Capitalisn't

What if we harnessed the collective wisdom of the crowds and delegated democratic leadership to the masses?In her book "Open Democracy: Reinventing Popular Rule for the 21st Century", Yale political scientist Hélène Landemore proposes a radically new vision for "what genuine democratic representation means and how we could open up our narrow electoral institutions to ordinary citizens, including via [what she calls] open mini-publics." Drawing from ancient Athenian democracy of the past and the promise of harnessing digital technologies of the future, she joins Bethany and Luigi to talk through this vision of participatory democracy. They discuss how to best harness human nature for agency and impact, ensure transparency to provide accountability in the face of private vested interests, and ultimately its implications for market capitalism.

In his new book, "Power and Progress: Our 1000-Year Struggle Over Technology and Prosperity", renowned MIT Professor of Economics Daron Acemoglu (with co-author Simon Johnson) argues that the benefits from technological progress are shaped by the distribution of power in society. In this episode, Acemoglu joins Bethany and Luigi to discuss the key challenges of ensuring that this progress benefits everyone, not just the wealthy and powerful. They discuss the rules, norms, and expectations around technology governance, the unintended consequences of AI development, and how the mismanagement of property rights, especially over data, can reinforce inequality and exploitation.Show Notes:In case you missed it, revisit our recent episode with David Autor, referenced in this discussionRevisit "Democracy and Economic Growth: New Evidence," co-authored by Daron Acemoglu, on ProMarket

On this episode, our hosts Bethany McLean and Luigi Zingales sit down with renowned MIT economist David Autor to discuss the impact of technology, labor markets, and immigration on wage inequality and the economy at large. Autor is best known for his work on the "China Shock," the impact of rising Chinese exports on manufacturing employment in the United States and Europe after China's accession to the World Trade Organization in 2001. His most recent work sheds light on which groups have seen the largest nominal wage gains during the COVID recovery, the connections between wage growth and inflation, and more. Autor discusses how advances in technology have disrupted traditional labor markets, how to make better policy choices about the future of work, and the challenges and benefits of immigration in a globalized economy.Show Notes:Revisit our conversation with R. Glenn Hubbard, which is referenced in the interview with David AutorRead the Autor's paper discussed in the episode here.

It is hard to think of an idea more central to capitalism than economics, particularly economic efficiency. Similarly, public policy is now — and has been for a while — conducted in the language of budgets, models, and cost-benefit analyses. But how accountable is this idea to the public?Elizabeth Popp Berman is a sociologist and historian of economic thought at the University of Michigan and the author of the new book "Thinking Like An Economist: How Efficiency Replaced Equality in U.S. Public Policy." In this episode, she joins Bethany and Luigi to discuss this history of economics as a pervasive influence in the halls of political power in Washington and the challenges of believing in economic models as "truth" in an increasingly complex world. Using case studies in health care, debt forgiveness, pandemic economic recovery, and beyond, the three of them debate whether there are spheres of public and political life where economics has overstepped its bounds and if it belongs there altogether.

Several questions continue to swirl around the collapse of Silicon Valley Bank and its larger implications. In this special episode, Chicago Booth’s Raghuram Rajan – former Governor of the Reserve Bank of India and IMF Chief Economist – joins Bethany and Luigi to explore the risks in the financial system and possible solutions.Rajan discusses a paper he presented (with NYU Professor Viral Acharya) at the Federal Reserve’s Jackson Hole conference in 2022, arguing that the Fed’s liquidity provision left the financial sector more sensitive to shocks, and suggesting that the expansion and shrinkage of central bank balance sheets involves tradeoffs between monetary policy and financial stability. Together with the hosts, Rajan discusses the path forward on inflation, given economic and political pressures, and his recommendations on how to manage risks and tradeoffs.Link to the advertised Chicago Booth Review podcast:https://www.chicagobooth.edu/review/podcast?source=cbr-sn-cap-camp:podcast23-20230320Check out ProMarket's ongoing coverage of the recent banking turmoil, including a summary of Raghuram Rajan's paper and new research by Luigi, referenced towards the end of the episode, on the new dangers of ‘bank walks.’

Read ProMarket's ongoing coverage of the Twitter Files, including the research summary of the Twitter Files prepared by Stigler Center Research Professional Utsav Gandhi in preparation for this episodeRead the Stigler Center's 2019 Report on Digital Platforms, addressing many of the underlying issues discussed in this episode: trust and transparency in social media, business models of journalism, platform regulation when it comes to content moderation, and more.

We had initially prepared an entirely different episode for today, but last week's Silicon Valley Bank collapse, the largest in U.S. history since 2008, meant a quick change of plans.What happened? What is unique about this bank run, and what isn't? How much should regulators be blamed, and how much should bank management be? Do social media and today's frantic digital environment mean this is the end of banking as we know it?Luigi and Bethany talk to two experts with unique insights into the crisis: Chicago Booth Professor Douglas Diamond, who won the 2022 Nobel Prize for his decades-long work on bank runs, and Eric Rosengren, former Boston Fed President, for his view as a regulator. They discuss the factors that led to the collapse, including risky lending practices, lack of oversight, and the challenges of regulating the rapidly evolving world of banking. They also explore the broader implications of the collapse, including the impact on the broader financial system and the role of regulation in promoting financial stability.Show Notes:Nobel Laureate Douglas Diamond on How the Fed Could Have Prevented SVB’s Collapse, by Brooke Fox, on ProMarketHow Do We Avoid the Next SVB? by Chicago Booth Professor Anil Kashyap, on ProMarketLink to the advertised Chicago Booth Review podcast: https://www.chicagobooth.edu/review/podcast?source=cbr-sn-cap-camp:podcast23-20230320

Revisit:When the Profit Motive Kills, with Anand Giridharadas, on Capitalisn'tWhy the US Government Buys Overpriced Services From McKinsey, by Matt Stoller in ProMarket

Read the following articles in ProMarket:There Is a Direct Line from Milton Friedman to Donald Trump's Assault on Democracy, by Martin WolfGeorge Stigler and the Challenge of Democracy, by Anat AdmatiCorporations Are Not “We the People,” by Geoffrey StoneeBook: Milton Friedman 50 Years Later, a ReevaluationAlso, check out relevant past Capitalisn't episodes:Martin Wolf: Is Capitalism Killing Democracy?Why Capitalism Needs DemocracyThe Breaking Point Of Democracy With Morton Schapiro and Gary Morson

Read the following articles in ProMarket:There Is a Direct Line from Milton Friedman to Donald Trump's Assault on Democracy, by Martin WolfGeorge Stigler and the Challenge of Democracy, by Anat AdmatiCorporations Are Not “We the People,” by Geoffrey StoneeBook: Milton Friedman 50 Years Later, a ReevaluationAlso, check out relevant past Capitalisn't episodes:Why Capitalism Needs DemocracyThe Breaking Point Of Democracy With Morton Schapiro and Gary Morson