Why is global trade slowing down? Structural explanations based on elasticity of trade

Why is global trade slowing down? Structural explanations based on elasticity of trade

A change in the composition of global trade towards products that have a lower elasticity. Another is that the slowdown simply reflects the end of the integration processes of China and central/eastern Europe – i.e. the high trade growth was largely a transitional phenomenon. A third is that it reflects the limits having been reached on the ability of (incentives for) firms to engage in the international fragmentation of production that is part and parcel of Global Value Chains

What’s at stake: This week’s data renewed concerns about developments in global trade as it showed for the last 6 months the biggest contraction in global trade since the end of the financial crisis. While cyclical factors may be at play, trade specialists have also advanced a host of structural explanations to explain the decline in the trade elasticity, ranging from a shift in the composition of trade to limits in the fragmentation of world production.

Motivation and stylized facts about trade elasticity

Bernard Hoekman writes that we should care about the growth performance of the trade/GDP ratio because trade is a channel for knowledge transfer (technology flows) and for specialization according to comparative advantage, thereby improving resource allocation and supporting higher economic growth and welfare (real incomes) over time. Another reason to care about whether trade grows faster than output is that net exports are a key channel for crisis-hit economies. If global trade is anemic, it becomes more difficult for these countries to address deficits and reduce debt.

Gavyn Davies writes that the expansion of world trade seems to have entirely lost its mojo. One of the most reliable rules of thumb in the post-war global economy has been that world trade volume tends to grow at about double the pace of global GDP. For example, from 1990-2008, global real GDP expanded at an annual rate of 3.2 per cent, while world trade volume grew at 6.0 per cent.Douglas Irwin writes that under normal conditions – that is, excluding wars and depressions – trade growth exceeds production growth. But the margin by which trade grows faster than production is not consistent. Bernard Hoekman writes recent history has, indeed, seen unprecedented high growth rates of global trade relative to global income.

Paul Krugman writes that ever-growing trade relative to GDP isn’t a natural law; it’s just something that happened to result from the policies and technologies of the past few generations. We should be neither amazed nor disturbed if it stops happening. It’s entirely reasonable to believe that the big factors driving globalization were one-time changes that are receding in the rear-view mirror, so that we should expect the share of trade in GDP to plateau — and that this doesn’t represent any kind of problem. In fact, it’s conceivable that things like rising fuel costs and automation (which makes labour costs less central) will lead to some “reshoring” of manufacturing to advanced countries, and a corresponding decline in the trade share.

Structural explanations

Bernard Hoekman writes that there are different potential explanations of a ‘structural’ nature (that is, nonmacroeconomic) that can result in a decline in the income elasticity of trade. One is that it reflects a change in the composition of global trade towards products that have a lower elasticity. Another is that the slowdown simply reflects the end of the integration processes of China and central/eastern Europe – i.e. the high trade growth was largely a transitional phenomenon. A third is that it reflects the limits having been reached on the ability of (incentives for) firms to engage in the international fragmentation of production that is part and parcel of Global Value Chains. A fourth potential explanation is a rise in government support for domestic industries, reducing the incentives for firms and households to buy goods and services from foreign suppliers.

Cristina Constantinescu, Aaditya Mattoo, and Michele Ruta write that the information and communication technology shock of the 1990s led to a rapid expansion of global supply chains, with an increasing number of parts and components being imported, especially by emerging economies for processing and re-export. The resulting increases in back-and-forth trade in components led to measured trade racing ahead of national income. The transition to a world where production is increasingly internationally fragmented in the long 1990s is compatible with the higher long-run trade elasticity for that period. Conversely, the decline in the long-term responsiveness of trade with respect to income in the 2000s may well be a symptom that the technology shock of the 1990s has been absorbed and that the process of international production fragmentation has slowed down.

Mathieu Crozet, Charlotte Emlinger, and Sébastien Jean write that while the underlying determinants of the inflexion in the development of Global Value Chains remain to be identified, a few elements of interpretation can be put forward. First, financial stress may have increased the uncertainty associated with foreign trade relationships, for example through more difficult access to trade finance or through decreased confidence in the financial health of trading partners. Second, the Crisis period, as well as specific events such as the Japanese earthquake and the Thai flooding in 2011, may have led a number of firms to reconsider the cost of finely splitting their value chains across countries. In addition, it is likely that the development of GVCs has been facing declining returns, as the low-hanging fruit had already been picked before the Crisis.

Cristina Constantinescu, Aaditya Mattoo, and Michele Ruta write that the change in the world long-run trade elasticity is driven by a few countries that have a large share in world trade and/or are growing faster relative to the rest of the world. China and the United States turn out to be particularly important as they account for 13 and 20 percent, respectively, of the change in the world trade elasticity in the long 1990s, and for 32 and 8 percent, respectively, in the 2000s. In both cases, the elasticity of imports to their own GDP is significantly lower in the 2000s compared to the long 1990s.

Arnold Kling writes that as incomes rise in China and India, the “Samuelson effect” starts to kick in. That is, the comparative advantage of cross-border trade is reduced. More production is done in China when American wages are 10 times Chinese wages than when they are only 4 times Chinese wages (using made-up numbers here). Also, as the cost of robots comes down, they displace workers in all countries, and this also reduces the comparative advantage of cross-border trade.

Uri Dadush writes that the slowdown in investment could easily have accounted for more than half of the slowdown of world trade relative to GDP. Firms across the advanced countries have delayed replacing machinery, while nervous consumers have delayed buying houses, furniture, and washing machines. The production of these investment goods requires a lot of back and forth of raw materials, parts, and components across nations, as they are often at the core of so-called Global Value Chains. The import content of investment goods, for example, is estimated to be twice that of consumer goods, so that the slowdown in investment had a large disproportionate effect on trade.  If this interpretation of the trade slowdown is correct, then trade growth is likely to resume to something much nearer to its customary rapid pace once the world economy returns to its trend growth path.

This article is published in collaboration with Bruegel. Publication does not imply endorsement of views by the World Economic Forum.



What is education for? The beauty of a PhD is that it is a place where individuals can immerse themselves in learning without focusing on where this will take them.

Building social capital isn’t the focus of most education systems. The beauty of a PhD path is that it is a place where individuals can immerse themselves in learning without focusing on where this will take them.

Last year, Mark Carney, Governor of the Bank of England, gave a speech in London called “Inclusive capitalism: creating a sense of the systemic.”

Carney’s 2014 speech is worth reading in full, but it is his remark that “we need to recognise the tension between pure free market capitalism, which reinforces the primacy of the individual at the expense of the system, and social capital which requires from individuals a broader sense of responsibility for the system” that resonates most strongly. Carney then goes on to say, “a sense of self must be accompanied by a sense of the systemic,” a theme threaded throughout much of the speech.

As an entrepreneur, it matters to me that every ambitious person with the talent, imagination and drive to turn ideas into reality is provided with opportunities to succeed. This is what makes capitalism an “engine of broadly shared prosperity,” and that is the reason for countless innovations that have changed how we live. Indeed, although we cannot guarantee the outcomes of such efforts, we should be confident that capitalism can help all people flourish regardless of their age, race, gender, place of birth or level of education.

However, in looking at how our public conversations about education are transforming, it is deeply worrisome that we are focusing on the wrong things, moving farther and farther away from a world where equal opportunity between individuals is possible. In a society where education is seen as a means to a job, and where higher education is seen as a path to a particular kind of employment, we miss what education is actually for. Moreover, the things that contribute to the full development of a person, such as an appreciation for philosophy, science and history, fall to the wayside as we place greater emphasis on subjects with short-term returns.

When a person focuses on achieving a particular end goal, they narrow themselves to the opportunities for exploration and experimentation around them. The beauty of higher education is that it is a place where individuals can immerse themselves in learning without focusing on where this will take them. The writing and ideas of Aristotle, Nussbaum, Sen and Oakeshott might not help students achieve particular outcomes, but they contribute to the development of a particular kind of person. It is regrettable that in most conversations I have on this topic, most people give a funny look when the words “intrinsic value” or “philosophy” are uttered.

Equally, I have found the same to be true in terms of how young people think about careers. Constantly focusing on the “next step,” we fail to reflect on the whys and for what purposes we are working. It is only after dropping out of Oxford, working as a sous-chef, living as an amish farmer and dabbling in governmental and advertising work that David Ogilvy founded the ad firm Ogilvy & Mather – at the age of 37. Had Ogilvy cared about short-term career prospects, he would have joined a consultancy.

Along with issues such as climate change and artificial intelligence, inclusive capitalism is among the most pressing of our time. But we will only re-instil trust in capitalism, and develop an inclusive society built on equal opportunity, if individuals possess what Carney calls “a sense of self… accompanied by a sense of the systemic.” Developing a sense of self requires thinking about who we are, a question that requires experience gained over many years through consistent introspection. But we cannot predict, optimize or aim at this experience; Bandura is right when he writes that many of the most influential moments in a person’s life arise through the most trivial of circumstances.

There are thankfully positive examples to which we can refer: in late July 2015, close to 120 young leaders from across North America converged in Calgary, each representing their city hubs in the Global Shapers network. A specific example that comes to mind is Arjun Gupta, curator of the Toronto Hub which has raised over $1 million for the Sick Kids Hospital and built multiple successful companies – demonstrating the curiosity, selflessness and drive we should see out of society’s young leaders.

Broadly stated, education is a means to developing an inclusive society over the long-term. However, it can only take place through a renewed focus on teaching what is fundamentally important. Focusing on jobs and short-term success is what leads us to pursue growth for the sake of growth; a deeper appreciation for learning allows us to ask what growth is for.

We need business leaders like Carney, as well as Lynn de Rothschild and Paul Polman, who continue to ask basic and yet fundamental questions regarding the purpose of wealth. Business should be seen as a vocation, as they have already written. But we also need university presidents and provosts, politicians and civil servants doing the same. “What is education for?”, “What kinds of people do we wish to develop?” and “How do we collectively engage in this dialogue?” might not contribute to GDP, but they will help us build a more powerful engine in the long-term, and more importantly, a society where equality of opportunity exists.


Successful and unsuccessful people

Successful and unsuccessful people

Last year, Dave Kerpen, author and chief executive of Likeable Local, received a postcard that illustrated the traits and behaviors of successful and unsuccessful people.

The card came from fellow Entrepreneurs Organization member Andy Bailey, the chief executive of Petra Coach. Although the two CEOs have never met, Kerpen said in a 2014 LinkedIn post that the postcard has had a profound effect on him, “reinforcing values I believe in and reminding me on a daily basis of the attitudes and habits that I know I need to embrace in order to become successful.”

The postcard, shown below, points out 16 big differences between successful and unsuccessful people.

postcardCourtesy of Dave Kerpen

Here are six of our favorites:

1. Successful people embrace change. Unsuccessful people fear it. “Embracing change is one of the hardest things a person can do,” Kerpen says. With the world moving fast and technology accelerating at a rapid speed, it’s imperative that we embrace these changes and adapt, rather than fear them, deny then, or hide from them, he says. Successful people are able to do just that.

2. Successful people talk about ideas. Unsuccessful people talk about people. Instead of gossiping about people — which gets you nowhere — successful people discuss ideas. “Sharing ideas with others will only make them better,” Kerpen says.

3. Successful people accept responsibility for their failures. Unsuccessful people blame others. Truly successful leaders and businesspeople experience both ups and downs in their lives and careers. But they always accept responsibility for their failures. Kerpen says blaming others solves nothing. “It just puts other people down and absolutely no good comes from it.”

4. Successful people give others all the credit for their victories. Unsuccessful people take all the credit from others. Letting people have their moments to shine motivates them to work harder, and, consequently, makes you look better as a leader or teammate.

5. Successful people want others to succeed. Unsuccessful people secretly hope others fail. “When you’re in an organization with a group of people, in order to be successful, you all have to be successful,” Kerpen explains. That’s why the most successful people don’t wish for their demise; they want to see their co-workers succeed and grow.

6. Successful people continuously learn. Unsuccessful people fly by the seat of their pants. The only way to grow as a person, professional, and leader is to never stop learning. “You can be a step above your competition and become more flexible because you know more,” Kerpen writes. “If you just fly by the seat of your pants, you could be passing up opportunities that prevent you from learning (and growing!).”

Other major differences: Successful people exude joy, share data and information, and read every day, while unsuccessful people exude anger, hoard data and information, and watch TV every day.

Check out the full LinkedIn post here


When workers are owners; labour and capital were born to stay together

When workers are owners…labour and capital were born to stay together

The received wisdom that employee ownership is a good thing comes with caveats

IT IS popular to lament the growing gap between capitalists and workers. In one respect, however, the gap is shrinking: the number of workers who own shares in the business that employs them has never been higher. America leads the way: 32m Americans own stock in their companies through pension and profit-sharing plans, and share-ownership and share-option schemes. The idea continues to gain momentum. Hillary Clinton’s recent speeches suggest that she may make it an important plank in her plans to reform capitalism. And worker-capitalists are also on the march in Europe and Asia.

Conservatives like employee ownership because it gives workers a stake in the capitalist system. Left-wingers like it because it gives them a piece of the capitalist pie. And middle-of-the-roaders like it because it helps to close a potentially dangerous gap between capital and labour. David Cameron, Britain’s Conservative prime minister, praises John Lewis, a retailer entirely owned by its staff. Bernie Sanders, America’s only socialist senator and now a candidate for the Democratic nomination (see Lexington), is a champion of employee share-ownership.

The trend is also being driven by a long-term shift from “defined benefit” (DB) pension plans, in which employers guarantee the retirement income of their workers, to “defined contribution” (DC) schemes, in which workers and employers put money into an investment pot, with no guarantees of how much it will eventually pay out. Including current workers and pensioners there are more than 88m DC plans in existence. A 2013 survey by Aon Hewitt, a consulting firm, found that 14% of such plans’ assets were invested in the shares of the employer in question.

A number of studies have found that workers at firms where employees have a significant stake tend to be more productive and innovative, and to have less staff turnover. Employee ownership has its drawbacks, however. One is the risk that workers have too many eggs in one basket: if their employer goes bust they can lose their pensions as well as their jobs. Enron employees were encouraged to stuff their “401(k)” plans (the most popular type of pension scheme) with company stock. Just before the firm went bankrupt in 2001 the average employee held 62% of his or her 401(k) assets in Enron shares. Likewise when Global Crossing went bust a few months later, the collapse in its shares wiped out a large chunk of its workers’ pension savings. Despite various initiatives by Congress to stop firms touting their shares to employees, cases are still arising: some former workers at Radio Shack, a retailer that filed for bankruptcy in February, are taking the firm to court, arguing that it kept offering to make its pension contributions in the form of company shares, when it should have known they were going to lose value.

A second problem is entrenchment. Supporters of worker ownership argue that it helps companies take a more long-term perspective. Critics argue that it can entrench bad management and undermine a company’s long-term competitiveness: underperforming bosses are much more likely to be able to stay in place, and resist hostile takeovers, if some of the company’s shares are in friendly hands. In 1994 United Airlines handed many of its workers a 55% stake, and representation on the board, in return for pay cuts. But its performance remained poor, and it filed for bankruptcy in 2002.

A third risk is entitlement. The strongest argument in favour of employee ownership is that workers will not only toil harder if they get a slice of the profits, but will make sure that their colleagues do so too. A new paper by Benjamin Dunford and others, presented at the Academy of Management’s annual meeting in Vancouver, argues that commitment can transmute into entitlement. The academics studied a sample of 409 employees at a commercial-property firm in the Midwest and found that those who invested a higher proportion of their 401(k) accounts in company stock expected better benefits—in the form of promotions and pay rises—than the rest, and took more discretionary leave. (However, the study did not consider whether, nevertheless, employee ownership boosted the firm’s overall performance.)

Arguments about employee ownership can easily become too sweeping: grand claims from supporters invite vigorous rebuttals by critics. A great deal depends on how schemes are structured, and the motives for introducing them. Another recent paper, by Han Kim and Paige Ouimet, of the University of Michigan and University of North Carolina respectively, considers the sizes of ESOPs and of the firms that offer them. They find that small ESOPs (which control a stake of less than 5% in the company in question) are far more likely to boost productivity than large ones, because firms that introduce large ESOPs are often troubled ones trying to conserve cash by substituting shares for pay, or seeking to fend off hostile takeovers by giving shares to friendly insiders. They also argue that ESOPs are much more likely to work in smaller firms than larger ones because employee-owners can more easily monitor each other and thereby boost overall productivity.

There is plenty to be said for employee ownership. It can sharpen workers’ motivation and go some way to healing a potentially dangerous divide between the working class and the boss class. But if politicians are serious about the idea, they need to think harder about how to make it work in practice. They should pay closer attention to how schemes are designed, and look for ways to tailor regulations and tax incentives so as to encourage well-designed schemes. They also need to deal with the problem of concentrating risk in a single company’s shares. Given that the average life expectancy of Fortune 500 companies has fallen from 75 years in the 1930s to perhaps just 15 years today, encouraging employees to invest their savings with the companies that employ them is a recipe for miserable retirements.


New York’s Taxi Cartel Is Collapsing. Now They Want a Bailout.

New York’s Taxi Cartel Is Collapsing. Now They Want a Bailout.

An age-old rap against free markets is that they give rise to monopolies that use their power to exploit consumers, crush upstarts, and stifle innovation. It was this perception that led to “trust busting” a century ago, and continues to drive the monopoly-hunting policy at the Federal Trade Commission and the Justice Department.

But if you look around at the real world, you find something different. The actually existing monopolies that do these bad things are created not by markets but by government policy. Think of sectors like education, mail, courts, money, or municipal taxis, and you find a reality that is the opposite of the caricature: public policy creates monopolies while markets bust them.

For generations, economists and some political figures have been trying to bring competition to these sectors, but with limited success. The case of taxis makes the point. There is no way to justify the policies that keep these cartels protected. And yet they persist — or, at least, they have persisted until very recently.

In New York, we are seeing a collapse as inexorable as the fall of the Soviet Union itself. The app economy introduced competition in a surreptitious way. It invited people to sign up to drive people here and there and get paid for it. No more standing in lines on corners or being forced to split fares. You can stay in the coffee shop until you are notified that your car is there.

In less than one year, we’ve seen the astonishing effects. Not only has the price of taxi medallions fallen dramatically from a peak of $1 million, it’s not even clear that there is a market remaining at all for these permits. There hasn’t been a single medallion sale in four months. They are on the verge of becoming scrap metal or collector’s items destined for eBay.

What economists, politicians, lobbyists, writers, and agitators failed to accomplished for many decades, a clever innovation has achieved in just a few years of pushing. No one on the planet could have predicted this collapse just five years ago. Now it is a living fact.

Reason TV does a fantastic job and covering what’s going on with taxis in New York. Now if this model can be applied to all other government-created monopolies, we might see genuine progress toward a truly competitive economy. After all, it turns out that the free market is the best anti-monopoly weapon ever developed.



The Upside of a Downturn in Silicon Valley

Innovators should welcome the coming downturn in startup funding.

The most successful tech companies came from a leaner, meaner Silicon Valley

In good times, in other words, it’s relatively easy to be a great start-up chief executive. When winter comes to Silicon Valley, we’ll find out which founders really shine. A lot of them won’t. Things won’t be pretty. But maybe it’s time.

In October 2008, in the early days of the last economic collapse, Sequoia Capital invited founders of technology companies to a frank meeting outlining the new global reality.

Silicon Valley had long since shaken off the doldrums of the dot-com bubble, but one of the industry’s most respected venture capital firms was now counseling entrepreneurs to again “batten down the hatches” — to cut costs, to focus on profit, to “spend every dollar as if it were your last” because “it is going to be a rough ride.”

The presentation was called “R.I.P. Good Times,” and it ended with a challenge meant to inspire founders as well as to scare them: “Get real or go home.”

As it happened, Sequoia’s dire warnings never quite came to pass; the tech industry’s good times merely paused for the recession.

But the presentation has achieved the status of legend among venture capitalists. Tech investors are known for their strutting optimism, but the best of them are keenly aware of the motivating powers of impending doom.

Some of the most successful tech investments of all time — among them Google and Facebook — came about in Silicon Valley’s lean times. This is a paradox of invention, as well as of investing: Bad times feed good ideas, which in turn lead to good times, which breed complacency, waste and lots of bad business plans.

No one in the tech industry knows if the recent stock market turbulence will prompt another opportunity to mourn good times. But some venture capitalists are beginning to plan for a leaner era ahead.

Sooner rather than later, some external shock — the Dow, China, Europe, Iran, interest rates, the inauguration of President Trump — may prompt aslow-moving retrenchment in the fund-raising for start-ups. Money will dry up, companies will face hard choices, and there will be layoffs, shutdowns and much heartache.

That may just be what Silicon Valley needs. Many investors are optimistic about the clarifying possibilities of a downturn.

The boom has made Silicon Valley soft: Companies are spending too much, investors are funding too many me-too ideas, and most founders have never had to confront any limits to their overweening ambitions. Venture capitalists won’t quite say they are looking forward to a correction, but some do say that a bust could toughen up the place.

And if a downturn in start-up funding is going to come anyway, you might argue that it couldn’t come soon enough: Not just R.I.P. good times, but good riddance, and let the bad times roll.

“The founders who start companies in bad times are the ones who are really driven,” said Roelof Botha, one of Sequoia’s partners. “They’re not jumping on the bandwagon to get to Silicon Valley just because it’s the fashionable thing to do today.”

Mr. Botha offered a story from his past at PayPal, where he began his Silicon Valley career in March 2000, the same month the Nasdaq hit a peak that it would take 15 years to reach again.

“Most of the people who were building start-ups in that era, including us at PayPal, had only seen one economic environment in our working lives,” he said.

But Michael Moritz, another Sequoia partner who was one of PayPal’s board members, repeatedly counseled caution.

“He was the one board member drilling into our heads, ‘Guys, you need to work on the runway — how many months do you have left, and what are you going to do about it?’” Mr. Botha said, recalling Mr. Moritz’s advice.

At Mr. Moritz’s prompting, PayPal’s executives decided to take what was then an extraordinary step: They began to charge users a fee to use the payment service. The company also worked hard to keep its costs down.

“That focus was instrumental in PayPal’s survival,” Mr. Botha said. “We could have been spending money willy-nilly and fallen by the wayside by accident.”

Instead, within a year, PayPal was sold to eBay for $1.5 billion, and its founders and executives went on to become Silicon Valley luminaries.

Over the last year, as money flowing into Silicon Valley went from a gush to a flood, Mr. Botha, like other venture investors, began advising start-ups to raise funds even if they didn’t need them immediately, to have cash on hand for a potential downturn.

The companies that did so will have a leg up, because a downturn offers a few immediate advantage for well-positioned start-ups: It lowers prices and wreaks havoc on more vulnerable competitors. Salaries for software engineers could fall, and they could become easier to recruit. The price of office space could go down.

Other less tangible costs — Bay Area traffic, marketing, employees’ overall cost of living — could also decline significantly.

“For start-ups, the only thing that is easier during a boom is access to cheap capital,” said Samuel H. Altman, president of the start-up incubator Y Combinator. “Every other thing is harder. And an environment of less noise and less competition makes it easier for people to do something that they’re really committed to over the long term.”

Silicon Valley’s established venture capitalists, too, will see some upside to a downturn. If the hedge funds and other global investors that have recently poured money into tech begin to pull back, competition for investment in the hottest start-ups will cool, allowing V.C.s to buy more of a company for less money.

“I’m not sure that we’re ready to declare that we’re now officially in leaner times,” said Scott Kupor, the managing partner of the venture firm Andreessen Horowitz.

Still, Mr. Kupor noted that as a relatively young firm, Andreessen will likely be putting more money into start-ups over the next few years instead of looking to extract money through sales or initial public offerings — which means that lower prices for start-ups could be good for its portfolio.

“All other things being equal, people would rather an environment where asset prices are lower and where there’s less availability of capital, so if one of our companies breaks out, they have less competition from 10 other start-ups going after them,” Mr. Kupor said.

Danielle Morrill, co-founder of Mattermark, a company that collects and analyzes data on private market funding, pointed to another benefit that some start-ups may see in tougher times. They could begin to pitch themselves as money-saving services.

Mattermark is a software as a service business — a firm that charges a subscription fee for access — and businesses of that type, Ms. Morrill said, can say that they are saving customers money over the competition.

“People are going to start talking about which companies are countercyclical,” meaning they’ll prosper in bad times, Ms. Morrill said. But she noted a problem with making such calls: “You don’t really know if you’re countercyclical until you go through a cycle like what we may have. And then you’ll find out.”

And that gets to the biggest question if we do enter a gloomy period for start-ups: whether founders will be up for managing in a more stressful, frugal environment.

Ms. Morrill said that the current market conditions “could totally affect my fund-raising, and there’s only so much you can change in a week or a month about the way you’re running your company.”

She added: “I can say we shouldn’t buy this expensive coffee, but that’s $100. The scarier thoughts are, when will we have to lay off some of our staff? You look at yourself in the mirror and you say, ‘I don’t want to be that C.E.O.’”