Today we take a dive into the world of “corporate bullshit” with Nick Hanauer, who has become an expert on spotting and debunking it. Nick is a businessman who became known for warning of the devastating social effects of plutocracy and who now hosts the “Pitchfork Economics” podcast, which presents sharp conversations with leading progressive economic experts. His new book Corporate Bullshit, co-written with Joan Walsh and Donald Cohen, goes through numerous historical examples of corporate propaganda and trains readers to spot misleading and manipulative information in our own time.
Nathan J. Robinson
In introducing this book to the public, you said on a recent podcast that as someone who has been in corporate boardrooms your whole life, there’s nothing you know more than “the extent to which some of your business colleagues will go to lie to protect their power and profits.” I would describe that as a strong statement. Can you justify that statement?
Nick Hanauer
Well, I would like to think that the boards that I’ve been on have represented companies that have been less nefarious than some of the worst offenders.
Nathan J. Robinson
Yes, I assume you mean the colleagues in the world of business generally, not the particular colleagues in your own businesses!
Hanauer
Yes. [But] I don’t think it’s possible to dispute that claim. You only need to take a cursory reading of history to acquaint yourself with the degree to which folks will defend the truly indefensible. From trying to justify slavery by telling themselves and other people that slavery was good for the slaves, to preventing women from having the vote by telling them that giving women the right to vote would harm them, to saying that climate change doesn’t exist, or that lead in paint is harmless, that seatbelts will create more harm than good—it goes on and on. Nathan, I just don’t think it’s challengeable as a statement. People will defend the indefensible.
The defining experience in this world for me was trying to raise the minimum wage to $15 an hour, which is where I got first acquainted with, in a direct and visceral way, the degree to which people would defend their interests with lies and malfeasance. If you try to raise the minimum wage, the thing you hear again and again is that it would kill jobs. The more you raise them, the more jobs you kill. So, the thing about me is that I’ve run businesses since I was a wee child. I went to work in the family business when I was 7 or 8 years old. I’ve been working in businesses and running businesses my entire life. And the thing I know better than almost anybody is that in the absence of customers, there is no business. If nobody has any money, who will buy the stuff? When I looked into the empirical evidence around raising wages, what I found was that there was literally zero empirical evidence that raising wages killed jobs, and as we worked on this project, more and more empirical evidence flowed in. And yet, no matter how much evidence we could show our opponents, they never stopped making the claim that if you raised wages it killed jobs.
It finally occurred to me—it took me a longer time than most to come to this obvious conclusion—that opponents weren’t saying that raising wages killed jobs because it was true. They were saying it because it was the most effective strategy they had ever found to keep wages low and profits high. If you can persuade people that raising wages kills jobs and will harm the very people you’re intending to help, then reasonable people will conclude that it makes no sense to raise wages, that to do so is both impractical and immoral, and so we should keep wages low, and therefore profits high.
Robinson
Well, and they’ll be scared of it.
Hanauer
That’s right. I want to underscore what you just said. Because when you really come to understand this claim, it sounds like a claim on economic cause and effect. But it’s really an intimidation tactic masquerading as economics. That’s what it is. It’s a threat. It’s a con job. It’s a way of saying to people in the way that mobsters used to: that’s a very nice job you have there, it’d be a shame if something happened to it. For you and I, who grew up in pretty fortunate circumstances and have pretty cushy circumstances, losing a job is an inconvenience, but for millions and millions of people around the country and the world, losing a job is an existential threat. And so, when I looked around, I saw a lot of this.
Here’s the really amazing thing: if you just zoom out and think about it, why doesn’t the Chamber of Commerce ever tell the truth, which is, the less we pay you, the more money we make, the bigger our executive bonuses are? Obviously, we don’t care about you or your family. We just care about our bonuses and our profits. So, screw you. Why is that never said? Why don’t they ever say, we make a lot of profit on that poison, and we don’t want to not do it? It’s profitable as hell to poison you.
I have this friend named Molly Crockett who’s a really brilliant neuroscientist and does research on human moral reasoning. I called her up and asked, Molly, what is this about? And she said, Nick, this is so simple. The thing about human moral reasoning, and the most important element of it, is intention. What you intend is the most important thing, which is why if you purposefully kill somebody, you go to jail or worse, and if you’re driving down the freeway, and somebody jumps off an overpass and hits your car and dies, you don’t go to jail. Because obviously, you didn’t intend that—it wasn’t your fault and couldn’t have been avoided even though the people are equally dead. And so, she said, people frame things this way to disguise their intention. If they just said the truth, people would want to burn their houses down. And the more I zoomed out, the more I looked around the world, the more obvious it became that this was a pattern that existed in every domain.
As luck would have it, I bumped into an absolutely amazing organizer and social justice warrior named Donald Cohen, who had the same kind of experience. And because he’s better organized than I was, he took a sabbatical, went to the Library of Congress, and created a database of these kinds of objections—thousands of them. He called it the Cry Wolf Project, and he didn’t know what to do with it. He gifted it to my team at Civic Ventures, and we sat on it for a couple of years, not really knowing what to do with it.
And then we decided to try to put these quotes in front of people somehow. Once you see the patterns, it effectively inoculates you against future claims. That’s where the idea for this book was born. We sought to organize these things in a way so that when you show them to people, they’ll say, holy shit.
Robinson
Because superficially, the argument that the $15 minimum wage kills jobs could be true.
Hanauer
It’s plausible! Yes.
Robinson
It’s plausible. And what you point out in this book is that a lot of these corporate bullshit arguments are effective in part because there’s a theory of the world under which they could be true. Before the empirical turn in economics, economists actually used to believe this would happen. The profession of economics changed its mind once the evidence came in. So, a lot of this could be true in theory. These stories are very powerful.
Hanauer
That’s right. They’re always plausible. It is plausible that you can drink lead and not die. It’s plausible that cigarettes are not terrible for you. It’s plausible that climate change isn’t real. And of course, there are some people who are inclined to believe these things. Like if you love to smoke, it’s music to your ears that smoking isn’t bad for you. You don’t want to believe it’s bad for you. Wouldn’t you love to not believe that climate change is an existential threat to the planet? It would be great to believe that. And so, these lies have a certain internal logic and power, but they are almost never true.
You show me an entrenched powerful interest, I will be able to point you to a bunch of narratives that defend those interests, irrespective of how egregious they may be. And people have asked me before, where are the next lies going to come from? And my answer is very simple: wherever you find concentrated power and wealth, wherever that is. So right now, that’s on social media. “Well, we are not screwing things up, social media is good for you.” “It should be your choice, and if you don’t want your kids to look at Instagram, then just stop them,” and blah, blah, blah. It’s always the same.
Robinson
Mark Zuckerberg has said something like, it wouldn’t be in our interest to make our customers depressed and angry, and the various ills that are attributed to social media.
Hanauer
“We’d never do that! We only have good incentives.”
Robinson
“We only have incentives to please our customers. Why would we kill our customers? That would be bad for us.”
Hanauer
We identify six basic stories in the book. “The free market can fix it” is one of the biggest ones. The argument, of course, is that the market will always regard good behavior and punish bad. In other words, we couldn’t be successful as Facebook if our behavior had been bad because the market wouldn’t reward us in the way that it has.
Of course, this is just absolute nonsense. This is the argument that was made to try to prevent civil rights laws for private businesses. We would argue that a racist business would be disadvantaged and, therefore, you’re just harming the economy by requiring people to be held to a certain standard, as the Chamber of Commerce told Congress in 1973. Employers do not deliberately allow work conditions to exist which cause injury or illness—safety is good business—which may be true in theory in some perfect world but has no connection to what actually happens on planet Earth. It’s just not true. People make harmful products all the time because they tend to be very profitable to make.
Facebook is an enormously profitable company, and the harm they are causing in the world does not cost them any money. It only costs us money, so they don’t care—they don’t have to. Another big one of the top lines of bullshit is “it’s not our problem.” That’s where Facebook started, of course, which is, with all these student teen suicides. Don’t look at us, that’s not us; the problem doesn’t actually exist. Disasters are a natural part, for example, of working in coal mines. Pay no attention to the 50,000 miners who were killed last year.
Robinson
My training is originally in law. And there’s this thing in law called “arguing in the alternative,” which is: I didn’t do it, but if I did it, it was self-defense. Arguing in the alternative seems to come up a lot here, which is: it’s not happening, but if it is, we’re fixing it through the market.
Hanauer
And another classic: it’s not our fault, it’s your fault. Injured on the job? You must have been careless. Your kid choked on the product? Well, you shouldn’t let them near it. In the 2008 housing crash, that wasn’t Wall Street, that wasn’t the banks, that was greedy people who wanted homes they couldn’t afford. It’s never us, it’s you. And then the one that I have come up against so many times in my career working on economic policy, of course, is: it’s a job killer. How many times have you heard that? If you raise taxes on the rich, it’ll kill jobs; regulate big corporations, it will kill jobs; raise wages for working people, it will kill jobs.
We live in a world which has been turned so upside down by this market fundamentalist framework that anything you propose that will improve the lives of middle class or working people has to affirmatively prove that it will do no harm, but anything good that happens to the truly rich is an unalloyed good. So, infinite bonuses on Wall Street are a sign of economic growth and success; a tiny increase in the minimum wage is a very dangerous job killer. And it is completely obvious that the more money you pay working people, the more jobs that creates, and the more money you pay people on Wall Street for securitizing imaginary assets, the more jobs you kill. If you’re really concerned about what’s killing jobs in America, it’s the concentration of income and wealth at the top. That’s what’s killing the jobs.
Robinson
Seeing through corporate bullshit not only helps us understand the world, but it’ll make you angry. Because you start to realize the size of the gap between what we could do and could have, versus what we do have. These fallacious arguments are being made by people who don’t even care whether they’re true. They just care whether they can scare you. These things are essentially causing a lot of unnecessary harm and suffering.
Hanauer
That’s right. The principle is converting fear to anger. So, if you look at the objections or the strategies that our opponents use, they are almost always rooted in an intent to create fear. Again, raising wages kills jobs is the canonical example of that. It’s an intimidation tactic masquerading as economics. But once you begin to teach people that they’re not saying it because it’s true, they’re saying it because it’s a really good way to bully you, people’s fear recedes and is replaced with anger. And anger is useful because anger animates people and makes them willing to fight. Corporate overlords want people to be fearful. We don’t want them to be angry. Angry is scary. If people get angry, then we have to change; if people are fearful, we don’t have to change.
We want to inoculate people, in their minds, against these lies so that when they hear them anew, they’re not intimidated by them. They’re angered by them, and when you’re angry, you’re willing to act. I think that’s so important to drive change in the world.
Robinson
You said earlier that if we have a cursory reading of history, we can see this stuff. But it struck me that I don’t think most of us get a cursory reading of history. I write professionally about politics and economics, and I consider myself fairly literate in this stuff, and a ton of the examples that your team excavated and that you write about are shocking to me.
Hanauer
They’re so shocking. Like with the things that people say, you just can’t even believe they said them. In my introduction to the book, I write that it’s all about defending the indefensible. There’s some indefensible stuff that went down over the years, and no matter how indefensible it was, there was some corporate executive or their lackey in Congress who was willing to defend it. It’s just unbelievable what people will say to protect power and profit.
Robinson
You have Lee Iacocca at Ford, for example, saying that seatbelts are a complete waste of money. And incredibly, he said the Clean Air Act could prevent the continued production of automobiles. You pass this Clean Air Act? No more cars. Again, you see the same thing with a $15 minimum wage. They scare you.
Hanauer
It’s just absolutely amazing. You had Mike Pence as recently as [the early 2000s] saying that smoking [“doesn’t kill”]. What? It’s just unbelievable what people will say. Of course, the bigger the social harm, the more that people will rush to protect industry, especially if there’s a lot of profit that is at play.
Robinson
Chrysler saying there’s no evidence of a threat to your health from automotive emissions, national lead companies saying lead helps to guard your health, and then you have the kind of right-wing think tanks like the Cato Institute saying the subprime mortgage market offers a good example of competition at work right before the crisis.
Hanauer
It just never ends. One of the things I’d love for people to know about the book is that it’s not a textbook or tome. It’s a coffee table book. The point of it is to be fun, and it’s filled with cartoons, pictures, and quotes. It’s really funny when you read this stuff. You just can’t believe that people would say it. It’s both heavy and light all at the same time.
Robinson
As you’ve mentioned, when you put the evidence in one place, you start to see patterns, and the patterns educate you. What they do is not just give you knowledge of history, but they educate you in critical thinking. If you could really teach everyone in the country one skill, you want to teach them critical thinking. With the information you get, how do you analyze it? How do you figure out what’s well grounded in fact? What’s a bunch of crap? If everyone could just grasp critical thinking, we’d be a hell of a lot better off.
Hanauer
That is true. It’s just unfair to blame people generally for this stuff because everybody’s just going to go along through their lives. The typical citizen doesn’t have the resources or the time to take the minimum wage and analyze the empirical economic literature. But, even if you have the time to parse the economic speak, you’d have to be an expert to figure this stuff out. It’s not fair to expect people to understand these things. How would people know?
Robinson
It’s why the bullshit works.
Hanauer
That’s right. This is why the bullshit works and why it’s so indefensible. It’s taking advantage of people in a really unfair way.
Robinson
That’s why I like what you do on your podcast. It’s some of what we try to do in Current Affairs, too. There’s such low-quality and unreliable information delivered to people, and they don’t really have a way of knowing whom to trust. We as independent media have to go out and find trustworthy information. So, you get all of these economists and policy professionals on the show who actually know what they’re talking about and who are really intelligent and insightful and can explain things in an accessible way, setting aside the bullshit and talking about how the economy actually works.
Hanauer
That’s what we have to do. And you do it in your magazine and podcasts, and we try to do it in our own little way. But as you know, it’s a lot of work because the bullshit out there is thick.
Robinson
There’s the rule that it takes an order of magnitude more time to refute a piece of bullshit than to create it.
Hanauer
Yes. I can’t remember who said it. But it’s true.
Robinson
I want to ask a little bit about you personally. You became infamous as the guy from the plutocracy who came out and warned about pitchforks. What was it in your life, and how was it that you looked at the social class that you were in and the world of business that you inhabited and said to yourself, “There’s something wrong here, and I have to speak and say something?” What triggered that? For most people in your position, that doesn’t happen.
Hanauer
I started out as a moderately empathetic person. I think that helps. The real turning point, for me was in about 2006 or 2007. I got to look at the IRS tax tables that are published that showed the change in income shares. So, in 1980, the top 1 percent of Americans shared a little bit more than 8 percent of national income, and I think by 2007, that number had gone from 8 percent to 22 percent or 23 percent—something like that. The bottom 50 percent of Americans in 1980, I think, shared in the range of 18 percent of national income, and by 2007, it had fallen from 18 percent to 12 percent. I just threw those numbers in an Excel spreadsheet and asked, what happens if this trend simply continues for another 30 years? And the answer was: revolution. You can’t not have that.
I can’t remember exactly what the numbers were, but the share of income for the top 1 percent was going to go to 40 percent or 50 percent, and the bottom 50 percent were going to share not 12 percent, but 5 percent or 3 percent. I thought, we’re in deep shit. You don’t have to have a PhD in political philosophy, history, or economics to look at those numbers and think, this is not going to work out, and it’s particularly not going to work out for the people at the top. That was the door cracking open for me, and then I started to peel back the layers of the onion.
So, I thought, how did this happen? It didn’t used to be this way. And then I always had this sneaking suspicion that orthodox economics was a pack of lies. It’s the only course in college I dropped. I spent a month in this Econ 101 class and just concluded that these people had no idea how the world actually worked. But the more I learned about economics, about the conventional way in which economists thought about cause and effect and the underlying assumptions they made, the more it became clear to me that it was internally consistent, mathematically elegant, and ultimately a protection racket for the rich. If you took any of this stuff seriously and enacted policy based on it, the only outcome would be that the rich will get richer, and everybody else would get poor. And I suppose I’ve always been animated by a mixture of empathy and an enlightened sense of self-interest.
Robinson
Well, the pitchforks thing is like: look, guys, they’re gonna come for us.
Hanauer
And with Trump and Brexit, that prediction is coming true. Why are people ready to burn American democracy down? The answer to that is very simple: for 50 years, the bottom 90 percent of Americans haven’t gotten a raise while the top 1 percent live beyond the dreams of avarice. It is undeniably true that for 50 years, the lives of working and middle class Americans have gotten shittier and harder while effectively all the benefits of economic growth have gone to the top 1 percent or 2 percent. It is impossible to sustain a democracy if the majority of citizens are absolutely clear about the fact that it does not benefit them. It’s just impossible. The thing will collapse. And, again, you don’t have to have a PhD in history to know that that’s what always happens. With any kind of cursory examination of history, from the Greeks on forward, you show me a highly unequal society, I’ll show you a police state or revolution. It’s one or the other; it just can’t not happen.
A lot of my friends think I’m super lefty. I don’t think I’m super lefty. It shouldn’t be controversial that every single person who works for a big company is paid enough money so they can live in dignity without needing food stamps. This shouldn’t be controversial. This is not a big deal. Capitalism is either a good system or it’s not. If it’s a good system, it can’t come tumbling down because you’re required to pay your people enough to get by without government assistance. Fucking figure it out. It’s not that hard.
I’ve been animated by that basic conception since. But, in truth, the more I learn about how our system is set up, what the ideas are that undergird it, and the policy agendas that we have pursued over the last 50 years, the clearer it has become just how screwed up it all was, how bad the ideas were that animated it, and how clear it is that we have to fix it and get ourselves back on the right track. Is that a good answer to that question?
Robinson
Yes, that’s a good answer. The book highlights a lot of continuity over time in the way that a lot of these arguments don’t change and are the same from generation to generation—different injustice, the same bullshit. I think you would probably agree that capitalism, and the age of what is called neoliberalism, has become a little more ruthless, insane, and cruel over the past few decades.
But as I was looking into your background, I found that your family had a company that made pillows and bedding. I found this really fascinating because it made me think of the most infamous manufacturer of pillows and bedding, Mike Lindell of My Pillow. Your family’s company was founded in the 1880s by immigrants. With My Pillow, you have this guy who seems to embody a very different way of selling pillows, which is that he tells people—just outright fraud—that this pillow will cure everything. He goes on television and is very Trumpian in how he sells pillows. And there’s almost an analogy between how you could sell pillows the Mike Lindell way or the way that your family did in the early part of the 20th century.
Hanauer
I have founded myself or helped found, I think, around 40 companies. Some of those companies are among the largest companies in the world. As I reflect on my business career, the only product I ever made that was unambiguously good for the world were the pillows that my family business made. We made these really great down pillows. By the way, down feathers are a waste byproduct of the poultry industry—they’re going to throw them away if you don’t turn them into pillows. Basically, it’s cotton, and then you get the feathers and wash them with soap and water—this is a very harmless process—and then you use air to separate the good ones from the bad, and then put them in the pillow and sew it closed. It’s a terrible business in the sense that the margins are very low. But we ended up making these products, both comforters and pillows, that people loved, that lasted decades, and were a great value. When you’re done with your pillow, if you open it up and put the feathers in the garden, it’s all nitrogen and a great natural fertilizer. It couldn’t be a better product for the world. It was a really cool business in that sense.
And then Mike Lindell comes along with this My Pillow thing. I’m just going to tell you a technical detail about being in the television promotion product business: those business models only work if you have a margin of at least 400 percent. In other words, if you can’t find a way to sell the product for at least four to five times what it costs you to make, the math doesn’t work. So, believe you me, I looked a thousand ways at trying to be in that business. The problem is that if you make a good pillow—if you want to make a pillow that will actually work well for humans—you’re going to have to spend in the manufacturing plant in the range of $20 to $30 per pillow, which means they would have to retail it for $120 or something like that, which won’t work. I think his pillows retailed for about $20, which means that it costs him something like two or three or four bucks to make one of those things, and they are a piece of shit.
Robinson
The reviews seem to speak for themselves.
Hanauer
They’re just a piece of shit. He just grinds up garbage and puts it in cheap fabric and calls it a pillow. That business model was never available to us because we made a product that just wouldn’t survive those margins. Of course, many years ago, when I was thinking about being in that business, it never occurred to me that the same sort of ethic that he applied to his product development would apply to his politics, too. But then, of course, there it is.
Robinson
I just think it’s very interesting that people always look at the pillow guy going into right-wing politics, but I look and see the connection between like the right-wing politics and how you make and sell a product. It’s the kind of ethic of, how can I gouge people? And one of ruthlessness.
Hanauer
Yes, in the same way that his politics are a lie, his product is a lie too.
Robinson
There’s been all sorts of things about promising it cures whatever ails you. The last thing I wanted to ask you here was, there’s been a lot of reporting on the way that despite a lot of strong economic indicators under Joe Biden, ordinary people still don’t feel great about the economy. You’ve been a supporter of a lot of Biden’s economic policies. I think you think that he’s exceeded expectations, probably, in a lot of what he’s done. He’s been very pro-labor and what have you. But you are also a person who pays attention a lot to the sources of people’s anger and discontent. So, this is a thing that many pundits find as a paradox—why could people possibly be unhappy? How do you understand why people could still be unhappy and frustrated?
Hanauer
Both these things make perfect sense to me. So, on the one hand, the Biden administration has been undeniably and objectively the most successful administration regarding economic policy, really, since Roosevelt. Nobody comes close. When you add up their accomplishments, and not just their accomplishments, but additionally, the way in which they have begun to shift the narrative around economic cause and effect, moving from a focus on making rich people richer to building the economy from the bottom up in the middle out. Absolutely transformational. And again, when you add up all the accomplishments, it boggles the mind: trillions and trillions of dollars being invested back into the economy. So, that is true. That’s a fact. Another fact is that for the majority of citizens, the benefits of that have not trickled down to them. It hasn’t touched them yet. What they have experienced is the largest period of increasing prices that the country has gone through in decades. I think inflation is the wrong word: we don’t really have a price wage spiral. What we had is a huge increase in prices as a consequence of the biggest supply chain shock in a hundred years. And although unemployment is very low, for 95% of Americans, they already have a job, and all they know is that they didn’t earn very much before, and now prices are significantly higher, and life has not gotten materially easier. They’re not running a counterfactual in their head, saying, if it hadn’t been for all these things—
Robinson
—how would it have been?
Hanauer
—unemployment would be much higher, and maybe things would have been worse. So, it is undeniably true that Bidenomics, the middle out economic strategy that they have employed, has done enormous amounts of good for the economy. But it is not visible to people who do not read the New York Times every day. If you’re just a working family in the country, you may earn a little bit more than you did, but you’re not earning 50% more than you did and the price of milk is up. That’s the reality for 95% of Americans. The economy does not exist; it’s an abstraction. They don’t look at the GDP numbers. It is my job and the expenses, and that’s it. And that is totally fair. Be clear that the Biden administration got done what the Congress would allow them to do. They would have raised the minimum wage to $15 or $20 an hour if Joe Manchin and Kyrsten Sinema had not been senators.
They would have done a bunch of other things that would have materially impacted more people in an immediate way if the Congress had been different, but they couldn’t. And so, we are left with a policy agenda, which is really an extraordinary accomplishment, but has not yet benefited many people. Boy, that is so frustrating to them. I work very closely with them and I know how frustrating that is to them. It’s frustrating to people like you and me, who kind of do see the abstractions: we are watching every bill that’s passed, and we’re doing the calculations on the amount of investment that’s going into manufacturing and stuff like that. But again, unless you live in one of those towns where they’re building a factory right now, and you just got a big new job, it’s not sinking in. So, again, for Democrats, particularly for wonky Democrats like you and me, it’s a point of frustration, but I do not think it should surprise us given the realities on the ground.
Robinson
That’s my take. I don’t feel like there’s much of a paradox there. It’s just really unfortunate that it might lead to the return of Donald Trump to the presidency.
Hanauer
I’m more optimistic than that, but it is frustrating.
Transcript edited by Patrick Farnsworth.
