Glen Weyl: “Radical Markets: Uprooting Capitalism & Democracy for a Just Society” | Talks at Google

Glen Weyl: “Radical Markets: Uprooting Capitalism & Democracy for a Just Society” | Talks at Google

do the official introduction. I’m Hal Varian and I’m
the chief economist here. I think many of you know me. Glenn Weyl is a
Principal Researcher at Microsoft
Research New England, and this year he’s visiting Yale
University as a senior research scholar and lecturer in
the economics department and the law school, where
he teaches a joint economics computer science course
called “Designing the Digital Economy.” Glen is a townie. He grew up in Palo Alto,
received his AB in economics from Princeton, followed
by an MA and a PhD in 2008. He then spent three years as
a Junior Fellow at the Harvard Society Fellows, and three
years as an assistant professor at the University of Chicago,
before joining Microsoft. And over the period
from 2014 to 2018, he’s been a Sloan
Research Fellow. And today he’s here to
tell us about his book, “Radical Markets, Uprooting
Capitalism and Democracy for a Just Society.” Take it away. GLEN WEYL: Thanks, Hal. And thanks everyone for coming. So this work is the culmination
of many years of careful policy design research with Eric
Posner, but in the 10 minutes I have to introduce
it, I think, rather than going into the details
of all of the proposals that we have, it’s
best to just give you a flavor of the
sort of broad idea that we’re trying to get across. And I think that
that’s best conveyed by a thought experiment. So I want you to,
for the moment, suspend your practical
considerations and come with me on a
journey of imagination, to a fictive city that I’m
going to call Marketopia. Marketopia is a
bit like Zootopia, except rather than
being defined by having a diverse group of mammals
that inhabit it, instead Marketopia is defined
by the fact that all the major private
property in Marketopia– let’s put aside personal effects
like heirlooms, and pets, and so forth– but all the land,
and the houses, and the airplanes, and
so forth, is continually up for auction to the
highest bidder, in a manner somewhat similar to the
way that search terms are for Google advertisements. So basically,
whoever is currently the highest bidder on
one of these pieces of private property controls
it for the time being, by making a rental payment
continually into a central pot until someone else comes
along, and beats their price, and takes over that
rental payment for control of that asset. And that’s not just true of
private property in Marketopia. In fact, many things that we
would usually consider to be determined by collective
decision-making processes, like the location of parks and
the politicians that govern Marketopia, what sort of schools
they have, and what they teach, and so forth– these are also determined
by an auction process, though rather than auctioning
them to the highest bidder, we add up the total
willingness of everyone to pay for different
alternatives, and we implement the one that
people are willing in total to pay the most for. And all the money that’s
raised by these auctions is continually returned to
all the citizens of Marketopia in equal shares, as
a social dividend, or you might call it a
universal basic income. Much as in Norway and
Alaska, when they auction off oil rights, they
return the revenue that they raise to the citizens. Now when you hear this
idea of Marketopia, it might sound like sort
of the most extreme version of a free market
that you can imagine. It’s much crazier than
anything that, say, Adam Smith could have
imagined, because it makes you realize that even though
we live in a market society, most things are not
available for liquid purchase at any given point in time. Most of the land on
the Google campus– most of the stock
of Google, in fact– not just the marginal units
of stock that are currently on bid, but most of the
stock that all of you hold– these aren’t things
you could just go out and buy at some
price at any point in time. Those are instead controlled
by often-wealthy concentrated interests, and if you wanted to
grab control of those assets, you’d have to enter into
a long and drawn out process of bargaining,
and probably pay many times what the person
would be willing to accept, because they’d get wind that
you’d want to buy that thing. And so Marketopia is a far more
extreme, complete free market than any society in history. And that might lead you to
think, OK, so in Marketopia, the wealthy are going to
dominate everything, right? The wealthy are going
to be able to outbid the prices that anyone
else is going to pay. They’re going to take
control of assets and they’re going to
use that to dominate everyone else in society. But then you have
to ask yourself, what do you mean by the wealthy? Well, a wealthy
person is someone who has lots of assets, like
stocks, and bonds, and houses, and land, and businesses. But in Marketopia, there
is no private ownership of those things. All of those things
are continually auctioned for the
public benefit. In fact, Marketopia is actually
the most extreme version of the sort of common ownership
advocated by people like Karl Marx that you can imagine. Much more extreme than
forms of socialism that actually existed,
which ended up in the control of those
assets by a concentrated bureaucratic elite, that often
ended up tyrannizing over the rest of the
population even more intensely than the capitalists
that they claimed to replace. In Marketopia, on
the other hand, there is true common ownership,
because by construction, all the value of all assets
flow equally to all citizens, and by construction, every
citizen has an equal right to compete for
control of assets. This might seem like
a paradox, especially to those of us who grew up in
the Cold War and post-Cold War periods. How can the most extreme form of
common ownership, of communism, go along with the most
extreme form of a free market? Well, while that might
seem like a paradox, it’s actually a
crucial part of what was the central tradition
in a field called political economy, that
gave birth to economics, political science, sociology,
and many other fields during the late 19th century. And this idea called competitive
common ownership was especially associated with the
work of this guy here. And I wonder if
anyone recognizes him. Who is that? AUDIENCE: Henry George. GLEN WEYL: Wow! This is the first time
anyone has actually managed to identify him. AUDIENCE: [INAUDIBLE] GLEN WEYL: Well, I’m glad
I came to the right place. So you could probably repeat
the following things for me, but Henry George was
the best-selling author in the English language,
other than the Bible, for about 30 years. His book, “Progress
and Poverty,” was the namesake of the
Progressive movement in the United States. He helped inspire the Chinese
nationalist revolution and many other things. He was an enormously
influential person, and yet his ideas are largely
forgotten in the post-Cold War era. And the goal of this book is
to revive the tradition that was represented by
Henry George and others, like Leon Walras, many of the
founders of modern economics, who believed that free
markets, true free markets, and true socialism
went hand-in-hand. To argue that, while these ideas
were forgotten in mainstream culture, they continued
to be developed in a field called mechanism design, which
won lots of Nobel prizes, but was largely applied to
things like auctioning off search words at companies
like Google and Facebook, rather than to the big problems
of social organization. And to show that we can,
based on this tradition, have a new way of
organizing society to address our most
pressing problems. And the way that we do
that is by developing five detailed, practical
policy proposals, building off of this spirit,
that instantiate this idea and address, we think, some
of the most pressing problems of inequality, slow
growth, and social conflict over political issues. So what are those ideas? The first, which is
most closely associated with this auction
I was describing, is the common ownership
self-assessed tax, in which every owner of significant
private property would self-assess the value of
that property at some value, stand willing to sell the
property at that value, and then pay a tax on
that self-assessed value. So this would be a way of
implementing the auction that I was describing,
without taking all ownership into the public,
so that people would still have some incentive
to make investments. So people would still have an
incentive to make investments. And at the same time,
all assets would be liquidly available
for turnover to a better potential use. The second idea is
quadratic voting. This is a system of
sort of auctioning, but for collective
decision making that would protect
minorities by allowing them to express the greater
strength of their interest in given issues
compared to majorities. The way that it would work,
is that every citizen would be endowed with a
budget of voice credits that they could spend on
different politicians or issues in a referenda that
are important to them, and they could put more
votes on the issues that were more important
to them, but according to a very particular rule,
which is that the cost in voice credits of influence
on any given issue would be the square
of the number of votes that you buy on that issue. Third, we propose a new
system of migration, in which immigration
would benefit, rather than just the
immigrants and the capitalists in the wealthy countries,
instead it would it would benefit all
citizens, because rather than large corporations
or governments determining who was
admitted to the country, instead individual citizens
would have the right to sponsor visas for
migrants and to negotiate– subject to some protections–
a share of the benefits that the migrants received from
migrating to wealthy countries. So that would allow for
massively increased migration, but with the broad
support of the working classes of wealthy countries. Fourth, we argue that
antitrust policy is an incredibly powerful
tool for maintaining a competitive and
dynamic economy, but that it has been
almost completely unenforced in the two most
important areas in which market power is accumulating
in our economy, and therefore we’ve
been ignoring about 80%, or maybe even 90%, of
the potential benefits of antitrust. Those two areas are that, first
of all, institutional investors like Vanguard, State Street,
BlackRock, et cetera, now control about a third of
the total corporate economy, and are the four or five
largest shareholders of almost every major corporation
straight across industries, Google and Microsoft,
American Airlines and Delta. And therefore, they
have no interest in seeing these companies
compete with each other. And we’ve seen rising
prices in close correlation to the growing power
of these companies. That’s sort of the most
comprehensive market power that’s ever existed,
because it’s coordinated almost the entirety
of the corporate economy. Another area that’s been
almost completely neglected by antitrust policy
has been the power that companies have
over workers, rather than over consumers. Because if you think about a
typical consumption decision you make, like what
type of water to drink, there’s probably 10 or 15
reasonable alternatives you have. Whereas if you think about a
job, what’s your next best job rather than working
at Google, it’s probably a way worse option. And maybe you have
one other option, but it’s much less competitive
than is a typical product market. And yet there’s literally never
been an antitrust merger case that blocked a merger
because of the way it reduced options for
employment for workers. And finally, we argue that
the individual contributions that people make to
the digital economy should be treated as
essentially labor, and that there should be
a labor movement of people who are contributing that
data, to organize, to demand a fair share of the value
created by their data from companies like Google,
Facebook, and Microsoft. Because increasingly,
people are worried about artificial intelligence
taking people’s jobs, but as all of us here know, all
that artificial intelligence is trained based on human data. And it’s, in fact, a lot more
like some sort of broadcasting of our data than it is
just brilliant engineers programming computers to
go and take people’s jobs. And so, if people
were more fairly compensated for their
data, the digital economy would be a source of economic
opportunity for people, rather than an economic threat. Now all these ideas
are quite radical. All of them would require
fundamental changes to our social institutions. And while for each of these
chapters, we have concrete, near-term, non-controversial
steps we can make in that direction, we also know that
as a broad social philosophy, no one would seriously consider
this if we weren’t in a moment of social crisis that
really, deeply required new out-of-the-box thinking like
this to avoid potentially catastrophic outcomes. But I truly do believe we
are in a moment like that, for three reasons. One is growing inequality. On the left here, we see a graph
of the share of national income accruing to the top 1% and
the top 0.1% of the income distribution, which has
doubled since the 1970s. And at the same time, we’ve
seen a dramatic reduction in the share of income accruing,
not just to lower income workers, but to all
workers in total. So the share of income
being paid out to labor, as opposed to capital, has
fallen by 10% over this period. Now you might think as, say,
Ronald Reagan or Margaret Thatcher would have
argued, that that might be worth it if that’s the
price of a more dynamic, more competitive, more
innovative economy. But at the same time that we’ve
seen this declining share going to labor, we’ve seen
an increasing power of corporations to
exert monopoly power. That is represented by
this orange line here. I’ve taken the markup
that firms charge– that is how much above
their marginal cost they charge– and I’ve
flipped it around, so you can see how
closely it parallels the decline in labor incomes. So that strongly
suggests that, far from us getting a more
competitive economy by deregulating, cutting taxes,
and relaxing antitrust policy, we’ve actually seen an
increasing growth of market power that is actually reducing
growth rates in the economy, as represented in
this graph here. So what this shows
is growth rates in different
wealthy countries in the immediate post-war
period, and then various periods thereafter. And the period of the
last several decades has had growth rates that
are, in the United States about half, and in many
other wealthy countries about a tenth, of what they
were in the immediate post-war period. This combination of stagnation
with growing inequality, I think, has largely discredited
existing economic ideologies, as coming out of
Reagan and Thatcher, in the same way that the
combination of stagnation and inflation during
the 1970s discredited the previous
Keynesian orthodoxy. And this stagnant
quality, as we label it, and the discrediting of
existing economic ideologies has also led to rising political
discontent and conflict. Together with the fact that, I
think, political institutions– not just economic technocracy,
but political technocracy– is increasingly being
viewed as illegitimate, there’s growing conflicts
between minorities and majorities, whether
over immigration, ethnoracial conflict,
or over, say, things like gun ownership,
religious minorities. And yet the way that wealthy
countries have increasingly resolved these issues has
been through the judiciary, or through supranational
institutions, in the case of the
European Union, that lack of the
democratic legitimacy needed for countries to
come to some reasonable way of resolving this. So there’s an increasing feeling
that the economic policies and the way that we
resolve political disputes are illegitimate,
and that’s leading to the rise of populist
leaders, whether on the right, like Trump or Brexit
movement, or on the left, like Jeremy Corbyn in
the United Kingdom. Given all this, I
think we increasingly feel like the only
path out is these sort of reactionary
populist movements that don’t really
offer an answer. And so we feel
the responsibility at this moment to
try to put forward an alternative,
progressive path that can harness the powers
of market and technology, but to try to make a more equal,
prosperous, and politically co-operative society. And I hope that
you’ll open your minds to these radical possibilities,
given what we’re facing. And I’m looking forward to
chatting with all of you and with Hal about it. HAL VARIAN: All right, great. Very interesting talk, and
let me raise a few objections here and there, and see– because I know that’s
your favorite pastime, is responding to
these objections. You know, they say
a cynic believes that everything has a price, but
an economist knows it’s true. So an interesting angle
there on that division– this dividing things up, but
then letting people trade– what do you do about ability? Ability Is very tricky, because
suppose you’re a great singer. I love to hear you sing, but
it’s very tiring for you. You don’t want to do it. Can I outbid you, and
say yes, I bid him. He wants to have a
quiet evening at home, but I’ve got this
money I’m going to pay him to go out and sing. GLEN WEYL: That’s
a great question. We tackle that in the
conclusion of the book. For the main part of the book,
we only allow for capital to be allocated in this way. And we think that, at least
in our present society, that could address
much of the inequality, though not all of the
inequality, that we face. So we calculate that
with our reforms, you could get down below
the levels of inequality in the 1970s, and significantly
better than in Sweden at present. But obviously, there would then
be a shift towards inequalities that are driven more by
ability, and away from those driven by wealth,
And those would have to be addressed
by future reforms. And we speculate
in the direction that you’re describing, Hal,
but we don’t have a proposal that we’re happy with actually
putting forward on that. HAL VARIAN: Let me
suggest an article. it was something I wrote. It was my thesis actually
which was on fair division. GLEN WEYL: I know
that work very well. HAL VARIAN: OK,
well, then you know. Because there were
a couple of ideas there about how you might
deal with this issue of either redefining
what would be fair when there’s differences
in ability, or, in fact, going the very radical
plan of actually, I could outbid you to
sing and you’d do it. GLEN WEYL: Yeah, so I’m actually
very sympathetic to that idea, but for a bunch of
practical reasons we talk about in
the conclusion, we don’t think we have a proposal
that actually makes sense. But at the philosophical
level, you’ll recognize your own writing in
what we say about that issue. HAL VARIAN: And it’s
also interesting, because there is a
practical example. There were apprenticeships. So what happened in America– I mean before there was
a United States, in fact, back in the
pre-revolution days– you could bring an immigrant in,
and the quid pro quo was they worked for you for
seven years, and you would teach them a trade. And so this was viewed
as a very successful way to provide education,
and skills, and so on. GLEN WEYL: I wouldn’t
say that too loudly, because on the internet, when
we certainly weren’t advocating indentured servitude,
but we just talked about our immigration
system, which is not indentured servitude, we got the most crazy
reaction from social media. So it’s a sensitive subject. HAL VARIAN: Yes, yes, I agree. And it’s also illegal, so– GLEN WEYL: Yes. HAL VARIAN: The
self-assessed tax. That was kind of fun. I first heard this idea from
Dick Zeckhauser many years ago. And he claims that
the Greeks used this for assessing to antiquities. GLEN WEYL: Yeah,
we talked about it in chapter one in some detail. HAL VARIAN: And in fact, we
did something very much like it for the top-level
domain names, when we had this top-level
domain name auction. So Microsoft and
Google, for example, both might one .doc as a TLD,
and the way it was resolved is you each write down your price. The high bidder gets it
and pays the other bidder the price that it bid. So it’s a kind of
interesting mechanism. It’s not, of course, perfect. Any economist could
shoot some holes in it, but it seemed to work
pretty well in practice. Data as labor. Well, we do that now. We pay labellers of data. We have just donated
9 million images to the Open Image project. We paid lots of people
around the world to label that data
with the contents. We did the same thing,
4.5 million YouTube videos which we had people
label, and that goes into the video project. Consumer panels like Nielsen,
that’s around all the time. So there is a market
for getting people to provide data labeling or
data of one sort or another. So it’s not unreasonably– I mean, it’s a pretty
big market, really. GLEN WEYL: Yeah, I think
that the problem is that the vast majority
of data we get, we collect from
people who aren’t aware of the productivity
roles that it ends up playing. And trying to engage
those people more and paying them a bit
more for those people who are in context, who can
provide additional value. And in fact, Google
does a little bit of that with the local
hosts and so forth. But I think trying to make
people more broadly aware of that, and trying to create
a structure where they would get direct compensation
for improving the quality of the
data they provide, and be aware of the payments
they were getting for all of their data, would
in the medium-term create the
opportunity for people to build greater human
capital, really, and contribute more online. HAL VARIAN: Well, there
is this question of what the payment would look like. If you take Facebook
as an example– because I think you’ve
mentioned this– Facebook had net
earnings of $10 billion, and they claim there
are 2 billion users. And that means $5.00
a year per user. And Google has similar
numbers, of course. So these work out
to pennies per day, in terms of the
compensation for information that people are providing. And I would argue– I certainly believe
for Facebook, and I certainly
believe for Google and also Facebook, of
course– a lot of this data is used to improve the product. So people are
benefiting from it. It’s benefiting as a public
good, not as a private good, but they get their
private benefit from using better products. GLEN WEYL: Absolutely. I think that if we had more
targeted direct compensation to people, we would get
larger product improvements. I would dispute with
you a little bit about some of the numbers. I’ve done different
calculations than that exactly, but yes, at the moment
things are relatively small, I think, by any calculation. But in a future where
artificial intelligence really does come up to take
the role that investors are pricing into your company
and into my company, it taking. I think that if we don’t find
a way to directly compensate people for the
data contributions that they’re making,
that are fueling those artificial
intelligence, we’re going to end up with a
lot of what I would call fake unemployment, where
people are unemployed, but not because they’re
not contributing value, just because the value
that they are contributing isn’t being counted
appropriately. HAL VARIAN: If you’d look
at the web raters handbook– I was just looking at
this a few days ago. I know several people
here have looked at this. We pay thousands of
people around the world to answer questions
about page quality. That is the labeling, that
then goes into determination of the algorithms and
the machine learning, that helps make the system work. So there is a direct market
in paying people to label, and we could do much
more of that, for sure. But the question is, should
it be done through the product improvement side of things,
or should it be done just as a line item on the budget. We’re paying people to
rate or evaluate this or label this material
in a way that helps us design a superior product. GLEN WEYL: And I think
that if more people were aware of the contributions
that they’re making and were getting compensation
for it, you would– I mean there are absolutely
markets as you’re describing for those labellers. They are a little bit sidelined,
and the public image that is portrayed is one in
which you don’t– HAL VARIAN: I know. You’re very right. I mean nobody knows about this,
even though it’s easy to check. GLEN WEYL: Yeah. I think putting that more center
stage and making more people feel like they’re
participating in it, I think, would change the whole
feeling of using the internet, in a way that I think would
be productive for our social conversation around technology. HAL VARIAN: Well, it is
interesting how many people write reviews for Amazon,
or for Google, or for Yelp, because people are volunteering
this information in many cases. And I think you
might want to argue that, well, the incremental
addition to that free service is worth paying for. And maybe it is, maybe it isn’t. Depends on how much
you’re getting people to contribute generously
of their time, in terms of doing
these evaluations. GLEN WEYL: Yeah,
well, that’s a– HAL VARIAN: Might be. It’s an empirical matter. All right, I’m going to ask one
more question, and I apologize. This is slightly technical. Your chart on the inference
labor share and the markup, I’ve actually been
working on that problem. This is a paper by
Eeckhout and De Loecker that you’re referring to. GLEN WEYL: Yeah, yeah, exactly. HAL VARIAN: And
it’s a little funny, because remember, markup is
the price over marginal cost. So the markup can go up
either by price going up or by marginal cost going down. And of course, we
think cost going down, gee, that’s a good thing. Price going up,
that’s a bad thing. But of course by making– by moving around these two
things you can change the– level the ratio of
price to marginal cost. So in fact, if you
take the formula in that paper for
the markup, it’s also a formula
for marginal cost. Just re-arrange the algorithm. And if you go out and
do the calculation, look at the same data– or
the same sorts of data– that they look at, you see
costs going way, way down. You also see– one last point– you also see prices going down. And the question
is, what’s happening is the marginal cost
is going down even faster than the prices are going
down, so the gap is going up. GLEN WEYL: Marginal costs
fell dramatically as well during the post-war period. And in fact, even more
dramatically, the productivity went up more quickly. My view is not everything
has been terrible in the last few years. That’s not the point. The point is that, if we don’t
have social institutions that reform and restrain
market power, that keep up with the
progress of technology, we’ll fail to realize the
potential that we can have, which requires
constantly breaking up the sources of rigidity that
enter the economy as technology advances. And I think we did
that more effectively in the immediate post-war period
along certain dimensions– though not all
dimensions– than we’ve managed to do it since then. So my argument is not everything
has just gotten worse. Of course not. We wouldn’t have had economic
growth if that hadn’t happened. But that we haven’t
managed to keep up in the innovation of
our social institutions with the innovation that we’ve
had on the technological side. HAL VARIAN: So let me make one
other objection to the Eeckhout De Loecker work. Because I don’t dispute
anything that you just said. But if you look at that, the
surprising thing from other contributors is, the same thing
has happened in pretty much every industry– that is,
labor share has gone down– and pretty much
in every country. So it seems very strange to
say, somewhere around 1980, all these different
countries and all these different industries
became less competitive. It’s much more
natural to say, well, in the 1980s we had a
technological shock that lowered costs pretty much across
all countries and pretty much across all industries. It’s called the computer. Micro-computer. That’s what we’ve done. And we’ve seen this
technology work its way through with some leaders– that is, some companies that are
doing very well because they’ve managed to reduce their costs
and improve their quality by using this technology. We’ve seen other
companies that haven’t done so well, because
they haven’t done this to the same extent. So to me, the technological
hit that reduces marginal cost is much more plausible
than the concentration hit which increases prices. GLEN WEYL: And
what I would say is that we had those marginal
costs falling before for reasons that were, in fact, more
powerful than the computer. Air conditioning,
refrigeration, lots of huge technological advances. Except at that time,
we had policy makers who were innovating, coming up
with things like the welfare state, and antitrust
policies, and labor unions, that were keeping
up with technology. And in the 1980s,
we stopped trying to keep up with the
innovations in social policy that were necessary to
restrain market power within the technology sector. And that’s the reason why we
suddenly saw those prices not track as far down with marginal
costs as they should have done, to maintain both maximum
productivity growth and– so that’s– HAL VARIAN: But
the real debate– the real question, I think
is, is this just difficult to learn how to use and
adopt this technology? When electricity came in, we
saw the same thing happen. When steam came in,
we saw the same thing. It just takes time for
this to work its way through the systems,
so you would expect some companies are
going to be more productive than others, because
they’ve learned to master the technology. And two of those companies
are represented right here, Microsoft and Google. All right, that’s
my debate, and I’m sure you’ve got some more
ready questions coming. Why don’t we start here. AUDIENCE: All right. Thank you so much for coming
to speak, and thank you for hosting and providing
a lively discussion. My name’s Stephen. I have one question for you
on a subject that you actually haven’t really touched on yet,
which is the quadratic voting piece. Simply because I
think politics is sort of the iceberg to all of this. It’s the underlying set of
problems to all of this. And so I’m curious,
one, how does that actually work, in terms of
how does one define the value that each person is given? Is it a static equal
value, or can you buy more if you
have more income? And two, if you’re willing
to extend the conversation, just how do you think the
globalization of finance has impacted this decoupling
of productivity and wages that has happened over the past
30 years, which has greatly contributed to rising inequality
and many of the problems that you’re discussing
and thinking about today? GLEN WEYL: On the first
point it would be not static. It would be dynamic over time. People would get voice credits. They would get a flow of
voice credits the same way that they get a flow
of a social dividend. But it would be equal
across all people there. Would be no opportunity to use
outside financial resources to purchase more. Unless in some much
more advanced society when some of these other
ideas have been implemented we have much greater
equality in which case we might consider allowing
people at least at some rate to purchase more credits. In terms of the globalization
of finance, look, I’m not 100% critical of what
happened with neoliberalism. I think that there’s been
a huge amount of growth in the developing world,
and to a large extent, that is attributable to the opening
up of the international system to allow opportunities
to many more people. Unfortunately, while we opened
up to other parts of the world, I think our economy
domestically, within the United States and
within other wealthy countries, allowed in this greater market
power and, to some extent, the external markets
were used as a wedge to consolidate the
power of capital within national boundaries. And so I think we
need to rectify that, because otherwise we’re going
to get a populist backlash that reacts to the fact that
things got better abroad and they didn’t get
so much better here, and that feels
like something that can be cured by xenophobia. Which it can’t, really, but you
see how people get that logic. So we need to find a
better way to unite the interests of people
within the country and around the world. AUDIENCE: What do you
think we can learn from the political failures of
the followers of Henry George and so on, insofar as
the land value tax, the optimal policy they
were proposing at the time, largely ran aground in the
Lloyd George budget in UK? The House of Lords largely said,
this endangers our interests. Here in California,
something like Prop 13, which is largely the exact
opposite of an allocatively efficient policy, is impossible
to get rid of, seemingly. What do you think we can
learn from these failures for creating better
policy in the future? GLEN WEYL: I think a major
problem for Georgism, fundamentally, was the failure
of the Chinese Revolution, because it ended
up meaning that– Sun Yat-sen, who was founder
of the Chinese Revolution, basically had the same
relationship to George that Lenin had to Marx. And the problem was that
Lenin was much more ruthless. He managed to– the
Bolshevik Revolution managed to survive and communism
spread, and that became the leading
alternative to capitalism. And so we got stuck
in a discourse where everything was about
capitalism versus communism. And so I think,
ultimately, if you can have a comprehensive
ideology that helps people rethink things,
like Milton Friedman did– he really changed
the whole discourse– I think that we can
have a path where people understand and believe in that. And I think he came
close in England. I think you change a
few things and Georgism would have been very
successful in England. But I think that the
communist revolution was a big part of what stopped it. AUDIENCE: Hi. Thanks for the talk. Really interesting point
about the concentration of assets in a few very large
asset managers, money managers. My question is, where
does the political will come from to sort of
go after these guys? They control a lot– and I guess this is
more broad, too– they probably have captured
the Congress, they’re lobbying. They’re incredibly strong
versus the very diffuse sense among the populace
that, oh, it’s probably bad to have four companies
controlling the majority of stock in the United States. GLEN WEYL: First of all,
the most powerful basis of the protection of capital
rents is free market rhetoric. It’s not just, or
even mainly, things done in the dark back rooms. Free market rhetoric
is something that so many people in
this country believe in, and if we can deny to the
capitalist monopolists the use of free market
rhetoric, by saying that true free markets
require radical reforms, radical egalitarian
reforms, I think we can change the political
dynamic around these things significantly. But second of all, you know,
it comes from young people. It comes from students. That’s where– that’s how
Milton Friedman changed things in the direction that
they went in the 1980s. “Capitalism and Freedom” sold
terribly among academics, initially, and it was very
unpopular in the press, but students loved it. And he had a coherent view,
and it applied to many things, and he really changed the
whole political discourse in the country. So I do believe that
in the medium-term, ideas clearly exposited
that try to directly connect to the public can have a
huge effect on world history. AUDIENCE: I’m a newbie to
economics and politics. Recently, I watched Ray Dalio’s
“How the Economy Works in 30 Minutes.” He talks about
borrowing and lending, and he says because of
that, we have credit. And it’s human
nature that we tend to borrow from the future, which
leads to some economic crises, because of cycles. So I’m just wondering,
in your ideal market, will there be economic crises? And if there are, will
there be differences in how we address economic crises? GLEN WEYL: I think that
that’s a great question. I can’t say that I confidently
predict that there wouldn’t be crises in the world
that I’m describing, but I think that they would
probably be less severe. And the reason is
precisely what you just said, which is that debt,
and the rigidities associated with private property as well,
are a leading cause of what happens during economic crises. And In this world, there
would be far, far less debt, because it would be much
less important to take on debt to own assets, because
the value of all assets would be greatly reduced. People would be effectively
closer to renting assets, and therefore many of the
sources of instability that come from debt finance
would be much less severe. AUDIENCE: Hey. My question is, it seems to me
like perhaps some products are not naturally amenable to
constant liquid exchange. Like housing, for example. I might want to live in a
particular place for decades at a time. And if I’m outbid on it,
and I don’t want to leave, then getting me to do
so requires violence. Or, for example, physical
infrastructure, like trains. It seems like there
would be an enormous cost if the administration
of this infrastructure were constantly changing hands. So, I mean– I think that that gives
you enough to reply to. GLEN WEYL: Obviously, you
could maintain stability in this world by
charging a higher price, so that it’s harder for someone
to take something from you. Now in our present world, as
well, stability is costly. Wealthy people, they live
in safe areas that aren’t hit by natural disasters. They own their houses outright. They usually don’t rent,
et cetera, et cetera. So they enjoy much
greater stability. The poor, they rent or
they are underwater often with their homes, either
figuratively or literally sometimes, living in
very dangerous areas. And so in this society, just
like in our present society, stability is costly. But the difference
in this society is that everyone would
have an equal, or a far closer to equal, basis to
pay for that stability, as they desired it, than
in our present society, because you would tax the
wealthy’s demand for stability at the cost of the opportunity
of the less well off. Whereas in our
present society, they can enjoy that stability
at no cost to themselves, or a much more limited
cost to themselves. AUDIENCE: Hi, it’s me again. I have lots of questions. So with regard to both
the self-assessed tax and the quadratic voting,
I’m sure the answers would be slightly different, but
the question and problem that I’m posing, I think,
aren’t quite the same. Which is, how would you
limit collusion and sort of gaming of such a system,
in which individuals could, on the self-assess tax side,
more or less set a price that is above market, that
others could buy, but low enough to
maintain a lower tax? And then on the political side– this happens in our
elections already, people running spoiler
candidates in primaries, or having some sort
of spoiler referendum to try and split a vote. How would you imagine that
could be protected against, particularly when, if I were
to put my energy in one issue, I would necessarily
be putting less energy and voice into another? GLEN WEYL: It’s more
than I have time for, to go into detail about
each one of the points, in terms of collusion
and so forth. But that’s an absolutely
central thing to the book. I definitely encourage
you to read the book. But the short version is,
all those sorts of problems exist in our present system. They are dramatically
reduced, if not eliminated, in the system that
I’m describing. I’ll just give you one example. Right now, there’s
the problem, when you have an election, of a
spoiler candidate running and possibly messing up
the main two candidates. But maybe even worse,
there’s the fact that you can end up
with two candidates that everyone despises,
but everyone votes for one candidate to block
the other candidate. That’s, I think, an even worse
problem than the spoiler. In this system, you can show
that that’s not mathematically possible, because
what happens is that, because of the
quadratic nature of the cost, if you really hate
Hillary Clinton, you’ll vote at least as much
against Hillary as you’ll vote in favor of
Trump, and vice versa. And so that pushes
two candidates that everyone hates
down to zero votes. And so then that leads
other candidates to rise up, so you don’t end up with these
perverse strategic things, where the two leading
candidates get reinforced just to
beat the other one. AUDIENCE: I’m sorry,
could you repeat that? I don’t– GLEN WEYL: So if you have
two candidates, both of whom are really hated
by the other side, but no one really likes
them, then what happens is that those candidates
get negative votes on them. So they go down
to zero net votes. And so anyone else
who is not despised ends up becoming a
leading candidate. And so you can prove that
that will lead to it never being the case that you just
get a perverse thing of two people that are really
disliked winning just to beat the other one. Yeah, back there. You were waiting. AUDIENCE: How do you think
blockchain technology relates to the ideas in your book
or the research you’ve done? GLEN WEYL: That’s a
wonderful question. Vitalik Buterin, who is
the founder of Ethereum, just wrote a wonderful long
post about that, which I would definitely recommend to you. And he and I are writing
something together that should come out this
week about the relationship. But very briefly,
what I would say is, the exact technological
relationship is complex and it will evolve. But philosophically, I think
they’re very closely connected. In particular, both are
trying to figure out monetary, market
based, distributed, decentralized systems for
ensuring through rules of the game, rather than
through discretionary authority, that we have a more egalitarian
distribution of economic power. I think a major
weakness in blockchain thus far has been that
it’s focused primarily on the cryptographic
protocols, rather than on the substantive
rules implemented by those cryptographic
protocols, and as a result, some of the rules have
ended up giving power, in fact, to oligarchic
groups, say, in China, that end up controlling them. So they don’t really achieve the
goals that they’re aiming at. What they need is a
substantive set of rules, to be implemented by those
cryptographic protocols, so that they actually
instantiate their goals. And that’s precisely
what Buterin tries to argue in this
piece, and that we’re arguing together. So I think that there’s a tight
unity of purpose between these, though the actual technological
connection is something that’s going to need to develop in the
coming years, or months even. I’m actually speaking at
the main Ethereum conference on Saturday about exactly this. Go ahead. AUDIENCE: Just going back
to the previous question. To be honest, I
think trying to apply any rigorous mathematical
proof to the political system, especially the American
political system, is doomed to failure. But I think one
question I would have, in terms of implementation,
you mentioned that this quadratic voting
system seems extremely radical. What are the sort of baby
steps that you mentioned, in terms of actually
trying to implement this, especially in the US? GLEN WEYL: Absolutely. We don’t have the
computer going, but I can show you afterwards. We have a nice user
interface, that even for people who haven’t
completed high school, makes it very intuitive
to do quadratic voting. And we’ve been using
that to do polling, and we’ve gotten some very
interesting results, where we were able to elicit
intensity of preference much more reliably than you
can get from existing methods. That’s a good place to start. But the next place that
we really want to go is ratings, say, of ride-sharing
drivers or products online, where you have this problem
of people often going to extremes and a lot of sort
of trolling-type behavior. And if you made
something costly, and made there be real tradeoffs
for people that would budget to upvote or downvote
things, I think you could get much more
reliable and useful feedback In a variety of circumstances. AUDIENCE: But in terms of
actually putting into place in American elections– GLEN WEYL: My view is that
once you start using it in some of these
commercial domains, you gradually expand
them outwards. As people get more used to
it in different domains, there will be a
greater willingness to experiment in other domains. Blockchain is
another place where I think that it’s quite
likely that this will be used in some reasonably near term. And I think people will get
used to the technology– it’s sort of like, e-government
happened to a large extent because of all the
advances that were made in the private sector, and
then those were imported into the public sector. So I expect something similar
would happen with this. HAL VARIAN: We’ll take
one more question. You had the mic? Go ahead. AUDIENCE: Thank you for
sharing your ideas again. I look forward to
reading the book. You said that the primary
urgency of what you propose is because there is
an impending doom, almost, if we don’t do something
about the current status quo. But do you see this
Marketopia being implemented without massive upheaval? Because I think what
you’re trying to suggest is that we need to save
our society, almost. But from the way I see it,
it seems like we almost need to almost throw
away society in order to implement this
without the oligarchs, without the current
special interests, basically taking control of
this or skewing in a way that, basically, either ruins it or
prevents it from ever seeing the light of day. GLEN WEYL: I believe
that revolutions are not always,
but almost always, more destructive than
they are productive. And on the other
hand, I do believe in the power of
democracy and ideas, if widely disseminated,
thoughtfully engaged with, and widely understood. I think public understanding
is the greatest accountability against special
interest capture. So I put my faith
in that, ultimately, and I hope that young
people, including some people in this
room, will build on the transmission of different
aspects of these ideas, so that we can keep the
broad public engaged and keep the political
process accountable to that. I think you saw with what
happened in the last year or two, how much desire
there is for change, and if that’s channeled
in a direction that’s productive rather
than destructive, I think that we
have an opportunity to build a much better society,
like Franklin Delano Roosevelt, I believe, did, rather
than just having upheaval, a violent upheaval. HAL VARIAN: OK, thank
you very much, Glen.

26 thoughts on “Glen Weyl: “Radical Markets: Uprooting Capitalism & Democracy for a Just Society” | Talks at Google

  1. Start your own company and run it how you want to, and i'll do the same. The opposite arrangement is called Marxism and it's immoral and disastrous in every conceivable way.

  2. Marketopia assumes assets belongs to society, which is to say the state. The so called owner can't refuse to sell. Soou are talking socialism, not a free market. There is no paradox. You are.just calling socialism something else, but it is still socialism, still utter stupidity and will fail every time it is tried. Read some von mises

  3. Who develops and improves property when no one owns it? Debt and economic inequality are critical features of a dynamic marketplace. Our attention should be upon the principles that determine the distribution of debt and the integrity of our economic hierarchy.

  4. We’re actually testing this right now, EU, :p, UK got disqualified , well see how it goes :p, joke, you sir ARE actually quite AT communism avenue :/

  5. No dude this system does not sound like any kind of free market, it's a hyper centralized labyrinthine mess that will eventually devolve into tyranny when someone much smarter than you decides to hoard all the money they make to manipulate the market in their design.

  6. Google, a multi billion dollar corporation, can't get 2000 views in 10 days on their own video.
    I think it's time they auctioned off their Youtube account so someone like Scribe Light can make better use of it.

  7. So are you saying that people in your city have to pay for everything and gets nothing out of it. No one owns enything even though they've won it in auction. When said item, ie a house, is won in auction, you can live in it until it comes up for reauction then you can get kicked out if you don't win again. How long will there be between auctions? Do you have to bid on food and other aminatives, like water, electricity and gas? You, my friend, are living in a dreamworld if you think anything like the city you want could ever exist.

  8. "I am actually a socialist. …True socialism seeks greatest good for all." — Elon Musk, Twitter, June 16, 2018

    “Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones. The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population. Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights. …I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals.”
    ― Albert Einstein, Why Socialism?, Monthly Review, May 1949

    "The trouble is that we live in a failed system. Capitalism does not permit an even flow of economic resources. With this system, a small privileged few are rich beyond conscience and almost all others are doomed to be poor at some level…That’s the way the system works. And since we know that the system will not change the rules, we’re going to have to change the system."
    — Martin Luther King, Jr., March 27, 1968

    “Why is it right that there is not a fairer division of the spoil all around? Because laws and constitutions have ordered otherwise. Then it follows that laws and constitutions should change around and say there shall be a more nearly equal division.”
    — Mark Twain, The New Dynasty speech to the Knights of Labor, March 22, 1886,

    "A basic principle of modern state capitalism is that costs and risks are socialized to the extent possible, while profit is privatized."
    — Noam Chomsky, “Hopes and Prospects," 2010, p. 114

    "[The] trickle-down approach to economic policy [is] what an older and less elegant generation called the Horse-and-Sparrow Theory: If you feed the horse enough oats, some will pass through to the road for the sparrows.
    — John Kenneth Galbraith, Economist and Advisor to President John F. Kennedy, Recession Economics, Feb. 4, 1982

    “The present conditions of business cannot be accepted as satisfactory. There are too many who cannot prosper enough. … This [trickle down capitalism] is merely the plan, already tested and found wanting, of giving prosperity to the big men on top, and trusting to their mercy to let something leak through to the mass of their countrymen below.”
    — Theodore Roosevelt, Convention of the National Progressive Party, Chicago, Illinois, August 6, 1912

    "There are two ideas of government. There are those who believe that, if you will only legislate to make the well-to-do prosperous, their prosperity will leak through on those below. The Democratic idea, however, has been that if you legislate to make the masses prosperous, their prosperity will find its way up through every class which rests upon them."
    — William Jennings Bryan, Democrat, Cross of Gold speech, July 9, 1896

  9. Without private property you don't have a free market so no – this is nothing like a free market at all. This is statism – Marxism as he finally reveals. This is a completely immoral economic model. No one would ever invest in property knowing that at any moment they will lose control of it once a group of people decide they like it and want to steal the benefits of that investment (which cost the investor his money he would otherwise use to keep the property).

    In fact, in order to keep certain amateur car races within a certain budget and affordable for people without huge resources to remain competitive there are rules that allow anyone who did not win the race to be able to buy the engine of the winning car for some fixed amount like $300. This guarantees that no one will ever put more than $250 of value in their engine unless they just want a one-time win. It also means that the technology and capabilities of the cars never increase – which is the purpose of this class of racing but is a damn poor idea for use of property in the "free world". Nothing "just" about this at all.

    This is the stupidest economic model I have ever heard of and I'm disturbed that Google would allow such nonsense to be presented as a good idea.

  10. Blunt and outright communism disguised in a thick pseudo- intellectual coat. Implementing these ideas destroys societies. as have been proven many times in history.

  11. Glen, blockchain isn't consistent with your techno Georgist utopia. There is NO state to force people to sell their crypto tokens by some given time period. One can OWN their tokens for as long as they wish. Your system is one of force, violence and coercion and should be resisted at every turn.

  12. This guy said every single adult in Belgium should be forced to house a migrant basically doubling the population of an already too densely populated country.
    If the Belgian fails to integrate the migrant because the migrant commits a crime, the Belgian will get fined.
    This means that a Belgian couple would be forced to house 2 migrants, if 1 of the migrants steals from you, you would be fined.
    If 1 of the migrants does something like rape your child or wife, the victims would be fined for it!
    This guy is a charlatan and should be discredited for everything he does coming up with such INSANE authoritarian murderous propositions.

  13. I love this idea! In a way under his model everyone is a shareholder of society, and no matter what job you have, you know you are going to receive a piece of the value you add to a company or community. If you are a simple bagger at a grocery store and know a way that can speed up the process, but might put you out of a job you are encouraged to do it because you will receive a share of the proceeds. (IT ENCOURAGES AUTOMATION!!!! 🙂 )When you buy a property you are essentially buying the job of property manager and you are only able to extract value in proportion to the value you add. It makes it easier for everyone to add value and everyone is rewarded by default of the value they add. And if someone does a bad job the value of their building goes down and someone competent can step in and add value.

    The reason why communism fell was it destroyed the prediction market that is the free-market. This idea is amazing because it gets the few benefits of communism without its downsides. It is decentralized so people can't loot the labour of others.

  14. If your response to this video is a cached, "Go home commie", "Try again Marx", then you're actually not arguing. You're just repeating a trope that you've heard, and you should really try to understand that its such a sheepish response. If you want to attack these ideas, actually attack the propositions, and don't blanket it.

  15. Humans are pretty funny. We like to try to make everything super complicated, perhaps because we feel the need to justify our bizarre sense of superiority over all other species of life. The reality is that nature — via evolution's natural selection and random mutation processes — already knows how to organize whole ecosystems, including homosapiens, extremely effectively by programming each of us with an innate motivation to create and explore, in some very unique specialized way, with the goal of serving the fitness of future life.

    All we need to do to make an exceptionally healthy, thriving planet, for all of us Earthlings — animal, vegetable, mineral, etc. — is to just set our selves free to do whatever work makes us feel like we're truly living. In other words, we need to stop using money, grades, votes, and other artificial point scoring games, to motivate us to go against our best possible selves.

  16. What about the inequality that exists between the recipients of taxation (politicians and their contractors) vs the rest of us. How does taxing all assets for just existing eliminate inequality between these two groups? Im not sure I'm a fan of the military industrial complex that would grow out of effectively nationalising all property.

  17. What about my house in which I lived for 20 years and all my friends that live in that area

    I don't want to move to another location and start to get used to some other area once a group of people decide they like to buy my house

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