What Happens Next – Sunday May 16, 2021 Food Addiction, Amazon, Good Stagnation, ESG, and Racial Indoctrination

My name is Larry Bernstein.

What Happens Next offers listeners an in-depth analysis of the most pressing issues of the day.

Our experts are given just SIX minutes to present. This is followed by a Q&A period for deeper engagement.

This week’s topics include Food Addiction, Amazon, Good Stagnation, ESG, and Racial Indoctrination.

Our first speaker is Michael Moss who is a Pulitzer Prize winning investigative reporter formerly of the New York Times. I was introduced to Michael by a previous guest on What Happens Next, the Yale Nutritionist Dr. David Katz who encouraged me to read Michael’s new book entitled Hooked: Food, Free Will and How the Food Giants Exploit our Addictions. Michael points out that we humans really enjoy Salt, Sugar and Fat, a lot. I hope to learn from Michael about how food companies formulate their products to be addictive and what, if anything, we can do about it. And, why should we condemn food makers for giving us what we love and crave.

Our second speaker is Brad Stone who is the author of my favorite business book The Everything Store. Brad has a new book that was released last Tuesday entitled Amazon Unbound: Jeff Bezos and the Invention of a Global Empire. The book discusses all aspects of Amazon’s business including Amazon’s cloud computing, its profitable advertising model, and the Amazon Marketplace. Today, Brad will speak about Alexa, Amazon’s expansion into the grocery business, and Amazon’s success in logistics.

Our third speaker is Dietrich Vollrath who is a Professor of Economics at the University of Houston. Dietrich has written a new book entitled Fully Grown: Why a Stagnant Economy is a Sign of Success. Dietrich expands on William Baumol’s work that as we grow richer, we substitute services like education and health care for goods. Unfortunately, services productivity has been less than the manufacturing sector and that implies less growth in our future.

We welcome back our fourth speaker Vivek Ramaswamy who spoke on What Happens Next last summer. Vivek is the founder of the biotech company Roivant Sciences and has a new book that you can preorder now and will be released August 17th which is entitled Woke, Inc.: Inside Corporate America’s Social Justice Scam. I’ve asked Vivek to speak about stakeholder capitalism and the ESG movement which refers to Environmental, Social and Corporate Governance that measures the sustainability and societal impact of a business. As a society, we are reconsidering the goals of a company away from profit maximization and towards non-

economic objectives. Vivek will explain why this change in corporate purpose is a threat to the integrity of American democracy.

Our final speaker is Paul Rossi who is a former math teacher at the Grace Church School in NYC. Paul recently got into a public dispute with the school principal over the racial indoctrination program in Grace’s K-12 school. The dispute erupted on the pages of the NY Post and was discussed in detail on Bari Weiss’s website. Today, I hope to learn from Paul about what is happening in NYC’s private schools and in particular at Grace Church related to both racial indoctrination and the degradation of privilege.

Last week, we heard from Lewis Alexander on the prospect for rising inflation. This past week, the US Consumer Prices were up in April by 0.8% after being up 0.6% in March. A 1.4% two- month increase in inflation that annualizes to 8.4% which is the fastest rate of price increases in over 13 years. Consumer prices was led by increases for used cars, rent, furniture, and insurance.

The economy is accelerating out of COVID and businesses are unable to keep or hire their employees. Casey Mulligan had warned us on a previous episode of What Happens Next that the recent Federal Government expansion of unemployment insurance would discourage work. Earlier this week, the US Bureau of Labor Statistics released its JOLT survey which showed that businesses substantially expanded their job openings to 8.1 million unfilled positions an increase of 600,000 on the month. This month has the largest number of unfilled jobs in US history. I have heard anecdotal evidence from small businesses that it is impossible to hire new staff, very few even show up for job interviews, and many are quitting to take new jobs. Other business owners have complained that many of their workers have quit to take unemployment because it pays a comparable or better compensation. Labor markets will be the key to understanding economic growth for the rest of 2021.

If you are interested in listening to a replay of this program or any of our previous episodes or wish to read a transcript, you can find them on our website Whathappensnextin6minutes.com. Replays are also available on Apple Podcasts, Podbean and Spotify.

Alright, let’s begin today’s program with Michael Moss who will discuss his book Hooked.

Michael Moss: In 2008, I was in Algeria interviewing Islamic militants, when a couple of FBI agents showed up at the New York Times headquarters looking for me. I had been spending the previous few years traveling to Iraq, tormenting the Pentagon for failing to equip American soldiers with body armor, and then writing critically about the war on terrorism, and according to the FBI agents, I had managed to land myself on an Al Qaeda hit list. I actually think it was just the Algerian government trying to get rid of me, but when my editors ordered me home that night, and I came back to the United States looking for something new to do, it was like going from one war to another, because my editor, Christine Kay, had

spotted this outbreak of salmonella in peanuts that were being used as ingredients by this billion-dollar processed food industry about which we knew very little.

And when I looked at that situation closely, it became the story about that industry losing control over its food chain. And then I started to write about E. coli in meat because I thought Upton Sinclair had solved the meat problem 100 years earlier, but there was a rolling wave of contamination of E. Coli, and hamburger making people sick. And this was a story of the meat industry intentionally losing control over its supply chain in order to avoid costly recalls. And I was continuing to look at contamination when one of my best sources who tests meat for the industry said to me, "You know, Michael, as awful as the incidents are you really should look at what my industry is intentionally adding to its product, over which it has absolute control." He was concerned about the salt going into processed meat, which led me to look at sugar, and into fat.

And boy, was he right. I mean, the obesity rate was soaring. Pre- pandemic, we passed 42% of American adults being clinically obese, type two diabetes tied to bad diets is in the tens of millions, pre-diabetes, even larger. I think there were like 8 million cases of gout last time I looked. And as a journalist, I was incredibly lucky to come across this trove of documents that took me inside the largest processed food companies, as they were formulating, marketing, positioning their products toward us, and it was those documents that enabled me to meet insiders who opened up even more secrets about how they do it. And much of what you get from that material in those interviews is that this is an industry that's striving day and night to use extraordinary science to get us to love their products and want more and more, and initially for the first book I worked wrote, Salt, Sugar, Fat, that I focused on that unholy Trinity, if you will. Because salt they call, "The flavor burst," and fat, "The mouthfeel" and sugar, "The bliss point." And in combination and individually, those three ingredients are meant to hit the brain’s reward centers so fast that we lose control over our eating habits.

And it's not just that they engineered a bliss point for sweet foods, the companies moved around the grocery store, adding sugar to things that didn't use to be sweet before, so now by one estimate, two thirds of the products in the grocery stores have added sugar, which is a really big problem for a lot of people. Still, I hesitated to call this, "Addiction" because frankly, if we'd had this conversation five years ago and you suggested to me that Oreo cookies were as addictive as heroin, I would

have scoffed and said, "Where's the excruciating pain of withdrawal and where are the people committing armed robbery of 7/11 to buy their Oreos like they might a pharmacy? And how come not everyone gets hooked on these product?"

But the more I looked at that question, the more I became convinced that actually, these products are in many ways as troubling as cigarettes, alcohol, even some drugs. And in some ways, even more troubling. And I'll tick off the ways that they are similar. The industry is succeeding in getting us head over heels, over convenience foods, "fast groceries" as I like to call them, by tapping into our basic instincts. We by nature love food that's cheap. They use chemical laboratories to mix and match formulations, in search of ever cheaper formulas for their product, knowing that we'll get really excited by a box of breakfast pastries that cost 10 cents less than it did the week before.

We, by nature are drawn to variety; back in hunter-gatherer societies, eating different kinds of foods, helped to ensure you were getting the full range of nutrients you needed to survive, and we also became very adaptable to different foods, and it's why we were able to roam around the world and fall in love with things as crazy as whale blubber if you happen to live in the Arctic. And so what the industry does; you walk into the cereal aisle and you're confronted by 200 versions of sugary starch, them knowing that we get excited by variety. And maybe the most important thing that they use is that we, by nature are drawn to calories. We have sensors in the gut, possibly even the mouth to tell us how many calories are in there, and for most of our existence, we wanted the most calories because that was life and death. But these food companies have turned that on its heels, on its face, and made their products so dense with empty calories that now we have this biological mismatch. We get excited, especially by the snack foods, and can't tell the difference between good calories, good nutrition, and the empty calories that they sell us.

Larry Bernstein: Michael, you make it seem like the industry is working together. Are they working together or is each big food company trying to find something for a customer to buy its product? How is it as an industry versus an individual firm?

Michael Moss: So there's about 10 companies that dominate the processed food industry. They are intensely competitive; the muzak you hear at the grocery store in an illusion; behind the scenes, they're fighting for space on the shelf and in your stomach. And actually our detriment, whenever one of them decides they want to do the right thing, and I write about

this in several instances where cabals of insiders in these companies get concerned about their culpability, and things like obesity and our general health trouble with these products and have tried to turn things around, when that individual company tried to respond, the rest of the cartel, if you will, I really believe this is a cartel in the sense that they dominate the food scene in the grocery store, swoop in and try to replace that company trying to do the right thing with even sort of more seductive versions of their products.

Larry Bernstein: We're going to have Brad Stone talk about Whole Foods in a second, but what is the role of the grocery store in this whole process of showing us foods, and can they do more of the right thing?

Michael Moss: Yeah, I think so. The typical grocery store has a situation where 90% of the store is the part where if you're meaning to eat or buy for good health and the health of your family, you're going to want to be very careful. In 10% of the store is the produce aisle where every nutritionist says we should be spending more time, with the goal of filling up our plate with whole vegetables and fruits. The perimeter of the store, people often say, is the safest place to be, but that center of the store is typically the cash cow for supermarket owners, who by and large have a very thin margin of sales, and so, they're looking to sell those things that sell the fastest and the biggest, right?

That said, one of the most powerful opportunities and changing the situation and helping people change how they value food has been the big chains, you know, the Walmarts who've come into food and a really big way, because if you can get them to change their attitudes about their formulations and their marketing of foods, then the rest of the industry may follow suit. It doesn't exactly work that way, because the other phenomena we have today is this new chain coming from Europe called Aldi's, which is actually even undercutting Walmarts, and going back to what I said about how we love cheap food, I mean, in the parking lot of Aldi's you will find luxury imported cars because everybody loves a bargain on food, even if they think they're shopping for health.

Larry Bernstein: Why do you blame the food companies instead of the consumer, who so desires the salt, sugar, and fat? Why isn't it my fault?

Michael Moss: One of the hallmarks of addiction is the loss of control. And look, you have to remember that for decades, the tobacco industry vehemently denied that smoking was addictive, and they were winning lawsuit after lawsuit of people who were victimized by smoking; got sick, got cancer, what have you. And then ironically, in the year, 2000, they turned around

and conceded that, "Oops, you've got it right; smoking is addictive," and then they started losing law suits because juries, before that, were saying, "Okay, but there's personal responsibility here, right? People have a choice." But the problem is with addictive substances is that they're able to hit the brain so fast, and so hard, that the thinking part of the brain where executive function lives, where free will lives, where our ability to make decisions about, "is this really a smart thing to be doing?" live. And that gets put to sleep, and these food products are engineered exquisitely in a way that excites the brain and destroys free will.

So I would argue that you look at somebody who's obese, that is not their fault, that is not a matter of low executive function on their part, or a lack of willpower, that is about them succumbing to products that are designed in a way that overwhelmed their ability to ration through their actions and eating habits.

Larry Bernstein: I want to talk about portion control for a second. Very often, we now have all sorts of choices with quantity. They've got little packages, normal sized package, and then the gigantic packages. And ironically, it's when you go to Walmart, for example, when they offer you just an enormous scale at relatively inexpensive prices. You were mentioning before that Walmart has the potential to do the right thing, but do you think by the size of the packaging that they offer that by design, they're doing the wrong thing?

Michael Moss: Coca-Cola and McDonald's pioneered the Supersize Me phenomena, right? Where you could buy twice as much product for hardly any more money. And that got people excited. I read about people in the book who said, "wow, that is a great deal. Of course, I would do that." And that spread throughout the grocery business, throughout the restaurant business where we became attracted to, and expecting, big portions, right? I mean, think about the last expensive meal you had in a restaurant where you're looking at how much food you're on going like, "Wow, is that... It would be so much greater to have a little more."

Larry Bernstein: "And I'm still hungry."

Michael Moss: And that plays out in the fast grocery, fast food world too. As a corollary to that too, I write about one of the startling things for me was that, none other than the processed food industry, as obesity began to rise in the 1980s, turned around and bought the dieting industry up. Things like Weight Watchers, Atkins, and the South Beach Diet became owned by processed food giants. And not only that, but they moved around the grocery store creating diet versions of their main line product, so you'd

be standing in the freezer aisle and there'd be Hot Pockets, and then Lean Pockets, with not a whole lot of difference between the two, but this is sort of a general strategy: the industry shifted responsibility back to us and they say to us, "Well, if you're losing control on eating our Hot Pockets here, maybe you can try the Lean Pockets this week?"

Larry Bernstein: And one of the aspects that's also similar to tobacco is there's disagreement in the science as to what's really going on. In nutrition, you have big debates: should we decrease carbs? Should we decrease fats? Should we decrease the amount of salt? Should we avoid sugar altogether? And when we had Dr. Katz on, his view is different from what other nutritionists said, but the essence of what Dr. Katz was saying was we know certain things for sure, like you should eat more fruits and vegetables and more plant-based products, that was his thesis. How do you feel about the fact that the industry in many ways, like the science doesn't know the right combination of foods to give its customers?

Michael Moss: Well, as a journalist, , I'm not a nutritionist; as a journalist, it's incredibly frustrating because you're absolutely right, there's nothing mushier than nutrition science. It's just so hard to do those gold standard experiments where you sit people down. And it wasn't until the year 2019 that this brilliant scientist at the NIH named Kevin Hall actually did the very first causative study looking at processed food, where he took two groups of people, and one of them ate ultra-processed foods for two weeks in the eating lab, and the other ate whole foods that David Katz would probably love, and guess which groups started to gain weight. It was the processed food group, but that's the first time we could actually say that there was a causative link with processed food and the weight gain that we've been seeing for the last 40 years.

I can say this, that the food industries love this infighting in the nutrition community, because whenever we become kind of more concerned about one of their additives, like sugar, or fats, or salt, they're really good at adjusting their formulas so that one decade they may be decreasing salt, and then they increase the salt and the fats in order to... or decreasing sugar, and then they increase the salt and the fat. Because the bottom line is seduction and allure; they're not going to diminish the attractiveness of their product. But they're incredibly good at adjusting these formulas, and obfuscating the bigger questions about their products, which are, it's not kind of the nutrition, how much salt, sugar, fat, how much it is, how much calcium, etc., but it's just like real food, this whole food that's going to make me really feel good in the long=term and healthy and strong?"

Larry Bernstein: I want to talk about variety for second, and I'm going to come about it a couple different ways. Let’s just take the Oreo for example. There's the Double Stuff, that's twice as much white filling. Then they've got the smaller Oreo. There's just all sorts of different ways of which we can get the Oreo. You said that human beings enjoy and appreciate variety. And by its very nature, variety doesn't have to be unhealthy. Why should we condemn an industry that provides infinite variety to meet our desires, cravings, and love affair with variety?

Michael Moss: So the reason I think we should be concerned about that is that they've created this mismatch between our biology and the modern food environment. And so, when we look at variety in the grocery store, it's like the Smorgasbord Effect, and you've heard about that maybe where you’re moving down the Chinese buffet and you've already been through once and you're probably semi-full and your plate's full, but you see that new item to your right, and it's irresistible, you'll want to put it on your plate because of that attraction that we have to variety. Until 50 years ago, that wasn't a problem for us, but the way that the industry has taken those essential, basic instincts of ours for cheapness, and for variety, and for calories and on and on, they have made over eating an everyday thing. So that's the context that it's trouble.

It even used to be a great thing to put on body fat that enabled our brains to grow, take us through hard times, to have more babies, but in the last 50 years, food has gotten so inexpensive and so ever-present that we're putting on way too much body fat by falling so hard for these convenience foods. So, it's in the context of their changing the nature of our food in a way that our biology hasn't had a chance to catch up. In the future, right, with some 100s of years for our genetics to catch up, we might be able to tell the difference between the calories in a bag of Fritos and then the calories in a home cooked meal from scratch that's going to give you the whole gamut of nutrients that you need to thrive and be healthy, but we're not there now by any means.

Larry Bernstein: Well, I know, and you know, that Fritos are not the healthy option. We both know that having an apple, for example, might be better for us. And yet, sometimes both of us do choose to eat Fritos. We do it even when they're side-by-side. We recognize that the Fritos are salty, and taste great, and you can't just have one, and it's going to be hard to finish the apple. So, at some brain level, we know the answer, at another brain level, we choose the less healthy option sometimes. Why isn't that on us? Why do we have to blame Frito-Lay for that?

Michael Moss: Well, you and I may understand the nutritional aspect of those, but many people don't know what a calorie is, who know very little about nutrition. They kind of vaguely know that fast food is bad for them to eat every day. But look, it's a matter of economics, and if you walk into the store wanting to eat healthy by yourself, you will find that a basket of blueberries costs as much as a two pound, three cheese, four meat frozen pizza that will feed the whole family. And so, if you're under that financial pressure, which so many people are, which are you going to choose?

I think the other powerful thing about these products is that they encourage mindlessness on our part, they encourage us to act without thinking and to eat without thinking. So, yeah, if we stopped and really thought about that bag of Fritos before we ate the whole thing in one sitting, we may in fact be able to exercise free will, will power, but where they have us is getting us at moments when we don't have to think about it, or when cravings, which are a real thing for many people, come on and sort of overpower us. I mean, look, what happened in the pandemic. I mean, we thought, at least we're going to get away from the vending machine, arguably the most treacherous corner of the processed food industry, but many of us turned our kitchen cupboards into vending machines because we went shopping, and under the stress and the strain of the pandemic, we began buying things that we hadn't had since we were kids; junky stuff, sales of those products went up and there's still up, to the delight of the companies.

Which is another way that these products are, I would argue, are even more problematic than smoking and alcohol and drugs, is the power of the memory. We begin forming memories for these products at a really young age. I mean, we carry those memories with us for life and we often associate them with great, joyful moments, so that's why the soda companies know they can put a soda in the hands of a kid when at the ballpark with their parents, the kid will forevermore associate that soda with joyous moments. So when they grow up and they want some joy and comfort, they immediately think of the soda. So that's the depth to which these products get into our heads to shape how we value food and our eating habits.

Larry Bernstein: We're now going to move ahead to Brad Stone. Brad is the author of The Everything Store and The Upstarts, and he recently just published this last Tuesday, a new book called Amazon Unbound: Jeff Bezos and the Invention of a Global Empire.

Brad Stone: Thank you, Michael. I went and bought your book, and I guess I'm going to have to go and throw away my Flaming Hot Cheetos after that illuminating talk. Well, my book is Amazon Unbound, it tracks the history of Amazon, particularly over the last 10 years, and its impact on society, and on our economy, as it has grown to a $1.6 trillion company and Jeff Bezos has become the wealthiest person in the world.

Well, Larry asked me to talk about Alexa, the grocery business and logistics, which are three parts of this story. They're sort of different, but when I reflected on this, I thought, the theme here is how Amazon's corporate compass really follows, not just Bezos's innovations, but his investment decisions and with poorly understood repercussions for, as I said, our economy.

Alexa, we go back to 2010. Jeff Bezos is reflecting on AWS and the advantages that Amazon has in the cloud, and he sends an email to his executive saying, "We should build a $20 computer whose brains are in the cloud, that's completely controllable by your voice." Now, he's kind of a famous Star Trek fan, so he's trying to make real this vision of a fully conversational computer. And I actually have the whiteboard drawing in the book of the first illustration of an Alexa, but that's the innovation, and what follows is really the investments. He handpicks his Chief of Staff to go run this project. He tells this executive that he can basically hire any AI engineer or voice engineer he wants, and acquire companies.

One of the big challenges is getting enough data for this device to make it smart, so they basically finance this secret effort, to bring Alexa out into the world. They hide it in apartments and houses, and they hire contractors to run through these houses and apartments and speak. They don't even know who they're speaking to or what they're speaking to, but this big data gathering effort results in the introduction of the Echo in late 2014.

Now the contrasting example is the grocery business. Amazon introduces something called Amazon Fresh in 2007. And it just languishes in Seattle for years, and Bezos just believes that this isn't a land grab, but this is more of a green field opportunity online ordering of groceries, and he takes his time. And then what happens in 2015 is this little company called Instacart starts to get funded by Silicon Valley, and it starts to have traction; Google introduces something called Google Express, it launches in Seattle, Bezos' backyard, Bezos takes notice, and finally he starts to take it seriously. This involves the introduction of a service called Prime Now, and the expansion of Amazon Fresh, and it's actually not all that successful. It's very slow growth, it's unprofitable, but Bezos sees this

now as more of a land grab. And this is the kind of thing that really provokes big investment decisions from him.

Now at the time, Whole Foods Market is languishing. This is a grocer, to Michael's point, that swam against the tide for many years, with an organic selection, not stocking things like big pallets of Coca-Cola and the Flaming Hot Cheetos, and yet it's stagnating on Wall Street. Then John Mackey, its CEO, is basically looking for a way to preserve control, so of course, Amazon famously buys Whole Foods for $3.7 billion in 2017. Interestingly, it's kind of let John run it autonomously, and Amazon is instead introducing its own network of grocery stores called Amazon Fresh, and in a very Amazon-like way, it's trying to differentiate itself, not with the product selection as Whole Foods did, but with technology. And so, you go into one of these stores and they're just starting to open them, and it's either got these Dash Cards where you can put a product into your grocery cart and it automatically tallies it, or the ghost store technology where there are cameras in the ceiling, and sensors on the shelves, and you pluck something off the shelf and it automatically charges you. It's a very Amazon-like thing, these type A disruptors believe they can save us some time waiting in the cashier line. I don't know about you, but for my particular vantage point, that's not really a huge pain point. So we will see how successful Amazon can be in the grocery business.

The last topic I want to talk about is logistics. And again, we go back now to 2013 where UPS and FedEx, are Amazon's major delivery partners, and they fail to keep up with Amazon's growth, and it's really interesting to consider why. Amazon operates at online store, you can order from it anytime of day, anytime of night, any day of the week.

Those fulfillment centers are running basically around the clock. UPS is a union shop, it's only operating five days a week, back then in 2013, and it's taking off holidays such as Thanksgiving. And so over Christmas of 2013, UPS chokes on Amazon's growth, and it declines to make the investment decisions that will allow UPS to keep pace with Amazon’s growth. FedEx is the same. These are relatively high margin logistics businesses, Amazon is like a locust, a low margin locust that will simply consume all of its capacity, and so Amazon starts to grow its own logistics business. Bezos wants a partner that'll keep up with it, and this is why today you look out and there are cars on the street that say Amazon, and trucks on the road and airplanes in the air.

Amazon does not employ those drivers or those pilots. It's a very “fissured relationship”, to take a term that David Weil, a professor at

Brandeis University has popularized. Amazon wants the advantage of a logistics network, without any of the pain of employing those workers, of exposing themselves to possible unionization, and that has led to some amount of chaos on the roads as these drivers get into trouble, and I think contributed to income inequality across the board.

Larry Bernstein: We had David Weil on the show about three, four weeks ago, talking about the gig economy. And we didn't really talk about Amazon so much, so let's bring it home. You're right, Amazon is not hiring the pilots, they're not hiring the drivers, and they're hiring independent firms to take it that last mile. They do it for a number of reasons, one is for unionization, another might be that they don't want to get involved when someone runs over a child and you have to have a 24/7 news cycle on that topic. In your own mind, why do you think Amazon's doing that, and why should we care? Should we allow firms to choose to focus on certain things? Amazon has like a million employees already, the fact that they don't have 1.2 million, is that really a problem?

Brad Stone: Well, first of all, the news cycles already happen when an Amazon driver hits a pedestrian. So they can't escape the bad press, but they do try to escape the legal liability, often not successfully. There have been some settlements that I write about in the book, where they've had to pay a family because of a driver's mishap. And what they've been trying to do is exert more control over those drivers with in-car surveillance and different kinds of software that monitor their performance. I think David makes a pretty good case that this does matter, that labor models like Uber's and Amazon's are having an impact on income inequality. Amazon tries to polish the halo over its head when it was announces things like a $15 an hour wage or $17 an hour wage.

But this network of middleman and independent contractors, they're treated like employees, but they don't have the protection of labor law. They don't fully enjoy the same wages or the rewards of Amazon's growth. And it's a great illustration of inequality among the workforce in a single company. So, when we ask why is the problem of income inequality getting so bad in the US with major political repercussions, this is a microcosm. And I think David Weil makes a good argument that this labor model needs to be addressed. And last I heard, the Biden administration was looking at him to bring him back as a wage regulator. So if that happens, perhaps he could have an impact.

Larry Bernstein: Let's go back to grocery stores. You heard Michael Moss's talk about providing the right foods to consumers. How does Amazon think about

that in the context of Whole Foods, Amazon Fresh and how they're going to be providing food to the public?

Brad Stone: Amazon's compass points only one way, and that is towards what its customers want. And if the customers want Fritos and Cheetos and Coca- Cola, they're not going to take a principle stand on that. I do think it's remarkable that they have left Whole Foods alone, and I think one of the big things that the activist investors were clamoring for in the battle over Whole Foods, was trying to open up those grocery aisles to those popular products, and so maybe it was a bit of a principled stand, that they let John Mackey run Whole Foods. But the new Amazon grocery store stores have all the junk that you would expect, the online delivery services like Amazon Fresh have all the junk.

And when you look at Amazon, well it's interesting when you look at their private label products, and they're just starting to get into this, they do tend to go for a higher quality skew of snack foods and whatnot. So perhaps they're taking the high road, but I don't think we can count on Amazon, like we probably can't count on Walmart and other big grocery stores too, they'll offer the selection, but I don't think they'll try to make a significant impact on their customers tastes.

Larry Bernstein: Variety was another theme of Michael's talk, and no one offers more variety of products across the board than Amazon does. I mean, they offer everything, to your previous book, The Everything Store, it offers everything, and we like that variety: we want it, and we want it fast. These run core to Amazon's mission statement, provide everything, potentially even in a day or two. How do you think about variety as the critical aspect of Amazon’s success?

Brad Stone: I mean, it's right there, back in 1994, when Jeff Bezos is a vice-president at D.E Shaw, a Wall Street hedge fund, and he's actually researching ideas for D.E Shaw and he comes upon the idea as he's observing the massive growth of the worldwide web, that you can create an everything store. That the selection of a normal store is going to be bounded by shelf space, but online, it can be unbounded, even if you don't have an obscure book, if somebody orders it, you can potentially go get it. And so variety, it was the first advantage Amazon had, that endless selection. The price is always going to be higher because you had to store it and pack it and ship it, and convenience was always going to be worse because customers would have to wait a couple of days, but selection was right there.

And one of the stories I tell in this book is how Amazon has pursued selection overseas, and it's opened up the marketplace to overseas

sellers, particularly in China, close to manufacturers, and a wave of low cost goods have flooded into the marketplace. If you're an Amazon customer, you probably sometimes can recognize that. And the selection has come with a lot of negative aspects, like poor quality or sketchy brands that basically don't stand behind the customer promise. So yes, selection's been key, variety has been key, but it's also brought some unintended consequences.

Larry Bernstein: Let's go back to Alexa for a second. So Bezos came up with this idea, he put it together, but I haven't heard a lot about the product in the last couple of years. I imagine that when he designed it, he expected this to continue to grow exponentially, in both use and quality, that there might be some third party designed apps. Why hasn't Alexa exploded as a solution to helping people solve problems?

Brad Stone: I feel like it has slowed down a little bit, perhaps with the migration of Bezos's attention to other things that are happening in his personal life, and of course his responsibilities, his philanthropy, and now he's moving on as CEO. But I do think they have encountered, well, two challenges, one, a technical challenge. The idea that he had was a fully conversational computer, the practical concerns his executives had was launching this thing with some actual skills that they could advertise. And I think they did that with music and ‘turn on the lights, turn off the lights, recite the weather or read the news’. And it hasn't grown that much, and I think they're hitting some natural barriers on artificial intelligence and conversational computing.

And then the second part is, as you mentioned, it hasn't created the kind of ecosystem of apps that you have on your smartphone, and they have tried, but I think there's a fundamental limitation there because it's frankly mostly conversational, there are some Alexa devices with skills, it's hard to see what's available and summon the right skill, it's just not there in front of you. And maybe, perhaps we as humans, when it comes to our technology, still really rely on words on a screen. And so it is slow, but by any measure, it's pretty much a success. I mean, they've got over a hundred million devices out there and more than any other company, they probably are further in terms of networking the home, bringing home appliances and light bulbs and doorbells, and other aspects of the home onto a computer network and making it easily operated by the homeowner.

Larry Bernstein: It was in your first quote at the beginning of the book, you mentioned that Thomas Edison's genius wasn't inventing, it was inventing a system of invention. And we had Ernie Freeburg on the show a couple of weeks

ago, talking about Edison and the teamwork involved in the process of invention. But like the story you're telling today, is the vital ingredient Jeff Bezos personal part of the process, where he's coming up with the big idea and then throwing resources to solve it. How important is he to the system? Because, in some ways, I imagine these systems are enormous. When you discuss logistics, for example, he hired an excellent team and followed some big ideas, but he wasn't in there day to day managing that process. Why do you think he is so critical to the success of the institution itself?

Brad Stone: He’s critical to a certain kind of success, when you peel back the layers of the big technology innovations like AWS and the Kindle and Alexa, he is there, but I think you're right in that while he has sponsored the big changes, like logistics and groceries, the marketplace, and AWS, there have been other leaders there. And so when I talk in the book about a system of invention, I'm talking about the customs, the leadership principles, the rituals like the six page documents that some people probably know about, but they can read more about in my book or you could even Google Amazon's leadership principles. And that system of invention has actually been very successful outside of Amazon, so Bezos instituted it at The Washington Post, they present documents to him, he reads them, he asked the executives to bring him new things.

And so, I mean, I do think that he has set up an enduring franchise that will continue to succeed when he steps away for good, it might be this fall, but I suspect he will linger for a bit. But you're right, in terms of like that disruptive new technological idea, the insight that he had with Alexa, the $20 computer, brains in the cloud, operated by voice, Amazon might miss that. And when I look at Andy Jassy, his successor, or other members of the Amazon leadership team, there's no one like that. In fact, there are now very few technologists. And so that could be a challenge for Amazon going forward.

Larry Bernstein: One of the most incredible things about Amazon is their willingness to start another division that will attack one of their core businesses. Take the Amazon marketplace and the willingness for creating an environment for their competitors to compete on the same products that they sell in their own store. Very few companies I've ever heard of were willing to do such a thing. Is it Bezos, is it the institution as a whole that says, "You know what, let's attack what we're doing right now and just see what happens." How do you view the Amazon marketplace, and thier willingness to take themselves on?

Brad Stone: Yeah, you're right, it's a willingness to endure the corporate discomfort that comes from setting competing teams against each other inside. Amazon's history is replete with them. Bezos selected an executive to start the Kindle business back in 2005, I think. And he instructed the guy, "I want you to proceed as if your job is to put everyone selling physical books out of business." And then you fast forward, I talked about the grocery stores and Amazon is introducing these Amazon fresh grocery stores in direct competition with Whole Foods, sometimes in the same neighborhood. So the reason they do that is because they want to be everywhere, they want to provide what their customers want. They view business expansion as active experimentation, trying a lot of different things, finding what works and then doubling down madly on it.

And they are able to do that by virtue of their enormous resources. At first, for the first 20 years, it was the relationship with investors and how Wall Street allowed Amazon to lose a lot of money. Those days are gone, the company is very profitable and now it's just financing all of these experiments, expanding in all of these directions, figuring out what works and then doubling down on it. And that's a reason why there are lots of reasons to criticize Amazon, to regulate it, I think I get into those in the book, but when you look at the years ahead, this company is like a boulder running downhill, and I think it's hard to look at the competitive environment and judge who might slow this company down or even stop it.

Larry Bernstein: Our next speaker will be Dietrich Vollrath, he's going to talk about the lack of productivity in the service sector. Amazon is in a lot of service sectors, they're in the business of retail, they're in the grocery store business. How do you think about opportunities for improvements in productivity in the areas that it touches?

Brad Stone: Yeah, give me an example.

Larry Bernstein: Getting goods to people.

Brad Stone: Well, last week Amazon issued, or announced it was going to issue, $18 billion in 40-year bonds. And they borrow money like this when it's cheap and the reason they do it and they don't have to do it, is to build more fulfillment centers closer to customers, to hire more of these middlemen transportation companies, probably to build more data centers. And what it means is, going back to the boulder analogy, they're getting closer to customers, they're going to deliver faster. They tried to make prime a one day proposition a year and a half ago, and then suspended that during the pandemic. But I think the economics of the business support

this kind of expansion, I think those deliveries are going to be ever quicker.

And what that means is, when we talked about convenience, selection and prices, convenience being one of the variables that always lagged, Amazon is solving that and pretty soon these deliveries are going to be ordering something, getting it on Amazon, is going to be just as convenient as going to the store. And depending on how you view that company, that's either an enormously appealing proposition or a very dangerous one.

Larry Bernstein: All right, thank you, Brad. We're going to move on to our next speaker, who is Dietrich Vollrath at the University of Houston, where he's professor of economics. He's going to be discussing his new book called Fully Grown, why a stagnant economy is a sign of success, and he'll be chatting about the current slowdown and why it's actually a signal of doing well. Go ahead, Dietrich.

Dietrich Vollrath Starting around the turn of the century, the US economy experienced noticeable growth slowdown, from 1950 to 2000, GDP per capita grew at about two and one quarter percent per year, and post-2000, the growth rate has averaged about 1% per year or less than half. There's a lot of possible culprits, and everybody's got their favorite for why this might've happened. There's too much regulation, or maybe too little, failure of innovation, or we're innovating in trivial things, maybe firms are too concentrated, maybe taxes are too high or too low, or we're trading too much with China or Mexico, or maybe we're not trading enough. Everyone has their favorite bugaboo. But when you dig into the data, it turns out that none of those things are anywhere close to large enough in their effects, to have actually caused that much of a slowdown in economic growth.

What I go through in the book is this detailed accounting and come up with the two boring and simple answers for why growth slowed down, and that's basically that we're old and we already have a lot of stuff. We're not all old, obviously, some of us are, like me, and the real story here is actually about really the baby boom generation entering and then leaving the economy. In the middle of the 20th century, baby boomers joined the labor force, they increased the ratio of workers to population, so that had a direct effect on growth, they also were the first generation with widespread college attendance. And as they age, they were getting more on the job experience, which meant human capital and skills and everything, were increasing much more rapidly than normal. And on top of that, this extension of women's rights to participate in the labor force

more fully added another wave of workers on top of the general wave of baby boomers, into the workforce. And again, we had this extra boost of human capital, and that meant faster economic growth.

But around the year 2000, all this starts to stall out, baby boomers hit their 50s and 60s, they aren't getting more educated, learning on the job, that's maxing out, women's participation rates in the workforce had leveled off at similar levels as men's. And most important, as the 21st century starts, that baby boom generation is starting to retire. And now these effects, the wave of labor that entered the economy and helped raise the growth rate, was ebbing away from the economy and pulling down the growth rate, has this huge impact on just the core rate of economic growth, mainly because the boomers themselves took advantage of a big change in their lifetime, the pill, other contraceptive techniques, but mainly the pill, and they got married late and they had few children.

Their kids, like me, there aren't many of us, and so there isn't this following generation of people entering the workforce to replace the boomers at a rate sufficient to keep the economic growth rate up. Our experience, my generation and then the following generations experience and entries into the labor force, just can't offset the drag that the baby boomers leaving is exerting. The thing is, is that that wave of growth in the 20th century, and now this slowdown in growth in response because of the baby boomers entry and exit, that was because of a string of successes. They had advantages of higher incomes and a prosperous economy. They took advantage of that along with new types of contraception and women's rights, to do what they wanted; they married late and they had small families. They unintentionally ended up creating a situation that would lead to slower economic growth, decades later, through the actions that they took in family formation.

Now, if boomers getting old explains a lot of the slowdown, the other part of it is that we were getting rich. We had a lot of stuff, we have more goods, we bought more goods every year, and it's cheap. And as a proportion of your income, that meant that the more goods we were buying, was an even smaller and smaller share of the economy. The thing is, is that that shift out of spending on goods and, tangible stuff, and into services, meant that productivity growth slowed down. And you touched on that already with the discussion with Brad, but services tend to have slow productivity growth because service labor is the product in many ways, and it's hard to get rid of it. A doctor's visit is the classic example, if you're going to go see the doctor, you want to see the doctor. It's hard to pull back on the labor commitment, say in healthcare.

So just like the demographic shift, that shift into services is really a sign of success. It's a sign of how successful we are producing the base material goods that we need to thrive. We took advantage of that to spend less on those basic material goods and moved into buying things that tend to not have really rapid productivity growth, and that just dragged down growth overall in the economy. So relative to those two big things, the aging and the shift into services, all the little pieces involved with taxation and regulation and concentration and inequality and trade, just don't add up anywhere close to enough to explain the slowdown by themselves.

Now, the thing is, is it doesn't mean that the economy is perfect. We shouldn't be complacent. The story of this is that we've moved into this world in which we have the opportunity to turn down the knob on how much focus we put on the growth rate, and maybe turn up the knobs on how much we focus on other aspects of the economy and society. We've reached a high enough living standard on average, at least, to worry about those things, rather than the growth rate itself. It was in that sense, this slow growth was an unintended consequence of these big successes, and now we have a chance to take advantage of it.

Larry Bernstein: First question is on services. When William Baumol was near the end of his life, I took him to lunch in 2016 with two of my buddies. I found the argument about the Baumol disease to be critical to understanding long- term productivity growth, as you mentioned. And what Baumol was focused on was that we were shifting our basket of consumer goods into services, where, as exactly you said, it's tough to become more productive. And he highlighted two things, healthcare and education. So let me start with education. A couple of weeks ago, we had Zvi Galil at Georgia Tech, and he mentioned that Georgia Tech is now offering an online master's degree, a one-year degree in computer science, for $7,000. And he hopes to offer it at a lower price next year. Do you think we're on the cusp of potentially improving the service sectors productivity, which hasn't been growing very much, but maybe now we should attack it and bring down the price of education, as one example of service sector productivity? Can we use technology to do that?

Dietrich Vollrath Yeah, I think this is the million-dollar question, and so I think there's two ways that I've thought about this. And so one is just looking backwards, you look at it and you say, "Wow." I mean, if you're going to really rapidly improve productivity in a service like education or something like that, then you're bucking a historical trend that is pretty deep set. It's hard to find any examples of sustained super high productivity growth in services. It exists, it's not very high. And so that part makes you wary, like we can offer an online degree and you can think of, "Oh, and I can add more

people and it scales." And I think over the last year we've seen, I know I've offered an online class and there's a lot of ways of maybe taking advantage of that, but again, how much does it scale?

At the same time, I think there is, to what you were saying, is it time we attack this? I think one reason to be optimistic about maybe bringing service productivity growth up, is that maybe what's happened is that we just have never actually really thought hard about it, oddly. Maybe to Brad's point, Amazon maybe is more of the leading edge of thinking about how to improve this service productivity for a lot of pieces of the economy, then maybe we even give them credit for. And so we've spent so much time maybe in our past, focused on increasing productivity for material goods, that only now can we really turn our brainpower to improving it in services. So I think there is some reason to be optimistic, but you are fighting a pretty big historical drag.

Larry Bernstein: Going back to Amazon for a second. I think if we had this conversation 20 years ago and said what kind of productivity could we see in retail, I mean, how much better can we be at pushing around carts, walking up and down the aisles and grabbing stuff off shelves, and now see what Amazon has done and the online revolution that continues, it's just unbelievable. I mean, why isn't that an example of something we can do to the other elements of the service economy?

Dietrich Vollrath: I think that's the right optimistic attitude maybe to take. We're famously terrible at predicting how good we can get at stuff. Like all these famous examples of, I think it was Olson at Digital Equipment who said that there's a worldwide market for maybe 10 computers, that kind of thing. We are terrible at this, as a society maybe, and I think Amazon is one of those examples where you're like, "Well, actually look at that, there are ways that maybe this can be faster and better." I have a couple of good friends who are general practitioners and started doing a lot more telemedicine over the last year, for obvious reasons. And a number of them are like, "We're going to keep that." I think sometimes the events of the last year have maybe accelerated thinking about how to push some of those productivity boundaries in ways that we would have been hesitant to do before. And not going to say that COVID ripping through the world was a good thing, but sometimes maybe it takes a big shock like that to make us think of what could be the next big change.

Larry Bernstein: In the book was the classic example of the quartet playing some piece of Mozart. And you said that when we look back 30 years from now, they'll be playing, that same quartet will play the same piece, but probably no better. What I think is unfair about that is that we now listen digitally to

millions of different scores of music in a variety of ways, whenever we want, and in repetition. For me, music is an example of something where we've done something quite extraordinary and become even much more productive about it. How do you think about music as both a failure and a success in productivity?

Dietrich Vollrath That is the classic William Baumol example, from one of his early papers. A string quartet can't get any more productive, they can't play the piece faster, people will get annoyed, and in some sense, they can't do it with any fewer than four people, so there's no way to increase labor productivity. So music, I think, is always a good example in this discussion because it becomes a question of, well, what have we done here? In some sense, the digital nature of your recordings in general, even before the digital revolution on this, took music and made it a good, made it a product. And we're really good at making stuff, so we can make LPs and CDs and 8-tracks, we figured out how to make those super cheap and put a player in everybody's house. We're able to get music out to more people. But it's the question, is that a goods industry or is that a service industry? The distinction may be in seeing a string quartet. They can't get any more productive. If you want to go see them live and some people have huge demand for that particular live performance, you can't really get much more productive than with that, but you can turn it into a good, and so maybe the way to conceive of how do we get to a higher productivity world is how do we take some services and turn them into goods? How do we take something like education and turn it into a recording is that we can put into our machine that we're really good at churning things out cheaply. And maybe we're starting to see that maybe with some online education things that become more like a recording or a CD and less like an in-class experience.

Larry Bernstein: Let's talk healthcare for a second. My father was a cardiologist and he told me that when he graduated medical school and was joining his residency that in cardiology, all they could do is say you after a heart that and you should have bed rest and that today because of the pharmaceutical industry, if a doctor is unable to manage your heart disease, it's malpractice. The rate of change in medicine, even from this COVID experience, has been quite remarkable. We were told that it would be impossible within a year to have a working vaccine. And today in the marketplace, we probably have half a dozen working vaccines. How do you think about the improvement of the combination of the pharmaceutical industry, the biotech industry, working in conjunction with medical professionals to improve the quality of the healthcare product in a way where we can start to see some of the productivity numbers, we've seen in agriculture add to lifespan?

Dietrich Vollrath You have to think about how you define the industry we're talking about. In one sense, we have seen those kinds of productivity increases in healthcare. To your point, there's essentially generic, super cheap versions of lifesaving drugs that exist now that 20, 30 years ago, people would have died from these diseases. But that goods producing aspect of healthcare, and I think the vaccines are part of that. And what have we seen over the last few months has been, it's an industrial manufacturing success. Like Pfizer is able to spit out millions of these. When we can turn something into a product, a physical product, we're really, really good at making that stuff.

But the part of healthcare that it remains expensive to access is what? It's the time and attention of the specialist who in the end might just be writing you a prescription for the thing that's going to save your life, but you still need that guy's time and attention in order to get to the point where you understand that that's the right prescription. And that may be that hang-up. And it may be the point where we have to start thinking about commensurably breaking these kinds of concepts of an industry down, just breaking them down and not thinking of healthcare as this big umbrella about like all the things involved in how I get healthy. There's the material side of healthcare. "Oh, I got a cheaper MRI machine. I got cheaper drugs. They produce pretty easily." And then the service side of it, which is the appointments and the attention from your healthcare provider, which in world are really hard to go do productivity increases on.

Larry Bernstein: Michael Moss was telling us earlier about innovation in agriculture and food. One of the great stories over the last century is the productivity of the farm. Very few people work in agriculture now in the United States. And yet we're, if anything, to Michael's point, we're overfed to the point of becoming obese. How do you think about all this productivity and goods production resulting in excess? Another example might be opioids. We had pain and now we've got too many painkillers. How should we think about becoming too productive and then the repercussions thereof?

Dietrich Vollrath: I think that's a great point. I was thinking something similar while he was speaking. From a historical perspective the ability to, on average at least, provide everybody with more than enough food is mindbogglingly crazy. This is historically wacko, but have we tipped over? Is it in fact bad? And in some sense, I think that material wealth and the material prosperity, we have, I think to the last point I was making was maybe should be what it should be doing is putting us in mind of, "Well now, what do we talk about rather than how do we get more stuff?" For most of history,

getting more stuff out to people was good. More food, better shelter, energy clothing, all the material goods, just getting more of them out to more people was always an uninhibited good.

And we've reached the point perhaps where we should reconceive the importance of thinking about economic growth as a measure of any kind of success. My wife's a nutritionist and a dietician. And so we have this discussion all the time about the kind of the terrible state of the US food consumption basket. And if we have a revelation tomorrow where my wife gets to convince everybody about what they should be eating, and it's more vegetables and fruits, what's going to happen most likely the agriculture, the food production industry in the US shrinks and the economy as a whole holds everything constant. The economy as a whole might not grow or it might get smaller.

And that might be good, right? So there may be this... We may be in this weird transition point where in fact, flat economic growth, slightly negative economic growth, might represent actually improving things. And I think the environmental side of stuff is the other obvious point. What if we stop producing? What if the oil industry shuts down tomorrow and the economy gets smaller, but we have abundant solar energy? We may have a smaller GDP, but wouldn't we be better off? So we're at this point where our decision points about how this stuff works are changing, right? No longer is maybe economic growth lined up with our wellbeing as much as it used to be.

Larry Bernstein: A question about your demographic analysis. There were too many factors moving around: the number of workers, relative ages, et cetera. So what if we just analyzed 30 year old males and analyzed the productivity of the 30 year old male over the last century, how would those numbers differ from the established productivity numbers that we normally look at?

Dietrich Vollrath That's a good question. Let's not muck everything up with the demographics. So what you'd see is you'd see less of apparent slowdown. It wouldn't be nearly as dramatic. You'd probably see some drift downward in productivity growth because the service sector manufacturing thing would still be there. And some of the other factors would still be floating around. But if you just rip the demographics out, it would be a much less noticeable decline in the growth rate. And that's not because it... And that's for two parts. One growth wouldn't have been nearly as fast in the 20th century. And it wouldn't have been nearly as slow in the 21st. It would have evened out. So from a very aggregate perspective, the demographics have this huge effect. And to your point,

they end up making it look we've had this revolutionary awful drop in GDP growth when most of that's demographics and your average 30 year old has been getting kind of a little more productive every year for roughly the same rate over a long, long time.

Larry Bernstein: So if you were just going to put a number on it, you started your conversation by saying productivity fell from 2.25% to 1%. Would you have just guessed it would have been a 50-basis point drop in productivity because of the services substitution for goods?

Dietrich Vollrath Off the top of my head, I bet you might say something like the growth rate from 1950 all the way up until now would have bounced between say 1.5 at 1.75% without taking out kind of the big baby boom shift and the changes in demographics. It would have just kind of smoothed that all out. So we wouldn't be that far off in terms of levels from where we are today, we would have gotten there more steadily.

Larry Bernstein: We're going to go onto our next speaker, Vivek Ramaswamy, who was the founder of a biotech company called Roivant Sciences. He's got a new book coming out in the fall entitled Woke Inc.: Inside Corporate America's Social Justice Scam. Vivek will be speaking on a bunch of different topics today, including ESG. Go ahead, Vivek.

Vivek Ramaswamy: My upcoming book, as you mentioned, Woke Inc., is in part a critique of stakeholder capitalism. It's in part a critique of the so-called woke movement that's being advanced by corporations and other elite institutions today. And in the book, I'm not a journalist that's done a lot of research to report on my findings, although I did do some research for the book, but I'm writing mostly from my firsthand experiences of having gone to elite universities, working in hedge funds for seven years, and then subsequently founding a number of companies, including a large biotech company, which I led as CEO for seven years before I stepped down this January.

So I'll start with a bit of a critique on stakeholder capitalism. And then I'll close with a discussion about the merger between stakeholder capitalism and the woke movement. So stakeholder capitalism first refers to the basic idea that companies shouldn't just serve their shareholders, but should also serve other societal interests along the way. And today, technology companies, Wall Street, big business broadly has roundly endorsed the idea. Milton Friedman 50 years ago didn't like it because he thought it might lead companies to be less efficient. And while I have to admit, I share his concern to some extent, there's even a bigger problem that I'm personally worried about which is that I think that stakeholder

capitalism actually represents a threat to the integrity of American democracy itself. And the idea is really pretty simple the way I look at it, at least in the first instance. In order for companies to be able to pursue these societal interests in addition to their shareholder interests companies and their investors have to first define what those other societal interests ought to be.

And that isn't a business judgment. It's a moral judgment and speaking, not personally as a CEO, but just as an ordinary American, I don't want our capitalist elites to actually play a larger role than they already do in determining our society's core values, where I think those questions ought to be answered by our citizenry at large through our democratic process, publicly through open debate, privately at the ballot box, without the intervention of market power to settle questions in the marketplace of ideas. And I don't necessarily consider that a Republican or Democratic idea. I do consider it a deeply American idea. I do find it pretty puzzling that progressives seem to be the ones today who love the idea of stakeholder capitalism, because many progressives who love stakeholder capitalism absolutely abhor Citizens United, a famous case from about a decade ago because it permitted corporations to influence elections and democracy.

I personally view stakeholder capitalism as Citizens United on steroids because it actually demands these CEOs use their corporate resources to implement the social goals that they in particular want to push. And even we talked about Amazon earlier, I chuckled as I watched Jeff Bezos going woke and joining the stakeholder capitalism movement, which should tell you a little bit about something when someone like Jeff Bezos takes over and adopts a new value, it should cause you to question what the real goals are in adopting those values at all. I come from the pharma industry. I think that rejecting stakeholder capitalism doesn't have to mean putting profits ahead of patients, but it does mean putting patients first, including ahead of other social causes. That means we don't care about the race or gender of the scientist who discovers a cure for COVID- 19 or whether the manufacturing and distribution process that delivers the vaccine most quickly to patients is carbon neutral.

Those are the kinds of choices that we need to make. It's not just strictly a question of putting profits ahead of patients, but the question of whether you put your essential corporate purpose ahead of ancillary social causes. And I personally think that actually a part of this debate from my own personal experiences are the issues of conflicts of interest and in the real world, most conflicts aren't actually financial. If you take an example, if I'm a public company CEO, and I decide to use the

corporate piggy bank to make a big donation to my high school or the temple where I worship in Ohio, that should raise a pretty big red flag since my high school or my temple have nothing to do with my business. But personally, I don't think it's any different if a CEO uses the corporate piggy bank to make a donation to say Black Lives Matter.

And many CEOs did exactly that last year and they were applauded for it. But in both cases, even in the case of the high school or in the case of BLM, the CEO drives some kind of personal benefit from using the company's piggy bank to make the donation. I personally consider that to be a conflict of interest. And I find it curious that the conflict of interest hawks seem blithely unconcerned, or at least silent, about this class of reputational conflicts of interest. Now, it's also curious that a lot of big businesses are now lobbying the government itself to mandate so-called ESG related disclosures for public companies. And again, I'm a skeptic. I asked lawmakers when I've testified in front of Congress and in front of the Senate earlier this year on these topics to ask themselves what those business leaders actually hope to achieve for themselves.

We talked about food earlier. Take a software manufacturer advocating for voting rights. That's pretty easy in a given state, but reckoning with the nationwide impact of soda consumption on human health? That's actually a lot harder. And that's just a general rule of thumb for me is when choosing between accepting constraints on matters that relate to the core of your business versus matters that don't, self-interested CEOs generally choose the latter. And that's exactly the smokescreen that stakeholder capitalism and its related cousin in the woke movement have created over the last few years. So I've other issues too. I talk about them in the book. I think stakeholder capitalism tends to favor incumbents over startups. That's why the business round table and the Davos crowd tends to favor it rather than small business owners. I personally think that it's possible that we're in the early stages of an ESG linked asset bubble, akin to the pre 2008 housing bubble.

Like both of them are driven by a social agenda that was at least in part disconnected from economic fundamentals. But to me, those are really secondary issues. And the bigger issue is the threat to American democracy itself because when we demand that corporations make moral judgments and exercise political power, I personally think that democracy loses twice, once through integrity in the lawmaking process and also in our political and public debate as citizens through corporate overreach influencing that by using market power to substitute open debate as the way we settle political questions. But we also lose social solidarity as a people when even the private sector becomes politicized.

And I think that personally in a divided polity like ours, we depend on certain spaces that remain apolitical, maybe the baseball stadiums in which we all gather irrespective of whether we're black or white or Democrat or Republican, or the common projects that we pursue, maybe it's building Alexa, or maybe it's building something else that brings us together towards a common purpose that isn't political in nature. I actually think contemporary American democracy and American democracy for most of our history has depended on the existence of those apolitical sanctuaries to bring together an otherwise divided group of people.

And instead what we see today is that this new infection of stakeholder capitalism is poisoning democracy. On the one hand partisan politics is now poisoning capitalism in the reverse direction and in the end we're left with neither democracy nor capitalism. And so speaking more as an American, not as a CEO, I don't want to live in a corporatocracy. I don't want to live in a $1, one vote, system. I don't want to live in a modern version of old world Europe where a small group of wealthy elites decide behind closed doors what's good for the rest of society. I want to live in a democracy where everyone's voice and everyone's vote is weighted equally. And I think that's actually the heart of what's wrong with stakeholder capitalism in a way that Milton Friedman’s critique from 50 years ago might've actually missed.

In my book I also take aim at the social component of the ESG movement in particular, which has merged with the modern so-called woke or critical race theory-based conception of individual identity that has taken an already divisive philosophy of concentrating power to make judgments in the hands of small group of business elites, but merging that with a debate about the essence of what it means to be an individual and agent in the world. I know that's something that our next speaker may be talking about as well, has created a particularly dangerous brand of woke capitalism that proved convenient for Wall Street, where it got to merge a bunch of woke millennials getting together with a bunch of big banks and together we're birthing woke capitalism, allowing them to put Occupy Wall Street up for adoption starting 10 years ago. That might have been where this began, but over the course of the last 10 years, it's actually become unstoppable in a way that's supplanted our solidarity as a people even further.

Larry Bernstein: Amazon had this HQ2 project where they were going to put their next corporate headquarters. Amazon went out and shopped it, and they picked New York City where they were attacked by AOC for getting tax benefits. Amazon seemed a little bit in shock and taken aback by that.

How do we think about the relationship for corporate America as it competes where it should locate its offices?

Vivek Ramaswamy: I think that this is just a new form of crony capitalism. Where crony capitalism 1.0 back in the pre-2008 era was, "Hey, if you're Goldman Sachs, place your alumnus in the US Treasury Secretary and let's hope that you favor your alumnus when it comes time to deciding who to hand out bailouts to and who not to." And that was a trick that worked pretty well. It's pretty simple in terms of how that game is played or corporate contributions to electoral campaigns to expect favors in return. But now I think that there's especially with the new progressive left, that kind of currency doesn't necessarily work to achieve the same types of results that it once would have, which is why they're tithing in a new currency.

They're tithing in the woke currency through performative social gesturing, which is a different way of exerting influence where direct green pieces of paper wouldn't do it. We're now able to do it through the signaling of virtue and ideological alignment. And I think we're seeing it. I think Amazon's a great example where I think the checks that they're writing to Black Lives Matter if you turn on your Amazon streaming services, the selection of movies that you see following George Floyd's death. I don't think this is a change of heart for Jeff Bezos relative to where he was 30 years ago. I kind of laughed when Amazon announced their $15 minimum wage when they might've announced it at a time where their competitors were actually coming under fire under profitability threats.

This is actually just another way of competing, but effectively when they ultimately face a political threat from a new left that may not be prone to lobbying in the same terms, the ability to signal potential solidarity around the certain social agendas and causes that the far left cares about is a new way of actually winning favor in a way that at least agrees to let the far left look the other way when it comes to leaving corporate power intact.

And I think that's happening every day in Silicon Valley today where the implicit grand bargain with the left today. The left was historically very skeptical of corporate power, especially the concentration of corporate power in potentially monopoly or oligopolistic hands. And instead, what we're seeing right now is a version of, especially with a particular party in power in the United States, an implicit grand bargain to say that, "Hey, we're going to censor content that you don't like on the internet. In return, we're going to agree to have you look the other way when it comes to leaving the status quo intact." And I think it's actually working

out through an unspoken grand bargain, but sort of a repeat game. It's actually settled at a new equilibrium that's working at least as well as the old equilibrium from direct lobbying through the use of dollars through the front door. And I think Amazon is among those that understands this game better than most.

Larry Bernstein: Jeff Bezos acquired the Washington Post. This is the largest newspaper in the political capital, and it took direct aim at President Trump. Jeff Bezos went to great lengths to articulate that this was his personal investment and really had nothing to do with Amazon. In previous generations the public was very concerned about major media power and its role with other corporate activity. Do you think that Amazon has abused it in some way? And how do you compare that with Facebook or Twitter denying Trump access to their sites as well?

Vivek Ramaswamy: I think that there's two different things going on there. I'm obviously editorializing and offering my perspective here. This isn't a factual account, but it's my opinion. I think that the Amazon example is an interesting one where I think a lot of what Amazon does is new crony capitalism, modern, progressive veneer crony capitalism. I think Jeff Bezos buying the Washington Post is something else altogether, which is actually the use of one's moral standing where your marginal value of an added dollar goes down pretty hard when you're in the hundreds of billions of dollars of dollars that you've amassed over the course of the last number of decades, that you ultimately need to buy yourself relevant to the ability to exert influence in ways that you actually care about, but through vehicles that go beyond the pursuit of profit alone.

That's what I differentiate in my book between the scammy kind of stakeholder capitalism. That's where I put Goldman Sachs and a lot of the Wall Street firms in that category where it's really just another way to make a buck or protect your market power over the long run, from the authentic kind of stakeholder capitalism or the authentic kind of stakeholderism more broadly, where you actually care about the value that you seek to advance, but you're using your market power to be able to do it. And I think there's a reasonable debate to be had about which one's actually worse. The first one is kind of scamming and inauthentic. The second one is actually potentially more frightening by actually concentrating real power in the hands of those who are using their market power to influence power in the marketplace of ideas.

I think this is actually happening in Silicon Valley with respect to the big tech regulation of content on their websites today. The government now in power with Democrats in control of the House, the Senate and the

White House, are effectively working with private companies to do through the back door what they directly can't do through the front door under the first amendment, which is actually censoring political opposition.

And I know that sounds conspiratorial, but if you look at just the data points over the last year, the most dramatic steps that these big tech firms have taken towards regulating so-called hate speech and misinformation on their sites actually came in close proximity to when they were called to testify in front of the House or the Senate on exactly those same topics. And a lot of powerful liberal lawmakers that are threatening those companies and saying, "We're going to come after you. We're going to regulate you. We're going to break you up. We're going to make it swift."

Many of those exact quotes over the course of the last year, these guys get in their private jets to go back to the other coast and they say, "Okay, we're going to do exactly what we were told to do because we know what they think counts as hate speech. We know what they think counts as misinformation. We're going to purge that from the internet. And by the way, there's a federal piece of legislation that immunizes us from any liability at the state level when we do that."

That's Section 230 of the Communications Decency Act. And one of the arguments advanced in my book and I wrote in the Wall Street Journal about this earlier this year as well, is that the combination of that carrot and stick, the stick being the congressional threats and the carrot being Section 230 that immunizes Big Tech from state liability when they go out and purge that content, actually creates from a legal standpoint state action in the mantle of private enterprise because there's actually longstanding jurisprudence which says that the government cannot delegate to private parties to effectuate what the government cannot directly do under the Federal Constitution.

I think that's effectively what's happening with respect to the regulation of political content on the internet today, where under the garb of acting as private enterprises, they're really acting as instruments of the state, which is a different form of crony capitalism in reverse. And so we live in complicated times and not every narrative neatly fits into just the scammy stakeholder capitalism bucket. There's different things going on in different places. But one of my goals in the book is to parse each of these for the essence of what they are.

Larry Bernstein: How do you think about applying Michael Moss’s comments on big food and stakeholder capitalism?

Vivek Ramaswamy: The point I would make is, take Coca-Cola issuing statements about a voting law in Georgia last month that, like it or not, like the law or not, Coca-Cola certainly sounded more like the statements of a super PAC than a soft drink manufacturer. I think that part of what is going on is ultimately a different way of evading accountability for a real public reckoning and conversation around issues that go to the core of a businesses like Coca-Cola.

Making statements about a voting law, that's easy work. The ability to engage and reckon with the consequences of your product on the nationwide epidemic of diabetes and obesity, particularly in the Black community is a lot more difficult even as Coca-Cola continues to engage in anti-racism training that teaches the employees on how to be less white. So I think for a lot of companies, stakeholder capitalism has proven convenient. The ESG movement has proven convenient. The adoption of new theories of racial identity relating to white privilege matters relating to race, and anti-racism have proven a convenient way to deflect a conversation around the essence of what their core business model is actually about. So that's back to what I think of as the scammy kind of stakeholder capitalism. I was listening to that argument about big food, the same thing that you could apply to big tech, there was a good discussion earlier about the nature of addiction and whether the accountable parties ought to be either the consumers or the users or ought to be the companies that feed those addictions.

I have a separate view, which is more deeply that the recession of notions like religion and patriotism and virtue cultivating institutions in our nation's history probably are responsible for both because that leaves people more vulnerable to the kinds of things that they're sold that have addictive properties that make it difficult to parse accountability between whether it belongs to the company or to the user. But putting that view to one side, I think that today for companies it has proven to be a lot more convenient to be able to engage with these orthogonal social debates that have nothing to do with their business as a way of evading real dialogue and debate around the essence of what their core business practices are ultimately about.

I think that we need to return to a world in which we can have wherever you land an open debate about those without being distracted by what I view as more or less irrelevant smokescreen debates about individual identity that these corporations are fueling, but also debates that in turn

actually create new divisions in our actual society in their own right by taking us and dividing us into particular tribes based on where corporations signal they land in one place versus another.

Larry Bernstein: Let's go on to our final speaker. Paul Rossi. Paul is a former math teacher at the Grace Church School in New York City. He will speak now about teaching race to children.

Paul Rossi: Since I published the article Very White on Substack, I got really interested in what this anti-racist pedagogy was doing at earlier and earlier grades. So I did an analysis of the types of anti-racist education in elementary schools. And I wanted to focus on one particular aspect of that, which was the identity formation or what's called identity work. And this is going on at thousands of schools across the country I think now, and it's really exploded since the murder of George Floyd. I'm sure for many of the parents in the audience today, this will be familiar to you. And this identity work is based on a theory called intersectionality. So intersectionality concerns the multifaceted ways that individuals are perceived by society and the impact of those perceptions on success outcomes.

So for example, Pollyanna, Inc. Is a popular educational consultancy. It's used by many independent schools in New York and across the country and it has a proprietary racial literacy curriculum and this racial identity work starts in kindergarten. So there's eight lessons for each grade and kindergarten level students are taught to see color as defining for characters in children's stories. So they have stories that are like Brown Bear Brown Bear, what do you see? Red as a dragon? Green is a chili pepper. And in this way, children are introduced and taught to name and their own skin color and identify surface level similarities and differences. And by the end of kindergarten, teachers who feel confident to do so are urged to explicitly tie this color awareness to racial identity. This is framed as an advanced activity, something that teachers supposed to aspire to, but not push for too early. But ultimately, they're going to do that when the students are ready for it.

In later grades, these identity wheel exercises develop a further understanding of these socialized identity. The way this works is the child places his name and personality traits in the center and then once that core has been established, the main focus really takes place. Which is, labeling wedges or spheres in this outer ring, which focus on the group characteristics like race, class, gender, disability, status, etc., and the participants will share and discuss the content in these orbiting circles.

The geometry of these wheels and the far greater time spent on their periphery, reinforce this priority that the externally and social constructed aspects of the self-expressed as group membership are what's really important.

Back to specifically with Pollyanna and the 6th grade curriculum, they ask students to revise Webster's definition of identity which is, quote, "The distinguishing character or personality of an individual," by highlighting these external and group markers of identity. So teachers are told to encourage sociological identity markers and ideas and students to think about their physical and social identities as well as their inner world.

So what's prioritized, again, as salient is always the group categorization often based on how you're perceived in society. The way I think about it is that if the self is an Apple, the implications from these activities and that the most important part of who you are is the skin. Students are urged to treat each other's multifaceted social identities with empathy, kindness, and acceptance, which are all very important, but absent are the many other defining personal and practical virtues, characteristic of healthy growth, such as emotional resilience, conscientiousness, industriousness, consistency, loyalty, fidelity, persistence under adversity, patience, and temperance in the face of opposing views.

Once defined by these group markers, the individual feels pressured to internalize politicized ideas, beliefs, and priorities that are attributed to these groups. So faith in one's individual attributes as a bridge to success is transferred into faith in solidarity with the perceived group identity and it's goal. So in this way, the locus of identity moves from the internal and the individual to the external and the collective. As students gain a deeper understanding of how racist policies influenced our history and present day disparities, their now externally based identities are now tied to power and privilege.

So this is the next stage of the game. To illustrate that, I'm going to quote from the website of the DEI consultancy called the Nova Collective, and this is characteristic of this rhetorical move which many of these consultancies do. Quote, "Things we hold that don't impact the way we receive resources or gain access or privileged society are seen as personal identity and those things that lump us into groups and either give us power and privilege in society or inhibit power and privilege in society, those are seen as social identities."

So this quote is illustrative because it implies there's this hierarchy of significance. The social takes priority over the personal, which is defined

in the negative. Social identity establishes one's value in the world, which has inscribed, defined and characterized that individual.

And most remarkably to me, the personal character, the personal identity is reduced to a kind of fanciful pigment, which has no influence or impact on how we gain access to resources in society. Furthermore, now that personal identity has been dispensed with, a moral valence can be ascribed to one's social identity. And the way this works is that the power of the people with certain social identities enjoy over others, based on solely the perception in the world, is therefore arbitrary. It's unrelated to personal agency, competency and choice, and therefore it's unfair and demanding of redress.

So, what does "content of our character" as a phrase even mean when that's defined as irrelevant or defined out of existence? At this point, you've now taken that external locus of identity and it's become an external locus of control. Research suggests that people with an internal locus of control are more adept at navigating intellectual and moral challenges. Whereas, external tend to feel they have less control over their fate, they're more stressed, they're more prone to clinical depression. And, external locus of control also correlates with something called "identity foreclosure", a concept developed by James Marcia. "It's a stage of identity in which an individual fetishists a fixed identity but hasn't explored other options or ideas."

This is most common in young adolescents. And at this stage the individual has just adopted simplistic traits and qualities and people with foreclosed identities correlate highly with measures of authoritarianism and ideological rigidity. So my thinking is that, having witnessed this at the school I taught at, is that this anti-racist identity work by setting an external locus for identity exacerbates these outcomes.

We live in a world where narcissism, depression, anxiety, and suicidal ideation are all on the rise among adolescents. I suspect there's also a connection between this kind of identity work, which is now common in schools. And the existential eraser that many young people and even people in college feel when their peers fail to, say, use their preferred pronouns, or when they don't see a representation of "people who look like them" in art, culture and institutional settings. So by transferring your identity to this external group identity, then you're dependent on society to perceive you a certain way. And if that becomes arbitrary or ambivalent, that is, I think, of terrible existential threat for children who've been raised by this type of pedagogy.

Which, in some ways it has a lot to do with race, but in some ways it's independent, particularly in race. But I'm really hopeful that future researchers will shed more light on this question. My personal feeling and the real essence of my objection to anti-racist pedagogy, the way it's practiced today, is that race is a falsehood. We know that race is a falsehood. We know that we live in a racist society where racism exists and it's carried through in monstrous ways, historically. But when you focus on creating and recreating, reifying identities around this false construct, you create a kind of learned helplessness around it.

I really think that there is not a lot of evidence. I have looked for it and I haven't seen the kind of evidence for the effectiveness of this so-called "anti-racism". I don't understand how you can have an anti-racism that is "pro race". I understand the rationale for it, but I don't think it's effective. And my experience with it is that it promotes resentment, futility, and depression.

I suggest we return to a kind of anti-racism that is truly anti-race, that it asserts that race is a fiction, but emphasizes racial de-identification, stressing instead the power of personal virtues and agency in overcoming a disparate outcome.

Larry Bernstein: Could you give some more examples of what this curriculum entails and how it differs as you get older from K-6 and maybe how it's distinguished in junior high and how it proceeds into high school?

Paul Rossi: The main thing I think that I saw in ninth grade was that they really reinforce racial identification. So, without racial identification, whether white, black, Latino, Asian, whatever, they can't lard on top of it all of the responsibilities and all of the important ways of seeing that they use to frame history, literature and all of the activism that flows from that.

So, that takes many forms. It could be in a history class, they explicitly are going to divide up the history in terms of the marginalization of certain groups and the privilege of whites, for example. And through that critical lens, it's called "the critical lens", everything can be interpreted. So, you could read Shakespeare that way. You could learn about any particular event in history based on the power dynamics and the groups that are involved in those power dynamics. It's not limited to a certain set of courses. It really does bleed into so many different subjects. And it is currently, at Grace, it's the cornerstone, it is one of the foundations of our mission statement of values.

Larry Bernstein: How much time is spent on this stuff? Are there assemblies on it? Is there weeks set aside for these types of discussion? Is it very minor or has it become central to the core mission?

Paul Rossi: It's become central to the core mission, we have all of the above. It's ingrained in all of the humanities courses. There is a separate curriculum, community and diversity curriculum, for 9th and 10th grade that's focused on it. There are over 18 affinity groups, groups that are collective by racial, gender, sexual orientation markers, that are optional. And, workshops and yes, we have weeks devoted... This year we had weeks where the normal curriculum is suspended and these types of issues are focused on, there are workshops. There's a panoply of workshops that sound like you're reading a college catalog on inequity, racial inequity, gender inequity, and so on.

Larry Bernstein: Can a child opt out?

Paul Rossi: No. It's mandatory that you attend these sessions. I think I mentioned in the article that I wrote, every child must sign a Student Life Agreement, acknowledging their biases, acknowledging their commitment to identify them and agreeing to be held accountable when they don't. No, you can't opt out. They're all required credits for graduation, in particular, community and diversity programming as well as during these workshops everyone's expected to sign up for them. And the Dean will track down anyone who doesn't.

Larry Bernstein: And if you disagree, what happens?

Paul Rossi: Well, what happens... I teach math, so I'm not as plugged into these courses as a student would be, but I can speak from my own experience. When I questioned some of the foundations for these beliefs, particularly racial identification, and I didn't apologize for the harm that was attributed to that, I was relieved of my teaching duties. So there were definitely consequences for me. I've also heard from other students that there's a very strong chilling effect for questioning intersectionality as a framework for understanding not only race relations in society generally, but also just your identity per se. So if you are white identified, for example, you are expected to move to a place where you identify yourself as such. And if you do not, that will be problematic.

Larry Bernstein: What happens to the child who questions intersectionality?

Paul Rossi: I don't know. I mean, I actually have never... I hope that a child will. I've never seen the outcome of a direct challenge to the belief structure. I

mean, it was difficult for me to do so, I can't imagine what that would be like for a child to do so. Although I know that a lot of the kids falsify their preferences in that regard, I know that a lot of them don't agree with the framework. I know a lot of parents don't agree with the framework. People, many, dozens of them have talked to me about it. Parents have talked to me about it. But to do so publicly, the consequences are quite severe socially, I think, as well as what might happen to you.

I mentioned this in my article as well, if a student tends to behaviors of resistance to the ideology in say 9th grade, then there was an email chain where that particular type of resistance would be flagged and that student would have a conversation. They would be pulled aside and there would be a conversation about it. Now, I don't know what those conversations look like. I know that they happened. I wasn't a part of them, but I was on the email chain where that was discussed and that was widely celebrated as a positive thing to do.

And what this resistance might entail, it would be simply being silent or saying, "Why can't we all get along?" Or, persisting in what's called a "colorblind" view of the world where you don't see color. Actually, in this framing of anti-racism, not seeing color is evidence of racism.

I think there's actually a video that went viral recently of a student in another school who... A class, was being shown a picture of two girls and the girls were black. And the teacher was insisting that what was most important about that picture was that they were black. And when he showed it to a student and the student challenged him and said, "I just see two girls hanging out, just chilling," the teacher pushed and pressed and prodded and eventually kind of lost his temper that student didn't acknowledge the most important thing about that picture is that the girls were black.

So that kind of forced "color sight", I call it "color sight". I mean, what does color sight tell you about a person? What kinds of assumptions are being stressed that you should make about somebody because of what you see in their color? Those are the kinds of things that are being pushed. I think it's totally counterproductive and disheartening and I really think that we need a different way of addressing racism. Which does occur, and does occur in society as well as in the schools. There are incidents that happen, and they need to be addressed. But doing it in this way, I think just adds so many more debilitating aspects psychologically and developmentally.

Larry Bernstein: Another aspect of this besides race, relates to privilege itself. I understand that the Grace Church School has assemblies where they try to show privilege within its own class. So they'll say something like, "Alright, here's the class. Everyone who is not on financial aid, stay standing. Everyone who has two cars, stay standing. Everyone that goes on vacation outside of the US, stay standing. Those of you that have the more than one home, stay standing," until there's a very small minority of the students who by definition have the greatest privilege, according to these criteria. Why would we want to single out students who have privilege and then denigrate them in front of their colleagues?

Paul Rossi: I don't know. It really is disturbing that they do this kind of thing. It's bad if adults were to do it, it's 10 times worse if you make adolescents do it, because adolescents are so status conscious and conscious of... Really, it's clique-ish. Clique-ish behavior is already prevalent in adolescents, I don't know why you would push that?

I think that the reasons for doing that, and I'm kind of putting my mind in what they would be thinking, putting my thoughts about what they would be thinking is, they want to make the claim that the unspoken implication is that the students who are left standing are white. And so that is making the point that whiteness carries privileges.

Now, in New York City, you may get that result. If you did the same thing in Kentucky, in particular rural areas of West Virginia, you're going to get a different result. And so, it's a sophistic sort of exercise. And I think that it's a foregone conclusion that they know is going to send a certain message. And so I think it's bad in practice and it's actually not illustrative of what they think it is.

Vivek Ramaswamy: And how is this concept of identity and intersectionality and racial curriculum, how has it changed over the last 5 to 10 years? Both in its broadness and its breadth?

Paul Rossi: It's gotten broader and deeper into different subjects. In my particular subject, math, after a self-study of our department, we had to adopt an anti-racist plank where we'd work in. I think there are some aspects of say talking about the discoveries of mathematics, mathematics being a global thing, that yes absolutely, great cultures have contributed so much to mathematics and it's not any particular culture necessarily. So, that kind of thing is fine. But when you start telling me that objectivity is characteristic of white supremacy, well then you've lost me. And you've actually started to say something which is terribly condescending to

people who aren't white or aren't seen as white, I would say, and I will fight that until the end of my life.

Racism has exhibited so much concept creep over the last 5 to 10 year that now even things like whiteness and blackness are these floating signifiers that can land on anyone at any particular time, kind of like a ghost. And, they can hijack and be used as a rationale for dismissing evidence, arguments, it's now become sort of a universal cudgel so that the blackness of a black person is no longer a value of their lived experience. Now if they have the wrong opinion, well, then it's internalized whiteness.

People would describe it as a religion, I really think there is a lot to that. When the word racism has undergone such concept creep, anti-racism becomes a witch hunt, which is what happens when concepts broaden and take on significance in every context. Then you're fighting shadows and the shadows are everywhere. And that's where we are now.

Larry Bernstein: This is the part of the show where I try to end on a note of optimism. Paul, I'm going to start with you. What are you optimistic about?

Paul Rossi: I'm optimistic that people across the country are making sanity a priority in education and that they are forming dozens of groups in the last five to six months. I've been working with a group called FAIR, Foundation Against Intolerance and Racism, and I've seen an explosion of activity often happening under the radar, of course, of the mainstream media. But where parents are definitely getting involved that were unaware of this kind of education a year ago. I think the scales has fallen from a lot of people's eyes and there's a real desire for a sane alternative curriculum in these areas. So, that gives me optimism.

Larry Bernstein: Vivek, what are you optimistic about?

Vivek Ramaswamy: I'm optimistic about the fact that I think people have been for the last decade, especially younger people, hungry for a cause, hungry for a sense of purpose, hungry for meaning and identity in ways that have been long unfulfilled. I think a lot of what Paul just talked about is in part a symptom of the black hole at the center of our collective hunger for purpose and identity in a moment where things that used to fill that void for us have receded.

I guess I am optimistic about what these, albeit toxic in my opinion, movements about racial identity and anti-racism and critical race theory have done, I think that they have also unlocked in the counter pushback

against it, hopefully an opportunity to fill that void with more civic education in our country. I think we're beginning to see a trend in certain states of reimplementing civic education in terms of describing not just our founding ideals, but the ways in which we've fallen short of them, but not just the way that we've fallen short of them so much so that we forget what those ideals were in the first place.

I'm optimistic about this trend of civic education that I think is actually going to go a long way, even all the way through some of the themes that I discussed in terms of corporate purpose. That if we are on a solid enough foundation, where we believe that we have already shared something in common from a young age, that we might be under less pressure to do superficial things later on to make up for that deeper deficit. I hope that trend continues by way of the recent, early birth of civic education across the country that we've begun to see in the last couple of years.

Larry Bernstein: Dietrich, what are you optimistic about?

Dietrich Vollrath: I think I'm optimistic about the fact that we're at a point where the idea of continued rapid material growth in our living standards is no longer critical as it was in the past. So, we we're at a point where discussions like Vivek and Paul are talking about, discussions on a number of societal dimensions can be had without this looming question of like, "Well, but what if that reduces our material living standards?" Some of those questions, we're kind of solving them, right? Distributional issues exists, we haven't gotten everybody above a certain level, but we can have the discussion because we clearly can produce a high minimum level of material living standards for essentially everybody.

So that gives us the opportunity to change the arguments we're having, so to speak. And arguments are going to go away, but I think now we have the opportunity to have arguments about more nuances about how we construct our society. So it makes me optimistic that we can touch on these things. Maybe we can have a more rational discussion about them without worrying about where we're going to eat tomorrow.

Larry Bernstein:

That ends today’s session, but I want to take a minute to plug Next Week’s show. Sunday May 23rd our first speaker will be Alex Tabarrok who is an economist at George Mason. He has recently written about the risks and rewards of COVID vaccines and treatments. I hope

to learn from Alex about how to behave, work, and play for those already vaccinated and for those not vaccinated.

Our second speaker will be my very dear friend Desmond Lachman who is the former chief emerging markets economist at Salomon Brothers and now at AEI. Desmond will speak about the Biden’s Administration’s desire to go big on its stimulus and infrastructure. Desmond will focus on whether we should have an expansionary fiscal and monetary policies in the current upswing.

Our third speaker will be Sam Wineburg from Stanford who is a professor in education and the history department. Sam will discuss his recent research has been in the internet and how people judge the credibility of digital content.

My co-host next week will be Katherine Monasebian who is the President of North American Commerce at Stanley Black & Decker. Katherine will host a panel of experts on the future of retail.

The first retail panelist is Deborah Weinswig who is the founder of Coresight Research where she focuses on retail innovation and technology. Deborah was the former head of the Citi equity research for the Global Staples and Consumer team and was the number 1 Institutional investor ranked analyst for her subject for nine years.

Our final speaker will be Jason Goldberg who is the Chief Commerce Strategy Officer at Publicis and is known as the RetailGeek. Jason is interested in what makes a great retail experience online and in-store and how to use technology to improve the shopper marketing. Jason co- hosts the Jason and Scott show which is the top-rated ecommerce podcast.

If you are interested in listening to a replay of today’s What Happens Next program or any of our previous episodes or wish to read a transcript, you can find them on our website Whathappensnextin6minutes.com. Replays are also available on Apple Podcasts, Podbean and Spotify.

I would like to thank today’s speakers for their insights. I would also like to thank our listeners for their time and for engaging with these complex issues. Please stay tuned for next Sunday to find out What Happens Next.