Welcome. Im Judy Samuelson and im the executive director of the Aspen Institute business and Society Program. It is my great pleasure today to welcome to the screen with me, to fellow travelers of the Business Society program, a longtime friends of our work we shared the knowledge i would say about forces and the ideas that influence business decisionmaking. So the business and Society Program as i take a look at rogers book, a couple of articles come to mind and one is for business engaged with what jacob black hawk called out as a public purpose. But also to ship the mindset of Business Executives. What they believe to be true. What they designed their businesses to achieve. Both of these goals i think are in pursuit of Better Business outcomes and rogers brandnew dust released book, thank you roger for being part of this journey. His new release fits squarely in this domain. The book is called when more is not better. Overcomingamericas obsession with economic efficiency. Both alan and roger are known to many of you. Roger martin is professor and a former dean of the Rotman School of management at the university of toronto where he both darted and has been theanimating force behind the Martin Prosperity Institute there. Hes the author of any number of books and im going to put in the chat bio you can put into learn more about roger and thank you for joining us. Allen is the chief content officer and editor in fortune andeditorinchief of fortune. This ceo daily column is how i start my day every day and i like to now turn the conversation over to alan. We posted their bios as i mentioned in the allens going to engage the audience in questions, you can pose in the q a box. After we have the opportunity to learn more about rogers recommendations for business. And with that, alan, im going to turn it over to you. Thank you for inviting me to do this. Thank you for all the good things you do at the business and Society Program and roger, you for letting me be your interview and im very excited about that because ive read the book and i have to say based on everything that ive ever read or study or talked to people about in business, its heresy. Complete heresy. Youre a heretic and im i want you, i want to start right in with that issue caused so many Business Leaders i know of spent their whole lives to increase the efficiency of their organizations. And to think about the whole six sigma discipline, it was all about increasing efficiency and your Organization Area it would be interesting to see how much Business Schools new that is focused on that issue and you say that the wrong bowl. Tell us why. Its the wrong bowl when its an obsessive goal. When there is a limit to how much more efficiency you should try to ring of whatever your domain is. So that i think is the fundamental error is that Business Schools, businesses and world economists all said we should worry about efficiency. But make that factory more efficient by a division of labor, David Ricardo said. Portuguese people should make wine, you raise sheep and make wool because people are more efficient trading with one other so theres a long history of recognizing that efficiency is a good thing. But in a certain point, and i think that certain point was around 40 to 50years ago or half a century ago , it headed into an excessive level where it was efficiency at all costs and was a single unitary goal. How did that happen, what happened 40 or 50 years agoto set us on this track . It was really i think to a great extent Milton Friedman and mostly it was known as a famous New York Times Magazine Article that was the business of business saying that business must have a single unitary goal of increasing value to shareholders, serving shareholders and mike as in, also a great guy and a great scholar sort of double down on that and made a very powerful argument starting in 1976 about how a corporation if it didnt have that singular goal, it wouldnt know how to make decisions. It would get confused and do all six of things that would end up being ineffective for the shareholders. That all happened in the 70s. Thats the decade i think where this notion of there should be a singular goal. It should be efficiency and that efficiency, they believed would make the world a better place. It would be less expensive products and more value for shareholders and investors, etc. Etc. So they stop thinking about the question of is it just that or is it a little more complicated picture. That went out the window, its just that. Roger, if not logic theres some history behind. We see so often so many compelling examples of what a single measurable goal, the affected people to say this is what were doing, everybody get behind. Going to measure it on a monthly basis and were going to clock your results. I think it wears outpretty quickly. You can tell my stories about a given project of just the man on the moon, the single goal but when you ask the question if you keep doing that and keep doing that and keep doing that, in due course you get to where as i say in the book, more isnot better. So i think the pursuit of efficiency did good things for america for the first 200 years of the country. From 1776 to 1976 i would say it was a positive. I think its just when you keep doing that. Often the world has changed so that goal is no longer kinda perfect and you start doing things that are excessive. Give us some examples of where efficiency has business astray. I think its when businesses astray in how much it has ground down wages of labor. To a point where youve got employees in much of retail, employees that sleepwalk through the stores and the shopping experiences. Efficient staffing Efficient Labor costs. But was the result . Costco took a and said you know what, heres what were going to do. Going to do something different. Were going to people pay people way more than minimum wage everybody makes over 20 20 an hour for a shot, and they figure out what efficient staffing looks like. If we were efficient they say we will have self. What on earth, how can you run an organized store with that kind of attitude. It just happens to be one of the most beloved, most successful gigantic retailers in america. By saying yes, we care about efficiency but we care about other things too. We care about shopper experience. I dont know if you go to costco a lot of the people go to cosco and they love it. They love the ways they are treated by staff or who are empowered to make decisions that are knowledgeable because theyre going to be there on time theyre awesome what youre doing and do it with a certain joy. So thats in contrast to if we only worry about efficiency in terms of labor costs , hourly wages, staffing levels. Youre not going to produce that more robust good for the customers. Roger, how does your discussion with you write about. Compellingly in the book efficiency, out of that time into this conversation were having these days stapler, moving away from shareholders , moving towards a attention to multiple stakeholders. Theres a lot about that i like. What that is is they moved away from seeing there is one singular goal and as long as you do that thing, you are all fine that is shareholder value maximization. The interesting thing about shareholder value maximization as i wrote about in previous books is that ever since we had that as the singular goal, shareholders have done less well than they did before. Which gets back to a clever guy like to write about, aristotle long time ago said a person likes to be happy, theyre unlikely and up happy. They set out to live a good life i which a life of servitude to either their fellow man and woman, they are likely to end up happy. So often the pursuit of a given goal, singlemindedly doesnt actually get you to that goal. So i think theres been a recognition that this pursuit of shareholder value is not terribly effective and its not great for society because all source of things that we care about in society so i like the notion of moving away from that singular goal to a notion of stakeholders, plural. There are more than one so you have to balance. What im not so keen on is what i think of as leadership thats being shown including at this roundtable in providing tools for doing that. This book is an attempt by the way to do that. Provide more ways of doing that because my experience is when you dont have a tool, when human beings dont have a tool, they dont do the things that they might want to do. And i want to get back to solutions in a little but i want to understand the problem better before we get there. Interesting that you cant the turning point of 40 or 50 years ago. You have the friedman article you also had was a rising ecosystem of corporate raiders, private equity , shareholder activists. All of them felt that the people who ran Large Companies use multiple goals ofs excuses. I didnt do great on shareholder return im doing really good over here on this thing or that thing. So is an understandable human diet. For them, forcing discipline around a single metric was a means of accountability and without it, they feared it wouldnt haveaccountability. I agree that again why i say that there is, there was a value in the push for efficiency. Theres, your life can be made easier but i would just warn anybody to be aware of what you wish for. You may just get rid thats what it has happened. You might get things you did not think you would one of the things that we have gotten, i think quite by accident. I do not think anybody like doctor evil plans great massive income equality with middle incomes and the top one percent doing better than they ever done in, nobodys said we want that. It was accidental out of taking one lever and pulling it super hard and i think that efficiency labor is spurred in part by corporate raiders and if you do that weregoing to come get you. The Court Decisions have made people think. Its not true that shareholder value was legally , your requirement. So we started pulling the lever and pulling it super hard. And got some things other than we thought. Give me some other examples of where that went wrong. There are many classic historical examples of where it went right. Look at what toyota did for the productivity in the automobile industry. Look at what sam walton did for the efficiency of the retail business. You talk about wages as one example where you feel like this has been taken to a couple of other examples, training it back in the right direction, but most unfortunately regional hospitality have pursued efficiencies to the point of having kind of workers that turn very quickly, 70 turnover in the hotel business. I mean, if you are served by somebody, the average hotel, they are on their way to a 16 month career in that company. And it is a problem primarily in the labor market, or do you see this in other parts of the corporate markets as well . Sure. We are pursuing efficiency in capital structures, right . Thats what you get toys r us or i heart radio, like perfectly Good Companies going bankrupt because they would load up with all sorts of that because that was a quote efficient capital structure. Covid, right . We had sufficient amounts of ppe in all hospitals, right, according to all the efficiency, efficient number, what is less tone and its a good studies coming out now, how tightly nursing staffing, its the biggest variable cost and hospitals that kept getting squeezed on, squeezed on to be perfectly efficient. That and purchase of ppe, all of that was efficient but it wasnt resilient at all. I dont think David Ricardo, he didnt say nor did he ever remained that you should open up every economy to everything. He just noted that you should actually focus your resources on the things you were better at. But trade policy has i think pushed efficiency to an extent that does matter when you wipe out an industry. Economist used to think that, well, you know, these workers will find the ways to other industries. Now people have shown definitively that no, if there is a huge human toll to some of the trade policies. Theoretically it sounds great but it is not making for a resilient economy at all. Roger, you had a significant portion of the book where you attack net promoters scores here i found fascinating, i was at a meeting of ceos of Large Companies, and off the record conversation but it dont need identify them because we were tight how you create a coping when rent room and basically 90 of them saw the nps score as their main tool for focusing on consumers. It obviously been adopted by businesses. They see it as a useful tool. Whats so bad . Let me start by saying i think i put in the same sentence as edward. Hes a great guy, very smart, came up with the score idea of customer loyalty. It just shows what happens when you take a goal, the goal is more loyal customers because they should keep your existing customers was more effective than losing a bunch of them and having to get new ones. So the goal is to keep your customers, and that then gets translated into a measure, right, a model that says okay, we want of customer loyalty. The model says its cheaper to keep your customers so heres the kind of things you do to keep your customers and then we will measure it with the nps. What happens over time is kind of scholars call that score becomes seen in the persons might as exactly same as the goal. We will have loyal customers if we have a high nps. But its not true. Its just a measure of that. And then what you get keen on is why dont we create incentive programs run high nps. Two of the last the car cyber bot, the salesperson at the end of the process told me i was going to be getting, they did not like name, i nps serve it and instructed me to give them tends on everything. All that did was make me feel like i never want to deal with that our company again, and have actually because it just turned me off so much. The pursuit of nps by providing incentives for people, employees, to try to generate high nps had the opposite effect that the model intended. That is a greater danger when you have one goal. Its the wells fargo story. Our one goal, the goal, the desire is to close customer relations. It gets translated into number of accounts per customer and somebody says okay, im how to get that up. I will open up accounts or customers. Whats wrong with that . Its wrong when you didnt ask them and they he didnt want id he did know about it. That cost billions and billions of dollars and shattered the reputation that is taken under jeers or more to build. Thats the nps kind of story, and it happens in the nonsector business nonbusiness sector. When you have a single goal, because life is not that way. Like, the things i say to everybody is, you just ask yourself, is this how you operate . In your life you would never pick a single goal and exclude all other goals in the pursuit i dont think so. Not for anything, not important, not for him to think longterm may set out on the first tee of a golf round to have a goal of getting an 85 or whatever. Though you would realize that if that was your only goal for that round, and it had nothing to do with having a good time with your playing partners enjoying the wide open outdoors, making couple of good shots that make you feel like hey, i can do this someday, you will have a miserable time, right . It is just not the way life works. Life is complex. As i say its a complex adaptive system. Its not the mechanistic system we can say there is the lever, i must go back one lever and everything good will happen on the basis of pulling back when lever. Life doesnt work that way. Why . Why do we think the company will work that way . Why do we think an economy will work that way . I can imagine, i wish someone like i think with the receipt is what he might say is because these people are not that smart. They cant get the mine, none of us are that smart. You can get your mind around a complex ecosystem, so simplification is essential for setting and achieving goals. I think he would and i think to a point hes right. Its just what happens when you go past that point . That basically what im saying is we have definitively, clearly gone past that point where again, the idea of like you just take what you said, taking that as the truth, that is now the truth. And lets you simplify and how would we know what supplication . Without some metric for supplication, how simplified things are. Like oh, its had a Small Corporate Office so that site everybody at the Corporate Office and its that simplification, or lets divisional lies the structure, break it into pieces. All those things can have value but when you take them to the extreme, thats or think youe thinking about, certainly think you are telling your employees, thats what you will get. So lets turn to solutions. What do you do about it . I think there are things Business Executives, political leaders, educators, citizens can all do. One of the things i would say to Business Leaders is just listen to dimming. Listen to them and say of the nomination of flak is not being efficient. Theres a proper amount of flak with symptoms because of not simple and linear as you think they are. You can say having no access ppe is a good idea until the next pandemic comes along. Stop with the elimination of flak and recognize that an amount, a nonzero amount of fk is the right thing to achieve. Second thing i would say is, pick multiple goals. Be like southwest airlines, right, where you set our goal is to be the lowest cost airline and highest Customer Satisfaction in the highest Employee Satisfaction and the most Profitable Airline in america. You have to say youve got to be kidding me . Unless you look at their 50 year track record. What that will make you do is be more creative, and if you are more creative you have a strategy thats harder to replicate. Not a strategy that is dead easy to replicate them. Outsource everything to china, vietnam, whatever. Anybody can do that but can you build an airline like southwest . Can you build a hotel chain like or seasons . No, because its more complicated but that means embracing multiple measures and not getting into this type of business. I would also say its so important for Business Executives to turn the back on, again, at least a half century trend in the world of business towards reductionism. If we have marketing, operations, h. R. , et cetera. Break it down, perfect each one and then add them back up. Thats how ill visit schools are are organized. Thats all companies organized. Each of these domains have own expertise. The problem is, as Peter Drucker before he passed away told me, he said roger, there are no accounting problems come , no marketing problems come no finance problems. Our only business problems. Which you have to admit is right. However, we teach businesspeople to identify is this a marketing problem . Get out my Marketing Toolbox and treated as a marketing problem. Thats kind of reductionism is creating companies that think they are being efficient, but they are being narrowly shortterm efficient and broadly longterm, grotesquely inefficient and ineffective. The last thing i said to businesspeople, dont believe that seeking a monopoly position is a good thing to accomplish. Now, most will say no, no, no, thats what i want. Thats exactly what i want. The problem is if you look at the history of monopolies, it doesnt end well here if you look at the companies that of making a position in the dow jones 30 for the longest time, you will notice the ones that stay around for a while have great competitors and are not monopolies. Why . Its because everybody if youre going to be good at something you need to practice and train. If youre going to be pianist you have to practice, training and go to competitions. If you are a golfer or a basketball player, you need training from a competitive action. If youre a monopoly you dont have any. And so youre just not going to do things that make you better if you are a monopoly. And that raises the question of how much of this is a difference in time frames between shortterm and longterm. There are lots of efficiency will fill your pocket in the, can fill your pocket and shortterm in lots of ways but undercut you in the long term in lots of ways, the monopoly example, the wage example being among them. What we are taught by here the difference between a shortterm focused and a longterm focus . I wouldnt say its all about that but that is a big piece of the puzzle because i do, and again, its a mechanistic view. If you break time into tiny chunks and optimized for each tiny chunk, that will not necessarily optimize you for a big number of those time periods. Its the same form of reductionism. Because what seems fine in the shortterm will end up when you add up a bunch of those, be kind of arranges for you in the longer term. That is a piece of the puzzle though i would consider it all variants of this idea that we understand the machine while enough to break it into little chunks, and when we add the up they will be all fine. I do not believe they will be all fine when you add them up. I want, we have a lot of questions. I will go to the question in just a minute, but as an educator how do you train a new generation of businesspeople to get their heads around this . What do you have to undo come what you have to do . And tied into that how do you get the superstructure in place, the metrics that you need in order to be successful at managing in the way you are suggesting . Thats an entrepreneurial challenge. To answer your first question, i think what we need to do to teach business students now is to give them tools, practical tools for seating if part of this this is a marketing problem and part of it is i dont know, a finance problem. How do i take those two models and integrate across them . Business education has almost completely dropped back and hunted on that. It basically said thats hard hunted so im not going to. They claim to teach general managers but they dont. They absolutely for sure do not. That can be done for what its worth i did that for 15 years. The hardest thing and then in my entire life is trying, trying to get that kind of thing instilled but thats a fundamental thing that has to happen. We have to train been to deal with clashes between models rather than picking, im going to pick this and call it a marketing problem and apply that Marketing Tool that i was taught. Thats the notion. On the tools we are just going to have to build a new and better toolbox. I do think that people are doing that. Something i i talked about in e book based on the work of a great professor at sloan mit on how you can think about what you pay, how you train your workforce, id display your workforce to create jobs that are good jobs for society and better for you to make there are things like the d corp. Which says heres the different government structure. What weve got to do, theres lots of environmental kind of environmental footprint measurements kind of entities. What we need to start to do, and i told us at a roundtable, i dont know if they will listen, they need to start calling together a set of tools so they can say to their ceos if you want to do what we said in her statement, if the option want to live that, heres a set of tools you can deploy to do that. Because if you dont they are not, they would just continue doing what youre doing now because those are the tools they learn to business school. Thats having to do things. On that point if the first set of tools is a reasonable set of metrics, there has been some interesting work done by the big four Accounting Firms working with the World Economic forum under their International Business council which just put out a report last week. Brian moynihan put a lot of time into that. Is that a step in the right direction . I think so although ive not looked at it but that kind of effort is because if its what you say, its a tool based, and im just one practical guide. Like, endless summer has a tool for something, they are not going to do it, full stop, right . People did not treat options do we had the actual options the room. People did not advertise online until google created a a tool o allow them to figure out how many clicks the got. When you develop a tool, people start doing the things. And if you dont have a tool they are just not going to do it. You just want a full toolbox and that every sitting there with a hammer. That is right. Right now anybody sitting there with a hammer and wondered why things are lurching and one particular direction. Well, because thats what happens when you have one tool. Let me turn to the questions and please put your questions into the q a, click on the q a. One question here, i dont have a name with it, what do you say to a ceo who says that growth is the objective and their goal . The title of your book is when more is not better. Is growth of that objective . Yeah, singular. Think about, growth with no concern about profitability, for example, result in you being bankrupt pretty quickly. And leisure in Silicon Valley but thats a a separate issue. Right. Even most of them run out of cash. Theres a a gigantic survivor s in our minds when it comes to Silicon Valley. So no, i think growth as part of, like i would say, saying, we would like to achieve this much growth and at the same time build more loyal customers with Production Capacity including our people that will enable us to maintain that over a long period of time. That is a useful set of goals, whereas growth is not, in my view. A couple more questions about the notion of the role that finances played in this. What role has financialization of the economy had to play in making the problems of the last 50 years . And also related to that, what role has the Federal Reserve or treasury had to play by reducing Interest Rates and creating bubbles . On the second one, on the fed, i think the fed labors under the delusional misconception of an economist data sent how the Machine Works and in no which labor to pull and how much to get the results they want. Its delusional. Absolutely and utterly delusional. They may be the smartest people out there, the best economists but nobody knows those things. I do believe the fed played a significant role in the Goal Financial crisis. I think its just to back often realize you dont know and all you can do is make a little tweak and watch. In terms of the financialization, yeah, in my own view i think from much of the 20th century the part of the 20th century were american really came absolutely to the four as the worlds most powerful economic superpower, it had an advantage of the finest Capital Market in the world, deepest, broadest come most efficient, most trustworthy, and that gave American Companies the huge advantage and thats one of the reasons what an American Companies became the leading, moore, big multinational that were able to go global. I think in the last 20 to 30 years its turned around. So our Capital Markets are now a deficit that American Companies have to overcome. So this financialization where Financial Markets now, Capital Markets now serve traders first. Basically there are set up to serve first companies, so we schumers, it was to let them grow so first issuers. It was to let them grow and the issuers attempts to grow and then as an afterthought traders here that and everything about them is setup so the best number 14 traders and the other two, who cares . As you know, alan, im sure from covering it in fortune, with half as many Public Companies now, they are shrinking in numbers. Private companies are growing because they are essentially fleeing the public Capital Markets which are now making their life miserable. So the financialization has slowly but surely kind made america less effective at economy. Another question here, do you think ceos to make the right decisions to pursue the right set of goals when they are mainly focused on the share price of the company, and mean incentivized to be focused on the share price of the company . Basically have to be insubordinate. There are a bunch of insubordinate ceos out there, thank goodness, but this is the thing people didnt understand about these incidents. Incentives, if you do not try to maximize your incentive, you are being insubordinate. If you are networking if your governance body, the board of directors or the Committee Says heres how were going to incentivize you at the number one figure that outweighs all others is shareprice, because thats that would give it the biggest payoff, you are insubordinate if you do not work in the next year, right, and when you get judged on how you did to maximize your shareprice. Then the board asked the question can why were you so obsessed with the shortterm shareprice and not building the company . Its like lou in casablanca. Im shocked that gambling is going on here. Its like what are you people thinking . Thats the problem. The problem is incentives typically work to appear in this case the subordinate ceo says thats what they told me to do and i will go do it. It turns out there are lots of ways to increase shareprice. The hardest one is to build the business and make it more profitable. Thats the hardest one, right . The easiest what is ago talk up your stock at the right time kind of on wall street. An easy one in building a business is the ushaped Financial Accounting practices. They wonder why are we getting shady financial practices taking shortterm, not taking any shortterm investments, cutting r d, cutting things . Why is her ceo doing that . Like, wake up. You asked them to do it. So, i mean, stock compensation is a bad idea. I have written an entire book about it. It is a fundamentally bad idea that is been discussed as a de facto good idea. Its just a bad idea. Questionnaire about supply chains. I should point out i i meant to say this earlier just for people listening, that while your topic is a particularly good one for the covid era, when weve seen the importance of resiliency and the limits of efficiency, your book was put to bed before covid ever hit. You were press yet Testing Press yet. I start the work in 2013 and a 2013 there were the socialism did not pull at all well. Bernie sanders was not a National Kind of political figure yet, and now both are. What does that tell you . What is a fact that socialism polls well with young people and Bernie Sanders is a powerful force for the Democratic Party . Whats the signal you are getting . The signal is Democratic Capitalism is not considered the absolute de facto standard. Its now considered a choice. And before that it was what we did. And thats because it has failed to deliver . It is failing to deliver what its always delivered and what it needs to deliver, which is a rising prosperity for most americans. The median family for me in the book, i use that as a proxy if the median family isnt moving ahead smartly, right, then the swing voter isnt moving ahead smartly, and the swing voter is going to say, you know, i dont know about this system. This system isnt delivering for me. They made of vote in 2016 on that. Lots and lots of exit polls asking why did you vote for trump . Did you really think he would do this better . They would say no, no, no, no no. No. I just want to blow it up. What was brexit . Brexit was a blow it up. So i think when you get frustration, there is more of a questioning of what does the fundamental system . In the Great Depression globally that happened, and during the Great Depression there was a major shift towards socialism, fascism and communism in western europe and in asia, part of asia. America said we are going to stay with Democratic Capitalism. But if you look at the numbers, that meeting income person to better faster in the Great Depression than theyve done since 1976. Thats what i was worried about and i think were getting what you would expect from that. Is capitalism in crisis . Democratic capitalism is in crisis. Capitalism isnt at all. Chinese capitalism is doing awesomely. Totalitarianism capitalism is doing just fine. Thirty years ago we didnt know that was a thing. Right. But it is. And its doing just fine. Its his precious, maybe im being too modest about this, but to meet the combination to wonderful combination of democracy and capitalism is precious having the majority of people decide in a democracy on how were going to run the economy, and that way being mainly by ownership of productive assets in private hands. That combination is wonderful. That combination is giving darn close to a crisis point. Question here, roger. You already refer to it about a double standard in a setting this aggressively apply to the logic of efficiency to keep worker wages at the market while at the same time boards of directors insist that executors be paid at the market because they are above average. No, no, no. Boardrooms are all around the coastline where everybody must be above average. It is a double standard and workers, workers are responding in the way workers ought to respond. Workers are responding by checking out. All the engagement numbers that come out to show deadly for engagement, and its whitecollar and bluecollar. And so theyre saying i am going to invest in other things. Im going to invest in bridge lease. Im going to invest in my church activities. Im going to invest in my family as opposed to, im going to really invest my all in my job. Its a complex system and adaptation, right, of labor that is being treated miserably is to simply not give its all. You can walk into a cosco and see what a difference is when they give their all. Its an awesome customer experience. Its fun. Its fun because theyre happy. They want to help you. They care about cosco. If you say but why dont you of this kind of stuff on your shelf . Chances are like this week when you come back they talk to the boss come talk to the bosses boss, its on the shelf until like how does this happen . Is because everybody listens to everybody. Its not nirvana, but so i think thats a double standard has a consequence, as a consequence of being felt and felt broadly. Globalization of supply chains, in pursuit of efficiency. Was it a mistake . To the extent it has been taken, absolutely. One, one simple kind of way is to just take a job that is protected by rules and regulations that were democratically agreed upon in the u. S. For safety and work conditions and the like, and putting them in any jurisdiction where there are lower standards. Often dramatically lower standards. And how does that make for a resilient initial economy . So you think those rules and regulations are whats good for the economy, and you say at the same time, but you can opt out of those because thats beneficial to you in the short term, do we believe in that set of, that construct or not . We are getting what you would expect. Sort of surprising thing, all our jobs are being exported. Well, what exactly did you expect . What adaptation did you expect to that . I mean, there just isnt hell of a lot of logic outworking it. Think something is a good idea and think of the other ultimate extreme. Yeah, okay. So thinking something is a good a good idea, taking it to the screen. A question about amazon in the q a. Amazon is on its way to becoming a useful monopoly. Whats the problem . Whats the solution . Is there a problem . I guess i dont think, i think of amazon if they kind of stopped and took stopped and asked the question, is what we are doing truly sustainable or not . I think they could end up being a useful monopoly for a long time. If instead they say because we can get people to work for us at this price, we will do it and they had the sort of twotiered workforce where the programmers in seattle make gazillions and the rankandfile live hand to mouth, look below living wage, they they were kind of slowly but surely create their own destruction. I guess i think they have got a choice, and i dont know how they will make it. But i would say is that i think right now doug mcmillon, walmart ceo, has got a huge, huge task and unbelievably huge task of bringing walmart out of, i dont know, 15 or 20 years, 25 years, im not exactly sure, of using the systemic strength of walmart in the pursuit of a singleminded goal. And its a fight, its an existential fight. Can you make walmart a place where people enjoy coming to work, to have a fulfilling time, and have customers look at him and say, they are having a good time. They are not like shuffling around like zombies because had to work a shift that into debt 11 p. M. As income worker shifted six again because who cares about the life . You just care about having the right number of shifts on the floor. I would say amazon has an opportunity not to put itself in position ten years and now, 15 5 years from now when nothing works at amazon because that people dimension has been ignored entirely. Thats the kind of resilience and sustainability i would be saying is their priority now and it is easier to do when youre on top and when youre under siege. Let me ask more broadly, what role do these tech platforms play in this . Is clearly a different kind of economics at stake and i was taught when i was taught microeconomics. They do close to zero marginal costs. There are clear benefits to everyone from getting more people on the platform. How does that affect the dynamic . Its part of what a talk of and the book, its this outcome for having more creative outcomes that they are at the tail of the long, the in the distance scale of the distribution. What i would say is that we have to enforce antitrust the way it was designed in the late 1800s, sherman and clayton early 20th century. So it is a wellknown fact in Silicon Valley that the tech giants have killed those. Literally. Im sure youve heard this term. They have identifiable chill zones where they will kill anything that is in that zone near them. They will either kill it by buying it for a fortune or grinding get out of business. And that is predatory behavior of the sorts we have laws on the books about that are not being enforced because theres the efficiency defense now of monopolization. So it doesnt matter in your view, it shouldnt matter that google is more efficient for amazon is more efficient if they are making it impossible for others to compete with them, you have to take action . In doing it any predatory way. Unless you think sherman and clayton should be abolished, they are still in existence, right . And i think they were put there for a good reason. Its because we want dynamic efficiency, so yes tomorrow it may be more efficient if facebook buys instagram. Its the same programmers come all that, but 20 years and it is the grade as much innovation . Will the be as much innovation for instagram after it eviscerates snapchat under its steel toed boot . I doubt it. I just have never seen that. Monopolies exist to serve themselves. Thats what your Cable Provider tells you. Last question before i turn it back to judy. This comes from heather wilson. What role should the board play in transforming companies away from efficiencies to a broader set of goals . Theyve got a tough job but i think they should, one, a good board is one that gets rid of all competition before the person retires so they can actually think more long long. This can be done take my stockbased competition, divided into two pieces and invest in one year after i retired, three, four, five, six, seven, eight, nine, ten. Thats what you want, to get rid of the insanity of shortterm orientation stockbased compensation. And to make sure that you can say of your goals that they have enough variability and internally based to make you think clearly about the tradeoffs you make it otherwise you have a dole, boring strategy that is replicable by somebody else. Those are our jobs for boards, but that would be my advice to them if they want to give great stewardship. Roger, thank you for a great conversation, a fascinating book, fascinating and thanks for taking the time to do this. You are watching booktv on cspan2. We can with the latest nonfiction books and authors. Booktv on cspan2 great by americas cabletelevision companies. Today we provide to you by these Television Company superbright e booktv to viewers as a public service. And not on cspan2 use booktv more television for serious readers. Good afternoon and welcome to the 565th 565th meeting of the Economic Club of new york. 113 year. Im john williams, chairman of the come present of the Federal Reserve bank of new york. With a distinguished history since 1907 the Economic Club of new york is a premier Nonpartisan Forum for time of discussions on a wide of issues facing new york, United States and the whole world. Mission is important today as ever as we continue to bring you people together as a catalyst sharing diverse points of view. In particular