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In "A Capitalism for the People," Zingales makes a forceful, philosophical, and at times personal argument that the roots of American capitalism are dying, and that the result is a drift toward the more corrupt systems found throughout Europe and much of the rest of the world. American capitalism, according to Zingales, grew in a unique incubator that provided it with a distinct flavor of competitiveness, a meritocratic nature that fostered trust in markets and a faith in mobility. Lately, however, that trust has been eroded by a betrayal of our pro-business elites, whose lobbying has come to dictate the market rather than be subject to it, and this betrayal has taken place with the complicity of our intellectual class.
Because of this trend, much of the country is questioning--often with great anger--whether the system that has for so long buoyed their hopes has now betrayed them once and for all. What we are left with is either anti-market pitchfork populism or pro-business technocratic insularity. Neither of these options presents a way to preserve what the author calls "the lighthouse" of American capitalism. Zingales argues that the way forward is pro-market populism, a fostering of truly free and open competition for the good of the people--not for the good of big business.
Drawing on the historical record of American populism at the turn of the twentieth century, Zingales illustrates how our current circumstances aren't all that different. People in the middle and at the bottom are getting squeezed, while people at the top are only growing richer. The solutions now, as then, are reforms to economic policy that level the playing field. Reforms that may be anti-business (specifically anti-big business), but are squarely pro-market. The question is whether we can once again muster the courage to confront the powers that be.
Publishers Weekly® Reviews
- Reviewed in: Publishers Weekly, page .
- Review Date: 2012-04-23
- Reviewer: Staff
Zingales, a finance professor at the University of Chicago’s Booth School of Business and coauthor of Saving Capitalism from the Capitalists, presents a striking dichotomy: most Americans endorse the free market system, but fear the power of big business. In an engaging if imprecise argument, he suggests that channeling “populist anger” can reinvigorate the “power of competition” and reverse the movement toward a “crony system.” Pro–free market beliefs are reflected in U.S. history, Zingales shows: contrary to world norms, here democracy preceded industrialization, and the mobility of the frontier encouraged personal initiative. As the government’s role in the economy has exploded, however—between 1900 and 2005 the fraction of GDP controlled by government rose eightfold—big business has turned this to its benefit. Zingales maintains that disenchantment with the bank bailouts of both the Bush and Obama administrations makes today a potent moment for the public to demand systemic reform, and persuasively demonstrates the urgent need for action. However, the specifics of his proposed remedies—including “equality of opportunity,” enhanced competition, market-based ethics, lobbying restraints, and public access to economic data—are vague rather than a clarion call. Of more value is his insight that intellectual and economic freedom are intertwined, and that business schools and academics can promote the common good by encouraging true competition and truly free markets. Agent: Eric Lupfer, WME. (June)