>> A Facebook co-founder with a message, this week on Firing Line.

>> We haven't, in earnest, tried economic or central planning in the United States in history.

And the whole idea is to rebuild after the chaos of the economic policy of this administration.

>> Chris Hughes and Mark Zuckerberg launched Facebook from their Harvard dorm room.

Unlike Zuckerberg, Hughes finished his degree and is now pursuing a PhD in economics.

Author of the new book, "Market Crafters," he examines how the American government has shaped our markets over the last century.

>> How is market craft different from imposing 10% tariffs on all imports?

>> This is not market craft.

This is just, you know, government by impulse.

The question now is, what will happen on the other side of Trump?

>> After leaving Facebook, Hughes joined critics, saying the company had become too powerful.

>> We need new regulations.

It's time to break up Facebook.

>> Today, he supports a change in law that would require social media companies to take responsibility for the content they publish.

>> What the tech companies want you to believe is that, well, they shouldn't be liable for what you or anyone else posts on their platform.

And I think it just doesn't fit the times, doesn't fit the internet as it exists today.

>> What does Chris Hughes say now?

>> "Firing Line with Margaret Hoover" is made possible in part by... ...and by the following.

Corporate funding is provided by Stephens Inc. >> Chris Hughes, welcome to "Firing Line."

>> Thanks for having me.

>> Your new book discusses the idea of what you call "marketcraft."

This is, quote, "the intentional state-led effort to organize and manage markets for social or political ends."

>> Right.

>> I'm gonna pose your own question to you.

>> Okay.

>> Which is, is marketcrafting just economic planning, dressed up in a new language?

>> No, we haven't, in earnest, tried economic or central planning in the United States, at least in my research in history.

We have done a lot of guiding and shaping markets towards political goals, like making Americans richer, their lives more economically stable, and safer.

And so I track a lot of that history, which is full of Republicans and Democrats shaping, managing markets, trying to make them work in a way that people are gonna like.

And, of course, a lot of the time, there are successes, plenty of failures, too.

And the whole idea is to tease out some of the lessons from both the failures and successes so that we can figure out how to rebuild after the chaos of the economic policy of this administration.

>> How is marketcraft different from imposing 10% tariffs on all imports?

>> So, tariffs can, in theory, be a tool of marketcraft if you said, "Hey, we want to produce a lot of solar panels here in the United States, so we're gonna put tariffs on those goods from elsewhere."

That kind of selective tariff can be part of crafting markets towards a certain goal.

The tariffs of this administration are not that, though.

These across-the-board, highly unpredictable maneuvers are just gonna raise prices for families and are not about crafting markets.

They're about bludgeoning them.

>> You write that you once believed the role of government with respect to the economy was to step in only in emergencies.

But your research and your thinking has evolved that actually the government's relationship to the economy can be more one of cultivation.

You liken it to a garden or a gardener.

>> Yeah.

One way to think about this project for me is a war on the verb "to intervene," because this is how so many folks, whether they're on the left or the right, talk about economic policy.

We say we intervene in markets to make them better.

And that sort of sets up government like it's an emergency room, right?

So that when things go wrong, government's there to either bail out banks or catch workers who've been disadvantaged in the economy.

That doesn't line up with the facts.

So if we look at what makes up American GDP, you see industry after industry that is crafted by the state -- healthcare, pharmaceuticals, aviation, you know, semiconductors and chips.

We can keep going through industry after industry.

And what we see is that often government is cultivating these markets, shaping it.

So it's important for me to say, though, that, like, all of those markets, they have problems.

Market crafting of itself isn't good or bad.

It's similar to industrial policy or competition policy or tax policy.

It's a method of guiding and shaping markets, which can be very effective in many cases and fail in others.

And those lessons are what we have to learn, 'cause we're gonna keep doing this in the future.

>> So, do you draw a line between cultivating and intervening?

>> Yeah.

I mean, I do use the garden -- >> What's the distinction?

>> I think the garden analogy is a very good one.

You know, we've learned through human civilization that when we domesticate otherwise unruly forces and we guide them with light, fertilizer, watering, they produce more.

And so markets, I think, are more akin to that, and it's a -- market craft is a partnership between the state and private investors to ensure that markets are working for the common good.

And that idea, I think, has been lost to history in some ways.

Over the past 30, 40 years, we've gotten so used to talking about intervening in markets, using this, like, free-market government dichotomy, that we have forgotten that much of the time when they work best, it's because they've been crafted.

>> One of the first market crafters that you profile in the book is a man named Jesse Jones.

>> Yes, old Jesse.

>> Jesse Jones ran the Reconstruction Finance Corporation, which was initiated under President Herbert Hoover during the Great Depression.

>> Yeah.

>> Why is Jesse Jones and the RFC for you sort of an ideal example of a market crafter success?

>> The Reconstruction Finance Corporation existed for about 20 years.

It was started by Herbert Hoover in 1932.

>> This is why I took particular interest to the research in this area.

>> And then it was meaningfully expanded by Roosevelt and Congress several times throughout the New Deal.

And they invent things like Fannie Mae, which still exists today.

They create the 30-year mortgage, which makes it much more affordable for people to own homes, and you see a lot of stimulative activity.

And then, finally, it becomes the major force to spur aviation development, synthetic rubber, a whole host of defense industries.

>> During World War II.

>> Exactly.

In the Second World War.

And so what it's doing here is it is guiding and crafting markets, and that success, I think, is something that we can learn from for today.

>> Another market crafter that you feature in the book actually appeared on the original Firing Line with William F. Buckley Jr., Secretary of Treasury William E. Simon, who served under both Nixon and Ford.

Simon appeared with Buckley in 1974, right at the time in which you write about him, during the first sort of oil panic.

Here is how Buckley describes him in his program.

Take a look at this.

>> Soon after the Arab states clamped their embargo and then boosted the price of oil by 400%, President Nixon announced the appointment of a domestic energy czar, and the American people were introduced to William E. Simon, a cyclone from Wall Street who bedazzled the Congress, the bureaucracy, and the press, and got us through the winter.

So that when the Arabs finally entered the embargo, we were still functioning, and our automobiles and factories were still purring.

>> So, Buckley says he got us through the winter.

>> Yeah.

>> You write about this episode in the book.

How, from your perspective, did Bill Simon get us through the winter of that first oil crisis in the early 1970s?

>> Yeah.

Through careful market craft, is the answer.

So, Simon was actually the hardest person for me to write about in the book, because he was a libertarian's libertarian.

You know, particularly late in life, he wanted nothing to do with what he would call an activist government.

And so, his task is to organize energy markets to prevent any kind of meaningful shortage.

So he does all kinds of things, stockpiling.

He allocates geographically which regions are gonna get what.

He decides, you know, whether the military and hospitals get fuel first.

He decides how much is gasoline.

He decides how much is going to the home heating oil.

He decides the price and if there are gonna be price controls on all of these items.

And it's really an emergency operation.

For several months, they are watching the price of oil go up and up and up, and they control it in the United States gradually.

They distribute it.

People have access to gasoline, and the price goes up only modestly, whereas in Europe, it doubles.

And so, you know, the clip that we just saw is after this extreme period of duress.

But we survived it better than a lot of other folks in Europe and elsewhere did because of some pretty activist market craft that this libertarian's libertarian was pursuing.

And his lessons from that, a few years later, were to create institutional structures to prevent another crisis like that happening, which still endure today.

>> Much of the last section of the book focuses on a market crafter who you know, who you interviewed, who was active in the Obama bailouts, the President Obama's auto bailouts, and also President Biden's stimulus program's Brian Deese.

>> Yes, yeah.

>> What conclusions do you draw from both the successes and the failures of the programs that Deese oversaw?

>> Well, Brian Deese was the chair of the National Economic Council.

He was not a household name.

So, as a market crafter in the Biden years, the reason that he's so interesting is because he says, you know, "Wait a second.

We want to make semiconductors here in the United States for national security reasons."

And so we're going to work with Congress, which had already been talking about this, including in the first Trump term, of how to do it, to make meaningful public investment on toward this fabrication, and now, you know, it's pretty successful.

We have five of the major semiconductor manufacturers have plants here in the United States that are either in construction or in fabrication right now, which is a meaningful advance.

>> And yet you've been candid about the challenges of Bidenomics, the challenges of the CHIPS Act.

>> Yeah.

>> Where does market craft interface with your negative criticisms of the CHIPS Act and Bidenomics?

>> Well, I think on balance, the CHIPS Act has been very successful.

A lot of the criticisms of the CHIPS Act that I've seen over the years tend to be more symbolic.

Like, you know, folks who I generally respect and like, like Ezra Klein or Derek Thompson will focus on requirements for child care or some of the other things that are part of it.

But in all my conversations with the folks I've talked to, they didn't really slow anything down.

So I think that they've become more of a symbolic fight that distracts us from the real story, which is the effectiveness.

>> You wrote, "The most glaring oversight was the inability to clear out a regulatory morass that slows construction and development in the United States."

>> Exactly, and that's why I think that Congress coming in after the fact in 2024 to streamline the environmental regulations is such a smart move, and it shows that, like, you know, we don't just have one bite at the apple.

We can and need to create these institutions, give them that kind of power, and then when they run into roadblocks, ensure that they can make it through.

>> Markercraft, as a practice you point out in your book, has been sort of accepted and taken on by many Republicans of late.

JD Vance, the vice president, Senator Hawley from Missouri, Secretary of State Marco Rubio has his own reasons for embracing marketcraft.

His seemed to be centered around a focus on national security in China.

But either way, there does seem to be a sincere interest amongst some Republicans to embrace marketcraft.

>> Yeah, I think that, you know, when Biden was president, you saw a lot of movement on the right to develop these ideas around how to use state power to make markets work.

And so the folks that you're outlining, Hawley, Rubio, Vance and others, I think we're at the frontier of that movement.

And even in the few days after Trump was elected, part of me wondered whether or not this emerging set of leaders might say, "Okay, we are going to push for a national investment bank or we're going to push for a certain kind of targeted tariff policy to support, you know, drone manufacture, critical minerals or some of the things that are important to them."

That is not what we've seen.

>> Correct.

>> So Trump doesn't have a marketcraft.

I mean, his economic policy, as far as we can tell, is about higher tariffs and lower taxes on the wealthy.

And so the higher tariffs are not the kind of tariffs that he pursued in the first term on things like automobiles, steel, aluminum, things that were more targeted in some cases.

There are these across-the-board tariffs, which seem to have been developed by a chat GPT model and then rolled out impulsively and then pulled back.

I mean, it is -- this is not marketcraft.

This is just, you know, government by impulse.

And so I think that's really quite different.

The question now is, what will happen on the other side of Trump?

I think, you know, that's not what most people are thinking about today, but I think, at least for Democrats and folks on the left, we have to be thinking about, you know, what is an economic agenda where we can actually say with confidence we can ensure that grocery prices are stable, that the price of housing comes down, that health care and child care can be affordable?

And you're gonna have to craft markets if you're gonna deliver on those promises.

>> I mean, it strikes me that a fundamental difference between the marketcraft you write about in the book and the marketcraft embraced by those Republicans that we just mentioned is that the aims are different, right?

>> Exactly.

>> Right?

The aims are fundamentally different.

>> Exactly.

>> The Trump administration in the last three months has worked to gut the CFPB.

>> Yeah.

>> It's sort of ceased to investigate fraud and corruption.

>> It's fired two FTC commissioners.

>> Yeah, so if the infrastructure through which the marketcraft that you advocate is gone in the next administration, then what?

>> It's a big problem.

We have to rebuild?

I mean, I think that's the only way to think about it.

I mean, the attacks on the Fed are maybe the easiest and clearest, but, you know, it is in the Federal Reserve Act.

It's very clear that the governors can only be removed for cause.

This language is also in the FTC, in the Federal Trade Commissions Act, and yet Trump just removes the commissioners saying that he's discovered some new power to do this.

And so there's a role for, you know, responsiveness, of course, to elections and the executive branch, but the entire institutional infrastructure can't be decided by political fiat, at least if we want to trust these institutions to deliver on price and financial stability or, in the FTC's case, to deliver competitive, open, and fair markets.

>> Right.

Andrew Ferguson, the new chair of the FTC, was appointed by Donald Trump and seems committed to going after big tech.

>> Yeah.

>> Which brings me to Meta.

In 2019, you famously called for Facebook to be broken up.

Right?

You wrote that, quote, "Mark's power was unprecedented and un-American."

It's 2025 now.

>> Yeah, six years ago.

>> Meta is worth more than a trillion dollars.

>> Yeah.

>> And in the midst of a massive antitrust trial.

>> Yeah.

>> While openly currying favor with President Trump, its CEO has also eliminated fact checking from the platform.

What do you make of this moment?

>> It's hard to believe, to be honest.

You know, I haven't talked to Mark in six years since that piece was published, so I don't have any kind of inside intel on what he's thinking or what people -- >> Why is it hard to believe?

>> Or what people at the company are believing.

But it's hard to see Facebook as a company has gotten so big, and it's taken six years to hold them accountable.

That's too long.

And yet Mark Zuckerberg is on the stand and making the case that Facebook isn't a monopoly.

And I think most people, when they think about social media, when you take a step back and you think about the fact that Facebook owns not only its Blue App but also Instagram and WhatsApp, it remains by far the most dominant monopolistic player in that space.

So, what I wrote six years ago, unfortunately, is still true today.

And to me, it's hard to believe that it's taken this long for the case to move, and then secondly, that Congress hasn't acted more forcefully to rein Facebook in.

Because even if -- >> But why haven't they?

>> Even if this case wins, then there will still be all kinds of concerns around privacy and misinformation, et cetera.

It's not like antitrust is, like, gonna solve all the problems with social media.

And so I think we need Congress to act.

And personally, I think one of the most important things to do is getting rid of Section 230, the law that makes it possible for these companies to say that they're not responsible for any of the content that's posted on the platform.

>> I'm glad you mentioned 230.

I was gonna ask you about it.

Social-media platforms like Meta, like Facebook, are protected from liability for most of the content that users post, including conspiracy theory, lies, harmful information, thanks to Section 230 of the Communications Decency Act, which is part of the Telecommunications Act of 1996, which was written to regulate cable television.

>> Yes.

>> There is no regulatory regime for social media that was written for social media.

>> Yes.

I was 13 years old when that law was written.

I'm 41 now, and a couple things have changed in the world.

>> A couple things have changed.

So I think what you're saying is a regulatory regime written for a totally different technology 30 years ago is incomplete or inadequate for regulating social media.

How should social media ideally be regulated?

>> Well, I think we have to be clear about what are the different problems.

And so there are privacy concerns.

>> Yeah.

There are mental health concerns.

>> Yeah.

>> There's questions around addiction, particularly for kids.

Then there's corporate concentration and power concerns.

And then, in some cases, there are -- and it's related to the corporate concentration concerns, but there's a sense of real political influence, which slows down any kind of change.

>> I want to get there.

>> But just to answer your question on 230 in particular, I do think that's a particularly important law because the way that the tech -- what the tech companies want you to believe is that, well, they shouldn't be liable for what you or anyone else posts on their platform.

And that may have been true in an era of the internet, of message boards, when there was not the kind of sophisticated algorithmic work that happens to lift up the most controversial or, in some cases, the most disgusting kinds of content up higher.

But right now, virtually every social media company, and particularly Meta and Facebook, they take all the content that's posted, and then the company, through its algorithms, decides what you see through the algorithmic decision-making.

So they are lifting up and amplifying certain content over others a lot of the time 'cause they think it's gonna be more -- it's gonna attract your eyeballs and it's gonna hold your attention more.

>> And they can sell advertising against it.

>> Exactly.

And so -- and oftentimes that content is very problematic.

I mean, you hear these incredible stories of, you know, some of the most extreme leading to teenage suicide and just really tragic, dark stuff.

And so I think it's fair to say if you're looking at all this content, choosing what's the most interesting, boosting it, attracting attention, and then making money off of the decision to boost particularly controversial stuff, you should be legally liable for that.

And that's the way it works in virtually every other industry in America.

To have this kind of industry- wide liability carve-out is unprecedented, and I think it just doesn't fit the times, doesn't fit the Internet as it exists today.

>> Against the backdrop of the failure of the government to regulate social media, you have warned that it would be a profound mistake for AI leaders and their products also not to be regulated.

What can we learn from the failure to regulate social media about AI as we approach its challenges?

>> I think this is a good example of where my message would be: let's be smart and let's be careful.

Too much regulation can be a bad thing.

So, with AI in particular, my concern is primarily around catastrophic risk, the idea that these models can lead to some kind of mass-destruction event, whether it be through weaponization, war, giving hackers particular power or, you know, some of the more out-there concerns about the singularity.

And I really like this bill that was passed by the California legislature last year.

It was called SB 1047, which actually, ironically, Elon Musk supported.

>> Supported at the time, yeah.

>> And some other reasonable tech leaders did, as well, which would have had what we call red teaming for catastrophic risk and then really relying on the courts to, you know, assess if some of the actions that you're taking in any particular example break existing laws.

I think that is the right kind of approach for AI to ensure that these companies are at once accountable but also able to do their thing.

I love these models.

I'm using multiple AI models, honestly, dozens of times a day.

I think the technology is amazing and pioneering.

It's the first thing I've seen really since social media or even the mobile phone that has changed my life this significantly, and I want that innovation.

I think we should be crafting that market to ensure that the innovation continues.

>> Given the precariousness of the economy right now, what kind of marketcraft would you -- if you were the market crafter right now... >> The market crafter in chief.

>> ...where would you deploy -- if you were market crafter in chief right now, where would you deploy, you know, effective market craft in this moment to steady the ship of our economy right now?

>> Yeah.

Bring down costs, and specifically housing, groceries, and care.

Those three items make up the vast majority of what American families are spending money on, and they are understandably still angry about the cost run-up that happened starting in the pandemic.

So I'd have a housing construction fund, which I think with a relatively modest capitalization could build millions of homes.

I'd also think about an industrial policy for modular housing.

This is the kind of housing where they build things off-site and they bring the components on-site.

So I think that's a marketcraft for housing.

I think on groceries, there are things to learn from Jesse Jones to take us back to where we started in the commodity credit corporation that can help us buffer the price of key goods like eggs or coffee.

And then on care, I think we need to, you know, continue to think about how to shape healthcare markets to make it significantly more accessible and cheaper, and there are ways of making Medicare available to more folks controlling the costs.

So I think there is a market crafting agenda to bring down costs, and I think that's where our attention should most urgently be.

>> How likely is that to happen, any of it?

>> I think somewhat, because if Democrats have learned anything from this last cycle, it's that voters really, really don't like instability.

And I think they're rightly angry about the cost of living.

>> It sounds like you're hanging your hat on that happening with Democratic leadership, not under this administration.

>> I think it will almost certainly have to be a Democratic.

This administration does not seem at all interested in the cost of living.

I mean, the tariffs that they're rolling out alone will hike prices.

I mean, the estimates are anywhere between $2,000 to $4,000 for the average American family, and so they're not earnestly interested in lowering costs.

They have a different agenda.

So I think in this case, it will need to be Democrats leading.

>> Chris Hughes, thank you for joining me on "Firing Line," and thank you for talking to us about "Marketcrafters."

>> Thank you for having me.

>> "Firing Line with Margaret Hoover" is made possible in part by... ...and by the following.

Corporate funding is provided by Stephens Inc. ♪♪ >> You're watching PBS.

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