April 30, 2025 • 9 mins
Facebook Co-Founder, Chris Hughes discusses the US economy and the balance between the public and private sector. He also delves into the evolution of big tech in the US. He is joined by Bloomberg's Jonathan Ferro and Lisa Abramowicz.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:06):
The earnings just around the corner as well. Meta set
to report earnings after the closing ballance. The industry faces
continued regulatory pressure. Facebook co founder Chris Hughes, arguing in
the US as a history of striking a balance between
free markets and state capitalism, writes in quote, we organize
many of our markets for the common good, choosing to
cultivate them rather than plan them outright. The work is
(00:27):
a craft, not unlike the work of a sculptor or painter.
Chris is the author of the new book Market Crafters,
and he joins us now for more. Chris Camrnic good
to see you, Thanks for having me. Let's start big
and then we can get some meta anks.
Speaker 3 (00:38):
Let's do it.
Speaker 2 (00:39):
A secret source of the US economy, how would you
describe it?
Speaker 4 (00:42):
It's the dance between the private sector and the government.
So I make the case that policymakers have often harnessed
and guided markets toward public goals in order to make
Americans richer, say for their lives, more economically stable. And
there's a hidden history of US doing this from the
nineteen thirties all the way to present. It's a republican
project as much as it's a democratic project, and we're
(01:05):
going to have to pull out some of the lessons
from that if we're going to rebuild on the other
side of the chaos.
Speaker 2 (01:10):
It's happening right now, so talk about the casts. So
we're doing a good job of it right now.
Speaker 1 (01:14):
Yeah.
Speaker 4 (01:14):
I mean, someone said this is more like market crashing
than market crafting, and.
Speaker 3 (01:18):
That seemed apt to me. No. I mean, this administration
is at.
Speaker 4 (01:23):
Best impulsive and at worst completely disorganized. The way to
do this in the right way would be to say
we have a mission like bringing back manufacturing jobs or
even the auto industry. Then you'd create trade policy tariffs
that would be targeted not on avocados and cars, but targeted.
Speaker 3 (01:42):
You do it in collaboration with allies, and.
Speaker 4 (01:45):
You'd pair it with industrial policy investments to make sure
that those plans can get online quickly and that they
can do it cheaply. And there is a recipe for
crafting a particular market along those lines.
Speaker 3 (01:56):
This is just chaos. Use to use the word.
Speaker 4 (02:00):
Where the tariffs are, whether they're on this week or
last week, and people are trying to figure it out.
Speaker 1 (02:04):
Taking a step back though further, there is this feeling
about what the engine of US exceptionalism has been and
it's been in the world that you co founded with
respect to Facebook, which is big tech, and this idea
that the technological expertise that has been cultivated in the
United States has been superior and has been the reason
why so many people have wanted to invest here. Do
you see that unable to continue in this certain sort
(02:28):
of less predictable moment, or do you see that as
continuing to chug along in a healthy way that does
lead to some sort of evolution.
Speaker 3 (02:37):
It is certainly on shaky ground, that's for sure. I
think the story of.
Speaker 4 (02:40):
American technical leadership is also one where we see private
sector innovation as a critical engine of growth, paired with
public sector decisions.
Speaker 3 (02:49):
So I'll give a crisp example.
Speaker 4 (02:51):
We've all been talking about semiconductors and chips for the
last few years, and that's been incredibly important in bringing
back advanced semiconductor manufacturing in the United States. However, the
real story of how to support the high tech industry
in the US starts more in the nineteen eighties with
Reagan era industrial policy. At that point, Japan's share of
(03:11):
global semiconductor production was increasing quickly, and there was a man,
Robert Nois, the co founder of Intel, who teamed up
with other semiconductor producers to go to Washington say, hey,
we have a national security problem on our hands. The
Department of Defense agreed, so did White House in Congress,
and they came together to first do a structured trade
(03:31):
policy on Japan to prevent them dumping in the market,
and then secondly make a big public investment in semiconductor production.
So at this moment when we could have lost that
technical lead, an early important moment, we invested and it worked.
A few years later, the United States retook its share
of global semiconductor manufacturing. So what I'm trying to say
is it's not just a coincidence that we have these
(03:55):
high tech companies now. And it's yes, it's partially because
DARPA funded the Internet and this the lights are powered
by the government, but it's actually something even more explicit
product of market craft, and that should give us lessons
for how we can do it in the future.
Speaker 1 (04:09):
You said that the US is at risk of losing
some of that tech dominance. What makes you feel that
about the structure of current tech companies, in particular Meta.
That makes you get the sense that maybe they're losing
some of that innovation or some of that structure that
allows them to lead.
Speaker 4 (04:26):
It's less that I think that the tech companies are
losing innovation and more that you have to have public
policy to be fundamentally stable to encourage companies all across
the supply chain to invest.
Speaker 3 (04:37):
And I think that's truly what's at risk now.
Speaker 4 (04:40):
I mean, you've seen virtually all the measures of investor
confidence go down, consumer sentiment goes down, Inflation expectations are up,
equity markets are down, I mean all, and there's a
real fear that the FED won't be able to lower.
Speaker 3 (04:52):
If inflation stays high.
Speaker 4 (04:54):
So I think all of those storm clouds on the
horizon are not just bad macroeconomically, but bad for our
our technical companies and our leaders. It certainly makes it
a much more challenging environment for them.
Speaker 3 (05:05):
To succeed in.
Speaker 2 (05:06):
If you're a sculptor, you'd be breaking metsa up right.
Speaker 4 (05:10):
I wrote a piece six years ago arguing that Meta
had abused its power and that it had illegally acquired
WhatsApp and Instagram in order to consolidate its power. You
have TC under Trump filed too on that same rationale.
Several years ago. The Biden administration reorganized the case and
continued to prosecute it. And as you know now, I mean,
(05:32):
the case is ongoing in Washington with exactly these questions.
Speaker 2 (05:37):
What is it about it that you think is illegal?
Speaker 4 (05:40):
The decision now over a decade ago, to say Instagram
is challenging our monopoly, our power in the social media landscape,
particularly with photos and WhatsApp, later with messaging, and then
to acquire those rivals and then do things like purposefully
slow investment development, as the Instagram co founder testified just
(06:03):
last week, that is against the law to acquire competitors,
either to shut them down or to consolidate a monopolistic position.
Speaker 3 (06:11):
It's quite clear now. The question is is what do
you do now?
Speaker 4 (06:14):
That was a long time ago, and so you know,
in my view, I think it's important that you know,
Facebook has to comply with the law despite making a
decision years ago that was illegal.
Speaker 3 (06:23):
And then the question will come to what is the appropriate.
Speaker 4 (06:26):
Remedy in twenty twenty five, and we need to know
more from the case to figure that out.
Speaker 1 (06:30):
Is it incoherent to call some of the big tech
companies in the US national champions and to try to
hope that they're successful while trying to break them up
and change their business model with elimination of revenues from
places like China.
Speaker 4 (06:44):
I understand why you say that it seems on the
surface like they might be in conflict, but actually what
I chart in my research is a long story of saying,
wait a second, we want leading industries in the United States.
Speaker 3 (06:57):
So we were talking a lot about tech.
Speaker 4 (06:59):
But you can do it in fu finance, you can
do it in energy. You can do it a whole
range of markets. And in order to do that you
need to use a few different tools simultaneously. One of
them might be public investment, like in the IRA for
climate or in the semiconductor example that we were talking
about earlier. Another might be procurement, another might be reserve buffering,
and then another might be competition policy. So these things
(07:21):
can work in concert as long as you have a
clear mission, what is government trying to do, and if
that's to spur in this moment AI research and development
so that we can lead the world and take on
China and be at the frontier that could be a
very In fact, I think that would be a very
smart mission to pursue.
Speaker 3 (07:41):
But it has to be crisp and clear, and then you.
Speaker 4 (07:42):
Can organize the institutions of American democracy to pursue that,
and sometimes that might mean public investment and competition policy.
Speaker 1 (07:50):
At the same time, this overlaps with the idea of
tariffs as well, and the idea that it was a
bipartisan effort to have specific tariffs on certain products going
to China that were national security concerns are just outright
bans of certain types of chips being sold to China.
Do you think that that is the appropriate policy in
terms of limiting the amount of information or do you
(08:10):
think that, as someone who's worked in the tech industry,
the more cooperation open and transfer of information, the more
innovation and the more people can kind of get ahead.
Speaker 4 (08:19):
I don't think it quite works that simply. I think
we have to be clear about what the goal is.
Speaker 3 (08:23):
Is the goal.
Speaker 4 (08:24):
Bringing back jobs in particular manufacturing industries, or is the
goal onshoing semiconductor manufacturing for national security concerns, or is
it just a broader goal of technical innovation and leadership,
Like with the investment in INNAI and depending on what
the goal is targeted, tariffs can have a place. I mean,
(08:45):
we saw this on Let's just use the example of
climate policy.
Speaker 3 (08:48):
Bidenomics has gotten a bad.
Speaker 4 (08:50):
Rep but obviously the IRA brought major investments in climate technology,
not only from the public sector, but doubling the overall
amount the private sector is investing as well. And that
kind of investment I think can transform that industry. So
there are bipartisan moments where people agree more so on
(09:10):
semiconductors than on climate, more so on tech oversite and
some other things, and I think those can be taken
advantage of. And you know, I charted the hidden history
of how to do this because.
Speaker 3 (09:20):
We do fail a lot of time.
Speaker 4 (09:22):
You know, government, if it doesn't have a clear mission,
if it doesn't have an institution charged with getting it
done and the discretion to bring in the best minds,
then it fails.
Speaker 3 (09:32):
But when those ingredients are there, it succeeds.
Speaker 2 (09:35):
And that's that's why I wrote the boking first with Chris.
This was great and hopefully we can do it again
soon for shore. Thank you, sir, Facebook co founder Chris
Use that
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:06):
The earnings just around the corner as well. Meta set
to report earnings after the closing ballance. The industry faces
continued regulatory pressure. Facebook co founder Chris Hughes, arguing in
the US as a history of striking a balance between
free markets and state capitalism, writes in quote, we organize
many of our markets for the common good, choosing to
cultivate them rather than plan them outright. The work is
(00:27):
a craft, not unlike the work of a sculptor or painter.
Chris is the author of the new book Market Crafters,
and he joins us now for more. Chris Camrnic good
to see you, Thanks for having me. Let's start big
and then we can get some meta anks.
Speaker 3 (00:38):
Let's do it.
Speaker 2 (00:39):
A secret source of the US economy, how would you
describe it?
Speaker 4 (00:42):
It's the dance between the private sector and the government.
So I make the case that policymakers have often harnessed
and guided markets toward public goals in order to make
Americans richer, say for their lives, more economically stable. And
there's a hidden history of US doing this from the
nineteen thirties all the way to present. It's a republican
project as much as it's a democratic project, and we're
(01:05):
going to have to pull out some of the lessons
from that if we're going to rebuild on the other
side of the chaos.
Speaker 2 (01:10):
It's happening right now, so talk about the casts. So
we're doing a good job of it right now.
Speaker 1 (01:14):
Yeah.
Speaker 4 (01:14):
I mean, someone said this is more like market crashing
than market crafting, and.
Speaker 3 (01:18):
That seemed apt to me. No. I mean, this administration
is at.
Speaker 4 (01:23):
Best impulsive and at worst completely disorganized. The way to
do this in the right way would be to say
we have a mission like bringing back manufacturing jobs or
even the auto industry. Then you'd create trade policy tariffs
that would be targeted not on avocados and cars, but targeted.
Speaker 3 (01:42):
You do it in collaboration with allies, and.
Speaker 4 (01:45):
You'd pair it with industrial policy investments to make sure
that those plans can get online quickly and that they
can do it cheaply. And there is a recipe for
crafting a particular market along those lines.
Speaker 3 (01:56):
This is just chaos. Use to use the word.
Speaker 4 (02:00):
Where the tariffs are, whether they're on this week or
last week, and people are trying to figure it out.
Speaker 1 (02:04):
Taking a step back though further, there is this feeling
about what the engine of US exceptionalism has been and
it's been in the world that you co founded with
respect to Facebook, which is big tech, and this idea
that the technological expertise that has been cultivated in the
United States has been superior and has been the reason
why so many people have wanted to invest here. Do
you see that unable to continue in this certain sort
(02:28):
of less predictable moment, or do you see that as
continuing to chug along in a healthy way that does
lead to some sort of evolution.
Speaker 3 (02:37):
It is certainly on shaky ground, that's for sure. I
think the story of.
Speaker 4 (02:40):
American technical leadership is also one where we see private
sector innovation as a critical engine of growth, paired with
public sector decisions.
Speaker 3 (02:49):
So I'll give a crisp example.
Speaker 4 (02:51):
We've all been talking about semiconductors and chips for the
last few years, and that's been incredibly important in bringing
back advanced semiconductor manufacturing in the United States. However, the
real story of how to support the high tech industry
in the US starts more in the nineteen eighties with
Reagan era industrial policy. At that point, Japan's share of
(03:11):
global semiconductor production was increasing quickly, and there was a man,
Robert Nois, the co founder of Intel, who teamed up
with other semiconductor producers to go to Washington say, hey,
we have a national security problem on our hands. The
Department of Defense agreed, so did White House in Congress,
and they came together to first do a structured trade
(03:31):
policy on Japan to prevent them dumping in the market,
and then secondly make a big public investment in semiconductor production.
So at this moment when we could have lost that
technical lead, an early important moment, we invested and it worked.
A few years later, the United States retook its share
of global semiconductor manufacturing. So what I'm trying to say
is it's not just a coincidence that we have these
(03:55):
high tech companies now. And it's yes, it's partially because
DARPA funded the Internet and this the lights are powered
by the government, but it's actually something even more explicit
product of market craft, and that should give us lessons
for how we can do it in the future.
Speaker 1 (04:09):
You said that the US is at risk of losing
some of that tech dominance. What makes you feel that
about the structure of current tech companies, in particular Meta.
That makes you get the sense that maybe they're losing
some of that innovation or some of that structure that
allows them to lead.
Speaker 4 (04:26):
It's less that I think that the tech companies are
losing innovation and more that you have to have public
policy to be fundamentally stable to encourage companies all across
the supply chain to invest.
Speaker 3 (04:37):
And I think that's truly what's at risk now.
Speaker 4 (04:40):
I mean, you've seen virtually all the measures of investor
confidence go down, consumer sentiment goes down, Inflation expectations are up,
equity markets are down, I mean all, and there's a
real fear that the FED won't be able to lower.
Speaker 3 (04:52):
If inflation stays high.
Speaker 4 (04:54):
So I think all of those storm clouds on the
horizon are not just bad macroeconomically, but bad for our
our technical companies and our leaders. It certainly makes it
a much more challenging environment for them.
Speaker 3 (05:05):
To succeed in.
Speaker 2 (05:06):
If you're a sculptor, you'd be breaking metsa up right.
Speaker 4 (05:10):
I wrote a piece six years ago arguing that Meta
had abused its power and that it had illegally acquired
WhatsApp and Instagram in order to consolidate its power. You
have TC under Trump filed too on that same rationale.
Several years ago. The Biden administration reorganized the case and
continued to prosecute it. And as you know now, I mean,
(05:32):
the case is ongoing in Washington with exactly these questions.
Speaker 2 (05:37):
What is it about it that you think is illegal?
Speaker 4 (05:40):
The decision now over a decade ago, to say Instagram
is challenging our monopoly, our power in the social media landscape,
particularly with photos and WhatsApp, later with messaging, and then
to acquire those rivals and then do things like purposefully
slow investment development, as the Instagram co founder testified just
(06:03):
last week, that is against the law to acquire competitors,
either to shut them down or to consolidate a monopolistic position.
Speaker 3 (06:11):
It's quite clear now. The question is is what do
you do now?
Speaker 4 (06:14):
That was a long time ago, and so you know,
in my view, I think it's important that you know,
Facebook has to comply with the law despite making a
decision years ago that was illegal.
Speaker 3 (06:23):
And then the question will come to what is the appropriate.
Speaker 4 (06:26):
Remedy in twenty twenty five, and we need to know
more from the case to figure that out.
Speaker 1 (06:30):
Is it incoherent to call some of the big tech
companies in the US national champions and to try to
hope that they're successful while trying to break them up
and change their business model with elimination of revenues from
places like China.
Speaker 4 (06:44):
I understand why you say that it seems on the
surface like they might be in conflict, but actually what
I chart in my research is a long story of saying,
wait a second, we want leading industries in the United States.
Speaker 3 (06:57):
So we were talking a lot about tech.
Speaker 4 (06:59):
But you can do it in fu finance, you can
do it in energy. You can do it a whole
range of markets. And in order to do that you
need to use a few different tools simultaneously. One of
them might be public investment, like in the IRA for
climate or in the semiconductor example that we were talking
about earlier. Another might be procurement, another might be reserve buffering,
and then another might be competition policy. So these things
(07:21):
can work in concert as long as you have a
clear mission, what is government trying to do, and if
that's to spur in this moment AI research and development
so that we can lead the world and take on
China and be at the frontier that could be a
very In fact, I think that would be a very
smart mission to pursue.
Speaker 3 (07:41):
But it has to be crisp and clear, and then you.
Speaker 4 (07:42):
Can organize the institutions of American democracy to pursue that,
and sometimes that might mean public investment and competition policy.
Speaker 1 (07:50):
At the same time, this overlaps with the idea of
tariffs as well, and the idea that it was a
bipartisan effort to have specific tariffs on certain products going
to China that were national security concerns are just outright
bans of certain types of chips being sold to China.
Do you think that that is the appropriate policy in
terms of limiting the amount of information or do you
(08:10):
think that, as someone who's worked in the tech industry,
the more cooperation open and transfer of information, the more
innovation and the more people can kind of get ahead.
Speaker 4 (08:19):
I don't think it quite works that simply. I think
we have to be clear about what the goal is.
Speaker 3 (08:23):
Is the goal.
Speaker 4 (08:24):
Bringing back jobs in particular manufacturing industries, or is the
goal onshoing semiconductor manufacturing for national security concerns, or is
it just a broader goal of technical innovation and leadership,
Like with the investment in INNAI and depending on what
the goal is targeted, tariffs can have a place. I mean,
(08:45):
we saw this on Let's just use the example of
climate policy.
Speaker 3 (08:48):
Bidenomics has gotten a bad.
Speaker 4 (08:50):
Rep but obviously the IRA brought major investments in climate technology,
not only from the public sector, but doubling the overall
amount the private sector is investing as well. And that
kind of investment I think can transform that industry. So
there are bipartisan moments where people agree more so on
(09:10):
semiconductors than on climate, more so on tech oversite and
some other things, and I think those can be taken
advantage of. And you know, I charted the hidden history
of how to do this because.
Speaker 3 (09:20):
We do fail a lot of time.
Speaker 4 (09:22):
You know, government, if it doesn't have a clear mission,
if it doesn't have an institution charged with getting it
done and the discretion to bring in the best minds,
then it fails.
Speaker 3 (09:32):
But when those ingredients are there, it succeeds.
Speaker 2 (09:35):
And that's that's why I wrote the boking first with Chris.
This was great and hopefully we can do it again
soon for shore. Thank you, sir, Facebook co founder Chris
Use that
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