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University of Chicago Podcast Network

Is capitalism the engine of destruction or the engine of prosperity? On this podcast we talk about the ways capitalism is—or more often isn’t—working in our world today. Hosted by Vanity Fair contributing editor, Bethany McLean and world renowned economics professor Luigi Zingales, we explain how capitalism can go wrong, and what we can do to fix it.


Cover photo attributions: https://www.chicagobooth.edu/research/stigler/about/capitalisnt. 

If you would like to send us feedback, suggestions for guests we should bring on, or connect with Bethany and Luigi, please email: contact at capitalisnt dot com. If you like our show, we'd greatly appreciate you giving us a rating or a review. It helps other listeners find us too.

Capitalisn't

Are bailouts the new “trickle-down” economics? Have government debt and deficits caused capitalism’s collapse—thus ending the American Dream?

Ruchir Sharma is a well-known columnist for the Financial Times, the author of bestselling books Breakout Nations and The Rise and Fall of Nations, and an investment banker who worked as Morgan Stanley’s head of emerging markets for 25 years. His new book, What Went Wrong With Capitalism, traces the roots of current disaffection with our capitalist economy to unabashed stimulus and too much government intervention. Take an example: Sharma writes that the United States federal government has introduced 3,000 new regulations in the last twenty years, and withdrawn just 20 over the same span. He likens the Federal Reserve’s constant bailouts—under chairs appointed by presidents from both parties—to the opioid crisis, in which the solution created more problems than the pain it was designed to treat.

Sharma joins Bethany and Luigi to explain how constant government intervention leads to inefficient “zombie” firms, higher property prices, housing shortages, massive inequality, and a historic government debt and deficit crisis. Together, they discuss the first step to a cure—a correct diagnosis of the problem—and how to approach the treatment without exacerbating the problems. In the process, they leave us with a renewed understanding of how “pro-business is not the same as pro-capitalism,” a distinction that Sharma says “continues to elude us.”

Episode Notes:

Link to submit papers for the Stigler Center 2025 Antitrust Conference

Revisit “Is the Federal Reserve an Engine of Inequality?”, our previous episode on modern monetary theory or the claim that debt doesn’t matter.

Revisit “Capitalism After the Crisis,” Luigi’s article for Foreign Affairs (2009), where he outlines the tensions between a pro-capitalism and a pro-business agenda. 

Also, check out ProMarket.org, our publication at the Stigler Center that he founded in 2016, with the mission of shedding light on this tension and how to ameliorate it.

America’s Addiction to Easy Money, with Ruchir Sharma

Daniel Ziblatt is an American political scientist, Eaton Professor of the Science of Government at Harvard University, and the co-author (with Steven Levitsky) of several bestselling books, including How Democracies Die and Tyranny of the Minority. Ziblatt writes from the position that what defines strong democracies is free and fair competition for power, inclusive participation, and a package of civil liberties that make those first two conditions possible.

2024 saw voters in more than 60 countries go to the polls—and deliver difficult outcomes for incumbents and traditional political parties. This week, Ziblatt joins Bethany and Luigi to discuss the fate of democracy after 2024. They explore how big money and corporate power have destabilized democracies worldwide by interfering with the conditions for free and fair competition for power. The consequence has been the movement of voters toward political extremes, which in turn can often threaten economic growth, civil liberties, and the rule of law. Nevertheless, should we judge the strength of democracy by process or outcome? Does democracy still thrive when the people vote for undemocratic politicians and parties?

Together, Ziblatt and our co-hosts discuss how to curb global democratic decline by realigning government away from the interests of corporations or big money and back to those of the people.

Episode Notes:

Revisit ProMarket’s series seeking to understand the issues of political economy driving global populist movements during the 2024 “year of elections.”

How Big Money Changed The Democratic Game, with Daniel Ziblatt

The public often imagines corporations as self-contained actors that provide a set of goods and services to consumers. Underpinning this image have been ideas of ownership, rights to capital and intellectual property, and corporate responsibility to stakeholders including consumers, workers, and shareholders. But what if almost everything we are told about the essence of the firm is wrong? So writes Sir John Kay, a British economist, corporate director, and longstanding fellow of St John’s College (Oxford) in his new book, The Corporation in the 21st Century.

The book revolves around contrasts between historical conceptions of corporations, capitalism, and contemporary practices. Kay writes, “A central thesis of [this] book is that business has evolved, but the language that is widely used to describe business has not.” In the 19th and 20th centuries, firms could be defined in terms of their control over material forms of productive capital (factories, steel foundries, railways, etc.) Socioeconomic critiques of capitalism, most prominently from Karl Marx, often centered on firms’ control of the means of production. Kay contends that firms today access productive capital as a service. For example, Amazon does not own its warehouses but rents them from another firm. Kay writes that today’s corporations and capitalism “[have] very little to do with ‘capital’ and nothing whatsoever to do with any struggle between capitalists and workers to control the means of production.”

Kay joins Luigi and Bethany to discuss the implications of this evolution in firms’ relation to capital: Why is it important to capitalism that its biggest firms no longer own their means of production? Why does the language used to describe this matter? What do Apple's manufacturing facilities, Amazon's warehouses, and TikTok's algorithms tell us about our notions of business ownership? How have these changes to capitalism redefined the struggle between the owners of capital, managers, workers, and consumers? In the process, Kay, Luigi, and Bethany explore the failures of capitalism and imagine what could and should be the purpose of the 21st-century corporation.

Show Notes:

Read an excerpt from the book (published by Yale University Press) on ProMarket

In Bethany and Luigi’s closing discussion of Kay’s book, Luigi cites several articles he has published on the topic, which we have linked below for the listener’s reference. In this past scholarship, Luigi studies how a firm and its operations often intertwine with other firms to form an ecosystem, and it is only through this ecosystem that value is created. Apple and Foxconn provide one example. Legally, they are distinct firms, yet Luigi contends they can be understood as elements of an ecosystem that creates value. Hence, it is sometimes productive to think beyond legal boundaries to consider how multiple firms may compose such a value-creating ecosystem in practice. Within the Apple/Foxconn ecosystem, Apple has a significant influence in dictating terms for Foxconn. Further, if Apple has such dominating power over its suppliers, then Apple could be said to have market power that raises antitrust concerns, which are less obvious if we take the legal boundaries of firms as the correct method of conceptualizing them.

Zingales, L., 2000. In search of new foundations. The Journal of Finance, 55(4), pp.1623-1653.

Rajan, R.G. and Zingales, L., 1998. Power in a Theory of the Firm. The Quarterly Journal of Economics, 113(2), pp.387-432.

Rajan, R.G. and Zingales, L., 2001. The firm as a dedicated hierarchy: A theory of the origins and growth of firms. The Quarterly Journal of Economics, 116(3), pp.805-851.

Zingales, L. (1998) Corporate Governance. In: Newman, P., Ed., The New Palgrave Dictionary of Economics and the Law, Palgrave Macmillan, London.

Lancieri, F., Posner, E.A. and Zingales, L., 2023. The Political Economy of the Decline of Antitrust Enforcement in the United States. Antitrust Law Journal, 85(2), pp.441-519.

Should Companies Have A Social Responsibility To Be “Great Businesses”?, with John Kay

In December 2024, Bitcoin, one of the earliest cryptocurrencies and undoubtedly the most famous, hit $2 trillion in market capitalization, bigger than Tesla, Meta, and Saudi Aramco. In this episode, Nobel Prize-winning economist and Chicago Booth finance professor Eugene Fama—widely considered the “Father of Modern Finance”—predicts it will go to zero within ten years.

Legendary investor Ray Dalio called crypto a bubble a decade ago; now, he calls it “one hell of an invention.” Larry Fink of BlackRock previously referred to Bitcoin as an index of money laundering. Today, he sees it as “a legitimate financial instrument.” Less than 36 hours after launching his own cryptocurrency before his second inauguration, United States President Donald Trump appeared to have made more than $50 billion on paper for himself and his companies. (During his first term, Trump called crypto “not money, whose value is highly volatile and based on thin air.”) Amidst this noise of crypto doubters changing tune, Fama joins Bethany and Luigi to discuss why he remains dubious about Bitcoin’s ambitions.

Bitcoin uses more electricity than many countries—around 91 terawatt-hours annually. Is this amount unsustainable? What makes its value so volatile, and what are the implications for the banking sector and our economy? If cryptocurrencies’ purpose is a reaction to an underlying distrust in financial institutions, can decentralized blockchain, the technological ledger that enables anonymous crypto exchange, fix it? Last but not least, why do supporters of a decentralized service, whose value lies in its existence outside traditional government structures, need to spend billions in lobbying to convince politicians, including the president, of its utility?

Show Notes:

 1. Read ProMarket’s archives on 
Bitcoin 2. and 
cryptocurrency 3. .
 4. Revisit our prior Capitalisn’t episode with author Zeke Faux, 
The Capitalisn’t of Crypto: SBF and Beyond 5. .

Why This Nobel Economist Thinks Bitcoin Is Going to Zero, with Eugene Fama

This week, Elon Musk—amidst his other duties of gutting United States federal government agencies as head of the “Department of Government Efficiency” (DOGE)—announced a hostile bid alongside a consortium of buyers to purchase control of OpenAI for $97.4 billion. OpenAI CEO Sam Altman vehemently replied that his company is not for sale.

The artificial intelligence landscape is shifting rapidly. The week prior, American tech stocks plummeted in response to claims from Chinese company DeepSeek AI that its model had matched OpenAI’s performance at a fraction of the cost. Days before that, President Donald Trump announced that OpenAI, Oracle, and Softbank would partner on an infrastructure project to power AI in the U.S. with an initial $100 billion investment. Altman himself is trying to pull off a much-touted plan to convert the nonprofit OpenAI into a for-profit entity, a development at the heart of his spat with Musk, who co-founded the startup.

Bethany and Luigi discuss the implications of this changing landscape by reflecting on a prior Capitalisn’t conversation with Luigi’s former colleague Sendhil Mullainathan (now at MIT), who forecasted over a year ago that there would be no barriers to entry in AI. Does DeepSeek’s success prove him right? How does the U.S. government’s swift move to ban DeepSeek from government devices reflect how we should weigh national interests at the risk of hindering innovation and competition? Musk has the ear of Trump and a history of animosity with Altman over the direction of OpenAI. Does Musk’s proposed hostile takeover signal that personal interests and relationships with American leadership will determine how AI develops in the U.S. from here on out? What does regulating AI in the collective interest look like, and can we escape a future where technology is consolidated in the hands of the wealthy few when billions of dollars in capital are required for its progress?

Show Notes:
On ProMarket, check out:
Why Musk Is Right About OpenAI by Luigi Zingales, March 5, 2024
Who Will Enforce AI’s Social Purpose? By Roberto Tallarita, March 16, 2024

Can AI Even Be Regulated?, with Sendhil Mullainathan

“Homeownership is the American Dream.” This saying is so ingrained in our zeitgeist that most Americans don't even pause to question it. However, according to the Black Knights Home Price Index, the average US home price increased nearly 80% from April 2015 to April 2023. Census data reveals that the median household income only increased by 4% during this period. Homeownership has thus become increasingly out of reach, especially for young professionals. So, how did the American Dream become an American nightmare?

In his brand new book, “Stuck: How the Privileged in the Propertied Broke the Engine of American Opportunity,” The Atlantic’s Deputy Editor Yoni Appelbaum offers a contrarian view, arguing that the crisis in American homeownership isn’t actually about cost—it’s about mobility. There are many places in America where housing remains affordable and even dirt cheap. The problem is that those affordable options are in less desirable locations, with fewer opportunities for high-quality jobs, education, and health care. Thus, young professionals continue to migrate to communities where opportunities are bountiful, but housing is not.

Appelbaum joins Bethany and Luigi to discuss how Americans got “stuck.” Why does mobility matter so much? What are the implications of reduced mobility for Americans’ faith in capitalism and the belief that our country is still the land of opportunity? If treating a home as an investment—which many of us do—means less mobility, is being “stuck” so wrong for society? Together, the three of them unpack this entangled question of mobility, homeownership, and what it means for the reformulation of the American Dream.

Capitalisn't episodes mentioned:
Shattering Immigration Myths: Data Beyond Borders, with Leah Boustan
Raj Chetty's Surprising New Insights on How Children Succeed
What Happened to the American Dream? With David Leonhardt

Read an excerpt from Appelbaum's book on ProMarket (Penguin Random House)

Did NIMBYs Kill the American Dream?, with Yoni Appelbaum

Skyrocketing costs of attendance, declining enrollment, the advent of artificial intelligence, campus debates about free speech, and a crackdown on diversity initiatives: Today's universities are in a pickle. Adding to this pickle are President Trump's threats and actions on slashing research funding — the financial lifeline of modern universities. Last month, the Chronicle of Higher Education highlighted a new survey of a diverse group of university presidents who were asked if they “believe the Trump Administration is at war with higher education” — and 94% answered they strongly agree.

Luigi and Bethany speak to one academic leader with deep experience at the heart of these debates: Nicholas Dirks, former Chancellor of UC Berkeley (2013-2017) and author of the book, "City of Intellect: The Uses and Abuses of the University." Together, the three of them discuss which idea of the university is still valid in the 21st century, how fundraising changed the governance of higher education, and how universities might navigate the challenges of Trump's second administration.

Revisit our previous episodes:
Universities and Politics: Should They Mix? with Hanna Gray
The Economics of Student Protests

Trump’s War on Universities, with Nicholas Dirks

In President Donald Trump's recent joint address to Congress, he said, "To unshackle our economy, I have directed that for every one new regulation, ten old regulations must be eliminated." Elon Musk, whom Trump has assigned to execute this vision, has argued that it is time to get rid of all regulations, or as Musk said, “regulations, basically, should be default gone.”

Joining Bethany and Luigi to discuss this intensified commitment to deregulation and laissez-faire capitalism is Sam Peltzman, perhaps the leading living expert on the economics of regulation. Peltzman is the Ralph and Dorothy Keller Distinguished Service Professor Emeritus of Economics at the University of Chicago’s Booth School of Business and director emeritus of the Stigler Center, which sponsors this podcast and is named after his mentor, Nobel-Prize laureate George Stigler. Together, the three of them chart a historical perspective on regulation, from Stigler’s ideas of regulatory capture to the unintended consequences of deregulatory efforts over time to today’s “chainsaw” approach to gutting federal agencies. To understand the costs and benefits of regulation, they discuss how federal agencies have recently intervened in markets, if the private sector could not have accomplished these interventions more efficiently, and if these interventions did more harm than good. Their case studies include the funding, testing, and rollout of the COVID-19 vaccine, the regulation of cryptocurrencies, the management of the collapse of Silicon Valley Bank, and the role of the government in addressing climate change. In the process, they answer the trillion-dollar question: Are Trump's deregulation efforts actually efficient?

Episode Notes:

 • Revisit our 
recent episode • with Federico Sturzenegger, the Argentinian Minister for State Transformation and Deregulation
 • Read the op-ed Bethany mentions writing in the wake of the financial crisis: 
Who Wants a 30-Year Mortgage? • At the end of the conversation with Peltzman, Luigi asks him about his recent academic papers tracing marriage and happiness. Read these papers on the Stigler Center’s Working Paper archives: 
The Socio-Political Demography of Happiness • (2023) and 
The Anatomy of Marital Happiness • (2025)

Why Trump Is Deregulating In The Wrong Way, with Sam Peltzman

Silicon Valley’s traditionally Democratic tech leaders are turning toward President Donald Trump, but are the reasons as straightforward as lower taxes and favorable regulations? Perhaps not, if we consider the influence of a convoluted political philosophy called the “Dark Enlightenment.” Washington and Silicon Valley power players, including Vice President JD Vance, Steve Bannon, Peter Thiel, and Marc Andreessen, have all cited the philosophy’s ideas and one of its leading developers, Curtis Yarvin. Yarvin was reportedly present at Trump’s inaugural gala as an informal guest of honor.

In a nutshell, Dark Enlightenment rejects liberal democracy as an outdated software system incompatible with freedom and progress. Instead, it argues for breaking up the nation-state into smaller authoritarian city-states, which Yarvin calls “patchworks.” These patchworks will be controlled by tech corporations and run by CEOs. The theory is attached to another idea called accelerationism, which harnesses capitalism and technology to induce radical social change. In fact, Yarvin proposed a plan he called “RAGE”—or “Retire All Government Employees”—as far back as 2012.

So, how did this obscure and oxymoronically named philosophy reach the highest echelons of business and political power? Bethany and Luigi trace the theory from its origins to its practical manifestations in Elon Musk’s Department of Government Efficiency, Silicon Valley’s race to develop artificial intelligence, and the growing push for “Freedom Cities” unfettered from federal regulations. Are the people embracing Dark Enlightenment espousing its ideas because they genuinely believe it is the way forward for humanity? Or do they believe it because it's a way for them to make money? What does it mean for capitalism and democracy if the administration runs the federal government like a tech company?

Is Silicon Valley Turning Fascist?

All too often, capitalism is identified with the for-profit sector. However, one organizational form whose importance is often overlooked is nonprofits. Roughly 4% of the American economy, including most universities and hospital systems, are nonprofit.

One prominent nonprofit currently at the center of a raging debate is OpenAI, the $300 billion American artificial intelligence research organization best known for developing ChatGPT. Founded in 2015 as a donation-based nonprofit with a mission to build AI for humanity, it created a complex “hybrid capped profit” governance structure in 2019. Then, after a dramatic firing and re-hiring of CEO Sam Altman in 2023 (covered on an earlier episode of Capitalisn’t: “Who Controls AI?”), a new board of directors announced that achieving OpenAI’s mission would require far more capital than philanthropic donations could provide and initiated a process to transition to a for-profit public benefit corporation. This process has been fraught with corporate drama, including one early OpenAI investor, Elon Musk, filing a lawsuit to stop the process and launching a $97.4 billion unsolicited bid for OpenAI’s nonprofit arm.

Beyond the staggering valuation numbers at stake here–not to mention OpenAI’s open pursuit of profits over the public good–are complicated legal and philosophical questions. Namely, what happens when corporate leaders violate the founding purpose of a firm? To discuss, Luigi and Bethany are joined by Rose Chan Loui, the founding executive director of the Lowell Milken Center on Philanthropy and Nonprofits at UCLA Law and co-author of the paper "Board Control of a Charity’s Subsidiaries: The Saga of OpenAI.” Is OpenAI a “textbook case of altruism vs. greed,” as the judge overseeing the case declared? Is AI for everyone, or only for investors? Together, they discuss how money can distort purpose and philanthropy, precedents for this case, where it might go next, and how it may shape the future of capitalism itself.

Show Notes:

Read extensive coverage of the Musk-OpenAI lawsuit on ProMarket, including Luigi’s article from March 2024: “Why Musk Is Right About OpenAI.”

Guest Disclosure (provided to The Conversation for an op-ed on the case): The authors do not work for, consult, own shares in, or receive funding from any company or organization that would benefit from this article. They have disclosed no relevant affiliations beyond their academic appointment.

Profit or Purpose? OpenAI's $300 Billion Question, with Rose Chan Loui

Many are praising a recent Business Roundtable announcement that corporations should serve stakeholders as well as shareholders. On the surface, this may seem like a historic reversal of the status quo that has held since Milton Friedman's famous "shareholder primacy" theory was put forward in the 70s. But it's not that simple.

On this episode, Kate and Luigi layout the history of this theory, revealing that it's really been around for as long as we've been asking the most fundamental question in business: what is the purpose of a corporation? They explore that question, and interrogate the possible underlying motives behind the Business Roundtable's decision.

Shareholders vs. Stakeholders

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