Why finance has become an excessively powerful in the U.S. and has handicapped the growth and effectiveness of the rest of the economy. What can be done about it? Journalist and author Rana Foroohar of the Financial Times talks with EconTalk host Russ Roberts about her book, “Makers and Takers.”
When people think about Karl Marx today, they often lose sight of several important things, argues philosopher and legal scholar, Brian Leiter. One is that Marx was actually kind of a fan of capitalism, in the sense that he thinks capitalism and technological process will lead to the elimination of menial labor. But then what? It seems we’ll get a big vacuum in the job market for people without elite educational degrees. And if we don’t do anything about that, presumably, we’ll get mass unemployment. And if there’s mass unemployment, no one will be able to buy anything, which will tank the entire economy, including the fortunes of the one percenters, who rely on people purchasing things to continue turning a profit. Communism can only get going once that process is finished. The purpose of communism isn’t to altruistically spread the wealth around . It’s just to prevent the world economy from imploding! So in a way, you could pitch communism as a project driven by self-interest.
In India around one fifth of the population still live below the poverty line, according to the most recent World Bank estimates. Businesses selling to this market need to keep prices low. In the famous tech city of Bengaluru, south India, we visit a veterinary clinic for pets, the unlikely home of a surprising young start-up, which is set to revolutionise one of the most common medical devices on the planet – the stethoscope. In a village in Mathura, about three hours drive from New Delhi we take a look at the installation of a new affordable solution to providing solar energy. We then meet a young entrepreneur in Kenya who is looking at the success of firms like Amazon and has developed his own similar internet based delivery system for Kenya’s low-income customers.
There are 7,000 languages spoken on Earth. Today we discuss if this is an acceptable number of languages for 7-plus billion people or perhaps we would be better off with just one universal language? As it turns out, the answer to the central question of how much linguistic diversity is the “right” amount could be stated as: enough for anyone to feel connected to the community of their choice, but not so much as to hamper trade or start a war.
Would you stand in line for 45 minutes, in the hot sun, for a slice of pizza? That’s common in a place like Di Fara, a famous old-school pizzeria in Brooklyn run basically by one man — Dom DeMarco — for over 50 years.
Is it possible that we secretly enjoy waiting in line? And might it even be good for us? Apparently, once we wait for something, we value it more than if it was effortless, than if we never had to wait, argues Ayelet Fishbach, professor of behavioral science and marketing at the Booth School of Business at The University of Chicago, contrary to the economist’s notion that lines are inefficient and undesirable.
Only lowering our living standards will achieve sustainable growth. That’s the message from Satyajit Das, a former financier who anticipated the GFC. Debt, energy consumption, housing affordability or superannuation – it’s all based on a financial system that’s in fact a completely fictional model. This model was always doomed to fail – eventually.
What happens when a state drastically cuts taxes. Sam Brownback did it in Kansas. As a Republican governor of a Republican state, he was going to enact the dream. Taxes on small businesses went down to zero. Personal income taxes went down. The tax rate on the highest income bracket went down about 25 percent. Brownback promised prosperous times for the state once government got out of the way. One goal of the tax cuts was to get more money to flow back into the pockets of hard-working, job-creating Kansans. The other was to trim back government spending.
After these tax cuts, Kansas had $600 million less revenue than before. So, to balance the budget, the government tapped into the highway budget. Towns and cities trimmed back, too. Marquette, Kansas saw its only school close in 2014. Now, the 65 kids who once attended Marquette Elementary travel 10 to 20 miles out of town every day to go to class.
Sam Brownback has said that he’s sticking to his tax plan. But the state legislature has recently introduced a bill to roll back some of his tax cuts.
How the human mind actually works? Starting in the late 1960s, the Israeli psychologists Amos Tversky and Danny Kahneman began the movement — now known as behavioral economics — that has had a profound effect on academia, governments, and society at large. Michael Lewis’s, author of a new book “The Undoing Project”, explains how it all happened — what brought the two wildly different men together, and why the impact of their work was so far-reaching.
To anthropologist Joseph Henrich, intelligence is overrated. Social learning, and its ability to influence biological evolution over time, is what really sets our species apart. He joined Tyler for a conversation on his work on cultural evolution, as well as his life among different tribes (academic and otherwise), Star Trek, big gods, small gods, China’s missing industrial revolution, the merits of coconut milk, the Flynn effect, American exceptionalism, and why he wants to travel in time to 6th-century Kent.
Western capitalism is in trouble. For decades investment has been falling, living standards have stagnated or declined, and inequality has risen dramatically. Economic policy has neither reformed the financial system nor restored stable growth.
In this joint lecture, Mariana Mazzucato and Michael Jacobs, drawing on their new book, Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth, explain inadequacies of orthodox economic theory and the failure of economic policies informed by it. They show how alternative economic approaches can better explain how capitalism works, why it often doesn’t, and how it can be made more innovative, inclusive and sustainable.
Michael Jacobs, an environmental economist and political theorist, is Visiting Professor in the School of Public Policy and Department of Political Science at University College London.
Mariana Mazzucato holds the RM Phillips chair in the Economics of Innovation at SPRU in the University of Sussex.