From WXXI news.

This is connections.

I'm Evan Dawson.

Our connection this hour was made after World War two, when the United States took the lead in creating international institutions.

For the last eight decades, the United States has served as a world leader.

Largely because of these actions.

And American companies, particularly multinational corporations, have grown stronger and more influential during this time.

That is not necessarily a good thing.

In his new book, Multinational Order, University of Rochester professor Doctor Randall Stone writes that corporations are very good at pushing policy in their own favor, especially when they know what they want, and they know that it doesn't interfere with national security interests.

U.S.

firms know how to squeeze policy to give themselves monopolies or chase competitors out of the marketplace.

Their growth can lead to environmental damage and more rapid climate change.

There are real consequences.

At the same time, Stone writes that globalization has provided serious benefits to the economy faster growing wages, more trade and cooperation.

The spread of technological innovation.

His book is not a treatise against multinationals or world trade, but Stone writes that the second Trump administration has been vastly different than the first, and that has upended the world order in ways that will be difficult to predict going forward.

He writes, quote, as the United States withdraws from international leadership and indulges in arbitrary abuses of power, international institutions will become less valuable to other countries.

End quote I ask doctor Stone to come on the show to discuss the themes of his book and give us a kind of multinational, one on one, put him put us in his classroom and he is with us.

He's professor of political science, director of the Scholarly Center for Polish and Central European Studies at the University of Rochester.

His book is Multinational Order U.S.

Firms and International Organization.

Welcome back to the program.

Nice to be with you, Evan.

Thanks for having me.

Tonight, 7 p.m.

at Rush Library.

You'll be doing what?

That's right.

We'll have a little reception starting at seven.

Then at 730, I'm going to be giving an overview of the book.

So if your interest is piqued, you get to hear a little bit more.

I should have waited to do the show after that because then I would have looked smarter.

This is going to be hard for me.

I'm going to do my best there.

Who did you write this book for?

Well, I think I'm always trying to write for a smart sophomore.

I want it to be accessible.

I want it to not require any particular background to be able to read the book.

But, sometimes the jargon gets the better of me.

Sometimes.

I can't help but put in, you know, some technical stuff.

I try to keep that to a minimum.

Well, I think you've succeeded in many ways.

I mean, the book, for me, it was a challenge because I don't come in with, your resume and understanding international trade and the world order.

But it did help me understand where trade and where, globalization has provided proved successful, where it can be manipulated.

And in particular, when national security is in play, how that changes the equation of the influence of power.

So there's a lot to talk about.

And I know our listeners are going to want to know, you know, what you really do think that the second Trump administration has done to sort of upend this, because the second Trump administration has really been very different than the first fair.

Absolutely.

Absolutely.

I mean, this is a book about world order, about the set of rules and institutions, and norms that support international exchange, support the economy.

That has allowed an unprecedented level of prosperity, for the world.

Right.

And this is a terrible time to write a book about world order, because it's crashing down around our ears.

Right?

It's, Trump think a Trump administration has been a calamity.

It has, upended our system of alliances.

Thumbed its nose at all the institutions, broken most of the promises the United States has made over the last 80 years.

And it's been.

That is devastating from the point of view of long term US power.

And because the US power has been based on alliances with like minded countries and cooperation and institutions and long term commitments.

So countries that can't make long term commitments can't be, expect, can't expect anyone to follow when they lead.

So everything is topsy turvy right now.

And.

I don't think that that invalidates looking backwards.

I think that understanding the past is really essential.

I think it's where you go next.

But it does mean that a lot of the conclusions, suddenly feel historical.

And they weren't historical.

A year and a half ago.

Well, so, look, I think some of the acolytes of this, this administration would say that you come from the ivory tower, global trade supporting, you know, the egghead class.

That's that's where you're coming to us from.

And this book must just be a defense of international trade.

It must be this rose colored glasses.

Look at multinationals and world order.

And this president and this administration are just upending that because it hasn't benefited us.

So let's take the broad strokes of where a critic might assume this book is going to go, because I found the book a lot more nuanced.

The book was a lot more balanced in its view of the benefits and the costs of the international order from the last eight years.

Yes, I, I, I strive for nuance and try to, you know, it's not that all the left wing conspiracy theories are wrong.

It's that they're not nuanced enough.

Right?

And they're, so there are important elements of critique here, and they're important things to support.

But I guilty as charged that I'm, you know, and egghead stick and stuck in the ivory tower.

I mean, I'm a, you know, I'm a tenured professor at an elite university, and I'm writing for, as I just told you, smart sophomores, I, you know, I'm not writing for people who had a hard time finishing high school.

And so the, you know, the social basis of the, you know, the hardcore Trump supporters are people who are going to find this really hard to follow and understand.

But you mentioned sort of left critiques.

I actually think that the horseshoe theory of politics really does come into play when it looks at globalization.

I think the the far political left does is more likely to support tariffs, is more likely to support protectionism or isolationism, as many of the president's supporters are.

Do you see it that way?

Yes.

Although, support and opposition to trade have just gone through the blender because of Donald Trump, who's a very effective political entrepreneur.

I think his policies are terribly misguided in most respects, but he does have, a cleverness for catching the moment and catching the political winds, if you will.

And so, you know, up until 2016, there was no question that Democrats were more protectionist than Republicans.

And this was true at the elite level.

It was true in Congress.

It was true of Democratic presidents, although presidents were always more free trade than Congress.

And, once 20, Trump came along and said, no, wait a minute, I'm changing the brand.

Now we're for protectionism.

And an awful lot of Republican voters just turned on a dime.

Trump says we're for protectionism.

We're for protectionism.

They hadn't really thought very deeply about the issue.

And so it's easy for them to change.

And, it was harder for Republicans in Congress, right, who were, were very committed to their, to their positions and had had good reasons.

But they have largely fallen in line and supported the president and not, not, constrained his ability to impose tariffs willy nilly.

And Democrats have largely switched to the other side and defending institutions.

Well, and and there they express much more pro-trade attitudes than they did, a decade ago.

But couldn't a Trump supporter say, look, it's not that I haven't thought deeply about it.

It's that there used to be a factory in my small town and now there isn't.

And I'm going to blame globalization for that.

And maybe Randy Stone says I shouldn't, but I'm going to well, I'm part of what's happened here is a resorting of who are Democrats and who are Republicans.

Right.

So, the what a core part of the Democratic base, was working class, unionized, manufacturing workers, right?

And those folks, have switched their allegiance to the Republican Party, mainly for cultural reasons, I think.

But the it's an interesting question.

How much of that is due to the fact that they were really punished, by globalization?

And they're, they, manufacturing jobs.

Wages have not gone up, in real terms since 1980.

And that is, that where as the rest of the country has become much more prosperous.

Yeah.

It's remarkable.

Okay, so a little bit of one on one here.

So when you say multinational, make sure the audience knows who you're talking about.

So these are, high productivity firms, right?

They're firms whose names you frequently would recognize.

Right?

They're big firms.

Big employers.

And they have international affiliates.

So they, they are able to pay the costs of buying, a foreign firm or establishing a factory abroad.

And so they, they, you know, multinational just means a firm that has one or more foreign affiliates, it owns, a division, that's based outside of the country.

But frequently these are behemoths that have, investments all around the globe.

Early in the book, you write something that was interesting to me.

It's no surprise that multinationals anywhere would, would seek to lobby, seek to exert influence.

But you write that the United States is more vulnerable to lobbying than other democracies.

Why?

It's because of the division of powers.

And it's an important part of the story is that the main limits on the power of U.S.

multinationals don't come from other countries.

They come from, their ability to lobby within, the United States and the limitations of what they can get, in the American political system.

And so the, the most, permeable spot for lobbying is the Congress.

And so typically, if you want to get something done, you lobby Congress, and then you get your congressman or your senator to, engage with the executive branch.

Perhaps they do it through the legislative process, or perhaps they do it through, hearings.

Often they do it through informal contacts.

Okay.

And that contrast to take Great Britain, take other democracies that maybe are more resistant to lobbying.

That's right.

Well, most other democracies are power parliamentary systems.

Right.

And so the prime minister, by definition, controls a majority in their, legislature.

They the, the legislature doesn't, act as such, constant check, on, executive authority.

And the United States, the president isn't elected independent of the of the Congress.

They may or may not have a majority.

And whether they have a majority or not, they still have to get a majority on board on any particular issue.

And and so there's a lot more horse trading that happens in the United States.

So this is where I'm going to try to put my student hat on in your classroom at the risk of getting a bad grade here, because this is not a book that tells you what to think.

This is a book that gives you the history, and it gives you a tremendous amount of exhaustive research and charts and information.

And toward the end, doctor Stone offers some sort of, you know, an analysis of some of the impact of the last eight decades.

But by no means is this a book that is an opinion screed.

I mean, it's a lot of history.

My opinion, or at least my if I were a student in your class, one of the conclusions I would draw is you.

You do draw a portrait of the benefits of trade and the possible positive aspects that flow from globalization.

But if our system of government were different in this country, we would have fewer of the negative outcomes, less of the political capture that happens, less of the outsized influence, and then perhaps less of the policy that then favors the few privileges, the few.

So you could get more of the gains of globalization and fewer of the negative aspects.

If we were more parliamentary in nature.

Yes or no?

That's a really interesting question.

And I don't think it's one that political scientists have adequately investigated.

You just been kind because you do want to give me a D here on the.

You know, I'm not I think you asked a good question, as so frequently happens in this room.

No, I think that, there is a consensus that, the United States is what is called, in the lingo, a weak state, right?

Whereas, France, Japan, Germany are strong states in the sense that, there are more points of access.

The executive is less insulated.

Policy is more driven by interest groups and interest groups overwhelmingly are multinational corporations.

Right.

Because 60% of all the lobbying that happens is business lobbying.

And the majority of business lobbying is done by multinationals.

Right.

So, they control a lot of the process.

The corollary of that would seem to be that multinationals lobbying in parliamentary democracies would have less influence, and that there would be, you know, less of this sort of special influence, politics.

There certainly is lobbying that happens in those countries.

There isn't lobbying data that is as good for any country besides the United States.

Right.

So it's harder to trace the lobbying that happens.

The European Union is beginning to, put together some really high quality lobbying data, but it doesn't go around back very far.

So I think we don't know the answer to the question, but I suspect that, if the United States had a parliamentary democracy, we probably would see less influence for special, interests, for the listeners who are going to hear that word lobbying and see it in your text.

Do you view it as a slur?

I talked to a retired member of Congress years ago on the show who said, why is it such a problem to become a lobbyist?

He said, look, people go to Congress, they serve, they understand our government works.

And then it's natural to go to be a voice of perhaps the business class, perhaps a particular interest corporation, because we know how the levers of power work, but we're not doing anything other than intervening, lobbying on their behalf.

Why is lobbying so bad?

So give me a sense of well, and it's a natural career path because they pay you really well.

Yes they do.

Right.

Yes they do.

Yes.

So the reason lobbying works is because policymakers are really uncertain about what to do about lots of things, and they can be persuaded.

They know that the lobbyists are biased, but they also know that the lobby lobbyists have more information than they do about various things.

So persuasion can take place.

The policymakers are willing to listen.

We think because they think that they benefit from getting that information, even though they know it's biased, right.

And that equation is what determines the limits of corporate influence, right.

Because they can be influential, when they can make a credible case that their private interests are correlated with a more general interest.

The difficulty comes in when, of course, you're paying lobbyists, and those who have the most money can hire the most lobbyists.

Large corporations hire numerous, lobbying firms to represent them.

And those lobbying firms have connections with particular congressmen, with people on both sides of the aisle and with the executive branch and so on.

And when they acquire new affiliates abroad, they increase their lobbying efforts.

Right?

And they start lobbying about new things.

So they're represented.

Their biases get incorporated into policy and the biases of the average American citizen are not.

So give the audience an example of when that kind of lobbying works and gets put into place in policy, that multinationals have their way and they're successful.

What does that look like?

What can that look like?

Okay, so one great example would be when the Clinton administration wanted to bring China into the World Trade Organization.

The Democrats in Congress were very skeptical because they thought this would undermine, wages, particularly in manufacturing.

And this would this would hurt their constituents.

And, Republicans in Congress tended to be more supportive because they were more, attuned to the arguments for free trade at that time.

The again, different time.

That's different time.

It was before 2016, right.

This, debate played out in 1999, 2000.

Okay.

And, the, so the Clinton administration was, was pushing for, ratification of what was called, permanent normal trade relations with China.

And this was one of the crucial steps to getting China into the World Trade Organization.

They would not have succeeded.

They wouldn't have gotten a majority if not for a huge and really unprecedented, surge of lobbying, that was done by multinational corporations.

It was led, by Boeing, Microsoft, AIG, the largest insurance company in the world, various financial services companies and banks, and Boeing in particular, was able to mobilize its suppliers in almost every congressional district in the country to visit their congressmen in Washington.

It was just an overwhelming show of, of lobbying power.

And the, you know, initial betting was this thing probably wouldn't pass.

And then it, you know, it it it did pass pretty with a pretty strong majority.

And with mostly Republican votes.

But a lot of Democratic votes came along as well.

As a result of this heavily lobbying effort, the one consistent theme in the book about where lobbying can fail is when the interests of an American corporation run against the perceived national security interests.

And so what's an example of that, by the way?

So China provides a great example of that, too.

So, since, you know, since 2000, China, joined the, the WTO in 2001 and, imports surged into the United States.

Right.

There was the so-called China shock, which had geographically specified impacts, in particular places like, eastern Ohio, which switched their political allegiances, from Democratic to Republican.

Largely as a result of that, and at the same time, China moved from being a poor, country that was developing remarkably fast to being the second largest economy in the world and a, a geopolitical threat to the United States.

a, consensus formed in Washington.

One of the few things that there's a consensus on in Washington, right, that China has moved from being an opportunity to being a threat.

And so U.S., foreign economic policy needs to be reoriented on to containing China.

Democrats believe that.

Republicans believe that, and.

At the same time, US multinationals had rushed into China, after they, they, got permanent normal trade relations.

It was a much better place to invest, right?

Most major multinationals have a presence there, and they would very much like to maintain low trading barriers with China, because they're being taxed on the things they buy from themselves, when they bring them back from China, when there's a tariff.

They're much more exposed.

Those multinationals are much stronger than they ever were before.

All right.

They're they're they represent a larger share of the US economy.

And they're they're have more money.

They're more powerful.

You would expect that if they were able to win in 1999, 2000, they should win now.

And they're completely sidelined because now China's viewed as a national security threat.

Now China's national security threat.

And so the correlation between the private interest and the public interest just isn't plausible.

And so they can't convince anybody.

It's interesting that you say that that's a bipartisan agreement, because you're right.

That one of the major changes that has happened just recently, you're right that during past crises like the Cold War, there was a elite consensus about national security and foreign threats.

And you say, quote, by 2025, however, bipartisan consensus had been replaced by Partizan polarization and quote, so maybe China remains one of the rare areas in this realm where there is agreement.

But explain in general, the impact of decades of, hey, when there's a crisis, a foreign crisis, there tends to be elite consensus on the threats and what not.

Always to do, but sort of outlining what that threat looks like.

Now.

Different world.

What does it look like and what's the impact?

That's right.

Well, the elite consensus came together around the Cold War.

It happened in about 1946.

There was a lot of uncertainty.

Up until that point, particular people played an important role in that, but Stalin was very threatening, right?

It seemed, objectively threatening.

And he very easily convinced, people on both sides of the aisle that this this was a threat, to the United States, to Western civilization, to our to our our way of life.

And the strategy that was created to deal with the Cold War involved significantly shifting our plans for how we were going to manage international economic relationships among Western countries, after World War two.

So there were there were lots of shifts that were made.

One of them was, the Marshall Plan.

I was a direct response to the Cold War.

The United States was planning to be a lot stinkier than we ended up being, with our allies.

And the the key reason that we, you know, we were so generous was, was the national security threat.

The Marshall Plan initially, by the way, wasn't expected to pass Congress.

I mean, Harry Truman was a weak president who hadn't been elected, and who, you know, was not expected to be reelected in 1948.

He was right, but he was expected to lose, to Dewey and, the, Congress was very skeptical about the idea of giving money away when we had lots of needs at home.

Right.

And we'd already borne lots of, sacrifices during the war.

But there was a, bipartisan, business led coalition to lobby for the Marshall Plan.

And they they pushed it through, and got overwhelming support for it.

So but the consensus was that there needed to be a system of multilateral institutions which would get buy in from our allies so that they'd be willing to drop their trade barriers.

This would be beneficial to our firms, but the United States would refrain from using a lot of the leverage that we had.

In order to make sort of countries willing to make long term commitments, make them willing to expose themselves to interdependence with the United States.

The more you lower your trade barriers and become dependent upon international exchange, as Canada is discovering now, the more vulnerable you become to a big country like the United States, if it chooses to be a bully, and the United States could have chosen a different path, we could have imposed so-called optimal tariffs on our allies, and we could have extracted wealth from them and shifted the terms of trade in our favor.

But we refrained from doing that.

Instead, we adopted the principle of most favored nation status with our trade partners meant that, you know, any deal that anyone got, everyone got, that's a way of restraining yourself.

If you're a big if you're a big, powerful country.

That was the consensus that the international system was based upon and it held throughout the Cold War, because the Cold War was such a unifying threat right after the end of the Cold War, there there was an opportunity to reevaluate things.

Well, where's the threat now?

Why don't we just raise our tariffs?

We could extract money from, from other countries if we did that.

But the calculation was that it would be more beneficial in the long run to continue a system of multilateral free trade which encourages everyone, to to have relatively low trade barriers, which are very beneficial to the US economy in the long run.

And so in some respects, the, the Reagan and Bush administrations, particularly the Bush administration started playing tougher with our allies on, on trade policy, when the Cold War ended, because then they had, this opportunity, to, to do so, and they got a number of concessions on things like intellectual property rights that were really valuable to us multinational corporations, multinational corporations that in the meantime had become powerful lobbyists.

And they were strongly in favor of continuing commitment to a multilateral order with institutions.

Right.

So because there was such a, a, set of institutions created shortly after the war that created market niches for internationally oriented firms, firms filled those niches.

They then, invested they acquired interests in more international exchange.

Right.

And then they started pushing for further augmentation of those rules and those institutions, to, benefit the kinds of business that they were doing.

And so it became a self-perpetuating process.

And one would have thought that the, the cement that was kind of holding the world order together was deeply embedded in the interests of multinational firms who are the most powerful agents in our political economy, that that should be really that long lasting, that should that should be very, very strong.

And so it's shocking from that perspective of this, the whole the whole story, of my book about about order is the disjuncture of the Trump administration, where suddenly, there's there's such a crisis where this all these rules are thrown by the wayside.

Okay.

But let me wrap up this section.

There's but we have so much to cover in such a short amount of time.

What, doctor?

Any stone.

His new book is Multinational Order, U.S.

Firms and International Organization.

And I do want to get some feedback from the audience in our second half hour.

So just just briefly and maybe veering into post hoc ergo prop hoc.

there would be a critique from the Trump administration.

It's in its supporters that would sound like this.

You are describing an international order that was supposed to prove that trade was the secret sauce to security, that the opening of trade, that the blossoming of these relationships would, would almost provide this, this bulwark against authoritarianism and strife.

And here we are again, with Russia rising, threatening its neighbors, invading Ukraine now, threatening Europe and trade didn't do what you said it would do.

I mean that that's the kind of argument I hear from J.D.

Vance and so many others.

What do you say to that?

Well, trade did eventually bring Russia around for the first time, right?

The Soviet Union was committed to autarky.

And, they thought that they could develop independently of the rest of the world.

And globalization is what won the Cold War.

And it became so costly to be outside of the global economy that, Russia eventually decided to give up its form of government.

Now, the Russian experiment with democracy wasn't successful.

It was for for a variety of reasons.

You know, the, the, the lingering elements of the KGB were the strongest state, put the KGB in power, and.

That's right.

And and, you know, I think Putin is learning what a bad idea it is to be, revanchist, you know, 18th century imperialist.

Do you think he's learning, I think he's he's just I, I don't think he's changed, but I think, he's demonstrated, the how costly it is, to try to seize small bits of, of, you know, the territory of neighboring countries.

It doesn't pay.

It's a terrible thing to try to do.

And he would have been he and his population would have been much better off if they had, encouraged, more cooperative relationships with the West.

Instead, they'd be building statues of the guy, possibly.

I mean, they're going to do it anyway.

But I mean, there may be citizens of Russia who want to build statues of Putin.

Had he simply allowed for more economic, true economic growth, wage growth open?

I mean, that's just a nice this isn't to say that expanding trade is necessarily going to resolve international conflict.

Okay.

And I think that the bet that the Clinton administration made about China was that China would liberalize more if they were if they were, in ensconced in international institutions.

And this is another critique saying, look, look what happened with China and gave them the WTO.

You got that quote unquote victory.

Now they're a rising communist, an authoritarian power.

That's right.

And, the, it did bolster Jiang Zemin and Zhu Rongji at a crucial point.

All right.

It, things looked quite positive.

Until, XI Jinping came to power in 2012, there, China was liberalizing, looked like, they felt like there was an an inevitability to it.

But politics can intervene and politics can do really inefficient things.

Right.

Witnessed the Trump administration all the inefficiency that we're you know, we're now, you know, wrecking U.S.

foreign policy and, and economic development, because the, the, the, the, particular coalition that came to power and the, the objectives that they have, XI Jinping is, is a similar kind of, you know, it didn't have to happen.

He didn't have to come to power.

But he did.

And now we're dealing with the consequences of it.

Wrong leader at the wrong time.

Now, choosing being Vladimir Putin could be very, very different in those countries if they had different leadership.

That's I think, the the key lesson about authoritarianism, right, that in an authoritarian regime, it means it makes a great deal of difference who the leader is.

But it doesn't you you invalidate the gains of trade and globalization, while in China is also a very positive example of the gains from trade.

China was an absolutely impoverished country in 1980.

And they've grown to be a middle income country over the course, of the last 45 years because they opened to international trade.

And there's I think there's no question that opening to international trade is the way forward in terms of economic development.

It leads to higher productivity of, of labor, which leads to higher wages, and it leads to, more, productive firms.

Right?

It, it leads to higher growth, so that those, those benefits are going to be unequally distributed and there are going to be losers as well as winners.

But, there's no economic success, no bright economic future without a lot of international trade.

After we take this only break, we'll work on some of your feedback.

And we've got a lot to squeeze in here with.

Doctor Randy Stone, whose new book is called Multinational Order U.S.

Firms and International Organization.

We're right back on connections.

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This is connections.

I'm Evan Dawson.

First Marc emails to say, does your guest write about the power of AI multinationals?

They seem to have growing power and influence, and they also seem to present a national security threat.

So artificial intelligence is not a central theme of this book.

But Mark wants to know what you think of AI multinationals.

Well thanks, Mark.

That's a that's a great question.

And AI is something that we as educators are, scrambling to keep up with and changing the way we teach our courses and so forth.

It's a, it's, it's also affecting the way we do our, our research.

I, you know, didn't, didn't use AI in this book except a couple times to look up, certain historical, facts, which I then, you know, could check otherwise.

But, it's great at figuring out who was the CEO of a particular country in 1986, a particular firm, AI firms, I do discuss, the rise of high tech firms.

All right.

But most of this was done in the period just before I, burst on the scene.

Yeah, right.

So, I think ChatGPT came out and it was a 2023, and it really prominently in September 23rd.

Yeah.

So, so this is a case where if I'd started the book a few years, you know, writing the book a few years later, I, I probably would have, spent a lot more time on this.

It's it's definitely true that a handful of high tech firms are responsible for most of the investment in the high tech tech industries.

This was true even before I. This is vastly more so the case now, right, that, the investment in data centers, for example, is, you know, is is driving, U.S investment numbers overall and is having a big effect on, on, you know, employment and, on economic activity, the, you know, so-called Magnificent Seven dominate the stock market index.

And if people suddenly decided they didn't believe in AI, there would be a stock market crash right there.

A lot of ways in which they are this emblematic of what I say is true generally about multinational corporations that, what they are are, are firms that have some productivity advantage.

Right.

And the, the AI firms are seeking to dominate AI.

Their investment patterns suggest that they think there's only going to be one AI model.

In the end.

Which is kind of a terrifying thought.

I certainly hope that that's not the case, that it's that, that the equilibrium ends up being more competitive than that.

But I think they're they're racing as if there's only going to be one of them that survives, not one person that survives, one firm that survives, although maybe one person who knows, know.

On Monday, we're going to talk more about AI with people who work in tech and AI.

And we are going to address, not only the hugging face hack, but the The Wall Street Journal op ed that came from, a gentleman who quit anthropic this week.

That's probably gotten more traction than any screed about AI safety than we've ever seen.

And so we are going to talk about that on Monday.

But I do think Mark's question lines up with a lot of the threads of your book, which is I would interpret this way, AI firms have already had an outsize influence on government.

They are spending a lot of money, despite what anthropic and despite what OpenAI say, they're spending a lot of money to prevent the regulation of what they're doing.

Absolutely.

And they've been successful so far.

Where it could change is if they're then viewed to truly be a national security threat themselves, because in the book, we keep seeing multinationals have a lot of outsize influence unless they start treading into national security issues, and then they've got a lot less, influence, and especially if they run afoul of idea of sort of national security interest of the United States.

AI so far has not been viewed as a threat itself.

But these firms, given what's happened in just the last week, you got Bernie Sanders calling for a pause or a stop.

You've got other other politicians now talking about Ron DeSantis.

I mean, it's an interesting coalition of strange bedfellows, but if they end up being viewed as a threat, that to me, reading your book says that's going to be where their influence stops, except for reading the conclusion of your book, which is we don't agree on what's a national security threat in elite levels anymore.

We used to we did all throughout the Cold War, but now we don't even agree on whether Russia is a threat, whether the invasion of Ukraine was justified, or whether Taiwan should be protected.

I mean, the elite fracturing of what constitutes a national security threat is a kind of a theme at the end here that says it's hard to predict where we're going next year.

So I'm not asking you to make a prediction, but I, I want to get your sense on what you think, how AI fits into the framework of your themes here.

That's right.

I think you got that exactly right.

The, an important dimension of this is, how does the AI race, with China, play.

Yeah, this is a question of, of AI regulation.

So I, I think that it's still the case that China is viewed as a major national security threat.

Yet even though the Trump administration seems to be schizophrenic about what they think about Taiwan, which is particularly interesting given that Taiwan is the source of most of the chips, right, that are produced in the world.

So, it's it's very relevant to the AI race.

Right.

I think that the Trump administration has doubled down on the idea of using AI for the next generation of weapons development.

We're going to have autonomous drones and autonomous fighter airplanes and so forth.

And, this is seen as, you know, crucial to determining whether China or the United States is the dominant military superpower.

For the rest of this century.

So the the AI race is being carried out among American firms for the most part.

But it's also a race with China and China is investing very heavily in developing its own AI.

And, the estimates vary about how far behind Chinese frontier models are and behind American models, whatever it is.

That's right.

I've heard six months, I've heard fewer, I've heard a little bit more.

And so to the extent that this is a race between the United States and China, it's going to become impossible to regulate, AI domestically.

And that's exactly what the American AI firms want.

All right.

So that, making this a race with China is, is is very beneficial for them because it allows them to escape from, from prudential regulation.

In other words, unless we can coordinate a slowdown or a pause or whatever you want to call it, of AI with China, unless that could happen, which seems unlikely, we're probably not going to see meaningful regulation that slows down or stops AI in this country is that I think that's right.

But and I don't I think we won't get a, a slowdown with China because China is determined to win this race.

And XI Jinping is expecting at some point to, to take over Taiwan and wants to be militarily dominant enough to be able to do that.

Can we just briefly ask you about that?

I was reading this week, and I have not read deeply on this, but there are reports emerging indicating that Taiwan is losing faith in the Trump administration and is is weighing options.

I mean, the most hyperbolic headlines were Taiwan consider surrender, to avoid a full out invasion.

You know, that's hard to believe, but, but the implication is there.

So disillusioned with any possible protection from the Trump administration that they might take a drastic measure.

I don't know what you were hearing or what you make of some of that reporting.

Yeah.

I don't know what to make of of that reporting.

I, my my sense is that Taiwan is pretty committed to fighting for its sovereignty.

But it would be it would be very difficult for it to, to do that by itself.

And now, on the other hand, there's reason to think that current developments in, in conventional weaponry favor the defender.

That, launching amphibious, assaults across that strait would be would be difficult and, and, that, you know, some of the, the, anti-ship, defenses that have been built up and Taiwan might be pretty effective and but I, I, I, I think that the, the Chinese view is still that they don't want to invade China.

Taiwan.

They, they want to absorb Taiwan peacefully and they think that they will be able to do that.

And that, so this this might be a sign that they're, you know, it's moving in that direction.

And briefly, is this an indication of, as you write in your book, the uncertainty and the lack of reliability that the Trump administration is, is signaling to the world.

Yeah.

So the Trump administration is pretty unpredictable on every front.

And they seem they like to be unpredictable.

Yeah.

They they don't.

They say that's a benefit.

Right.

And I don't think they understand, the, the importance of being credible when you're in a deterrent posture.

So the, one, one danger is that the Trump administration convinces XI Jinping that they won't defend Taiwan, perhaps convinces the Taiwanese that they won't defend Taiwan.

XI Jinping decides to launch an invasion, and then Donald Trump changes his mind and we end up in a war.

So a war with China would be, you know, the the defining tragedy of the 21st century.

And, it's, you know, it it it may happen.

Okay.

On that happy note, let me, get an email of Dallas is asking about Ross Perot's charts.

And I think Ross Perot's famous sucking sound of the jobs going into Mexico when he ran for president in 1992, I played that's right.

I played the Ross Perot to school debate in 1992.

I did that's the that's the truth.

But he's curious to know if you think his charts turned out to be correct.

So, no, in the sense that, the, the, the NAFTA agreement was very good for the United States and, it was, it was it was also very good for Mexico.

It led to much higher rates of economic growth and development in both countries.

NAFTA ended up being important as a way for US automobile fuel makers to maintain their international competitiveness because they were able to outsource certain things to Mexico, and therefore they were still competitive in European markets.

Right.

And they wouldn't have been if they hadn't had that opportunity.

The, the, the, lowering trade barriers displaces certain workers from certain jobs and certain kinds of things, certain kinds of production moved from the United States to Mexico.

That's undeniable.

That doesn't increase the unemployment rate.

High unemployment is a macroeconomic phenomenon, not a microeconomic phenomenon.

Right.

So in the short run, there's more this more disruption.

That doesn't mean the unemployment rate, is is going to be, is could be higher, in, you know, in the, in the long run.

There are so the a lot of the benefits of NAFTA came in service industries and U.S.

service exports to, Mexico increased pretty dramatically.

Overall, it raised American wages, but it lowered US wages in certain areas, particularly in, in, automobiles.

Most of the effect, though, that we see on manufacturing wages is not actually due to lowering trade barriers.

Most of it's due to increased automation.

And so the counterfactual is that if we hadn't had NAFTA, we would have had more robots.

Dallas thank you.

And that brings us to our last 90s.

So tonight, 7 p.m.

at Rush Frist Library, doctor Randy Stone is presenting on his book Multinational Order U.S.

Firms and International Organization.

You hear him regularly on connections.

You can see him in the flesh tonight at or at Rush Frist Library, a free event open to the public.

Yes, free and open to the public.

There should be some nice wine and, and food available.

It's, the main entrance of Rush's library off the quad of the University of Rochester.

And parking is free after seven.

No Canadian one now might be a maybe somebody's going to stuck Canadian one.

Look, let's close our last minute.

This tariffs you write in the book.

It's interesting before the tariff imposition from the Trump administration we actually did have lower relative tariffs than a lot of countries.

It wouldn't have been unreasonable to at least look at that.

But just give me your 32nd view of the latest spasm between the United States and Canada, and what we should learn from that.

It makes no sense whatsoever.

And of course, it's getting worse, right where it's, Trump imposed more tariffs because he couldn't think of what else to do that, that week.

To be on the front page.

And, Mark Carney felt the need to respond in kind.

He's been trying to, conciliate Trump all this time, but, he does doesn't want to look like a doormat.

This has led to more escalation by the United States.

Will presumably lead to more tits and more tats.

Before before this runs its course.

I think that, the Trump administration will be persuaded that they need to regularize relations, with, with Canada.

But I don't think that, they will, back down ultimately, with China.

And so I think that, there will be a lot of this kind of, foolish posturing.

But in the end, I think we'll have more reasonable trade relations with Canada.

You can read more about that in multinational order, along along with eight decades of history that gives gives you a much better frame of how the world works.

And how American influence works and how American corporations exert their influence.

Thank you for coming out and talking about this book and having this conversation with us.

Thank you, Evan, and thanks for struggling through a 450 page book.

That's what we do on connections.

That's doctor Randy Stone, 7 p.m.

tonight.

Rush Frist Library, more connections coming up.

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