Tyler Cowen asks:
Why is there so much suspicion of big business?
Perhaps in part because we cannot do without business, so many people hate or resent business, and they love to criticize it, mock it, and lower its status. Business just bugs them. . . .
The short answer is, No, I don’t think there is so much suspicion of big business in this country. No, I don’t think people love to criticize, mock and lower the status of big business.
This came up a few years ago, and at the time I pulled out data from a 2007 survey showing that just about every big business you could think of was popular, with the only exception being oil companies. Microsoft, Walmart, Citibank, GM, Pfizer: you name it, the survey respondents were overwhelmingly positive.
Nearly two-thirds of respondents say corporate profits are too high, but, “more than seven in ten agree that ‘the strength of this country today is mostly based on the success of American business’ – an opinion that has changed very little over the past 20 years.”
Corporations are more popular with Republicans than with Democrats, but most of the corporations in the survey were popular with a clear majority in either party.
Big business does lots of things for us, and the United States is a proudly capitalist country, so it’s no shocker that most businesses in the survey were very popular.
So maybe the question is, Why did an economist such as Cowen think that people view big business so negatively?
My quick guess is that we notice negative statements more than positive statements. Cowen himself roots for big business, he’s generally on the side of big business, so when he sees any criticism of it, he bristles. He notices the criticism and is bothered by it. When he sees positive statements about big business, that all seems so sensible that perhaps he hardly notices. The negative attitudes are jarring to him so more noticeable. Perhaps in the same way that I notice bad presentations of data. An ugly table or graph is to me like fingernails on the blackboard.
Anyway, it’s perfectly reasonable for Cowen to be interested in those people who “hate or resent business, and they love to criticize it, mock it, and lower its status.” We should just remember that, at least from these survey data, it seems that this is a small minority of people.
Why did I write this post?
The bigger point here is that this is an example of something I see a lot, which is a social scientist or pundit coming up with theories to explain some empirical pattern in the world, but it turns out the pattern isn’t actually real. This came up years ago with Red State Blue State, when I noticed journalists coming up with explanations for voting patterns that were not happening (see for example here) and of course it comes up a lot with noise-mining research, whether it be a psychologist coming up with theories to explain ESP, or a sociologist coming up with theories to explain spurious patterns in sex ratios.
It’s fine to explain data; it’s just important to be aware of what’s being explained. In the context of the above-linked Cowen post, it’s fine to answer the question, “If business is so good, why is it so disliked?”—as long as this sentence is completed as follows: “If business is so good, why is it so disliked by a minority of Americans?” Explaining minority positions is important; we should just be clear it’s a minority.
Or of course it’s possible that Cowen has access to other data I haven’t looked at, perhaps more recent surveys that would modify my empirical understanding. That would be fine too.