GM94: When Capitalism Reboots and Crashes Again ft. Mark Blyth

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Jan 14, 2026

Mark Blyth, Professor of International Economics at Brown University, dives into the evolving landscape of capitalism, likening it to a software crash. He discusses how past crises have shaped today’s economic environment, touching on populism, inflation, and the failures of austerity. Blyth critiques the central bank's focus on inflation while neglecting real-world issues and proposes state-led industrial policies as a potential solution. He also examines the implications of demographics and geopolitical dynamics, all while warning us of a return to 19th-century rivalries.

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ANECDOTE

Origin Story: A TV Debate Spark

Mark Blyth's interest began watching a TV debate at age 13 between a slick monetarist and a detailed Keynesian modeler.
That moment convinced him ideas shape politics and economics, not just describe them.

INSIGHT

Capitalism As Hardware And Software

Capitalism works like hardware plus software: institutions are hardware and ideas are software driving outcomes.
Each major regime fails when its 'software' develops fatal bugs and triggers a systemic reset.

INSIGHT

Neoliberalism's Fragility Problem

Neoliberal globalization fixed one problem but created a new fragility via financialization and asset concentration.
The 2008 crash exposed that fragility and central bank fixes amplified wealth inequality.

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As the long era of neoliberal certainty frays, Mark Blyth argues that we are drifting back toward a 19th century world of rival blocs, imperial habits and dangerous illusions. In this conversation, he traces how repeated “software crashes” of capitalism produced inflation, austerity, populism and now a return to industrial policy and great power confrontation. He connects deficits, demographics, migration, and housing with the lived reality of stagnant wages and rising prices. Along the way, he questions central bank mythology, challenges deficit obsession, and asks whether politics can adapt before events force a far harsher reset.

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Episode TimeStamps:

00:00 - Cold open and warning on a return to 19th century style imperialism

00:23 - Niels and Alan introduce Mark Blyth and set the macro context

02:24 - From Scottish childhood to monetarism and the politics of macro ideas

08:33 - Capitalism as hardware and software and the recurring crashes of each regime

15:32 - The slow death of neoliberalism and the rise of populist reactions

18:57 - Deficits, austerity, bond vigilantes and why the house is on fire anyway

23:49 - Affordability, grocery prices, housing and the disconnect in elite dashboards

29:02 - Generational conflict, asset concentration and the missing left response

35:42 - Aging, health care, migration and the politics of who does the caring

40:43 - Inflation myths, central bank limits and lessons from recent shocks

45:13 - Britain’s broken growth model, deindustrialization and the London problem

48:01 - Industrial policy, defence, housing and what a real project state would do

53:14 - Trump’s hemispheric vision, hydrocarbons, and a world of regional satrapies

59:03 - Dollar power, cheaper currency strategy and fragile growth built on tech valuations

01:02:33 - Long term outlook, risks, and the books that still explain the mess we are in

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