Economic Theory Archives - American Affairs Journal

Trivial Pursuit

It would not be possible in the space of even a lengthy review to do justice to either the scope or the style of Brooks and Papola’s cinematic achievement. I can only share some of what I saw. After a brief credit sequence we meet “Arthur,” which is what I will call the Brooks-esque character in the film. (I am going to assume we are not quite meant to identify him with the real-life Brooks, who cannot possibly be as stupid and sinister by turns as this guy…

The Financialization of the American Elite

On October 1, 2018, the newly christened Klarman Hall opened to much acclaim on the campus of Harvard Business School. The stunning $120 million building houses a conference center as well as a gleaming auditorium built around a 32-million-pixel, 1,250-square-foot video wall and a state-of-the-art, modular design that seats up to a thousand attendees. To mark the opening, the school held a daylong series of speeches and lectures, headlined by the building’s namesake and one of the school’s wealthiest living graduates, billionaire investor Seth Klarman…

Squaring the Circular Economy

Phillips and Rozworski are at their best in analyzing the scale and scope of central planning in economies dominated by large corporations. In doing so, they demonstrate the inadequacy of ideological debates premised on the opposition between “free markets” and a “command economy.” People’s Republic of Walmart also scores points against the dwindling band…

Corporate Power Beyond Lobbying

The biases that private interests can introduce into politics have always been a key concern for democratic theory. Lobbying in particular has come into the focus of social science research since the beginning of the twentieth century.1 After a century of study, there is a general consensus that the freedom of political participation creates an…

New Gilded Age or Old Normal?

Since the mid-1970s, inequality has increased under Democratic as well as Republican administrations and Congresses. In retrospect, the four and a half decades from 1933 to 1978 were a historical aberration. The longer-term trend toward more inequality in capitalist economies, which prevailed before this period, has resumed after it. That leads us to conclude that there may well be no technocratic or tax policy fix for capitalism’s tendency to generate ever more inequality…

Trade, Antitrust, and Restoring Domestic Competition

Will more restrictive trade policies harm the U.S. economy by shielding domestic businesses against competition? That’s what standard economic theory holds, insisting that pressure from foreign rivals is needed for U.S.-based businesses to continue to innovate, to create the highest quality goods, and to sell them for the lowest possible prices. Although this theory has…

National Developmentalism: From Forgotten Tradition to New Consensus

In response to the rise of “populism,” members of the Washington establishment have adopted a reassuring way to frame the question of America’s proper relationship to the world. As they see it, Americans are divided into two camps—open or closed, globalist or nationalist, interventionist or protectionist. In this framing, the closed, nationalist, and protectionist camp…

Nationalism’s Dividends

Here are some facts about China from the World Bank: Since initiating market reforms in 1978 . . . China has experienced rapid economic and social development. GDP growth has averaged nearly 10% a year—the fastest sustained expansion by a major economy in history—and more than 850 million people have lifted themselves out of poverty.…

Uber’s Path of Destruction

Since it began operations in 2010, Uber has grown to the point where it now collects over $45 billion in gross passenger revenue, and it has seized a major share of the urban car service market. But the widespread belief that it is a highly innovative and successful company has no basis in economic reality. An examination of Uber’s economics suggests that it has no hope of ever earning sustainable urban car service profits in competitive markets…

Subscription Capitalism: The Story of a Power Shift

The emergence of the internet changed the business landscape in fundamental ways. Computer-based services could be offered to anyone irrespective of geographic restrictions. This meant that internet companies could become globally significant with relatively little initial investment, as demonstrated by Facebook, Google, and several others. Their ability to rapidly concentrate wealth with relatively little overhead…