Capitalisn't

According to the latest industry statistics, the global influencer economy grew from $1.7 billion in 2016 to $21.1 billion in 2023 — and it's only expected to grow exponentially from here with advances in artificial intelligence. In 1988, Noam Chomsky and Edward S. Herman investigated how mass media sways audiences to conform to social norms without coercion, or what they called “manufacturing consent.” In her new book, “The Influencer Industry: The Quest for Authenticity on Social Media,” Dr. Emily Hund investigates how social media influencers have manufactured a new media economy to which we’ve unwittingly consented.

Hund, a research affiliate at the Center on Digital Culture and Society at the University of Pennsylvania’s Annenberg School for Communication, joins Bethany and Luigi to unpack this new digital landscape where influence has become a powerful currency, shaping not only news consumption and consumer behavior but the very fabric of modern capitalism. Together, they discuss whether influencers are empowered entrepreneurs rewriting market rules or victims of a system that commodifies identity. What are the hidden incentives driving influencer messaging and, thus, the news and content we receive?

Read an excerpt from Hund's book (Princeton University Press, 2023) on ProMarket.

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It's been nearly 16 years since the federal government bailed out Wall Street to the tune of $700 billion in response to the financial crisis that precipitated the Great Recession. The idea that the public must guarantee critical financial institutions that are “too big to fail” was controversial then, but does it still remain an issue? Stanford finance professor Anat Admati, whom the New York Times profiled in an article titled "When She Talks, Banks Shudder," argues it’s become worse.

Admati joins Bethany and Luigi to discuss the updated edition of her and Martin Hellwig’s book, The Bankers' New Clothes: What’s Wrong with Banking and What to Do About It. Dissecting new financial developments, including the failure of Silicon Valley Bank, the crypto industry, and shadow banking, Admati lays bare how the current financial system is rigged for the benefit of the few. She also prescribes how we can build and regulate a fairer and more accountable financial system and, thus, a more stable and equitable capitalist economy.

Show Notes:

• Read the 2024 preface of The Bankers' New Clothes on ProMarket.
• Revisit our 2019 conversation with Anat and Chicago Booth Professor Guy Rolnik, exploring the reasons why market and policy may fail in finance and technology and what we must do to address such failures.
• Read Anat's contributions to our e-books on George Stigler and Milton Friedman.

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After two seasons and 163 episodes, Capitalisn’t hosted its first-ever live event late last year. As part of the University of Chicago Podcast Festival, co-host Luigi Zingales fielded questions from three UChicago undergraduate students — Surya Gowda, Mete Bakircioglu, and Giuseppe Di Cera —and an in-person audience in an “Ask Me Anything.” 

From the evolution of competition policy to the impact of greener energy sources on prices, from the challenges of regulating the shadow economy to Luigi's struggles with his favorite soccer team, here is our “Ask Me Anything” episode.

If you wish to submit your own question for our forthcoming mailbag episode, please do so here. https://www.speakpipe.com/Capitalisnt

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The firing, and subsequent rehiring, of OpenAI CEO Sam Altman raises fundamental questions about whose interests are relevant to the development of artificial intelligence and how these interests should be weighed if they hinder innovation. How should we govern innovation, or should we just not govern it at all? Did capitalism "win" in the OpenAI saga?

Bethany and Luigi sit down with Luigi’s colleague Sendhil Mullainathan, a professor of Computation and Behavioral Science at Chicago Booth. Together, they discuss if AI is really "intelligent" and whether a profit motive is always bad. In the process, they shed light on what it means to regulate in the collective interest and if we can escape the demands of capitalism when capital is the very thing that's required for progress.

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After discussing the trajectory of China's economy earlier this year, Luigi and Bethany turn their attention to the future of another global economic behemoth: India. Joining them is renowned Indian economist Raghuram Rajan, who has a brand-new book out this week, "Breaking the Mould: Reimagining India's Economic Future" (co-authored with Rohit Lamba).

In "Breaking the Mould," Rajan and Lamba make the controversial and counterintuitive argument that India should follow an economic development path that is based not on manufacturing, as China has done, but rather on services. In this conversation, we discuss why India's strengths play to services-based development, how India can deal with the economic and educational inequality created by its past, how Western business should engage with India, and why democracy is critical to India's future economic success.

We think his perspectives are important for Indian citizens and policymakers, but also for global citizens and policymakers given the critical role India will play in shaping the world of the future. 

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After previously exploring the worlds of 'consultants for sale' and 'scientists for sale,' Luigi and Bethany turn their attention to another broken system of 'enablers' - the world of lawyers for sale. With award-winning investigative journalist David Enrich, they discuss David's latest book, "Servants of the Damned: Giant Law Firms, Donald Trump, and the Corruption of Justice." 

Enrich presents several case studies showing how 'Big Law' firms have used their wealth and influence to capture the justice system, serving the interests of their wealthy clients at the expense of ordinary Americans. With Bethany and Luigi, he discusses: How can we restore the integrity of our legal institutions? What are the broader implications for the rule of law in a society dominated by economic and political interests?

Show Notes - also revisit:

1. The Capitalisn't of Consulting: McKinsey and Beyond, with Walt Bogdanich
2. Science for Sale, with David Michaels

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In his new book "Number Go Up," Bloomberg News investigative reporter Zeke Faux takes readers on a wild ride through the world of cryptocurrency, from its origins in the dark corners of the internet, its meteoric rise to mainstream popularity, and finally its equally precipitous fall. 

A few days after the 'convicted' verdict in the trial of beleaguered crypto entrepreneur Sam Bankman-Fried (SBF), Faux joins Bethany and Luigi to make a case for why we should judge cryptocurrency by what it has done and not what it can do. They discuss whether it is too soon to write crypto off, what larger commentary it offers about capitalism, and why Luigi, who teaches a popular MBA course on fintech, feels "crypto is money that can only be created by computer scientists who don't understand history."

Show Notes: Revisit a 2017 Stigler Center mini-course by NYU Stern Professor David Yermack on the potential implications of blockchain technologies on the future of finance.

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In his new book, Sohrab Ahmari argues that the concentration of economic power in the hands of a few corporations has created a new form of tyranny in America. "Coercion is far more widespread in supposedly noncoercive societies than we would like to think—provided we pay attention to private power and admit the possibility of private coercion," he writes.

Ahmari, founder and editor of Compact magazine, joins Bethany and Luigi to discuss his book, "Tyranny Inc.: How Private Power Crushed American Liberty--and What to Do About It."  In this episode, they discuss the complex relationship between capitalism, personal freedoms, and political power. The conversation sheds light on what classical liberalism ignores, how today's Right is discovering what the Left may have forgotten, and ultimately, where today's political Left and Right may be able to work together.

Show Notes: Also check out two previous episodes mentioned in this conversation:

• Is Common Good Capitalism The Answer? With Oren Cass
• A Conservative Critique Of Capitalism, With Patrick Deneen

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In her brand new book, "The Big Fail: What the Pandemic Revealed About Who America Protects and Who It Leaves Behind," Bethany and her co-author Joe Nocera argue that the COVID-19 pandemic was not simply a natural disaster but also a man-made one.

Based on rigorous research and compelling storytelling, Bethany, who is renowned for her incisive reporting, reveals uncomfortable truths that have emerged from the pandemic about capitalism, inequality, and corporate power. In this one-on-one conversation with Luigi, she dissects the policies, decisions, and systemic structures that exacerbated the pandemic's fallout for the most vulnerable in society, shedding light on who benefited and who was left to fend for themselves.

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How does science become public policy? It's not always as straightforward as it might seem. In his book "The Triumph of Doubt: Dark Money and the Science of Deception," leading public health expert and former Clinton/Obama administration official David Michaels shows how corporate interests often "manufacture uncertainty" in order to protect their profits. Using wide-ranging case studies from Big Tobacco, Volkswagen, American football, and talcum-based baby powder, Michaels exposes the disinformation playbook deployed by corporate-funded science to sow "doubt, denial, delay, distraction, deflection, and defense." With him, Bethany and Luigi discuss how we can fight back against manipulated science and replace the triumph of doubt with the triumph of truth.

Show Notes: Also, check out our previous episode on the "Capitalisn't of Consulting" and the case of McKinsey, mentioned by Luigi in this episode.

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