some of which are pretty obnoxious and some of which are helpful. The ability to do obnoxious stuff is directly related to size. A 4 person local stationery store doesn’t get much traction refusing to collect sales tax and getting laws passed making it illegal for anyone else within a 100 mile radius to sell stationery.

        • Terry says:

          I agree.

          “Imperfect people to be sure with all the vices and shortcomings of people” as I said. When people get together, they often do bad things, especially when those bad things benefit themselves. Medium and small businesses do bad things too. Individual people do bad things as well (not all salespeople are completely ethical in all their dealings, and some employees who work for tips do not report all their tips).

          The question is, does the term “big business” unjustifiably create the impression that it is somehow a sentient being in its own right? I think that in many cases, it is a lazy shortcut for thinking about what is actually going on.

          “The ability to do obnoxious stuff is directly related to size.” This is a key assumption, and it is not obvious to me. Does a 1,000 person corporation do more bad things than 1,000 dishonest AC repairmen? Hard to say.

          • Chris S says:

            All fair points – but I think it makes sense to distinguish between the ability to do bad things and the relative impact of those bad things. It seems pretty clear that on average, the malfeasance of a large corporation is going affect a lot more people. Hence the dislike of “big business” (and “big government,” by the same token).

            Plus there might be the impression that the leaders of large corporations are better able to shield themselves from the legal/financial consequences of malfeasance, which may contribute to a sense of unfairness.

            I do think Andrew’s comment about the salience of negative examples pretty neatly explains the inconsistency between positive ratings for individual big businesses vs. negative ratings for “big business.”

        • Chris Wilson says:

          +1. Plus, suspicion and downright hatred of monopoly power and Wall st is as American as apple pie. It used to be common sense for both political parties too.

  5. David Littleboy says:

    “Why did an economist such as Cowen think that people view big business so negatively?”

    Perhaps what Cowen thinks is a ridiculously large amount of suspicion of big business might be a much smaller amount than what you or I might think of as being a reasonable amount of suspicion of big business.

    (Another hypothesis would be that he’s “pulling a David Brooks”, i.e. inventing data to back up his conclusions ahead of time. But hypothesizing that would be rude…)

  6. Jag Bhalla says:

    In case folks don’t know Tyler has a book coming out defending the role of “big business.”
    But beyond the surveys of public opinion its worth considering the role of Big Biz in the climate crisis.
    As David Wallace-Welles puts it in The Uninhabitable Earth
    “to the markets this is growth, to human civilization this is suicide”

    • Anonymous says:

      > “to the markets this is growth, to human civilization this is suicide”

      The only reason “markets” demand this is that the currency used constantly inflates, so without “growth” you are losing money.

      Reward people for saving resources for a rainy day by using a deflationary currency (or at least having periods of deflation that wipe out people/companies who grow too fast) and you will see the opposite incentive from “markets”. Since ~2% yoy inflation is an official policy of the federal reserve and other central banks, it is difficult to blame “markets” for this behavior.

      • A deflationary currency is a terrible idea, it doesn’t reward saving resources, it rewards saving *money* buried in your backyard. Eventually your $1000 buried in your backyard buys as much real resources as $10000 used to when you buried it…. without you doing anything at all.

        As the quantity of goods available to buy increases, the quantity of money should increase too so that we don’t have the issue that some things cost less than a transactable amount etc.

        Don’t get me wrong, I’m really really upset about Fed monetary policy, as they inflated the currency a LOT and just gave it away to banks etc…. (basically because they had no other legal option. giving it away as a UBI would be way way better) but I don’t think your comment is quite on the right track.

        My current thinking is ideally, you’d pick a large basket of consumable items that everyone needs, like various common foods, a fixed minimal safe quantity of housing per person, a fixed minimal quantity of health-care services, a fixed minimal quantity of clothing etc… and target monetary inflation to keep that basket’s average price *near constant* imho. But inflation is basically a tax on *cash* not a tax on *investment* as owning some real assets, they will grow in price with inflation, but the value of cash declines.

        Holding cash is a bad thing for society, it’s a good thing to tax it through inflation, but it’s a bad thing to distribute the largess of that inflation to banks and finance industry bigwigs and soforth.

        • Anonymous says:

          > “it doesn’t reward saving resources, it rewards saving *money* buried in your backyard”

          If the money isn’t being spent on stuff, then resources aren’t going to be used to make this stuff. The resources are conserved.

          > “Eventually your $1000 buried in your backyard buys as much real resources as $10000 used to when you buried it…. without you doing anything at all.”

          “Not doing anything at all” is conserving resources. This is supposedly something people want to encourage and reward.

          > “As the quantity of goods available to buy increases, the quantity of money should increase too so that we don’t have the issue that some things cost less than a transactable amount etc. “

          As long as the medium of the currency has less value than the face value ($1 is worth more than the paper it is printed on) you can set the minimum “transactable amount” wherever you want. And why should the quantity of goods available to buy always be increasing? That is the “growth” people supposedly do not like.

          The original point is that with a deflationary currency people/companies will only invest in something (“growth”) if it is expected to make more than “doing nothing” (ie, saving). In that case the “markets” will reward companies that are good at saving money. The need for constant growth to survive directly follows from use of an inflationary currency, not “markets”.

          • >“Not doing anything at all” is conserving resources. This is supposedly something people want to encourage and reward.

            Well not doing anything at all includes not say planting more trees, or cleaning up pollution, or inventing methods of providing energy to people with less or zero pollution, or any number of goods involving improving the natural environment.

            You’re not really conserving resources, you’re delaying consumption until later when people who are able to hoard cash and still survive can eventually own and consume all the stuff.

            Since some quantity of consumption is required for life (food, water, shelter) deflationary currency simply accelerates the concentration of wealth as those people who can hold on to some currency and hoard it can eventually own everything, while others eventually die (in its extremest form). The truth is eventually either you’ll have a violent revolution, or people will stop accepting this currency.

            • Infinitely divisible currency might solve the problem of transactions being impossible, but doesn’t solve the psychological problem of keeping track of all those zeros, the opposite of “Zero Stroke” where all the zeros are in front of the significant figures rather than in back.

              https://en.wikipedia.org/wiki/Zero_stroke

              basically it becomes too mentally costly to keep track of prices expressed as 1.24e-13 or whatever.

            • Anonymous says:

              > Well not doing anything at all includes not say planting more trees, or cleaning up pollution, or inventing methods of providing energy to people with less or zero pollution, or any number of goods involving improving the natural environment.

              Sure, but if it is more profitable than saving for people to do such things they will still do it. The vast majority of what people consume resources for is net wasteful unnecessary activity though. Just thinking of the internet, it is over 90% used for watching funny videos, advertisements, and porn. Actual productive activity is a minor use case for resources in general.

              > You’re not really conserving resources, you’re delaying consumption until later when people who are able to hoard cash and still survive can eventually own and consume all the stuff.

              That “later” is some indefinite time in the future, so the conserving continues indefinitely. They will still spend when you really want/need something relative to their savings though, just be more selective about it.

              >”Since some quantity of consumption is required for life (food, water, shelter) deflationary currency simply accelerates the concentration of wealth”

              No, inflation accelerates the concentration of wealth because prices always rise before wages. We have been living with an inflationary currency for many decades now and concentration of wealth has risen to the highest levels in human history: https://nonprofitquarterly.org/2017/11/22/highest-inequality-human-history-societies-ripe-social-change/

        • Clyde Schechter says:

          1+ again. You’re on a roll!

    • Terry says:

      “to the markets this is growth, to human civilization this is suicide”

      This anthropomorphizes “markets” and “human civilisation”. Is that for rhetorical effect? Is it accurate to imply that markets have a consciousness that is able to perceive “growth” or that human civilization has enough consciousness to decide to intentionally kill itself? If you restate it without anthropomorphization, does it lose any meaning? Or does it become more accurate but more boring? Is it just saying that “economic activity that ignores externalities can be bad for humans?”

      Is Big Biz uniquely culpable in the climate crisis? Would 1,000 mini Exxon’s be better than one large Exxon? (I suspect not.) Why is the bigness of individual businesses relevant? Or, is “Big Biz” a more loaded way of saying “a high level of economic activity”?

      • Martha (Smith) says:

        “Is it accurate to imply that markets have a consciousness that is able to perceive “growth” or that human civilization has enough consciousness to decide to intentionally kill itself?”

        Methinks the “Implication” of consciousness is something you are adding to the original — i.e., an inference you are making, not an implication inherent in the original.

  7. Daniel Greco says:

    I was going to make a version of Sebastian’s point, but now that you’ve added the PS, I’ll just add that merely changing the title of the post doesn’t really address the substance of the issue.

    Once you recognize the difference between attitudes towards big business taken generically (negative), and attitudes towards individual businesses (generally positive), it’s no longer so clear that there’s a mistake on Cowen’s part–coming up with a theory to explain a non-existent empirical phenomenon–that needs to be psychoanalyzed. It looks as if he’s talking about negative attitudes towards big business taken generically, which looks to be a real phenomenon, and thus an appropriate target for attempted explanation.

    • Andrew says:

      Daniel:

      1. Nobody’s psychoanalyzing anyone here!

      2. I think it’s fine for Cowen to do his study of why (some) people hate business. When doing so, I hope he accounts for the surveys finding that most Americans have positive views of particular big businesses. I didn’t see that mentioned in his post, hence my post above.

  8. Dale Lehman says:

    I think most of these comments are off the point. Jag is on the right track. Tyler Cowen indeed has a new book out on the virtues of big business. More to the point, he is extraordinarily successful at provoking people by using standard economics fare – pointing out how the “average” person misunderstands the world – and, in particular, lacks appreciation for the wonder of markets.

    Even more important – and, irritatingly for me, Cowen manages to say contradictory things. He has popularized the notion of the “great stagnation” while at the same time suggesting we are on the verge of unprecedented technological progress. I find his ideas frustratingly hard to pin down and his “evidence” is often selective and not robust. What he is extremely good at is getting attention and prompting discussion.

    These may only be my opinions are reactions. But I think you can defend virtually any stance on whether Americans support or hate big business. Some of the followers of Cowen’s blog seem completely preoccupied by the latest crop of democratic contenders – those that promise big government solutions (like free college, taxing the rich, raising minimum wages, etc.) and Cowen is capitalizing on the sentiments that these people are ignorant of economics. At the same time, Cowen manages to criticize many conservative economic views, appearing to be moderate an pragmatic. He has a unique ability to sound like he simultaneously agrees and disagrees with almost everybody. And, his blog continues to get widespread attention. And his books continue to proliferate.

    Call me envious or whatever. But it bothers me that Cowen’s blog post has prompted a discussion of whether or why Americans do or don’t hate big business. Whether or not big business is hated seems a poorly worded question to begin with. Compared to what?

  9. Terry says:

    A very good post.

    So why are there distinctly different attitudes towards big businesses and “big business”?

    To even begin, we need to say what exactly is being referred to when we say big business”.

  10. Dzhaughn says:

    This seems a bit obtuse. Isn’t Cowen sampling (informally) from a space of, what, items of public discourse, not voters. “Why are there so many claims that are suspicious of big business?”

    If we buy Andrew’s stats, maybe we should muse on the degree to which the population of Democratic candidates for office differs from the population of voters on this question.

    • Terry says:

      “This seems a bit obtuse. Isn’t Cowen sampling (informally) from a space of, what, items of public discourse, not voters. “Why are there so many claims that are suspicious of big business?””

      Another interesting angle. I’ll muse on that a bit and get back to you.

    • Andrew says:

      Dzhaughn:

      1. Looking at public discourse is fine, and then I’d like to look at it systematically, not at the number of claims but at the proportion. As noted in the above post, Americans are on average much more sympathetic toward individual big businesses than toward big business in general. It would be interesting to see if this is the case with public discourse as well.

      2. The Democrats are just one of the two major parties. It would not make sense to compare the population of Democratic candidates to the general population of voters. It makes more sense to compare D & R candidates, or D & R officeholders, to D & R voters.

  11. Vince says:

    This (“a social scientist or pundit coming up with theories to explain some empirical pattern in the world, but it turns out the pattern isn’t actually real”) of course brings David Brooks to mind. Recently he wrote a paean to rural America. As is often the case, he makes claims that aren’t supported by the data. Jordan Ellenberg has a great post on this at https://quomodocumque.wordpress.com/2019/03/25/nebraska-isnt-poor-and-nebraskans-arent-naive/ (Hopefully the link came out properly in this comment.)

  12. Daelier says:

    — “No, I don’t think there is so much suspicion of big business in this country.”

    … so just how then did America get its massive government regulatory apparatus over businesses big and small if most everybody liked & trusted business?

    The American Progressive Era greatly vilified big business (“Robber Barons”) and that impulse continues unabated.

    Socialism ardently opposes big business since mid-19th Century … and is still popular worldwide and in U.S.
    American Democrats are now de-cloaking and embracing anti-capitalist, anti-business socialism.

    …or perhaps American government does not accurately reflect the attitudes of most citizens?

  13. Terry says:

    Maybe it is the data that is stupid rather than the pundits.

    When you ask a bunch of ordinary doofusses how they feel about “Big Business”, you are going to get a bunch of ill thought out reactions to a loaded term.

    Maybe we shouldn’t be trying to make sense of junky surveys like this.

    On the other hand, ill thought out reactions of doofusses is the basis of our system of government, so maybe we do care.

  14. Stijn Debrouwere says:

    Jon Elster found this delightful Montaigne quote on the topic:

    > I realize that if you ask people to account for ‘facts,’ they usually spend more time finding reasons for them than finding out whether they are true … They skip over the facts but carefully deduce inferences. They normally begin thus: ‘How does this come about?’ But does it do so? That is what they ought to be asking.

    • Anoneuoid says:

      I believe this is a marketing/propaganda technique. I often see stuff like “What are the ethical consequences of X?”, which is something everyone can have an opinion about no matter how technical X is. Of course, to discuss the ethical consequences of X you must assume X is something true/real. Over time that assumption becomes a belief.

      Perhaps it can be used against NHST.

      What are the ethical consequences when the vast majority of medical researchers are using statistical methods based on a logical fallacy?

  15. Eddie says:

    2007 survey research about big businesses? I’m not sure that’s representative of a more current state of opinion about big businesses (especially the big banks) given what happened in 2008 (and in the ensuing years).

    • Andrew says:

      Eddie:

      I’m sure views have changed, but given the overwhelming support for those businesses in 2007, I expect that there’d still be strong positive views for most of them in 2019. Banks could be an exception.

  16. Bill Spight says:

    Thank you for the reminder that wording matters. :)

    And, indeed, “big business” sounds like a monolithic conspiracy, whereas “big businesses” sounds like a diverse group, some of which may be beneficent, some of which may be maleficent. The difference between similar contrasts, such as Agribusiness vs. agribusinesses, might make an interesting linguistic or sociological study.

    But as an economist, Cowen should know the history of antitrust legislation, at least in the US and Europe, and the theoretical and practical problems with monopolies and monopsonies. So I take his question as a rhetorical device intended to defend big business against populist bias. I took a quick look at the referenced page and was only a bit surprised to find that he uses “big business” and “big businesses” interchangeably. That, OC, would be in line with the rhetorical use that I supposed.

    Disclosure: I am anti-trust myself. Power corrupts.

    • Bill Spight says:

      P. S. Cowen’s characterizations of corporations as amoral is cold comfort. The question is not one of friendship or feigned friendship. Sociopaths are amoral. To be sure, moral people can make good use of amoral instruments. The question then becomes the mores of big businessmen.

  17. Joshua Pritikin says:

    Okay, but big business co-opting the political system should be outlawed. Check out http://bribestop.us/

  18. Steve says:

    I think you’re responding to a claim Cowen didn’t make. He asks, “Why is there so much suspicion of big business?” “So much” doesn’t imply “more than half” or “most” or even necessarily “increasing”. You say that ‘more than seven in ten agree that ‘the strength of this country today is mostly based on the success of American business’ — but this is perfectly consistent with Cowen’s claim: 30% is a very high number to me! In any event, I also think you’re cherry picking some survey results which speak to very specific questions. Sure, if you ask people directly what they think of individual big businesses, you can get positive answers. But, as you point out in your PS, what people think of individual businesses isn’t the same as what they think of ‘big business’ in general, and Cowen’s claim was about opinions of big business in general.

    I think it’s more informative to look at public opinions on socialism and its viability as a political platform. Certainly, there have been periods in American history where socialism has been more acceptable, but I do think it’s gotten more mainstream over the last few elections than it was in, say, 2000. The rhetoric that a candidate like Bernie Sanders uses or AOC I think is some evidence that there is a significant faction of voters who view capitalism as inherently problematic or dangerous.

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