At northwestern for 15 years. I was trained as a phd in economics. . Namely capitalism is a great Economic System and produce teen millions of goods and services that could sit on the shelf unless people are there to buy it. Marketing is the connection time of the ancient that wooden shoe like this, would you like an out of watch, wouldnt you like whatever. Theres got to recognize that marketing is an economic discipline. Its another part of economics even though it uses social psychology and sociology and other things like that. Host weve invited her faster kotler to talk about his book confronting capitalism. Heres the cover of the book. What is the difference between freemarket capitalism and keynesian capitalism in the classic term . Peter theres three levels you might look at a system. One is lets have the system, no regulations. Some people collect cowboy capitalism. The other extreme and say lets have a socialism, let the government have a more active role in a lot of regulation and a lot of owning businesses and no one. In between is the thing we call capitalism with a heart. I doubt remain capitalism can remain capitalism can have excesses under the free approach and maybe some regulations if for nothing else but our safety. When esa foods, drive safe cars and a number of roles to make infrastructure fine and im a capitalist with a hard it agrees to mean that our wealthy country has a 15 poverty. It is down 5 or 6 in sweden and other places. Some of it is frictional. It grieves me the income gap is growing and we have to give food stamps to the people who are employees of the donald that is they are selling food that they need food stamps to buy enough food, clothing and shelter, food at least. That is the second thing. And then theres a number of problems i listed 14 things. My goal is to improve the system, not to replace it. Host you do. You list the 14 shortcomings of capitalism. Little or no solution generates a growing level of income and wealth inequality as he talked about sales to pay a living wage to billions may not provide enough human jobs in the face of growing automation, doesnt chart dismisses that the full social cost of their duties. Could you explain that one. Yes. Every business in producing some in is also creating a carbon footprint. Maybe there will be some air pollution, Water Pollution created by the business. Some waste. So the question becomes should we charge companies for the cause against their revenue that they are not covering. Companies tend to make this externality. That is not our costs. If we did whole lot of the earth and leave the earth in shambles, someone will fix it up. We Want Companies to internalize the cost of a racer pricing cover the fact to make a living have to charge a little more in doing a we will have taxpayers having to clean up the mess. We think that chapter is about the fact a lot of cuts comes out of industrial symbolist nation that are covered in the very Companies Performing in that country. Host what is the Milton Friedman was on so that . Guest i think he would subscribe to the argument that we dont have a true picture of how to allocate the nations resources without price being the reflector of the true cost of creating something. To give it a Bigger Picture when we say gdp went up, Gross National domestic auto cleanup and the wii sold more guns, sold other things that may not be so good. But we should subtract from the gdp growth is the amount of cost involved in the creation of the product base. We dont do that. Host professor kotler, when you look at a city like houston or phoenix and then chicago and see the growth happening in houston and phoenix as opposed to chicago they say its because the regulation, taxes, is that a Fair Assessment . There are bad regulations in good regulations and there is one party that believes all regulations are pretty bad and i would say we havent illinois a sales tax of about 10. 5 , one of the highest sales taxes because illinois in a very bad day. Why is that in a bad state . Or do you want to blame basically. Could we say we were too generous in the teachers pension plan to get them not to weep out against low pay and so on and so forth. Peter you are raising a conflict related question about regulations. Every time we have the regulation we should review it every three to five years and ask if we should give it a period u. S. Economy is increasingly run by a visible head instead of atoms in its invisible hand. Im also interested in the interaction between our political system called democracy and our Economic System called capitalism. In the political system, we have a great deal of influence by a few that is because of the concentration of income and wealth, we expect that 2016 election will cost the nation about 5 billion, just the electioneering which is twice what it was in 2012 and 1 billion of that may be coming from the Koch Brothers themselves. Basically democracy is more of a plutocracy with every candidate from the several republican candidates have been one or more billionaires to support them. It always screws me where the money is going for electioneering and not not improving to two from failing us in the nation. Back to the 14 shortcomings of capitalism. Number 66point Natural Resources and the apps that regulation create Business Cycle and stability and emphasizes individualism and selfinterest at the expense of community. We offer a balance between three and doing good. Or lets say between your last and having a community orientation. We are even hearing Companies Say they now care a lot about the communities in which they operate and. Weve got to build healthy communities, healthy cities. What are we going to do about that and im trying to show the difference between the difference of onramp in capitalism which selfishness is great. Another philosophy essay neglects a lot of community wellbeing. Isnt there some positiveness to selfishness . The guy who lied us into a lot of economics, atoms that read another book besides the wealth of nations. See 100 route one called the moral i forget to exact title. Capitalism that is the most good for the most people. I dont think where the capitalism doing a lot of good for other than 1 . 1 is not an idle phrase. Its as is the fact much of the Wealth Creation is not being shared in any reasonable way through fair wages, living wages and things like that. But if you say we are increasingly run by visible hand you are in favor of that, correct . Well, id rather go back to the invisible one where there wasnt so much concentration of income and wealth in a few hands. No politician can get it back to today without getting donors and therefore i cant believe they are not having to give Something Back to the donors. Politicians are supposed to be within the Public Interest but a lot of People Finance them so i worry about a visible hand being a plutocratic hand. Number nine, 14 capitalism. Id at least are growing financially driven rather than producer driven economy. Guest booster grows in manufacturing economy and went 5000 people in a factory earning a middleclass level of ledeen and we lost art. We didnt keep the jobs here and not the whole discussion of whether we should have tried to do that. In any case money is made mostly true making money on money. Weve become a financial economy not a manufacturing economy. That is all right because we need people to invest in real estate and better roads and all of that. The point is we have become overly financial last. A lot of people have pointed that out. Banks are becoming rich. Doesnt accumulation of of capital have every advantage to grow their estates. But i might ask about his first of all how do we get back to more manufacturing and how do we contain some of the poorer aspects of finance. One thing that point now, peter is the Capital Gains taxes about 20 now. Used to be 15 . Theres a lot of People Living without doing much work. Theyre getting their income or Capital Gains. The tax Capital Gains higher is to double tax then i know the argument. Basically i would like to see a situation where people who are in Capital Gains pay whatever their income is. Not just on the financial gain through Capital Gains. There are a lot of tax loopholes they think. Simpler tax system. Is that a fair word . Lets not get into the flat tax. If it is a flat tax of 20 for everyone, thats her very well to people in this country. I wanted to be simpler but not a flat tax. Host professor kotler, lets go back to number nine, Consumer Debt in manufacturing jobs. When you look at chicago today at chicago 50 years ago, what is the difference in the city . Is it a better city today . It is a city now more financially oriented. We have the merck tile exchange is a big thanks and so on. What has to manufacturing by the way. We are one of the cities that still have manufacturing. With kraft and other companies but a sickly the real question is what makes a good city and chicago have so many problems that what are the 14 problem cities have been trying to be excellent license for living in producing. By politicians back to the 14 for cummings. Business interests collaborate the economic interest of the majority of citizens. Number 11, favor shortterm profit planning over longrun investment planning. 12, should have regulations regarding product quality, safety truth in advertising an anticompetitive hate. Guest the last one we do a pretty good job of keeping our food safe in their clothing manufactured in a fair way if we still have an imploding manufacturing. Making sure buildings are built up and dont collapse on us. Are we over regulating . Yes, sometimes its hard for a business to get started. By the way, the worldwide information on how easy it is to start a in the u. S. , britain and they may have they have the paradox that morning of march but yours. They are so important and yet the ease of starting the business. When you look at economies around the world and you mentioned sweet largely commercial when you look at economies around the world, which one would you like to see . You know peter, already a study to show you what happened. Namely to pictures or profiles of two countries were given to just decide which one they like better. No name is mentioned. They liked a better than v. Mainly because a country where there is very good education you could go to college at no cost for the Health System is functioning very well and they didnt like the other one where cost 50,000 per year to get a college education. What is the cost to have each each for a year here at northwestern . Northwestern is one of the expensive colleges and that is such a hardship on students who end up with 50,000 at that. 1. 2 trillion at that collectively. Therefore how are they going to buy furniture and how are they going to get married . That is holding back a lot of progress. Host how would you reform not . Guest youre raising the major question how do we let universities continue to thrive and grow and build dormitories and get better professors and so on and who is going to pay if the student tuition doesnt cover it, should we ship some money for five . Thats one possibility because youve noticed the waste in defense for the 1. 2 trillion are not accounted for. We are pumping too much into defense and not nothing to education and health. Host 14 from a shortcoming in your view. How did you come up with 14 by the way . Guest i didnt plan on 14 yes i work on this over a few years i stopped at 14. We dont need more. The two big ones are poverty and the growing income gap that proliferates into all the other. Host as an economist, what is the issue with income inequality . Guest two things. It doesnt leave enough money in the pockets of the working class to buy the goods and services he made by our system which really means slow economic growth. The other thing that happens when you dont have enough money to buy the goods is you still buy them anyways on the basis of buy now, pay later. The mechanism to support capitalism. Everyone i know is in debt. Either a big mortgage for a pretty heavy credit card. That is fine. That gives them the freedom to have something they want rather than to wait and buy later. The problem is the economy needs enough buyers for all the good that wants to make. It is in the very best interest of the capitalists who have businesses for everyone to be a capitalist and have a lot of money which more of us should own at least some shares or they should want to pay higher wages so theres enough money to buy the things they make. Henry ford was paying 2. 50 an hour. He says i will raise that five so they can afford to buy my cars. Thats kind of thinking we want to see where capital is due. Host 14 companies to bring social values and happiness. Guest this is interesting. This gdp, Gross Domestic Product and its growth answer everything we need to know about performance of the system . My argument is we need a Second System in the Second System i preferred the wellbeing measurement system. As there will be enough people improved this year as well as the gdp, which is goods and services. In other words, has education gone up . These are called social indicators. Britain is working very hard on a separate system that in fact they even call it a happiness measure and the country that started it, they do use a happiness indicator. As a matter of fact its at one point im so glad i do this. I dont want to be king anymore and the people said youve got to stay and be king because if you leave we will be less happy. The point is i think we need another indicator of the wellbeing of the nations people and not just how much was produced in the way of goods and services. Host why do you think 50 years plus after the socalled war on poverty that the poverty rate hasnt changed . Guest i bet its a puzzler myself because we are such a rich country. I think our Education System is poor and culturally speaking we dont get enough aspiration in the young people that commented the nation. We dont get time to be lifetime learners. Most people still think they went to school and they dont have to learn anything more. By the way, the democracy basically depends on people who know what they are voting on. Ive seen so many people vote for the party thats against their interests. You see the point. Why does poverty per se so long . Theres lot of social and cultural issues involved in nine. Lets all make that the next study. Host professor kotler, since youre a marketing expert, how would you market changing the way we do business in america . What would be your marketing tag . Guest yeah, were probably the worlds best marketers. That is, Companies Know very much that they must be customer centered when they make a product. They should know who theyre making it before. We are making a card for people who dont have much money. Were taking a credible system. We do a lot of segmentation matching resources and products to a group we think will want this. However, that is also the problem in the sense that we will make anything that will produce profit and perhaps we dont make a lot of the services the economy needs in terms of Educational Services and Health Services and so on. We have avoided using our resources to produce a population that has a high level of wellbeing. Host philip kotler, northwestern university, confronting capitalism Real Solutions for a troubled Economic System is the book weve been talking about. This is what tv at convocation at northwestern university. This was the 23rd at timbre, 2001, 12 days after 9 11, the worst in American History since pearl harbor. Heres the direct her of Central Intelligence that the seat of power in washington d. C. Was calling in the middle of the night halfway around the world via passing the entire chain of command to ask some sleeping field operatives what to do. If you didnt know we were in trouble before, you knew it now. I said mr. Director, im not sure were thinking about this in the right way. Youre asking me about military tactics. In the end this is a political problem. We have the power to Chase International terrorists out of afghanistan. But who is going to keep them out . At the end of the day of what we need to have as a competent Political Authority assert its control over afghanistan doubled to what we can to not just keep it from becoming a safe haven for international terrorists. If the taliban is willing to be that government, so much the better they are there in controlling most of the country. And if mullah omar, the head of the taliban is not going to change policy with regard to bin laden, others in the leadership may be willing to step in and do that. If we cant convince the taliban as a whole to do what needs to be done, we have to smash the taliban had him do it in a way that will enable us to do Something Else in its place. Whatever military means we use, we have to sync with them and calibrate them to get us to where it is we need to be politically. Ive been going through this recitation from his sticky notes and asked me questions. I said this isnt going to work. This is taking too long. I may write all this down. He said good idea and remember early sunday morning my time on a late saturday night his time. Says its 11 00. The helicopter comes from its 6 00. Can you get me something at five so id drove as fast as i could ever gotten a paid message in three hours. This time a senior lieutenants are coming back in and i circulated to demagogue an input and made the changes since then back again completely bypassing chain of command and send it to security detail of the canvas to the director pessimistic at that. As far as i was concerned that was the end of the story. I had no idea what would happen after that. He did wake up and gave them my piece and circulated copies to other members of the work cap a mighty cheney and rice and rumsfeld and secretary powell and rumsfeld and myers. They discussed it that day at camp david. The following monday they met with the president and laid it out the president had done. This is our template going forward. Next i knew, tommy franks, the Combatant Commander for the region was getting me on the phone to do a Video Conference because hed been ordered to make sure his data plan formed to my paper. This is absolutely extraordinary. This is simply not the way things normally work. Well, it said no plan survives contact with the enemy and this plan was no exception. Next, tran talks about the city and people of nagasaki in the morning of his bond until today. August 9th, 2015 marked the 70th anniversary of the bombing of nagasaki. Susan southard is one of this community. That is what makes this event very special
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