Planet Money Summer School 1: A government's role in the economy is to make us all richer
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Jul 9, 2025 
Join Simon Johnson, a prominent MIT professor and former chief economist of the IMF, as he dives into the intricate relationship between government and economic success. He argues that government influence has always been present in economics, countering the notion of a purely free market. The discussion spans intriguing stories from India, New York City, and Peru, touching on how bureaucratic efficiency can make or break economies, particularly for informal sectors like Jamaican street vendors. Johnson emphasizes the critical roles of innovation, wealth distribution, and inclusive governance in fostering prosperity.
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Politics Shapes Economics
- Economics and politics are deeply intertwined and cannot be separated.
- Political decisions shape the economic rules and power structures from the start.
Roadside Fruit Sellers' Struggle
- Three Jamaican women sell fruit informally on the roadside for 20 years, never paying taxes but facing harassment.
- They pay "taxes" to corrupt cops who steal their goods and intimidate them regularly.
Inclusive vs Extractive Institutions
- Inclusive institutions provide equal rights and protections under the law for all citizens.
- Extractive institutions concentrate power and allow elites to expropriate wealth, blocking economic growth.
