FT News Briefing The Wolf-Krugman Exchange: Power, plutocracy and political economy
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Dec 21, 2025 
This discussion features Nobel laureate Paul Krugman, a prominent economist from City University of New York. He and Martin Wolf delve into the rising challenges posed by globalization and increasing inequality. They critique the growing political power of plutocrats and explore the implications of US federal debt on global markets. The conversation also touches on China's economic future, Europe's defense spending, and the potential impact of AI on India's IT sector, making for a thought-provoking dialogue on contemporary economic issues.
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Inequality Shift Began Around 1980
- Inequality trends sharply changed around 1980, but globalization isn't the sole cause.
- Institutional shifts like union decline and corporate governance mattered more than trade alone.
Corporate Rules And Tech Reshaped Economies
- Corporate governance changes and shareholder-value ideology reshaped company behavior since the 1970s.
- Technology and productivity also reduced manufacturing's share, so the old industrial dominance couldn't persist.
Plutocrats, Not Just Corporations, Drive Power
- The modern problem is plutocracy: a handful of ultra-wealthy individuals exert outsized political power.
- Progressive taxation historically reduced wealth concentration and could do so again.