UPDATE: TED has now broken down and posted the talk. I guess the fact that they already posted a similar talk on inequality, that comes to somewhat more radical conclusions but isn’t so mean, was the straw that broke the camel’s back here:
Nick Hanauer is a venture capitalist who wrote a well-received op-ed at Bloomberg last year on how taxes should go up on the rich to “reward job creators.” In an upset to what passes for conventional wisdom in Washington, Hanauer wrote that despite being a rich person, he’s never been a “job creator,” and that “rich people don’t create jobs, nor do businesses, large or small.” Rather, strong aggregate demand from a viable and broad middle class creates jobs by creating the need for more goods and services. And soaring US inequality harms that job creation engine.
These are hardly controversial ideas from an economic standpoint, but in the context of the national conversation last year, they sounded revolutionary. So TED, the conference devoted to “spreading ideas,” signed Hanauer up for a talk. The talk was basically a recapitulation of this published op-ed; it’s not like the ideas were hidden somehow. But TED got cold feet and decided to scotch the talks. TED officials decided that the talk, which you can see a full transcript off thanks to Jim Tankersley, was too politically controversial to broadcast. Hanauer gave the speech in March, but TED won’t release it to the public.
Behold the controversial, earth-shattering insights in this excerpt, which is too hot for TED:
I have started or helped start, dozens of businesses and initially hired lots of people. But if no one could have afforded to buy what we had to sell, my businesses would all have failed and all those jobs would have evaporated.
That’s why I can say with confidence that rich people don’t create jobs, nor do businesses, large or small. What does lead to more employment is a “circle of life” like feedback loop between customers and businesses. And only consumers can set in motion this virtuous cycle of increasing demand and hiring. In this sense, an ordinary middle-class consumer is far more of a job creator than a capitalist like me.
So when businesspeople take credit for creating jobs, it’s a little like squirrels taking credit for creating evolution. In fact, it’s the other way around.
This isn’t just unexceptional, it’s reality. Hanauer makes the point that, if the rich were truly “job creators,” then we would have more jobs now than ever before, since income for the rich has tripled and tax rates have dropped 50%. Instead we have mass unemployment. It’s true that wages and productivity decoupled around 1980, to the extent that workers are earning 25% less now than they would if their salaries tracked productivity growth. It’s true that it’s impossible for enough super-rich Americans to power an entire economy simply due to scale. It’s true that consumers drive the US economy, not the rich. But all of these things were deemed off-limits by TED.
In fact, as Joe Weisenthal points out, TED’s rationale for censoring Hanauer’s speech – a speech they SOLICITED, which is fundamentally the SAME in content as the op-ed which drew their interest in the first place – is simply that they didn’t want to offend their friends:
I launched numerous magazines for each of which, at time of their launch, there was zero consumer demand.
In each of those cases I hired teams before launching and before knowing whether anyone would buy. Businesses do this all the time. They imagine a product, and take a risk. You might say there must have been latent demand, and that in the short time period you had, you didn’t have time to fully flesh out the argument.. sure. But I think a lot of business managers and entrepreneurs would feel insulted by that statement as given.
Setting aside the idea that “latent demand” only came up late in the game, this strongly indicates that TED dropped Hanauer literally because he might insult managers and entrepreneurs.
Unfortunately for TED, this kerfuffle has created a “Streisand effect,” where the subject attempting to be censored gets more publicity BECAUSE of the censoring. Good work, TED.
More from Ezra Klein. To quote him, “as we know, the history of ideas worth spreading is that they never offend society’s entrenched interests.”