The Gray Area with Sean Illing

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The free-market century is over

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Feb 12, 2024

Guest

J. Bradford DeLong

J. Bradford DeLong, an economic historian and author, shares insights from his book, "Slouching Towards Utopia." He discusses how the "long twentieth century" established foundational institutions for technological growth and globalization that improved lives but ultimately faced significant challenges. Delving into the rise and fall of social democracy, he critiques the impact of neoliberalism and the Great Recession on economic fairness. DeLong emphasizes the complex relationship between markets and state intervention and reflects on the future of political economy amidst rising global issues.

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insights

INSIGHT

Shifting Economic Challenges

Pre-1870 economies struggled with resource scarcity, leading to poverty and elite exploitation.
The productivity explosion post-1870 offered a chance to solve this scarcity but created new distribution challenges.

insights

INSIGHT

1870: A Turning Point

Around 1870, the Industrial Research Lab, the Corporation, and globalization led to rapid technological advancement.
This progress quadrupled the rate of technological advancement and marked a turning point in economic history.

insights

INSIGHT

Hayek vs. Polanyi

Hayek argued for free markets as crucial for wealth creation, but warned against prioritizing social justice.
Polanyi countered that imposing pure market rule would lead to social unrest and resistance.

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Economic Transformations and Ideologies Since 1870

02:45 • 18min

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A Flourishing Era of Social Democracy

20:49 • 4min

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The Rise and Fall of Social Democracy

24:43 • 13min

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Markets and State: A Complex Evolution

38:08 • 8min

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Reflections on Missed Opportunities

46:22 • 9min

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Navigating the Future of Political Economy

55:06 • 3min

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Great Transformations

Mark Blyth

Capitalism, Socialism and Democracy

Joseph Schumpeter

In this seminal work, Joseph A. Schumpeter analyzes the processes of capitalism, arguing that it is both innovative and unstable due to the concept of 'creative destruction', where continuous innovation disrupts established industries. The book also examines the potential replacement of capitalism by socialism and discusses the future of democracy in evolving economic structures. Schumpeter presents a balanced view of both capitalist and socialist systems through theoretical models and comparative analysis, and he predicts that capitalism might eventually give way to socialism due to internal societal and economic changes rather than external failures.

The road to serfdom

Friedrich Von Hayek

In this influential book, Hayek argues that the abandonment of individualism and classical liberalism leads to a loss of freedom, the creation of an oppressive society, and ultimately, the tyranny of a dictator. He challenges the view that fascism and Nazism are capitalist reactions against socialism, instead positing that these ideologies share common roots in central economic planning and the empowerment of the state over the individual. The book emphasizes the dangers of collectivism and the importance of maintaining a free market system to preserve human freedom and dignity.

Rise and Fall of the Neoliberal Order

Gary Gerstle

In this book, Gary Gerstle examines America's recent history, focusing on the past forty years during which the nation embraced marketization, global economic integration, a harsh penal state, and increasing inequality. Gerstle discusses how neoliberalism emerged in the 1970s and 1980s, dominated American politics in the 1990s and 2000s, and began to fracture during the 2010s with the rise of Donald Trump and Bernie Sanders. He highlights the role of the Soviet Union's collapse in securing neoliberalism's triumph and analyzes how neoliberal policies, despite promising universal prosperity, failed to address economic inequality, leading to its eventual decline.

Slouching Towards Utopia

An Economic History of the Twentieth Century

J. Bradford DeLong

This book tells the story of how humanity transitioned from dire poverty before 1870 to an era of rapid technological advancement and economic transformation. Despite this progress, the world faces issues such as global warming, economic depression, uncertainty, and inequality. DeLong's work reveals the last century as less a march of progress than a slouch in the right direction, examining why the expected utopia was not achieved.

In 'Why We're Polarized,' Ezra Klein argues that America’s political system is polarizing due to the merging of partisan identities with racial, religious, geographic, ideological, and cultural identities. The book explores how these merged identities have led to a dysfunctional political system and traces the feedback loops between polarized political identities and institutions. Klein also discusses the role of media and psychological factors in exacerbating polarization, providing a comprehensive analysis of the current state of American politics.

The General Theory of Employment, Interest and Money

John Maynard Keynes

Published in February 1936, 'The General Theory of Employment, Interest and Money' by John Maynard Keynes revolutionized economic thought by challenging the classical economic theories of his time. Keynes argued that total spending in an economy can fail to generate full employment if total savings exceed total investment. He introduced key concepts such as the 'Principle of Effective Demand,' liquidity preference, and the marginal efficiency of capital. The book emphasizes the importance of aggregate demand, the role of government in stabilizing the economy, and the interaction between monetary and real economic factors. Keynes's theories have had a profound impact on economic policy and continue to influence macroeconomic thought and policy to this day.

The Paradox of Democracy

Free Speech, Open Media, and Perilous Persuasion

Sean Illing

Zac Gershberg

The Paradox of Democracy captures the deep connection between communication and political culture, from the ancient art of rhetoric and the revolutionary role of newspapers to liberal broadcast media and the toxic misinformation of the digital public sphere. With clear-eyed analysis, Gershberg and Illing show that our contemporary debates over media, populism, and cancel culture are not too different from the democratic cultural experiences of the past. They argue that democracy is always perched precipitously on a razor’s edge, now as ever before, and that democratic freedom can be self-negating due to the power of persuasion and the potential for manipulation by authoritarian forces.

What Is Property?

Pierre Proudhon

Pierre Proudhon's "What is Property? " is a seminal work of anarchist thought. It presents a radical critique of private property, arguing that it is inherently unjust and leads to social inequality. Proudhon advocates for a society based on mutualism, a form of anarchism that emphasizes cooperation and voluntary association. His work is known for its provocative arguments and its influence on later anarchist and socialist movements. The book's central question, "What is property? " remains a powerful and relevant challenge to conventional notions of ownership.

Sean Illing talks with economic historian Brad DeLong about his new book Slouching Towards Utopia. In it, DeLong claims that the "long twentieth century" was the most consequential period in human history, during which the institutions of rapid technological growth and globalization were created, setting humanity on a path towards improving life, defeating scarcity, and enabling real freedom. But... this ran into some problems. Sean and Brad talk about the power of markets, how the New Deal led to something approaching real social democracy, and why the Great Recession of 2008 and its aftermath signified the end of this momentous era.

Host: Sean Illing (@seanilling), host, The Gray Area

Guest: J. Bradford DeLong (@delong), author; professor of economics, U.C. Berkeley

References:

Slouching Towards Utopia: An Economic History of the Twentieth Century by J. Bradford DeLong (Basic; 2022)
The Road to Serfdom by Friedrich von Hayek (1944)
The Great Transformation by Karl Polanyi (1944)
Capitalism, Socialism and Democracy by Joseph Schumpeter (1942)
"A Short History of Enclosure in Britain" by Simon Fairlie (This Land Magazine; 2009)
"China's Great Leap Forward" by Clayton D. Brown (Association for Asian Studies; 2012)
What Is Property? by Pierre-Joseph Proudhon (1840)
The Rise and Fall of the Neoliberal Order by Gary Gerstle (Oxford University Press; 2022)
Apple's "1984" ad (YouTube)
The General Theory of Employment, Interest and Money by John Maynard Keynes (1936)
"The spectacular ongoing implosion of crypto's biggest star, explained" by Emily Stewart (Vox; Nov. 18)
"Did Greenspan Add to Subprime Woes? Gramlich Says Ex-Colleague Blocked Crackdown" by Greg Ip (Wall Street Journal; June 9, 2007)
"Families across the country are tightening their belts and making tough decisions. The federal government should do the same," from President Obama's 2010 State of the Union Address (Jan. 27, 2010)
"The Eighteenth Brumaire of Louis Bonaparte" by Karl Marx (1852)
Why We're Polarized by Ezra Klein (Simon & Schuster; 2020)
The Paradox of Democracy: Free Speech, Open Media, and Perilous Persuasion by Zac Gershberg and Sean Illing (U. Chicago; 2022)

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This episode was made by:

Producer: Erikk Geannikis
Editor: Amy Drozdowska
Engineer: Patrick Boyd
Editorial Director, Vox Talk: A.M. Hall

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