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Well, we have seen the government
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recently announced that they were going
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to take a stake in Intel and we are
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seeing more potential moves coming in
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the future for assets seen as strategic
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to the strength of America. But what we
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aren't seeing is a lot of push back by
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leaders of various companies. They are
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staying silent over concern that their
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company maybe could be next. And this
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approach has both sides of the aisle a
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bit concerned. Pleasure to be joined
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right now by Philip Nichols who's a
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professor of legal studies and business
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ethics here at the Wharton School. Is
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also a professor of social
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responsibility in business. Phil, great
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to talk to you again. How are you, sir?
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>> I'm great, Dan. It's always good to talk
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to you.
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>> All right, so take us through what we've
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seen recently and give us your thoughts
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on some of these moves by the White
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House.
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>> Sure. Um,
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this is going to take a bit of time, but
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not much time.
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the what we're seeing recently is part
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of a larger shift in the environment of
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business in the United States. Uh and
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it's a huge huge shift. The only thing I
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can compare it to in the last century
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is the New Deal.
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And that's basically
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um what was once a fringe theory about
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presidential power, the exe the unified
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executive theory
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has now become the working way of
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thinking about the constitution of the
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United States.
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And and that's that's just this
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fundamental change. What it means is
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that we now have an executive
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who is not is immune to most forms of
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prosecution. Almost all. It's hard to
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think of any that they aren't. We have a
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president who's not bounded by the the
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the authority of Congress. Um, Congress
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no longer dictates how funds are to be
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allocated and how funds are to be spent
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on what laws are to be enforced. And we
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have a Supreme Court that in trying to
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figure out this unified theory is giving
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a lot of latitude to the president to
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the executive in all kinds of arenas of
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the business world and the social and
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political world as well. But our concern
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is the business world.
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It took after the the the many Supreme
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Court decisions that came late in the
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New Deal. It took decades to figure out
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what the new rules were. It also took,
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particularly after, you know,
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ironically, another Roosevelt, Teddy
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Roosevelt, it took decades to figure out
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the new social norms regarding the
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relationship between the executive and
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business.
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And so right now, you know, one of the
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funny things about um
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business people assessing risk is they
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have a team of lawyers who can tell you
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with with really really
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great accuracy the risks involved in
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taking action. Do this, this will
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happen. Don't do this, this will happen.
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We don't have the same kinds of teams
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regarding the risk with social rules,
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but people navigate social rules. Right
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now, we can't do either of those things.
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A a business cannot assess the risk
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involved in taking action or not taking
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action with respect to the law because
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the law is essentially being rewritten
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and it it takes a while. It takes it'll
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take a few decades. How much of this
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then is the time that we are in when you
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think about the advent of AI and the
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impact of cryptocurrency and so many of
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these new components
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>> absolutely
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>> that have that have come into our world
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in the last 10 years.
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>> Absolutely. And and they
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that is it's it's perhaps not a
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coincidence that this huge shift in law
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accompanies a huge shift in what we're
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able to do and how we're able to do it.
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But that only adds to the uncertainty
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about everything. The the social rules
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in particular are being rewritten as
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social media takes over the way that we
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interact with one another. And so once
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again, you point as you point out,
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it's impossible to assess the risk. We
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just don't know.
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>> So then what is your expectation as we
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move forward here? Because we see this
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move uh around Intel. Uh there's also
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the moves to receive revenue from Nvidia
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over sales of chips from China. Uh
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Howard Lutnik, the commerce secretary,
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said in an interview this morning that
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the Pentagon may start to look for these
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types of business partnerships. Is this
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going to be the new norm? Is that wall
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that was kind of there where the
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government stayed away from the private
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sector?
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>> Yeah.
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>> Has that been broken down now? Yes, I
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would guess that it has been. I would
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compare this and I I don't want to get
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political.
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People make their choices and that's
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great, but I would compare this to other
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regimes that have a powerful
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central authority without a check on it
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and they tend to get heavily involved in
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business and that isn't good for
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business. It reduces competition. It
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skews contracts in a particular way. It
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generally means that businesses are
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going to be smaller and more cautious in
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how they expand, how they innovate, how
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they do things.
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>> What does this mean then for seuite
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executives and how they have to approach
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not only running their business but
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obviously the relationship they have
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with the government and not only their
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government but obviously if they're a a
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multinational governments around the
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world. I would imagine that a lot for
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that very reason a lot of them will
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start moving their headquarters to more
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neutral places and then interact with
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the United States from someplace else.
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um because it's going to be really hard
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to grow and to navigate in the business
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environment that's being created now
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particularly during a time of
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uncertainty right I I think the
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interesting component I'll finish up on
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this is that as you look at it some
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people see this as a protection of a lot
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of the businesses that are out there
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others will say that it's not that and
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it's you know getting your hand in the
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cookie jar when it really shouldn't be.
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How do you view what we're seeing play
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out right now?
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>> That's a great So, if you look at other
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places and other times when this has
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happened, it may start out as it doesn't
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always, but it may start out as we're
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doing something beneficial to our our
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polity, our country, whatever, but it
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almost always devolves into the hand in
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the cookie jar. I mean, it just goes
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that direction eventually.
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>> Phil, great to have you with us today.
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Thanks very much for your time and your
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insight. All the best.
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Thank you. You got it. Philip Nichols,
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who's a professor of legal studies and
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business ethics as well as professor of
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social responsibility in business here
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at the Wharton School.
