In the Public Interest

GUEST: Gerald Levin
AIR DATE: 06/19/10

I’m Richard Heffner, your host on The Open Mind.

And whatever value is placed on the massive Time Warner/America Online merger of a decade ago,

…. In January of this year a New York Times writer called it “a deal valued at a stunning $350 billion dollars…then and now, the largest merger in American business history”

… And in March a Bloomberg Business Week writer referred
to “[Time/Warner’s] catastrophic $106 billion dollar merger with AOL in [the year] 2000”.

Well, whatever the astronomic numbers involved, my guest today seems destined always to be identified first and foremost with that giant media fiasco and as the then extraordinarily accomplished and powerful Chieftain of Time/Warner, and the ultimate conjurer of that incomprehensibly huge and ultimately failed merger.

But to me, Jerry Levin will always instead be much more my intensely wise fellow admirer and early associate of another iconic American figure – David Lilienthal, the New Deal/Fair Deal’s Chairman first of the Tennessee Valley Authority and then of the Atomic Energy Commission, and, indeed, my broadcast guest back in 1955, together with famed Tennessee Senator Estes Kefauver.

More than that, I think of Jerry Levin as the singular statesman among all the many media figures I knew during my Hollywood years.

Now, of course, my guest and his psychologist wife Laurie Ann direct the Moonview Sanctuary headquartered in California, where they tend to the shattered nerves and psyches of CEOs who can afford their brand of holistic and sometimes otherworldly therapy.

Indeed, in the midst of our newest economic stresses and strains, I want first today to ask Jerry Levin about a statement he made recently that must reflect importantly upon what he’s learned in all these ups and downs about what does make businessmen tick … sometimes in the public interest, sometimes not.

What he told Bloomberg Business Week recently was … quote … “I believe in the importance of the capitalist system, the way it’s been structured. But there is such a focus on delivering those returns almost without any understanding that there are deeper issues that management is also about — humanism and respect for people in the company; serving the public interest; higher obligations to yourself and to the world. Very few mission statements take that into account.”

And Jerry, since very few mission statements do take that into account, why do you say you believe in this system as structured?

LEVIN: Well, first of all I, I think it has proven itself to be the most efficient way of providing material resources for a population.

The issue is the one that you’re describing, which is, you know, what about the public interest? Who is the proprietor of the public interest? Is it government alone? Is it the non-profit sector? Is it industry?

You know what’s interesting for me and I’m delighted to be in the presence of such a great historian … you mentioned Dave Lilienthal … two of the people in my life … starting with Lilienthal … who actually wrote a book called Management as a Humanist Art and the company that he founded after being a terrific public servant was designed to use the efficiency of the capitalist system to do good work.

And so we had a company called D&R, Development and Resources, Corporation which in its charter said, “This company is designed to make a return and at the same time only engage in those projects that somehow provide for the betterment of humankind.” In the charter itself. And then, you know, there’s a new biography out of Harry Luce today.

And I was a disciple and a student of the history of Time Incorporated. And Luce himself, in his will and in his preaching said that Time … Time Incorporated should be operated not only in the interest of shareholder, but in the public interest.

And that phrase has always meant, for me, that you do have a higher obligation and everything we’ve seen recently in Wall Street would suggest that if somebody or some few of the leaders had just taken into account the consequences of their actions, we might have had a different result.

HEFFNER: But they didn’t.

LEVIN: They didn’t because we’ve been living through a period of …where they … the system itself has in its financial rewards … I think blinded people to the actions that they were taking. And it was as if there was a scorecard of self-worth and identity that had so much to do with the making of money.

And what used to be … it’s an interesting thing in the trajectory of investment banking. Whereas before we had senior people who operated in the grand tradition, advising companies. That morphed into a trading environment, where the profits being made in the trading itself overtook the investment advisory business.
And then there’s one other thing I point to. That so many brilliant young people were going into business school as opposed to the medical profession, the healing arts, other professions because there was, there were so many career opportunities and all these very smart people, when given the opportunity to devise a new instrument, just came up with something that was technologically, in terms of financial technology, almost hard to understand.

And each instrument would go one better or be that far removed from the basic asset and liability balance sheet that we’re accustomed to in the old style.

So it was like the, the intelligence, the creativity was all channeled on instruments that were … and I love the word “derivative” … that were so far removed from the actual asset … the actual, you know, building a home or creating a new product.

Which is why I always thought the Internet was such a terrific innovation … digital technology itself. Because it gave you the tools to invent something where there was a need or use and a lot of it has to do with … what I like to favor … communications and media history.

HEFFNER: But Jerry hasn’t that technology itself been so much a part of making everything else derivative? Of taking us away from the essentials that you identify from these two important people in your life … Henry Luce and our friend from TVA and Development Resources.

LEVIN: And a great defender of J. Robert Oppenheimer at a time when most people would not speak up. It, it seems to be … you know, this historical view that every new technology has … bears the burden of being a transformative technology … that it has a messianic purpose.

You know we saw that with radio. With television. Certainly the motion picture which still exists in, in … actually intricate form. So, too, the Internet. And as we were developing cable and public access. What happens is that sometimes there’s a little Gresham’s Law about, you know, the bad drives out the good.

There is going to extremes on the pornography or some of the baser instincts get reflected in the technology. But when you step back and think about the good parts of it … let’s go back to cable, which I’ve always loved.

With all of the darts thrown at cable, look at the amount of programming that is now available beyond the networks and beyond the studios. So it’s fulfilled it’s promised.

The Internet itself while it perhaps lacks a historical perspective that I hope, you know, as you continue with your archives, you will bless it with, that at the same it has connected people.

The, the notion, the metaphor that when I get on the Internet it’s worldwide instantly … so for all of us who wanted to create, when we were very young, the new Library at Alexandria … here’s a shot at it. So is it coming in the form of Google? Is there something else on the horizon that two young people in a garage are now developing?

And of course social networking has embraced most of our young people. There is a concern … the older generation is always concerned, whether it’s rock and roll or social networking. But there’s so much good that comes from it. And it is, like all new media, disruptive … creatively destructive medium. But in its place it’s giving us the power to communicate across cultures and in fact across time and space. It’s a beautiful metaphor. It’s not perfect yet.

HEFFNER: It’s wonderful that you can then say this on your birthday, I suppose, today, it’s appropriate that you speech as enthusiastically and as optimistically as you always have. But look at the other side, what we have done with it. Maybe I’m just reflecting my age … and you’re right … the older people always say, “ay de mi”, it wasn’t like this when I was young. It wasn’t. In terms of quantity I think you’re correct. In terms … and spread of contact of communications. But in terms of content. Are you pleased with what we’re doing with these amazing instruments.

LEVIN: Well, as with all new media we haven’t found its appropriate format that is distinctive to the medium itself. Because right now the medium is delivering television … it’s delivering movies with high speed broadband. There are certain small vignettes that have digital names where creative people are starting to tell stories in little bites.

Now that doesn’t satisfy, you know, our desire to have extended theater. But somewhere in all of this testing and all of the innovation will come a way of using the medium in a way that will tell stories and provide information in a way, you know, reading the, the new biography of Harry Luce and you know what Luce and Haddon did in 1923 to kind of make Time Inc. … to collect everything in a new form because you were inundated at the time with so much information. Somebody’s going to do that now

HEFFNER: Well …

LEVIN: In a new form.

HEFFNER: … I, I was delighted when Bill Buckley latched on to, heard about an idea that my grandson Alexander had when he was still in secondary school with a Yale sophomore, and they came up with an idea that they called Scoop’08 and Bill Buckley thought “this is like Luce and Haddon”. The enthusiasm, the enterprise, the genius that went into what they were creating.

And, in a sense, he was right. But I also think of, of something you said in an interview not that long ago. You said “I think it’s something that no one could have foreseen and to this day whether Apple is going to dominate entertainment or whether Amazon is going to dominate publishing, all the old business plans are out the window.” How do you get paid for content? You think we’re going to find sufficient answers to those questions? To that basic one?

LEVIN: I, I do, even though, you know, the, the initial satellite communication … we had the same issue where everything was, “Gee, it’s coming through the air, it should … I’m entitled to it … I should get it for free”.

And we had to slowly move satellite communication into the model of subscription or video on demand.

Right now the Internet … the culture of the Internet is certainly, as it was with music early on …”I’m entitled … I, I can get it free.”

The notion of proprietary interest or copyright is, is not endemic to the technology itself. However, people do pay for iTunes, the Wall Street Journal, you still have to pay and at some point, some combination of per item, subscription, on demand capability … the, the avenue will come where there will be compensation because content is just too valuable.

So just as we had in broadcasting … we had a tripartite system in this country. We had wonderful free television paid for, essentially, by advertising. We had public television thanks so much to, to you and to a lot of pioneers where the government and the public kind of paid for it. And then there was pay television, where you paid for it yourself. Well, I think that’s … that model somewhere is going to reappear in a slightly different guise on the Internet.

HEFFNER: Let me ask you a question. What makes you so … is it optimistic … is that the word? So positive. Optimistic is a strange word. Positive … you are a very positive person and always have been.

LEVIN: Probably … it probably came from my grandmother.

HEFFNER: Okay. Fair enough.

LEVIN: And so … but I, I’ve seen … the texture of my life has been wonderful. And I’ve been witness to and participated in such grand activities, I mean I can detail … actually started out as a lawyer and did some interesting things in the Supreme Court with Lilienthal, we built dams and hospitals and electrification in Iran.

At Time Inc. and Time Warner and Turner and, and AOL I saw the innate capacity of people in our country … that is all of the immigrants who came here to make such a delightful cacophony … I mean I love … when you go to Ellis Island … everybody should do that and just look at the picture of people arriving … with all their different costumes and bringing all of their culture … and yet underneath they’re all the same.

They have the courage and the honor to come here and make a life for themselves. That’s what this country is and that’s, no matter how bad things have been and, and how difficult they have been, there is no other place on the planet that has not only our experiment in democracy, which is really baffling at time and insidious at times …but the underlying nature of what makes us tick.

You know, why is Europe having so many problems now? And even in Asia, you know, the Chinese are starting to slow down. I’m not saying we don’t have significant problems, but there’s something about the spirit and, and interestingly I mean I know when Luce wrote in 1941 that we’re in the American century, it was … you’ll say … at a different time, at a different age.

And, of course, we’re in some other kind of century now. But look at where’s the pivot point for this planet … it’s still America.

HEFFNER: Going back … taking off from there, but going back to the question I asked you at the beginning about … you said “I believe in the importance of the capitalist system, the way it’s been structured.”

Didn’t the events of the past couple of years indicate to you that some change is needed. Some change to put into effect what you spoke about in terms of Luce and Lilienthal … their respect for responsibility. Their respect for not milking this great country dry.

LEVIN: I, I actually have a very simple solution that, that hasn’t gotten very far. The modern American corporation is not that old. It’s construct could be tweaked a little bit. All you need to do is make, as a matter of corporate law that the Board of Directors and the governance of the corporation has a dual purpose.

It is to be operated in the interest of shareholders and in the public interest. And then let people and leaders … let’s teach this in business school … and then let the courts oversee what is meant by giving shareholders a fair return and operating in the public interest at the same time.

I think we’d have a body of jurisprudence that would overtake the, the unfortunate singular aspiration so far to simply focus on “how do I make myself wealthy and to a certain extent make my shareholders’ wealthy?”

I think if we just made that addition, it sounds Pollyanna-ish, but if you go back in the origins of the old corporation … you know corporations started with trading companies in the 17th … hundreds and 16 hundreds. They had a public purpose, they were kind of government organized and it was to engage trade for the benefit of the people.

So here we have this thing called the American corporation. Let’s build into the system an obligation so that the public interest doesn’t only reside in government. Now you say, “How can we turn such a sacred trust over to business leaders.” But in fact, they’re the ones that have the most direct and immediate impact with us as consumers.

HEFFNER: And who is going to bring this change about, Jerry?

LEVIN: Well, (laughter) we need somebody to stand up, we need some leadership, this is not about tweaking the financial regulatory system because, historically, we’ll go back and forth … you know you can separate the banking function from other financial functions. I mean we can keep going back and forth.

But somebody needs to stand up and come up with the trust that would reside in the capitalist system by giving it co-equal responsibility with government and academia and non-profit in interpreting the public interest. We just need leadership.

HEFFNER: We just need leadership.

LEVIN: (Laughter)

HEFFNER: You not just saying that, that’s the Pollyanna-ish …

LEVIN: Well, ahhh, but we’ve had great leaders in this country. And as I look around the world I don’t see anyone else incubating tremendous leadership. So, somehow I believe it’s going to come from here. I really do.

HEFFNER: When I go back to FDR’s Commonwealth Club’s speech in his first campaign for President in 1932, I realize that he was saying very much what you’re saying now. He was talking on leadership, taking us … to take on this responsibility. Didn’t happen. Hasn’t happened through the Depression. Hasn’t happened through the Recession. And there are a great many people who have a very, very large interest in having it not happen.

LEVIN: I know that today we live in apparently a very divisive time. The anger that seems to separate the possibility of compromising discourse seems to be bubbling to the surface. But I would suggest that its … feels new because we live in a 24 hour, nanosecond form of news gathering plus the fact that pontificating people who need to fill up time.

But I think this has existed many times in the past. And out of it has usually been the crucible to look at what occurred in the thirties and we did get out of the Depression.

You can say it took a world war for that to occur. But leaders have come along. The Marshall Plan was a great undertaking on the part of this country. Leaders had the, the instincts to understand that.

In the sixties when we had and you know, you’ve interviewed some of the great people of the Civil Rights Movement. And it resolved itself in a way that would have been unthinkable in the thirties and forties.

HEFFNER: As you think about the people you deal with now, in a therapeutic situation, do you see that change …

LEVIN: Here …

HEFFNER: … rising?

LEVIN: … here’s what I see. Right now whereas I used to be engaged in story telling in a media sense, I’m now engaged with my wife in the most important stories, the back story of people’s lives. And the work that we do is a kind of a microcosm of, I think, what I’m hinting at for the cosmopolitan … larger arena.

And that is, underneath all of anxiety, mental illness, trauma, chronic pain, there is a need to re-connect with your fundamental purpose. Why am I here? And who am I? If we can do that on an individual basis, that same therapy … I’ll just use the word in the broadest sense, should apply to our leaders and to the thought process about “Who am I? What’s my purpose? And what am I doing with this institution?”

If you can get centered and find the meaning as to why are you here. Why were you given this, this … in the case of corporations … you’re a Trustee, you’ve been given that opportunity. The same thing with a government official, the same thing with a college president.

HEFFNER: All I can say, Jerry Levin, is that I hope a lot of people are listening, as I’m sure the people are who deal with you in California and will here in New York now.

Thank you so much for joining me today on The Open Mind.

LEVIN: Thank you for having me.

HEFFNER: Thanks. And thanks, too, to you in the audience. I hope you join us again next time. Meanwhile, as an old friend used to say, “Good night and good luck.”

N.B. Every effort has been made to ensure the accuracy of this transcript. It may not, however, be a verbatim copy of the program.