Translator: Bob Prottas
Reviewer: Ariana Bleau Lugo I want to begin today
by telling you something about the Boston Tea Party
that you might not know. At its core it was an
act of corporate sabotage. Those ships were owned by the
British East India Company, the most powerful
corporation of its day. The company was tightly connected
to the British government. So much so that when it stumbled and found itself teetering
on the verge of bankruptcy Parliament quickly stepped in
and passed the Tea Act. And what this did
was it created a special exemption for the British East India Company so that it could sell tea in the
colonies without paying any tax. The idea was that it could
undercut local tea merchants and take their business. So what ignited the Boston Tea Party
was not so much a tax but a corporate tax loophole. (Laughter) This story of highly
concentrated economic power married with political influence is something that sounds
very familiar to us today. Over the space of just 20 years,
a handful of big companies have taken over large
swaths of our economy. Our banking system diversified
as recently as the 1990s is now mostly controlled
by a handful of big banks. Our food system has come
to resemble an hourglass where we have millions of farmers
and millions of eaters connected by this
incredibly narrow passageway. The gatekeepers are a few big food
companies and supermarket chains. Do you know that over 40%
of the nations milk supply is now processed by a single company? Including 70% of the milk
produced here in New England? If you're a dairy farmer
that means it's pretty hard to get a fair price for your milk. If you're a consumer you still
have this illusion of choice because this one company markets
under dozens of different brands. And then there's Wal-Mart. Wal-Mart was a small player
in the grocery industry just 15 years ago. Today it captures one out of every
four dollars that Americans spend and it's growing rapidly. In dozens of cities it already
has more than half the market. And the future of retail
looks even more concentrated. One third of everything we buy online
now comes from a single company. Many people are beginning to
question the wisdom of this and they're changing where they shop and what they buy
and where they do their banking. But what I want to suggest to you today is that a purely consumer based
response to this problem on its own is not likely to get us
where we need to go. It can't get us where we
need to go in part because it doesn't fully recognize how it is
that we got here in the first place. For a long time the story of how
big companies came to control much of our economy was that
bigger is better. Right? It's more efficient,
more productive, it outperforms. But that idea suffered
a serious blow four years ago. We all remember this. It was one
of histories most dramatic reveals. Toto pulled back that curtain and there stood
Wall Street's wizards of finance. Insolvent, panic stricken,
their hands out. It turns out that big banks are not safer
and they're not even more efficient. According to economists,
banks peak in efficiency when they reach the size of a small regional institution. Beyond that they become
top heavy with bureaucracy. Today's big banks
are orders of magnitude larger. The top four each have about
2 trillion dollars in assets. And their top heaviness
may explain why we actually pay more in checking account fees
and higher interest rates on loans if you bank with a big bank rather
than a local bank or credit union. But more important,
the bigger banks become the more disconnected
they become from our communities. And the less able they are to do the most important thing
we need banks to do, which is to make
nuance judgments about risk. And in particular the risk
that a new business will fail. Local banks are actually
really good at this. Because in addition to the credit
report and the market analysis they have all this soft
information to go on. They get to know
the borrower face-to-face. And they know
the local market intimately. So they're much better
able to make that decision. Big banks making decisions
in regional and national offices are largely flying blind. Rather than end up with a bunch
of bad loans on their books they've instead opted to sharply curtail small business lending. Studies show that regions where
bigger banks are more dominant have fewer small businesses
and slower job growth than other regions. And it's not just banking. In sector after sector
if you really begin to look what you see is that consolidation
is not serving our interests very well. We know for example that
small farms produce more than twice as much food per acre as big farms
with far less environmental impact. And big box retail
once seemed like a bargain. We now know it's costing us
far more in lost income. This model has almost single handedly eliminated large segments
of the middle class. Millions of jobs in manufacturing
and small businesses are gone and all we've gotten in exchange are very low wage jobs
working in these stores. Jobs that pay so little that many
rely on food stamps to get by. Or consider the case of pharmacies. It's pretty hard to find
a locally owned pharmacy these days. Unless you happen
to live in North Dakota. Under a unique state law, virtually every pharmacy in North Dakota
is locally owned. There are no chains. And by any measure
residents are better off. There are far more pharmacies
in North Dakota than in other states. Particularly in remote rural areas. And prescription drug prices
are among the lowest in the country. So if they aren't outperforming, and delivering better outcomes, how is it that these giant companies
have become so dominant? And the answer is that much like
the British East India Company they've used their market power and their political influence
to rig the game. Since 1995 we've given
over $275 billion to farms through the Farm Bill. Almost 80% of those dollars
went to the 10% of the largest farms. And most of the money was spent
on a handful of big commodity crops. Like corn and soybeans. These are the building
blocks of processed foods. So it's no wonder
that a quarter pounder often costs less than a pound
of locally grown broccoli. And our state tax codes
and our federal tax code are littered with loopholes
that give big companies the ability to escape paying taxes
that small businesses have to pay. This modest office building
in Wilmington Delaware has only a handful of parking spots. But it's home to hundreds
of big companies including Wal-Mart and CVS who are using this address as a way to escape paying
state corporate income taxes. And I hardly need to say
anything about the ways in which government has helped
big banks become even bigger. Boy!
(Sighs) I don't know about you but I thought
TED was supposed to be inspiring. (Laughter) (Applause) You know Stanley Kubrick once
described his film "The Shining" as an optimistic movie. (Laughter) He said anything that posits
the existence of life after death is a fundamentally positive story. (Laughter) I know that I'm reaching here a bit, but I think we can take some comfort in the realization that
there is nothing inevitable about the current
structure of our economy. It's not the product of some
kind of natural evolution. It's the logical outcome
of a set of policies. And many people are beginning
to have a different idea about how the economy ought to operate
and to act on that idea. We've seen these remarkable
shifts in just the last few years. The number of farmers' markets
has more than doubled. We've added over 1,400 new locally
owned neighborhood grocery stores. More than 500 new independent
bookstores have opened. Long dormant factories
in New York and San Francisco are filling up with small scale
clothing makers and beer brewers. And more than 600,000 people
have moved their accounts from big banks to local banks
and credit unions in the last year alone. Along the way we've
learned that there's a lot to recommend an economy
that is rooted in community. We've learned that we're
far more likely to have a conversation at the farmer's market
than we are at a big box store. Seven times more likely
in fact according to researchers, who confirm that communities
that have a lot of locally owned businesses do in fact have
stronger social networks. And those social networks
in turn give them an edge when it comes to solving
problems and innovating. And we've learned that local business isn't just
a smaller version of big business. It's as though it's running on
an entirely different operating system. This really came home to me
a few years ago when I was interviewing
the president of a small bank in South Minneapolis and he said, "You know when we make a mortgage loan
we're not planning to sell it. We're planning to keep it
on our books for 30 years. So our success and profitability depends on the well being
of our borrowers. When they do well, we do well." He said,
"You know, foreclosure is almost as much of a disaster for us
as it is for our borrowers. And we've learned that
there is a lot to recommend doing business with people
who really know us." A few years ago my brother wanted
to buy me a book for Christmas. He lives in Arizona and there was
no local bookstore where he lived. So he went to the
website of Longfellow books. My local bookstore in Portland. He found the book
and he placed the order. And he had it shipped to
South Carolina where my father lives and where I was planning
to spend the holidays. So here's this order.
It's coming from Arizona. It's going to South Carolina.
It doesn't have my name on it. Except my brother has asked
that it be gift wrapped and that the card say
"Merry Christmas, Stacy". A few minutes later his phone rings
and the person says, "This is Stuart at Longfellow books. I want to thank you for your order. I just had a question about it. Is this book for Stacy Mitchell?" And my brother surprised says,
"Yeah, it is. She's my sister." And Stuart says, "Well I thought I should let you know
that she's already read it." (Laughter) (Applause) Here's what worries me. (Laughter) As remarkable as these
developments are, they're unlikely to amount
to anything than an interesting trend
on the margins of the economy if the only way that we can figure out
how to bring about the change we want to see is through
our buying decisions. I'm like a lot of people. I put a lot of my
"making the world a better place" energy into thinking about how
I can be a better consumer. You know fair trade coffee,
recycled toilet paper, I'll get the iPad
instead of the Kindle so I won't be locked into
buying books from Amazon. The primary and often exclusive way we think about our agency
in the world now is as consumers. But as consumers we're very weak. We're operating as lone individuals
making a series of small choices. And the most we can do is pick between the options that are presented to us. And it's not that these
choices don't matter, they do and that's part of why
this way of thinking is so seductive. But it's not a great strategy
for changing the world. You know, if you think about it, what we're hoping is that some day enough of us will have enough
information about all the issues and all the choices in the marketplace and we'll have access
to all the right alternatives. And that all or most of us will be able to make the right decisions
all or most of the time. And while we're trying to line up
these millions of small decisions in the right direction,
we are swimming upstream against a powerful down
current of public policies that are taking our economy
in exactly the opposite direction. What we really need to do
is change the underlying structures that create the choices
in the first place. And we can't do that through the sum of our individual
actions in the market place. We can only do that by
acting collectively as citizens. You know, throughout our
history we have been called upon at various times to arrest
control of our livelihoods and our democracy
from would-be monopolists. The British East India Company,
the trusts of the early 20th century. This is one of those moments. It's not hard to imagine
what we would campaign for. We could begin by turning
the Farm Bill on its head. Instead of giving the most
money to the biggest farmers feeding the fast food pipeline, why not give the most money
to local farms feeding their neighbors? We should rethink how we
do planning and transportation. You know for decades we have been
just pouring public resources into creating the kinds of landscapes
that are perfect habitat for national chains. Meanwhile our village centers
and our downtowns, we're just pulling the rug
out from under them. The places where local businesses
are most likely to succeed. You know it's no coincidence that Vermont, which has some of the strongest
anti-sprawl legislation in the country, also has more small businesses
per capita than any other state. And it's not hard to imagine
having a banking system that supported the real economy. Because we had that system
in place for more than half a century. From laws that were in place
from the 1930's until the 1990's prevented banks
from speculating on Wall Street. And they also limited their ability
to expand beyond state lines. So they had to stay focused
on their home regions. There are bills in congress
right now that would begin to reinstate some of that framework. And we should close all those
loopholes that give big businesses an advantage when paying their taxes. Just image if we took
a small amount of the savings and redirected it to
new initiatives to grow a whole new generation
of local businesses. We could take a page
from a great Pennsylvania program that in the last few years
has seeded over 100 locally owned and cooperatively owned grocery
stores in low-income neighborhoods. And I think we also need to pull
antitrust out of its 30-year hiatus. I think there is some important questions
that we really need to be asking like: Is it in our best interest
that one company controls more than
a third of e-commerce? Does my local dairy
farmer deserve to have more than one choice about
where to sell her milk? So the answers are there and
the public support is largely there. The question that I think
we have to grapple with is how do we begin to see our
trips to the farmers' market and to the local bookstore, not as the answer but as a first step. How do we transform this remarkable consumer
trend into something more? How do we make it
a political movement? Thank you. (Applause) (Cheers)
