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Tyler Cowen: I very much appreciated your latest book and its various attacks on crony

capitalism, corporatism, and special privileges for corporations. What do you see as some
historical examples of countries that have tackled these and really won that battle?
Putting aside countries who lose wars and their major corporations are destroyed or
greatly weakened, what would be some historical examples we could look to?

Ralph Nader: I think Scandinavia is a good start. In the mid-19
th
century it was among the
poorest countries in Europe. The rise of Swedens quality of economic development was
associated with the growth of the cooperative movement and the social democratic
parties, and the establishment of a framework where to a degree greater than most other
countries, the commerce in Sweden had to adjust to the social insurance systems that
were set up. So the supremacy of commercialism over worker, consumer, and other
smaller power centers was not tolerated. Over the years, you can see that they provided a
great deal of retirement security, and the social insurance system reduced a lot of anxiety
and need in return for the taxes that were paid.

TC: But Sweden would be considered quite a corporatist model by a lot of political
scientists. If you look even as late as the 1990s, the Wallenberg family owns about three
quarters of the stock exchange. If you look at OECD data and ask which two countries
stick out the most in terms of the greatest wealth inequality, they say its Sweden and the
United States. So Im all for Swedenits a great placebut have they really gotten
away from corporatism and corporate privilege? Havent they in a way tried to do
everything at the same time, and they have managed just because theyre good at stuff?

RN: Well, they certainly have their large corporations, and now with the European Union
it has become cross-bordered. But you have to look at where the level of livelihood starts
in Sweden, and theres just no comparison. You dont see extreme poverty, or people
dying because they dont have health insurance. So the Swedish political economy has
made its peace with big business. But they couldnt deprive the mass of the people of a
standard of living that is pretty much unparalleled. Swedes today have a minimum of five
weeks paid vacation; they have, through their taxes, paid daycare and paid sick leave;
good public transit; stronger labor laws than we do; the kind of retirement system we can
only dream of. The problem is that life in Sweden became boring, so there has been what
might be called right-wing strain provoked by immigration from southern countries. That
has begun to dissolve the social compact that Sweden has furthered.

TC: Keep in mind that per capita income in Sweden is about the same as that of African-
Americans. So there has been some penalty to all this in terms of the absolute standard of
living. Would you agree to that?

RN: No, not at all. Just look at the social welfare standards. They get income in two
ways. One is from salaries and wages, and the minimum wage is much higher in Sweden.
And the other is from residuals from their taxes. Our system has a lower minimum wage,
massive poverty17 million children are characterized as food insecureinadequate
housing, and poor public transit. In Sweden they dont allocate huge amounts of the
budget to military contracts and wars overseas. So they get a much larger residual from
their tax payments to supplement their wages, salaries, and pensions.

TC: If I look back at your career, I see youve been fighting various kinds of wars or
struggles against a lot of different injustices. If you look back on all those decades, during
which time youve been right about many things, what do you think is the main thing
youve been wrong about?

RN: Oh, a lot of things. Nobody goes through these kinds of controversies without
making bad predictions. I underestimated the power of corporations to crumble the
countervailing force we call government. We always knew corporations like to have their
adherents to become elected officials; that has been going on for a long time. But I never
foresaw the insinuation of corporatism as a policy in one agency after another in
government. Franklin Delano Roosevelt foresaw some of this when he sent a message to
Congress when he started the temporary national economic commission to investigate
consecrated corporate power. That was in 1938. In his message he said that whenever the
government is controlled by private economic power, thats facism. Now, there isnt a
department or agency in Washington where anyone has more powerover it and in it,
through their appointees, and on Congress, through lobbyists and political action
committees. Nobody comes close. Theres no organized force that comes close to the
daily power to twist government in the favor of Wall Street and corporatism, and to
disable government from adequately defending the health, safety and economic well-
being of the American people.

TC: Lets say we look at the U.S. corporate income tax. The rate on paper is 35 percent,
which is quite high. When you look at how much they actually pay after various forms of
maneuvering or evasion, maybe they pay 1718 percent, which is more or less in the
middle of the pack of OECD nations. So if corporations have so much political power in
the United States, why is our corporate income tax still so high?

RN: Because they can avoid it. They can game it, so it looks good. They can protest that
we have the highest corporate tax rates in the Western world. But everyone knows that
they game the system to levels that are staggeringly disgraceful. For example, the
Citizens for Tax Justice regularly reports on corporations that make huge amounts of
U.S.-based profitslike General Electric and Verizonbut pay no federal income tax.
One worker in either of those companies pays more in dollars to the U.S. Treasury than
these companies have done, year after year. Furthermore, these giant banks are paying
less than ten percent now. There are so many write-offs, deferrals, and deductions that
they dont have to worry much about the taxes on their U.S. profits. The large
corporations are now moving toward tax exemption. General Electric gets money back
from the treasury after it pays nothing. They have divisions within their corporate
structure devoted to finding loopholes, and their people get bonuses for diminishing their
tax responsibilities.

And that doesnt even account for the offshore tax shelters. The New York Times reported
that a bunch of companies report making $147 billion in islands like the Bahamas. But
we know theyre just transferring the money from countries with little taxation to these
tax havens.

TC: But Sweden, a country you cited favorably, taxes capital income much more lightly
than the United States doesnot just on paper but in terms of whats actually paid.

RN: Well, as I say, were comparing the well-being of the mass of the people.
Corporations pit countries against one another. They have their own influence in the
countries where theyre domiciled. Corporations have had to concede more to the masses
of the people in places like Sweden, Belgium, the Netherlands, and Australia. Australia
has a lower unemployment rate than the United States, and its minimum wage for people
older than twenty is $16 per hour. And our Federal minimum wage is $7.25.

TC: The Australian minimum wage has a great number of exceptions.

RN: If youre 19 years old you get $11.50, and if youre older than that you get $13 or so,
and older than that, $16 per hour.

TC: When it comes to human nature and human behavior, would you describe yourself as
an optimist or a pessimist?

RN: Pessimism has no function. Its an indulgence of people who have little stamina to
confront the challenges of modern life. And its a good way to rationalize their
withdrawal from the work of participating in the great work of human beings, which is,
as Senator Daniel Webster said, justice.

TC: But on the main issue youre fighting, which is corporatism and corporate privilege,
you admit that things have become much worse?

RN: Its not just me; a lot of conservatives and libertarians think that corporations are too
allied with the wars of empire, the bloated military budget, massive and diverse corporate
welfare from bailouts to handouts to protections from market discipline. The Patriot Acts
restriction on civil liberties has drawn the ire of people like Ron and Rand Paul as well as
the Competitive Enterprise Institute, and many other think-tanks considered conservative.
Snooping is everywhere.

TC: But is there some fact about the world that makes you more optimistic, or is that just
a more useful attitude?

RN: If you look at the history of nations, major redirections for justice were brought
about by never more than 1 percent of the active citizenry. Whether it was civil rights, the
environment, or consumer protection, they had one asset: They represented what
Abraham Lincoln called the public sentiment. Nowadays people give up on themselves
and rationalize their own powerlessness, but it takes very few people in congressional
districts and around the country to make major, long-overdue changes in American
society that are supported by large numbers of people.

TC: What kind of change do you think we need in our internal culture to get this done?
Im very struck by something in your 17 Ideas book, where you talk about how
America needs a new tradition of sports. Sports, you say, shouldnt be something
corporate that people watch on TV, but something they do themselves, something that
creates community, something that brings people together. Do you see us as being in a
situation in which we need a more communitarian culture to get these changes done, or
not?

RN: Yes. Weve become too much of a spectator culture. People just look at screens, now
more than ever with the iPhone, smartphones and young people sending scores of text
messages each day, watching professional sports. One of the consequences is that the
more athletic kids play while the rest watch, and the lack of physical activity leads to
obesity. Its not just youngsters; it happens to conform with the purposes of advertising.

Corporations are extremely adept at commercializing childhood and maneuvering around
or undermining parental authority. They urge children to nag their parents at a young age
to buy junk food, soft drinks and violent programming. You see fewer kids out in the
street now, just playing. These old games we used to play, like hopscotchkids today
wouldnt even know what youre talking about. But they do know a lot about video game
violence and the heroes and villains that are involved. So I think we do need a broad
recognition of the need to bring the neighborhoods and communities into more
participatory sports. Just a hoop, and throwing the ball into a hoopanything to connect
human to human, rather than let kids wallow more and more in virtual reality. The whole
electronic world is affecting us in ways we have yet to discover. That amount of time,
day after day, in front of the screen, cant not have an effect on the human mind.

TC: But theres a literature in psychology that refers to something known as the Flynn
Effect, which shows that with every generation human IQs are rising by several points.
This seems to indicate that, first of all, were in some ways getting smarter. Second, one
of the potential explanations for the Flynn Effect is that young people are hit by this
blizzard of images and symbols which they have to process, and this seems to be raising
their IQs. This is necessarily speculative, but the evidence, on balance, seems to suggest
that were getting smarter, and that all the stuff thrown at kids is actually helping them do
this. What do you think of that?

RN: Well, the society is getting smarter at the same time as its getting dumber. In other
words, we have more scientists, more engineers, more people with better hand-eye
coordination as a result of these video games. But look at how were tying ourselves up
in knots! The kids today hardly know about the Vietnam War. As the old saying goes, If
you dont know history, youre doomed to stay forever a child. They dont know where
the town hall is; they have no connection to nature. There are books written on the
disconnection of young people to nature. So maybe they can fill out various kinds of
standardized tests and do puzzles and react very quickly to these video games, but quo
vadis? To what end? Our society is disgracefully below its potential. It has tied itself up
in knots in the corrupt, wasteful health care system, where you have 800 people per week
dying because they cant get health care to get a diagnosis or treatment, according to a
Harvard medical school study. Weve got students burdened with $1.2 trillion in debt.
Why is it that some European countries, working from that tax payment residual, offer
tuition-free education? Its a big deal when young people graduate with so much debt.
Theyre risk-averse, they dont want to buy homes at the same rate that they used to when
they werent under these burdens. The same is true of the military-industrial machine.
Wheres the major enemy? Theres no more Soviet Union, and China wants our jobs and
industry. The Chinese arent going to send missiles here, and were spending $800
billion, including wars in Iraq and Afghanistan, every year just to become a military
superpower that is desperately searching for enemies, or creating them through
exaggerated appraisals. So whats so smart about individuals when collectively they cant
have the decent society that is well within our grasp, and when the young people believe
they wont be as well off as their parents?

TC: If someone cited to you religion and American churches as the sector of our society
that has best resisted corporatization, would you agree or disagree? And if you disagree,
what would you cite instead?

RN: Theyre resisting less. Theyve given up on gambling, and the main bulwark against
widespread gamblingoutside of Las Vegasand against government-run lotteries, was
the churches. But then Bingo started in church basements, and the gambling interests
went to work on the churches. They claimed that their businesses in Atlantic City would
help the elderly throughout New Jersey. The churches lost their credibility.

A society riven with gambling is one that bets on the future rather than builds the future.
So what countervailing force is there? Labor unions are weaker. We have a tremendous
disruption of the community civic values that used to hold commercial values in check. I
only see this emerging left/right alliance against the corporate state that I wrote about in
my book, Unstoppable. Its the only political realignment that is possible over the next
ten to twelve years. It has the support of public opinion and sentiment. You see bipartisan
reform of the juvenile justice system; a dozen state legislatures are beginning to challenge
the extension of these global, corporate-managed trade agreements in Congress; and
theres growing opposition to more wars of choice overseas. Youre beginning to see 70
80 percent support for an inflation-adjusted minimum wage. You cant get that kind of
poll result without a lot of conservative workers. And the poll results come in at about 90
percent in favor of breaking up the banks that are too big to fail because we fear that their
speculative octopi will get us into another recession.

TC: Would you say that youve always favored this kind of left/right alliance on
corporate issues, or is this something new in your thought?

RN: Alwaysgoing back to my law school days. I always marveled that the powers that
be would focus so much on areas of disagreementissues like gun control, school
prayer, and abortion. But the corporate media would not cover a lot of areas where left
and right do agree that matter very much to our country and its place in the world. And
that is mirrored by the two parties who keep off the table in their debates all these
convergent areas. The obfuscation is quite impressive. So you have this combination of
Wall Street and Washington, the corporate powers and their political allies, converging
across party lines to perfect this corporate government against the wishes of a majority of
the American people. Thats what has to be overcome, and thats what I wrote my book
about.

TC: Youve mentioned, and we can all agree, that more of life is lived on the internet
than ever before. What kinds of steps would you favor to regulate online goods? And
would you still favor those even if they conflict with freedom of speech and the Bill of
Rights?

RN: First of all, I am for net neutrality. I dont want to see this stratification begin and
become horribly complex, especially with computerization, where the big guys get better
treatment. I like the old, open access paradigm. After all, the internet was founded with a
lot of research and development money coming from the Pentagon. A lot of what Google
and these Silicon Valley companies have done is based on continual, government-
subsidized basic research and also applied research. So I dont want to see the internet
corporatized.

In terms of slander and libel, they present complicated free speech issues. Im against
anonymous comments. I think this breeds a cowardly culture, and that people should
stand by what they say. On the other hand, there are instances where, when people are up
against bullying influences, the internet doesnt foster resistance or criticism unless you
do allow those anonymous comments. So I do lean as strongly as possible toward not
having anonymous comments on newspaper websites. I just asked a friend of mine who
is a newspaper editor why his paper allows anonymous comments online but would never
publish an anonymous letter to the editor in the print paper. These online commenters are
basically slamming and slandering public servants.

TC: How would you reform higher education in the United States?

RN: Well, Id reform all education by implementing very strong civic skill and training
and experience courses into the national curricula. Its terrible that a student can graduate
high school without knowing what the Freedom of Information law iswhich can only
be enforced by the citizenry. I dont think there are even half a dozen high schools that
teach their students how to use the state and federal Freedom of Information Act, which
wouldnt require more than two or three hours of instruction. So I would circumvent a lot
of the nonsense of debates on education by putting more empirical content in place to
ensure that these students learn about their city, state, country, the worldin a
participatory way.

At the college and university level you have to recognize that theres a lot of choice for
the students, but theres also a lot of propaganda and censorship. Im much more about
open thought, open debate, open thinking. Id want to encourage students to audit classes
in addition to taking regular classes. I want to preserve the humanities and the social
sciences and not allow the commercial interests such excessive sway over the
universities. I would not want to see our colleges and universities turned into trade
schools.

TC: Having read your books and heard your comments, in some key ways I think of you
as a conservative who wants to go back to some features of an earlier Americasay, the
1950s or 1960s. Back to an era of sports and communitarianism and people caring about
things, and talking to everyone with less impersonality. Im not saying youd want to go
back to the racism of that era or turn back the clock, or reverse the increases in
prosperity. But in the sociological sense, is it fair for people to think of Ralph Nader as a
conservativealbeit a conservative with a strong, crusading zeal?

RN: Well, I want to conserve whats best about the past. Over the centuries people have
made mistakes and done good things, so why dont we discriminately take whats best
from their experience? There are good traditions and values, a proper sense of pace. But
we can reject whats bad about the past, which is sexism, racism, and a lot of coarseness
in the workplace. So preserving the good things of the past is a conservative value, in my
view, and rejecting the bad things is a progressive value.

TC: If we were to auction off passports at a global scale for people to bid on, which
countrys passport would command the highest price? People could bid to purchase an
American, or British, or French passport, and if you bought one youd basically be a
citizen. You can already do this indirectly in a lot of countries, by investing money under
the existing rules. But if you think of this a little more explicitly, which is the country that
is in highest demand to live in?

RN: Well, a discriminating citizen of the world would ask, whos the most powerful force
in the world, such that I dont have to worry about being attacked, invaded, and torn
apart? The obvious answer is the United States. Another approach is to seek out a country
that has a better social safety net. In that case, Id want to go to Sweden, Norway,
Canada, or Australia. One of the reasons why there has been so little immigration from
European countriesas opposed to wartorn, impoverished countriesto the United
States is that European residents know that when they land in the United States they have
a pay or die medical system alongside a lot of other insecurities. Theyll have to pay up to
$1,000 for day care and use a lousy public transit system. So thats why were getting far
fewer immigrants from western Europe than we used to.

TC: Yet wouldnt you admit the fact that Swedish-Americans have better health
outcomes than Swedes, and Japanese-Americans have slightly better health outcomes
than Japanese, and so on? When you break it down by country of origin, health care
outcomes in this country seem pretty good, right?

RN: If the metric reflects income level. In other words, if Swedish-Americans have a
higher income level by far than most Americans, they can afford to pay the Mayo Clinic
in Minnesota for better health care. Nobody dies in Sweden or Canada or Luxembourg or
Germany or Taiwan or Japan because he cant afford health insurance and couldnt get
diagnosed and treated in time. Those peoples are insured from the moment theyre born.
As you probably know. Friedrich Hayek opposed Medicare and Medicaid because they
were not universal programs. Thats something Paul Ryan conveniently leaves out, but
its what Im using as a yardstick.

TC: Well, this was wonderful. Thank you.

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