Capitalisn't

As the United States elections draw near, everyone is wondering who will take control of Washington next. In this week’s Capitalisn’t episode, Pulitzer Prize-winning reporter Brody Mullins reveals how the real winner will be neither Democrats nor Republicans. Rather, it will be the lobbyists.

Mullins is the co-author (along with his brother Luke, also an investigative reporter) of The Wolves of K Street: The Secret History of How Big Money Took Over Big Government. Brody joins Bethany and Luigi to discuss how corporations ranging from Genentech to Google participate in the invisible but massively influential lobbying industry to bend government policy toward their favor. Together, the three trace the roots and evolution of political lobbying from the 1970s to now and explore how it penetrates and leverages other spheres of society to abet its operations. How are academia and the media complicit in this ecosystem of influence operations? How has lobbying adapted to the changing attitudes of Americans towards Big Business? How might it change under either a Harris or Trump administration and beyond?

Episode Notes: Luigi mentions the transformational work of one figure in American politics who fought back against lobbyists’ substantial influence: consumer advocate Ralph Nader. Revisit our prior conversation and episode with Mr. Nader.

You asked and we answered: Over the last year, we have solicited listeners’ questions via voicemail, email, and social media. In this episode, our producer, Matt, turns the tables on Bethany and Luigi and puts them in the hot seat to answer your burning questions in an Ask Me Anything “AMA” format.

How do Bethany and Luigi actually define capitalism? Does universal basic income disincentivize work? Does the adoption of artificial intelligence mean we need to rethink economics? What would Bethany and Luigi do if they were president for a day? And perhaps the scariest one of all: does Luigi believe in taking time off?

Last week, United States presidential candidates Kamala Harris and Donald Trump delivered hour-long speeches outlining their economic policies for the country if they win in November. This week on a special episode of Capitalisn’t, Bethany and Luigi weigh in on the candidates’ economic proposals. What makes this discussion particularly urgent is that neither candidate is espousing a traditional Republican or Democratic platform. Further, despite the length of their respective speeches, there were few specifics. Instead, both candidates are running on "vibes" more than detailed manifestos. With just under five weeks to go before Election Day, Bethany and Luigi sift through the proposals around taxes, tariffs, price gouging, and the “Opportunity Economy,” helping us separate the substance from the slogans.

International technology policy expert, Stanford University academic, and former European parliamentarian Marietje Schaake writes in her new book that a “Tech Coup” is happening in democratic societies and fast approaching the point of no return. Both Big Tech and smaller companies are participating in it, through the provision of spyware, microchips, facial recognition, and other technologies that erode privacy, speech, and other human rights. These technologies shift power to the tech companies at the expense of the public and democratic institutions, Schaake writes.

Schaake joins Bethany and Luigi to discuss proposals for reversing this shift of power and maintaining the balance between innovation and regulation in the digital age. If a "tech coup" is really underway, how did we get here? And if so, how can we safeguard democracy and individual rights in an era of algorithmic governance and surveillance capitalism?

Marietje Schaake’s new book, “The Tech Coup: Saving Democracy From Silicon Valley,” is available here. Read an excerpt from the book on ProMarket here.

America’s universities have powered its economy by developing an educated workforce and producing transformative technology, including the internet and vaccines. They were seen as vehicles for social mobility; when veterans returned home from World War II, the newly enacted G.I. Bill compensated millions with paid college and vocational school tuition. However, universities today are bloated and expensive, losing the public's trust, and have become a battleground for controversial culture wars. Project 2025, the Heritage Foundation’s blueprint for a second Trump administration, plans significant cuts to university subsidies. A big battle is looming over the future of American universities.

To shed some light on what this future might look like, Bethany and Luigi are joined by Hanna Gray, Distinguished Service Professor Emerita of History and President of the University of Chicago from 1978 to 1993 — a period marked by immensely challenging debates on free speech, financial constraints, and leadership decisions. Gray has written that the creation of the modern university “rested on a faith, pervasive in the post-war world, and the potential for education to create a better world, to produce both social mobility and a meritocratic society that would realize the true promise of democracy.” With her trademark humor, sharp wit, and unwavering resolve, she offers insights from her trailblazing experience into whether this promise is more unkept than kept and if faith will be enough for the modern university system to survive.

Episode Notes: Read the Kalven Report on the University's Role in Political and Social Action here.

Is race a more consequential determinant of social mobility than class? How and under what circumstances do Americans move up the economic ladder?

For years, Harvard economist Raj Chetty has leveraged big data to answer these questions. In his recent paper, Chetty and his team show that Black millennials born to low-income parents have more quickly risen up the economic ladder than previous Black generations, whereas their white counterparts have fared worse than previous low-income white generations. That said, Chetty finds little movement in or out of the top income brackets and that the income gap between Black and white Americans remains large.

Chetty joins Bethany and Luigi to discuss these new insights as well as why mobility matters, what costs come in the pursuit of bolstering mobility, and how other factors such as parenting, gender, and social capital factor into the equation. What policies should America pursue, especially against the backdrop of the 2024 presidential election, where many conservatives argue that white working-class Americans are falling behind and liberals argue that Black and brown Americans continue to face systemic inequalities?

Show notes:

• Revisit our Capitalisn't conversation with Oren Cass, who is mentioned by Luigi
• Revisit our Capitalisn't conversation on Chile, which is mentioned by Bethany
• Check out related coverage on ProMarket, including a write-up by Raj Chetty and co-authors on "Lost Einsteins," mentioned in the episode

This week we're taking a quick summer break, but in the meantime, we wanted to re-share a special episode that is relevant in the news again. With the recent federal court ruling that Google engaged in illegal monopolization of internet searches, we thought it would be a great opportunity to share our episode with lawyer Dina Srinivasan. She's an expert in the field of competition policy and a fellow with the Thurman Arnold Project at Yale University. Google is no stranger to lawsuits and has previously defeated many of them, but now, antitrust experts are optimistic that this case against Google's advertising business is even stronger for the government than the Search case that Google lost just last week.

To simplify the apparent complexity of the case and understand why and how it matters to consumers, the advertising market, the tech industry, and the economy, Luigi conducted a special bonus interview with Srinivasan. Following the interview, Bethany joins Luigi to discuss the implications of this case for consumer harm, the business model of journalism, democracy, and beyond.

Read more on ProMarket: https://www.promarket.org/tag/google-ad-tech-case/
 

Watch: 2024 Antitrust and Competition Conference | Antitrust Case Studies: Google https://www.youtube.com/watch?v=Aw6-LaVh55U

Harvard professor of international political economy Dani Rodrik has long been skeptical of what he calls "hyperglobalization," or an advanced level of interconnectedness between countries and their economies. He first introduced his theory of the "globalization trilemma" in the late 1990s, which states that no country can simultaneously support democracy, national sovereignty, and global economic integration.

At the time when he proposed his trilemma, Rodrik was considered an outcast. However, economists and policymakers have come to accept his theory as governments seek to address populism, trade imbalances, and uneven growth through renewed interest in industrial policy, or government efforts to improve the performance of key business sectors. Rodrik joins co-hosts Bethany and Luigi to discuss changing attitudes towards globalization: its distributional effects, how it affects politics, and how it is still searching for a narrative consistent between academic circles and the media. Together, the three of them discuss what role corporate America should play in our world restructured by economic and political populism and if economics is getting too far away from the rest of the social sciences when it comes to shaping industrial policy and creating the jobs of tomorrow.

Show Notes:Read Rodrik's co-authored December 2023 paper on the "New Economics of Industrial Policy"
Read an ebook by ProMarket on cutting-edge contemporary debates around industrial policy

In one of this year's bestselling books, "The Anxious Generation: How the Great Rewiring of Childhood is Causing An Epidemic of Mental Illness," New York University social psychologist Jonathan Haidt argues that today's childhoods spent under the influence of smartphones and overprotective parenting has led to the reported explosion in cases of teenage anxiety and depression. He calls this process a "three-act play": the diminishment of trust in our communities, the loss of a play-based childhood, and the arrival of a hyper-connected world.

Haidt also believes the problem is solvable. On this episode of Capitalisn't, he joins Bethany and Luigi to discuss parenting, learning, adolescence, and in an age where Congress won't act on regulation, his four proposed solutions to break social media's "collective action trap" on children.

But are his solutions feasible? How do we weigh their costs, benefits, limitations, risks, and the roadblocks to their implementation? What are the consequences of an anxious generation for our economy — and what can we really do about it?

Read more about Haidt's work here: https://www.anxiousgeneration.com 

And follow his Substack here: https://www.afterbabel.com

If democracy is a social contract, why don’t we allow everybody who is willing to sign it? Why don’t we have open borders for immigration?

In their book "Streets of Gold: America's Untold Story of Immigrant Success," Princeton University’s Leah Boustan and Stanford University’s Ran Abramitzky provide insights from big data to explore how immigration shaped the United States by looking at the economic legacies of immigrants and their children. On this week’s encore episode, hosts Luigi Zingales and Bethany McLean talk with Boustan to unpack how immigrants and their progeny have impacted jobs, wages, and housing prices for native-born Americans. Conversely, how do immigrants’ countries of origin overcome obstacles to socioeconomic change when many of their most-motivated citizens leave? Can data move the U.S. immigration debate beyond the current border crisis?