Debra Satz, a 2017-18 CASBS fellow and dean at Stanford Univ., moderates a discussion on prospects for economic theory to contribute to a more equitable, dignified & ethical political economy. The panel consists of Elizabeth Anderson, Samuel Bowles, Nobel laureate Sir Angus Deaton, and Amy Kapczynski.
Moderator Debra Satz
Panelists
Elizabeth Anderson University of Michigan
Samuel Bowles Santa Fe Institute
Nobel laureate Sir Angus Deaton Princeton
Amy Kapczynski Yale Law
@CasbsStanford
Creating a New Moral Political Economy program at CASBS
Social Science for a World in Crisis
Narrator: From the Center for Advanced Study in the Behavioral Sciences at Stanford University, this is Human Centered. What was once a faint sign in the distance is now a glaring neon billboard: contemporary capitalism is past its expiration date. Neoliberalism has been the dominant economic paradigm for nearly half a century, and in that time it has failed to deliver its promise of a humane and dignified life for all. As economists confront this failure and pursue the building of a better discipline, what facts about the world should they take into account? What did they miss? What research and values should they attend to? Despite economists' awareness of neoliberalism's shortcomings, there's a tendency among some in the field to ignore or not engage with knowledge from outside the discipline. Fields like political science, anthropology, sociology, and philosophy are seen as unscientific. But as today's discussion illuminates, we have an immense opportunity to improve the explanatory and normative dimensions of economics by incorporating insights from these disciplines, and maybe as well perhaps from older economic insights which have been underemphasized for a century or more. Today on Human Centered, another panel discussion from our Social Science for a World in Crisis series. This episode, which originally webcast on August 23rd, 2022, is titled Creating a New Political Economy Framework: Where Do We Go from Here? And it features panelists Elizabeth Anderson, the Max Shea Professor of Public Policy and John Dewey Distinguished University Professor at the University of Michigan; Sam Bowles, the Arthur Spiegel Research Professor at the Santa Fe Institute and Professor of Economics Emeritus at the University of Massachusetts at Amherst; Sir Angus Deaton, the Dwight D. Eisenhower Professor of Economics and International Affairs Emeritus at Princeton University and winner of the 2015 Nobel Prize in Economics; and Amy Kepsinski, Professor of Law at Yale University. Moderating the conversation is Debra Satz, the Vernon R. and Elizabeth Warren Anderson Dean of the School of Humanities and Sciences at Stanford University and a 2017-18 CASBS Fellow. So let's listen in as these distinguished economists ponder the question: Creating a New Political Economy Framework: Where Do We Go From Here?
Debra Satz: Hello, I'm Debra Satz. I'm a political philosophy professor, very interested in the topic of today's webcast, and I'm at Stanford University where I'm also the dean, and I'm a former CASBS fellow. And I'd like to welcome everybody to the 21st episode of CASBS's series, Social Science for a World in Crisis. Uh, before we get started, I want to acknowledge the, um, partners for this episode, uh, the CORE, Curriculum Open Access Resources in Economics, uh, the Institute for Fiscal Studies Deaton Review, the McCoy Family Center for Ethics and Society at Stanford University, and the William and Flora Hewlett Foundation. Uh, we have a fantastic, uh, panel, uh, to join us, uh, for our topic, which is about, um, creating a new framework for political economy, a new framework for thinking about how to organize an economy, and what kinds of considerations should be taken into account when we make various evaluations. Our panelists have very long and distinguished bios, and I'm not going to recite them in the interest of time. I'll give a quick introduction of their illustrious titles. And then we can proceed to the event. Elizabeth Anderson is the Max Shea Professor of Public Policy at the University of Michigan. Sam Bowles is the Arthur Spiegel Research Professor at the Santa Fe Institute. Angus Deaton is a Nobel Laureate in Economics and the Dwight D. Eisenhower Professor of Economics and International Affairs Emeritus at Princeton University. And Amy Kapuscinski is professor of law at Yale University. This event is associated with a program at CASBS on creating a new moral political economy. And the center thanks the Hewlett Foundation for support of that program. Let me give a brief roadmap of the event. Although like any road map, I hope we'll take lots of detours and see some unexpected and beautiful things. But here's the plan. I'm going to set up the discussion topic and I'm going to pose a broad question for each of the panelists. Each of the panelists will talk for about 5 minutes on their take the question. Then we'll have some panel discussion, maybe with panelists probing, or am I probing the different panelists? And then we'll open it up for probing and discussion with all of you. A note to all the attendees: you can submit your questions using the Zoom's Q&A feature. And we always ask that you keep your questions on point. And we will get— be able to get to as many as possible. So let me begin. This is kind of the frame. What's sometimes referred to as neoliberalism is well past its expiration date. By neoliberalism, I mean the view that aside from a few cases, involving externalities like pollution or instances of monopolistic price gouging, the economy is best guided by markets and not by government. On that view, the neoliberal view, there's a sharp distinction between markets and government. There's a limited faith in the possibilities of democratic collective action. There's a preference for monetary incentives over social norms. There's a blindness to the existence of power in the market. And there's a commitment to efficiency above everything. I say that neoliberalism in this sense is past its shelf life because these ideas are all open to challenge and because such thinking when turned into policy, has failed to deliver a dignified and humane life for everyone. For example, many people in the United States lack access to good jobs at wages that allow them to support themselves and their families. They lack access to healthcare, to childcare, and even to free time. At the same time, huge inequalities of wealth, have undermined equality of opportunity and led to a system that's widely viewed as rigged in the interests of the few. More markets is simply not the one-size-fits-all answer to the many policy questions that implicate the market— the economy. Now, contemporary economics is, of course, distinct from neoliberalism. Most economists are aware that market failures are common and that economic incentives don't always serve the common good. Still, I think there's a tendency among economists to ignore insights from other disciplines as unscientific, or to use a technical term, mushy. And so economists tend, right, not to engage that much with insights from political science, anthropology, philosophy, and so forth. This is in sharp distinction to an older tradition in economics. Historically, the classical economists, people like Adam Smith and David Ricardo, were engaged in a very— with a very broad set of concerns, not simply with aggregate growth and the distribution of divisible goods like income, but how economics could be part of thinking about a humane and liberal and democratic social order and about a life with dignity for its members. Just think about Adam Smith's view of poverty It included not just income and wealth, but what it took to appear in public without shame. And that has not only economic but also political and cultural aspects as well as economic. I think we have an opportunity to improve the explanatory and normative dimensions of economics by incorporating insights from other disciplines and maybe stressing some insights from economics itself that haven't been adequately emphasized by the discipline. I'm particularly excited to— for the opportunity to bring normative, moral, and democratic considerations into our evaluation of the economy After all, markets don't just distribute goods and services. They also shape our relations with one another and affect our shared institutions. And they in turn are shaped by us. So that brings me to my broad question for this very distinguished group of panelists. What insights, research, and values do you think are most important for economists to attend to, particularly as they confront the failures of contemporary capitalism? And in addition to values, what facts about the world should economists take into account? So Liz, I'd like to turn the floor over to you to kick off our discussion. Thanks.
Elizabeth Anderson: Yeah, so, um, thanks so much, Debra, because you set this up beautifully. One thing I just want to point out is I want to contest neoliberalism's own self-description as favoring markets over government. So I wrote a book called Private Governments in which I argue that markets themselves are only part of the economy. There are little private governments in the economy, namely corporations or firms of various sorts. And those are little governments. And that's, you know, you get this straight from economic theory. Coase wrote the classic theory of the firm in which he explained that the boundary of the firm is basically the boundary between markets and government. And what I contest there is the idea that the market is necessarily a liberating force under certain conditions. It promotes the concentration of power in firms which are largely run hierarchically and dictatorially. And labor markets in particular are just the conduits through which individual workers get allocated to one little private government as opposed to another. And that, in fact, I think is critical for bringing richer normative insights into our evaluation of our contemporary economy. Lately, my most recent work of political economy is studying the Protestant work ethic from the 17th century, when it was invented by Puritan theologians, up to contemporary social democracy and neoliberalism as kind of rival varieties of a market system. And what I show is that these arguments have— they owe their origins to the Puritans. You can see some of these contests about, say, how workers should be treated and what they're entitled to all the way back to the 17th century. My study goes through the classical political economists, Adam Smith, Ricardo, John Stuart Mill, his father James, Malthus, Bentham, Burke, all these classical economists. And what I find is they had a much richer normative conceptual framework for evaluating economic arrangements. Uh, and Smith, I think, is a really pivotal figure in setting the terms of understanding both the value of markets, uh, and of property arrangements. Uh, and what he focuses on, which I think extends beyond what most but not all contemporary economists focus on are two big things, which are themes that were carried through the entire tradition of classical economics. One is that the most important products of our economic system is ourselves. What do we make of ourselves in organizing production, exchange, and distribution in one way or another? He was especially concerned by the fact that the Industrial Revolution was creating a micro division of labor which on the one hand promised enormous productivity gains, but on the other hand radically deskilled workers and consigned them to tedious drudgery, numbing their minds and suppressing the development of a variety of virtues and dispositions that they could bring to bear on their wider society. Things like patriotism, civic consciousness, and even just the energy and time to be able to dedicate oneself to anything beyond just scraping by a living. The second normative concern that the continuous throughout the classical economists is how do economic arrangements affect the way we relate to each other? So do economic arrangements foster a kind of predatory zero-sum kind of interaction where one person gains at another person's expense, or do they promote broader visions of cooperation? Do economic arrangements promote social hierarchy or a more egalitarian way of people relating to each other as equals on terms of mutual respect? Do economic arrangements foster trust or distrust? Among people. These are fundamentally concerns about the social relationships that we have with each other. Are they antagonistic or solidaristic, right? And those themes run through the entire history of classical economics, and I think we really have to be thinking about them today. There's a lot of distrust these days, and it's not accidental. When you get a surprise emergency room bill for $30,000 for something that you think really should have cost a lot less than that, right? Somebody took advantage of you because you had no idea. You even went to the hospital, which is within network in your insurance plan. You expected to be covered, but it turns out that the ER has been outsourced to some private equity firm, which is staffing it, right? And you're getting scammed. Or social media, it prioritizes, it makes viral the posts that encourage outrage, distrust, and political polarization. That's the stuff that gets everybody's attention and gets people angry at each other. But does that make for a better society when people are profiting off of that? Maybe we should be asking hard questions about the business models of contemporary— some of the most successful firms out there because of how they turn us against each other and how they also reduce their workers to tedious drudgery in our contemporary micro division of labor where people are hired, you know, by the task. Instead of for real jobs that have promotion ladders.
Debra Satz: Sorry, great start. And Sam.
Samuel Bowles: Thanks a lot, Elizabeth. I've already got a bumper sticker from this conversation. The economy produces people. How about that? It even fits on a bumper. You don't have to have a Hummer for that one. Or how about firms are private governments? I already knew that one from the title of your book. There's a lot to say in response to your wonderful introduction, Debra. I'd like to talk about economics, and I think that economics has already accomplished in its contemporary research a great deal of what has to happen for economics to be able to address the kinds of challenges that you, Debra, and Elizabeth have already outlined. But let's start with fundamentals. An economic paradigm, that is a way of understanding the economy, has to take a position about at least 3 things. The first is what are people like? And the second is how do we interact with each other in producing our livelihoods? And the third is how do we interact with nature in producing our livelihoods? There are many other ways you could organize this, but at least those 3 things— what are we like and how do we interact with each other and with nature in producing our livelihoods. We've got to say something about that. Now, I think the problem with the neoliberal paradigm that you described, Debra, is that it is based on an economic model that is fundamentally inadequate with respect to each of those three things. Start with what are we like? The model is that— is modeled by Homo economicus, or economic man, the unremittingly amoral self-interested individual. Nobody thinks that's the case. Nobody thinks people are like that. This is said to be a harmless assumption, a harmless simplification. But think about it, Homo economicus is a sociopath. No one would want to do business with a person like that. No one could. And modeling people that way radically limits the opportunities that we may have for thinking about living under different rules of the game in which such things as trust and generosity and a commitment to civic virtues would be part of what we're like and not all of what we're like. Self-interest is surely a very important motive. Now, if we turn to think about how we interact with each other, COVID and climate change together must have convinced people that what we call in economics environmental spillovers or external effects, the effects of our actions on other people that are not taken account of in the contracts in which we're engaged, those so-called external effects are typically introduced in Chapter 34 of an introductory textbook. They're regarded as an imperfection of the model. Now, if you think about it, An epidemic, as we now all know, is all about external effects. It's about spreading things from one person to another, in which we didn't contract for these effects. And the same is true of climate change. I think this is a big fact in the world today, that we're addressing the fact that we interact with each other in ways that goes way beyond buying and selling. Thank you for stressing that, Elizabeth. When, for example, the world globalized in the 19th century, centuries, in the 20th century. The leading edge of that globalization was trading goods and services, and most of those goods were subjected to contracts, that is, we were buying and selling stuff which fit in more or less to the standard economic model. The effects that are now circling the world, the sinews that hold us together, are now not only affection and regard for each other, but also the spreading of diseases and the spreading of climate effects. So we have to rethink how we interact with each with each other and with nature in that respect. Now, a very important part of that comes down to the question of power. That's a big fact in the world, everyone knows it. Economics has taken account of part of that, that is, for example, market power, but the reality of people working for someone else, being required, for example, during the pandemic, to continue working, exposing themselves and their families to mortal dangers, just undermines the fact that this is a kind of unaccountable power that we ordinarily would think ought to be subject to either some kind of liberal rights to prevent this from occurring, or some kind of accountability. So when I think of what we're confronting, the crises we're confronting today, I think that economics has a lot to offer. I think economics is often criticized because the textbook version of economics, or the TV version of economics is what's being considered, and that is certainly worth a lot of criticism. But what economists are now doing is addressing many of the issues that I have just talked about, and I think there's a huge capacity for us to build on that. But I think we have to go beyond simple slogans like shared affluence. I know it's an attractive idea, both affluence and shared, but I would like to return to what you said, Elizabeth, and also Debra. Let's think about dignity. What about equal dignity? Why isn't that a good slogan? I'll put that on my small car too, equal dignity. Thanks.
Debra Satz: Thank you. Thank you. Angus.
Angus Deaton: This is terrific. Thank you very much for inviting me. I am an economist. I want to make it clear that I'm not here to defend neoclassical economics, or let alone neoliberalism, a word which, you know, most economists would not have been familiar with until the last year or two. I don't think the economists think of themselves as neoliberals in any sense. I want to take a slightly different perspective as a sort of practical Empiricist, which is, I think, especially in the United States, but with echoes elsewhere, we really are in a terrible mess, a much bigger mess than we've been in for a really long time. And, you know, you might have reasonably made a defense that capitalism was working for most people in spite of all of its flaws, but in the last 20 years even 30 years, that case has become harder and harder to make. And I'm thinking in particularly, obviously, the work that Anne Case and I have been doing on just this enormous explosion of death among people who don't have a 4-year college degree, which, as I'm sure you know, is two-thirds of the population. So it's not just a small minority that's sort of being left behind somehow, but the actual vast majority of the economy, of the population, of adults at least. So just for those of you who— the few who haven't read our work— and this is what we called an epidemic of deaths of despair, with rapid rises in suicides and drug overdoses. And alcoholic liver disease that's been picking up since the mid-'90s and has been getting steadily worse. It's almost entirely confined— if you have a BA degree, if you have a 4-year BA degree, you're exempt from this. And it's not just deaths, but the conditions of life, so that communities are disintegrating, people are suffering enormous morbidity as well as mortality. People don't go to church anymore. Divorce rates have climbed steadily when they have not been climbing for people with a 4-year degree. So in some sense, not just the economy, but society is not working for the vast majority of Americans. So one of the side questions, which I don't think Debra quite said, but I've been thinking about quite a lot, and I don't quite know the answer to yet, is, you know, are economists or economics responsible for any of this? And if so, in what way and how much? And, you know, I'm not sure I know the answer to that question yet. I mean, I think some economists certainly said some very unhelpful things which politicians picked up and ran with in very negative ways. So that case is fairly easy to make. Whether there's some deep flaw in the way that economists go about their business is a harder question, and I'm not sure I know the answer to that. One thing I should say, again, more for the audience than the panel, is just that economists are very pluralistic in their use of models, for instance. I think the best description of this is in a book by Danny Rodrik, who talks about and defends and argues very much for this practice. That, you know, here's a model, I think you might call it neoclassical economics. It has its place and you can use it sometime, but here's another model and here's some insights from Marx or here's some insights from Adam Smith. And all of those can be used in different contexts and used to really good effect. So we're certainly not a monolithic thing with a single model. All right, come back to the mess we're in. I think one of the things that really is important is while a lot of these issues are worldwide, it's clear that what is— what capitalism is doing in America is much worse than what it's doing elsewhere. You just don't— these deaths, you see echoes of them elsewhere, but nothing like the same extent. And in fact, the situation we have now when people without a 4-year BA, their life expectancy is going down whereas life expectancy of people with a BA is going up, which was the case until the pandemic. And the sort of— there's similar things in the pandemic, but let me just— there's this division, one going one way and one going the other way. The only place where that's documented before is in the collapse of the Soviet Union and the satellite countries of the Soviet Union. So there's a real sense in, in that a society, you're getting a social collapse of some sort with some people being treated much, much worse than others. Now, I think that part of what we've got here is that democracy has sold out to capitalism in America in a way that's less true elsewhere. The effects of money on politics and politicians is much, much more extreme here. Elizabeth talked about the healthcare system and, you know, the surprise medical bills. Are, you know, this ridiculous thing of letting private equity run hospitals, um, and run hospitals just to take unconscious people and take money away from them. That does not happen anywhere else in Europe, nor in Europe are pharma companies allowed to write their own ticket and addict people in very large numbers for profit. Those drugs are much better controlled in the rest of Europe. Now, in the end, I mean, you know, if you identify a single cause of this, it's campaign finance. But it's also the lack of campaign finance has meant, you know, and allowing equating money with free speech has meant that we've sold democracy to people with money. And that's a really bad thing. And, you know, money It speaks everywhere, but it doesn't speak elsewhere in the way as loudly and effectively and as catastrophically as it does in the United States today. I think for one of the things, just to come back to The Economist, one of the things we've been bad at is equating well-being with money. And, you know, because we can analyze money and because analyzing markets is helpful for analyzing money. You can see why we've gone down that route. But I do think the recent claims that are being made about efficiency is an expense, that's what we focus on instead of focusing on what economists can do. And there's this quote that Amartya Sen is very fond of quoting, which was that Pigou, his argument was the reason you should become an economist is so that you can basically help the poor and help people whose lives are not going very well. And that was replaced in economics by Robbins's dictum that economics was about the allocation of scarce resources. And, you know, switching entirely from Pigou to Robbins was a terrible mistake. And it didn't happen in Britain to the same extent, you know, Marshall is not exactly the defender of Robbins, but I do think with our focus on money, we'd be much less attentive to other social scientists, to what sociologists are saying about marriage patterns. You know, all of that sort of stuff that I began with is much, much better documented in the sociological and political science literature than it is in economics. Thank you.
Debra Satz: Thank you. Amy.
Amy Kapczynski: So I'll begin by picking up on something that Elizabeth said, which is that it's really important to understand that the prevailing paradigm, the sort of neoliberal paradigm that appears to be breaking up, really never was a free market paradigm or a paradigm of markets over government, but in fact relies fundamentally on the power of government to construct markets. Right. And so as a law professor, this is something particularly salient to me and to the folks in the sort of law and political economy school in which I work. And part of what, of course, we think about is how law, the law of property, the law of contract, the law of antitrust, but also other forms of law like constitutional law, how in fact they help construct the economy. And so it was very compatible with some of what Elizabeth is talking about, about the way, for example, that markets have been constructed to allocate power to firms and a kind of preference for the vertical exertion of power over employees, for example, and also the production process, that is very much a product of law. And for example, Sanjay Kapur's work here about antitrust is, I think, a quite helpful guide to some of how law has been reorganized over the last several decades with this sort of neoliberal spirit in mind, with the idea of sort of maximizing things along a willingness to pay principle and along all the assumptions that Sam and Angus and all of us have been talking about. Debra, you laid out helpfully that competition is fundamentally kind of inherent and sort of an optimism about transactions and things, all of this that was characteristic of neoliberalism, law changed in various ways to give more power to firms and to help ensure that capital could be coded. That's Katerina Pistor's sort of idea and book. And so what law has done in this period to express this neoliberal spirit has been to, in fact, and I think this is really the essence of neoliberalism, to allocate power to those with capital to allow the sort of coding of capital to sort of follow a willingness to pay principles. So those with more ability to pay benefit more than others. And in ways that fundamentally are in tension with any kind of democratic spirit about— that would express fundamentally what I believe democracy expresses, which is a principle of the equality of all. So part of that, I think what you asked, Debra, about what is it that economists and political economists should be attuned to, what facts in the world, I think is the rising inequality, the rising concentration, and fundamentally the kind of encasement of markets from democratic control. Those are, I think, very dramatic facts, as are facts that are talked about less in economics and political economy about the racialization of inequality and the forms of kind of carceral control, again, very extreme in the US, but present elsewhere to some degree as well. The use of the carceral state to manage fundamentally social problems and as an expression of some of the way that neoliberalism has accepted austerity politics to sort of the kind of governance that austerity politics can breed. I very much second the kind of emphasis on questions of health. That's the focus of my own work. And I think one another sort of fact that we should be aware of and thinking about is what I and others would call the crisis of care, not just in the United States, but in fact broadly in Europe and elsewhere around the world. A lot of my work has been in fact transnational and about the developing world. We have a crisis of care, and we know from the work of people very much in a kind of heterodox or a sort of more critical neoclassical tradition that care is not well compensated in markets, and that that is part of what we— part of the reason that we see, for example, the very poor wages in care markets. Of course, there's also tremendous amounts of uncompensated care and health inequity, which while extreme in the United States, and some of the statistics that Angus helped point to are very much distinctive in the United States, the fundamental problems of health inequity are worldwide, in fact, and also very fundamentally part of a European story too. So probably those are the— along with the climate crisis, right, I think are some of the very salient facts that we ought to be paying attention to. And broadly, I think what we we need to then be thinking about is what kind of economics and study of political economy can be built to in fact better provide for care for the planet, for one another, and in fact the kind of shared material freedom that democracy is in fact predicated upon. I'm sure we'll have more time to talk about this, but broadly I think one implication is of course more interdisciplinarity in this field because fundamentally many of the questions that emerge are questions then about how we shape markets best. So those are fundamentally questions about the function of institutions, how we can organize government well to, for example, as we know it will have to, to lead in the fight against climate change. How do we make government effective? How do we make it fair? How do we make these decisions in a way that we believe is sufficiently democratic and attuned to deep social inequities that in fact characterize many forms of government power and make many people suspicious of government power? So I think those are some of the critical questions that we'll have to be thinking about as we sort of overthrow a set of assumptions about government and markets from the neoliberal era that I think really don't serve us, and particularly in an economy that is organized as ours is today. And in a period where I think, and we could debate this, but where I think there's more and more interest in the idea of a certain set of social guarantees even in the United States, right? And the need for more muscular social policy to protect workers, to provide healthcare, to provide for our environment, and quite simply, sort of a form of planetary survival that we can— we would like to call our own.
Debra Satz: Great. All right. I have— there's some audience questions, and I'm sure there are questions you want to ask of each other. I just wanted to ask, and maybe this is partly to Sam, who I know has a lot of views about it, but it's also to everybody. If you were teaching intro econ, you know, how would you want to set it up? What would you want to do differently than the way that, you know, micro and macro have been taught? Or would you want to just teach the same way?
Samuel Bowles: Well, I— yes, I have thought about that. And thank you for mentioning the CORE project, which has a new intro course. which does outline the way that a group of us around the world think that intro ought to be taught. Well, I think the main guiding point should be, suppose you looked at the world and said, what are the big problems out there? And, you know, I would say, well, one is economic injustice and one is climate change. One is making the best use of the knowledge we're generating. You could get your own list, whatever it is, and then say, what would economics look like? What would it look like if those were the problems we were trying to answer? And if for the last half century, people have been trying to figure out ways of addressing those. Now, I can't say what that would be like, but I can be pretty sure that it wouldn't start from the assumption that people are self-interested and amoral. It would take some empirical guidance on that. It wouldn't start from viewing people as interacting with nature as the main— that is, just interacting with something inert. We interact with each other strategically. So I think game theory should be part of what every student learns right at the beginning to see how we interact in those ways. That allows us to get power, including bargaining power, on the table to begin with. I would take as obvious that when we act, we have effects on others that they didn't ask for and are not compensated for, as is the case in the cases that I mentioned. And finally, I would— oh, you're wondering, can this be taught to first-year students? Yes, we're doing it around the world to hundreds of thousands of students every year. So yes, it can be done. It's very popular with students and with particularly the younger professors. But the fifth thing I would add, if I can be a little bit technical or nerdy, is the following: for curious reasons, economists tend to ignore increasing returns. It's kind of a problem for us because if a firm is facing increasing returns or any other kind of positive feedbacks, it means that the cost of producing a larger amount will be less than the cost of producing a smaller amount. And so the firm will grow forever. And that makes it, of course, inconsistent with the idea that there is a determinant firm size, and it also makes it inconsistent with the survival of competition. Now, interestingly, that model has to be wrong because while we're surely seeing in the US a decline in competition, the capitalist economy has over a very long period of time produced a fairly high level of competition in most markets, assisted probably by globalization. So, the model is fundamentally wrong, but it's also dangerous. Now, Alfred Marshall, who is one of the founders of what's called neoclassical economics, on the title page of his great book has a Latin expression— I had to look it up— "Natura non facit saltum." What? "Nature doesn't take leaps." Why did he put that on the title? he put that on the title because he said economics is interested in studying small changes in what's called in mathematics a smooth surface, that is, we're just moving around a little bit to find the peak of some surface. That's what we do, and there's only one peak, we assume that, we've never been able to show it. If you have positive feedbacks, if you have economies of scale, it's not only that the theory of competition has to be rewritten, but we also have to worry not about small changes on some smooth surface, but cataclysmic cataclysmic changes when we pass a tipping point, for example, the melting of the polar sea ice, for example, or the deforestation of the Amazon. So getting a dynamic process into the minds of students at the beginning, uh, that we can have both the small changes we may want to optimize over some, some surface, but also we run the risk of really cataclysmic, very sharp dynamics that I think is in our future if we don't address climate change and economic injustice. Oh, wait, wait, wait. I got another bumper sticker, Angus. Democracy has sold out to capitalism, parenthesis, in America. You can only have that on an American car. I thought I really liked what you said. It really is to some extent an American phenomenon that you're talking about, but democracy has sold out to capitalism, or even better, you said we've sold democracy to people with money. I'll take either one of those. My bumper is getting full.
Debra Satz: Yeah, Angus.
Angus Deaton: I have a quick word on— just a very quick word on teaching. I mean, I think economics is changing internally quite fast. Sam's project is an important part of that and to be much congratulated. And even in America, young professors are picking up those texts and going in a different direction. But I, I was a little horrified by the following fact that one of my colleagues showed me the other day, which is that starting from about zero or very close to zero, 30% of members of Congress today, the House and the Senate, have Ivy League degrees. I mean, it's just an extraordinary fact. Didn't used to be true. And the Dems are much more like— it's mostly Dems. Republicans have gone the other direction. So I think it's probably 30% of Dems in both the House and Congress. It's also true in Britain in that the Labour Party members of Parliament are now much better educated than the Conservative members of Parliament, which did not use 3-3-12. So just think of Harvard for the moment. And at Harvard, there are 700 students every year taking EC-10, right? And that's been true for many years. And if you look at who's been teaching that, Marty Feldstein taught it for a very, very long time, followed by Greg Mankiw, who taught it for a very, very long time. And, you know, those guys will teach about markets and they will teach a lot about Milton Friedman. And even Harvard has changed that. So now EC10 is no longer taught by Greg Mankiw. but it's taught by David Laibson, who's one of the leaders in behavioral economics, and by Jason Furman, who was chairman of Obama's Council of Economic Advisers. So that, you know, what these students are being taught is suddenly very, very, very different. And I think there is a lot of internal change going on.
Amy Kapczynski: And, you know, we're hungry for insights from elsewhere Yeah, Amy, um, you know, just to add to that point, I bet quite a lot of those Ivy League degrees are from law schools. And, um, because law schools— and this is again a fairly American phenomenon— law schools are, are, um, you know, often a stepping stone to public office. And so part of what's going on in law schools at the same time as the— what you're describing going on in economics departments is the importation of a highly sort of schematized version of all of this into law schools that then becomes part of what students are taught in the first year of law school. And sort of one of the kind of common themes of the first year of law school is, in fact, to turn students away from asking questions about whether or not the way that tort law is structured or contract law is structured, in fact, generates inequality or is an expression of political power, and in fact towards a set of questions about what it would be, what would be efficient for the law to do. And then efficiency defined as a form of this kind of willingness to pay principle. And that operates not only in these kind of canonical first-year courses, but also in courses like administrative law with the rise of cost-benefit analysis. And so the bringing of these ideas into law was very, is very much part of the story about how they get into a much too small group of kind of governing elites and sort of trying to undo and show the moral problems and also the institutional flaws of the sort of designs of some of those ideas as they were brought into. And you even see it in constitutional law with the kind of rise of solicitousness towards corporate speech, for example, right? So it actually affects all parts of the law school curriculum. And I think that— and so shifts in how legal academics are thinking about these things is also going to be part of the story of change.
Debra Satz: Good. Elizabeth, did you have a—
Elizabeth Anderson: Yeah, I won't speak about how to teach economics, but I teach an adjacent course, Introduction to Political Economy, which is our gateway course to the Philosophy, Politics, and Economics major. And I frame that course as a study of institutional design and choice for the solution of various collective action problems. And so we look at, like, markets are one way to do things, private property. These things solve a lot of problems, but there we have a lot of tools in the toolbox. Social norms help us solve some problems. In other cases, we have to resort to law. And I end the course with one of my favorite— it's a classic work in political economy by the economist Elinor Ostrom on common pool resource management. And what I love about her book, it's empirically grounded. She's looking at common pool resources, which are resources that a whole group has to use together, like groundwater management, a really vital question for the American West and other places, um, where you can only take out in total and a sustainable level, a certain amount per year, but then you also have to allocate to individuals who have a right to withdraw how many units each gets. And what she shows is sustainable systems of governing these commons actually require a lot of creativity in the design of institutions, and simple answers like, oh, let's just privatize or let the central states just design everything. Those fail. And you have to bring in various forms of collective democracy and social norms, and a lot of complicated things have to happen in order to design a successful common pool resource management system. So it helps people see the nuances in this. And also to keep open the variety of institutional designs that are open to us that we could use as tools to solve these problems.
Debra Satz: Yeah, I'm going to turn soon to audience questions, but Sam?
Samuel Bowles: Yeah, thanks for that, Elizabeth. Thinking about what's lacking in economics, I think your course is offering a lot that which we should have more of. And it's not just interdisciplinarity, it's that we need a little more space to think about our institutions and our concepts. And if you listen to debates about the market and the state, it's as if there's a tug of war along a particular line. And over here on the left, you have— that's the state. And over here on the right, you that's the market. And over here, the state runs on the basis of norms of preferences of obedience or authority and implementation by elections and bureaucracy. Over here, you have self-interest. And these two, greed and fear, if you want to put it in a vulgar way, are the kinds of motives that we're encompassing. But if you think about either Elinor Ostrom's work about communities or your own work about the firm as a locus of private power, private government, there's no place for them here because they're neither market nor state, they're framed by states. So rather than this line and with this tug of war of policy across the line, I think we should be thinking about a more three-dimensional or with three vertices. Think about some other thing down here, which is called community or a civil society in which social norms are the thing that are motivating people's actions and the idea of disciplining each other through gossip or condemnation or praise and so on is part of what we do. I think that would add a lot. And the last thing about interdisciplinarity, I know economists are often accused of not being interdisciplinary enough and many economists said, "Why should we be?" interdisciplinary about the price of bread. Well, okay, maybe about the price of bread, but what about the price of labor? If you start to look at now the relationship between the employer and the employee, everyone who studies economics in grad school knows that that's a market, that's a relationship which is governed partly by a contract, that is, the pay is governed, but how hard the worker works is not in the contract. So that's a big piece that's left out. That's where power comes in. And it's also— where social norms come in, whether the worker, for example, has the thing you're working— you're studying, the work ethic and so on. So the fact that now economic theory provides this big space for social norms and power as not as something about some distant subject which economists can claim they're not interested in, but about something they have no choice but to be interested in, namely how hard people work, the productivity of labor and the pay of labor. Those are economic questions and they require the sociology of social norms, the political science and political theory of power and so on. So it's no longer an option to be hostile and parochial towards the other disciplines. Being a good economist means taking on board some of what we might learn from the other disciplines.
Debra Satz: Thanks. I'm going to turn to some of the audience questions. I'll note that in the chat box there's a link to the core and also a link to a group of law faculty who are challenging neoliberal ideas and their role in the law. So here's a question. I mean, we've been talking about, you know, how to set up teaching and the kinds of questions. So something happened And Liz, you had mentioned the, you know, if you go back to the Smith, Ricardo, John Stuart Mill, you know, tradition, these economists didn't think of themselves as studying a closed-off realm, right? They saw themselves as engaging with issues about power, about social norms. So what happened that economics changed from the classical period to a, you know, more streamlined version, more narrow version?
Elizabeth Anderson: I actually explained the disciplinary divisions in contemporary academia mostly in terms of the internal politics of TERF warfare. I don't think there's actually any intrinsic divisions. I mean, all the disciplines deep down need to draw on each other. Now, of course, there are uses to specialization, right? People get tooled up in particular methods And so there is some use to division of labor, but it's not obvious to me that it should be— that can justify sharp departmental divisions within the academy, which kind of then creates certain kinds of group identities around disciplines. I think there's something artificial about that. So the division of labor doesn't necessarily have to dictate— the division of intellectual or academic or scholarly labor doesn't have to correspond to departmental divisions.
Debra Satz: So maybe if I can just push on, take the audience question in a slightly different direction. I have always been struck by the fact in most economics departments, although there's a very strong economic history, you know, economic historians studying like trading relations in the medieval world and drawing insights from that, there's not very much teaching of the history of the discipline, which is different than some other disciplines. It's more like the natural sciences where people tend not to read Newton. And I'm just wondering, you know, if that's helpful or it would be more helpful to also hearken back and look at some of the other writing from really the kind of early thinkers of capitalism and the rise of markets and the rise of a way of organizing society. That had a broader perspective.
Angus Deaton: It has pretty much died out. I mean, it used to be there. Economic history itself is a little odd because there aren't very many of them, and so they like to cluster in a few departments. And so lots of departments don't have an economic historian, which I think is sad. It's also true that what happened was there was enormous contraction of the subject matter of economics in the early '80s when everybody was working on the same sort of set of topics, which were sort of econometrics, macro and micro, and all in a very standardized sort of way. And it was like we were all working on different parts of what was recognizably the same elephant. I think that has disintegrated. For what it's worth, I mean, economics is not that closed. So, you know, we give people tenure in top universities at the age of 25 or 26. I'm not sure why the disciplinary boundaries— I think economists get paid so much that they think other social sciences are not worth anything, and that may be sort of part of it. And also remember, people are very insecure. I mean, economists are not socially very graceful. They don't really get on very well with other people, and so they're always a little scared that someone might come up with something that they don't know anything about. And so we're very defensive in our professional societies of pushing off stuff that we regard as deviant, and it's not allowed. But that works against, you know, the openness. So it's certainly true that, you know, there have been huge changes in economics, so you know, Sam has talked about his part of it, but, you know, political economy is now a sort of regular part of what young people do. It is a major theme in the field. So are behavioral economics. That may have gone further than it should have done and is maybe on the retreat. But these waves— I mean, I'm old, but in the last 30 years, I've seen major changes in all sorts of directions. So it's not a stable monolithic thing that's very well defended.
Debra Satz: So I've got Sam and Amy, but let me just— there's an audience— was an audience question asking for a definition of political economy as a, you know, so what people mean when they say, you know, we teach political economy or we're open to political economy as opposed to we teach economics. I don't know if anybody wants to jump in.
Angus Deaton: I think it's related to what Elizabeth was saying in the old days, philosophy, economics were not separate either. And, you know, as it narrowed, it became sort of economics. So political economy in its modern sense, in the sense I was using it, is that people think very hard care about the political ramifications of the models they're writing down and take politics and economics tied up together. And they've tried to get away from this economist as engineers, engineering the ideal solution to building a bridge, which is this, how you ought to run an economy. And only if— only these stupid politicians would get out of the way, then we could maximize the national interest. And, you know, we sort of stopped thinking Sam and then Amy.
Samuel Bowles: Yeah, I think what Angus said is right. Remember, the classical economists were social engineers in that sense. That is, they defined the problem in the following way: let's think about a set of good outcomes that would be a decent society and see if we can reverse engineer the rules of the game which would allow that society to prosper and reproduce and so on. That's not the way we mostly think in economics. In economics, we mostly think we've got a bunch of individuals, they have a certain bunch of preferences, we have some technologies, we'll let them interact in some way in a market and then see what the outcome will be. Notice that's the opposite direction. You're going from a set of givens to a set of outcomes. The classical writers were trying to think about the rules of the game. Now, there is a branch in economics, very few people know about it or read it's called mechanism design. And that is exactly what the classical writers were doing, is trying to figure out new rules, new property rights, new ways of organizing ourselves that would result in good outcomes. I think also, tell me if you agree, Angus, I think there's now a broader meaning of political economy. For example, I think political economy, which is referred to in some of the CASBS literature, is an attempt to bring back the older political economy, a broader framework including ethical and moral concerns as well. And that's quite different from this very exciting branch of what is also called political economy that you mentioned, which is trying to figure out how the government will respond as a result of my endogenously saying, "Well, what will the voters do and how will that affect it?" So I think there may be three kind of uses of the term, but why it became so narrow, to come back to your question, Debra, I think the way the theory developed, it got to be that buying a loaf of bread was really what it was about. And it wasn't about hiring labor, it wasn't even about borrowing money. It was essentially economics at mid-century, the last century, came to be about rather simple mathematically renderable problems in which interdisciplinarity really wasn't required very much. Now, why did the— by the way, I think one of the reasons for that was the mathematization of economic knowledge. In the '60s and '70s, given the limited mathematics that were commonly in use, we didn't have a lot to go on. I was part of that process. I was said to be the first person ever to use problem sets in teaching PhD courses in microeconomics. I think I may have been. So it was essentially converting teaching graduate-level micro to a bunch of applied math problems. And that inevitably narrows. About the focus of what we're doing, because as I was saying, we weren't even dealing with differential equations. We were just doing calculus and simple optimization problems. So I think that was part of it, but there is also a sense— and I think, I mean, I guess part of the insecurity that you mentioned, Angus, is also a kind of arrogance. There is a sense that what we know now in economics is the truth and the other stuff was mistaken. Taken. And I think that confidence has now been shaken because I think we do recognize that the tools we have are probably not adequate to some of the tasks. But I think not studying the greats in the past is in part that we don't have anything to learn from them. And I have to say, if you haven't read Adam Smith or Karl Marx, you've really missed out on a lot. —so don't think that you know everything until you've read at least those two people. And John Stuart Mill also, who, by the way, is a big culprit here. He was the one who came up with the best definition of economic man that anyone ever did. And he was a wonderful philosopher. Isn't it striking that it was Mill, John Stuart Mill, who really gave us a definition of economic man? Great.
Debra Satz: Amy.
Amy Kapczynski: So I think one way to think about what happened in economics and the elevation of a certain kind kind of mathematicized and rather imperial kind of conversion of economics, it's worth sort of situating it in the period, right? And the kind of what's happening broadly, what it is that that kind of claim, that kind of organization of economics could do. And I think, you know, thinking about the '60s as a period of enormous racialized conflict and social conflict, I think, you know, there's a sort of desire for forms of discourse that can resolve things scientifically, technically, that would, in a sense, even perhaps because of some of the shared prosperity of the era that, you know, the '50s coming out of the World Wars, that this could be a technical discipline, right? And that we could sort of leave it to economists. And of course, the sort of increasingly, you know, the models that Sam was talking about present the field as quite technical and susceptible to, of course, different, you know, debates, but scientific determination. And that, I think, is actually, it's important to not see that as separate. I mean, and then it becomes brought into law schools as a means of political governance, in fact. And it allows elites to make claims that they're governing things neutrally. So it's, in fact, quite the opposite of the early meanings of political economy, where there's in fact economics is a place for discussion over the normative implications of our kind of systems of production. But in fact, in attempt to sort of describe them as, you know, describe as scientific, true or false, and neutral way that can generate sort of governance over a particular sphere that will benefit everybody presumptively. And of course, part of what has to happen then is the taking of a very particular set of, you know, moral claims, you know, fundamentally the ones that are brought into law and economics and the willingness to pay principal as if that is an unquestionable moral good. And it's obviously not. But that is ceded to actually by all parties, I think, in governance really. And this is something that the Democratic Party has as much to do with as the Republican Party because of a sort of anti-politics that's sort of running through this period and desire expert governance. And now we're, we're seeing, I think, a sort of a turn away from that. And that's a virtue, I guess I would say, with respect to a definition of political economy. I think one, you know, a 5-word definition of the economy is how we meet our needs. I think political economy is the study of how politics constructs an economy through which we can meet our needs and the interplay between our political system and our economic system. I would say I would want to define it that broadly, how we meet our needs so that we don't recreate the sort of false, I think, dichotomy between production and reproduction, nature and man, that obviously we need to call into question to really fundamentally address these issues of health care, social inequity, democracy, climate, and so forth. Great.
Debra Satz: Let me ask one other change I see between the classical period and the contemporary period, which is the classical political economists were really concerned about social class and the division of like our cooperative efforts among landlords, owners, and workers. And the class perspective seems less present in contemporary economics, even with the changes, you know, that Sam and Angus have been describing. There isn't as much focus on— maybe that's starting to change in labor economics, but it's really been focused on individual decision-making and less on things like collective action and collective solidarities and shared experiences. Angus, I see you have a hand on this.
Angus Deaton: Yeah, I just wanted to respond a little bit to that. It's not quite the same thing. But in my work and the work I've done with Anne, I think of education has got a lot to do with class. And so that distinction is sort of coming back. And I think even— we get a lot of flak from this, but I think it's really out there— which is that if you look at life expectancy at age 25, adult life expectancy, class has largely replaced race in terms of these inequalities. And there's recent work suggesting even in the incarceration— state, or whatever you call it, that there are almost as many whites without BAs as there are Blacks anymore. So that distinction even in the prison system is becoming really, really very important. And it's sort of like we're turning ordinary people, people without a BA, into the— I mean, you don't necessarily want to think of it as entirely a good thing for Blacks. It's just that we're taking less educated people and turning them into our underclass. And I think that is a very important distinction. Can I just put one other thing in which I think is important in terms of thinking about economics? You know, the classical economics is certainly different from modern economics. That's one way of splitting it. And that I think is certainly very important. But if you think of modern economics, a lot of what we have to complain about and has been so pernicious has come out of Chicago. And this is, you know, a particular line of thought that has come from Milton Friedman and George Stigler and the externalities guy, Coase, and Posner, you know. So this is not something that a lot of us ever bought into, even if we were pretty much on board with, you know, a lot of people. I was having lunch with my friend and colleague Alan Blinder the other day. And Alan has always thought of markets as being very good, but they've got to be really regulated by the state. Now, Chicago came along and said, A, inequality doesn't matter. The attempts to regulate firms are futile at best and harmful at worst. That money and efficiency, the idea of efficiency is essentially identical to the idea of justice. I mean, you know, that's what Posner was sort of arguing. So this is not what most economists thought. But, you know, those ideas, which are partly libertarian in a quite extreme form, but partly incredibly friendly to large organizations, to firms, were picked up by Republican politicians as a sort of way of supporting the people people who were funding them. Okay, now that's not as, you know, that's not really a story of mainstream economics. It's a story of economics being hijacked by this bunch of thinkers who were real thinkers. I mean, this stuff is really important and it was new, but its long-term consequences have just been catastrophic. So let me stop ranting there. Thank you.
Elizabeth Anderson: It wasn't only Republicans, by the way. It was kind of a bipartisan thing. But I do I think my colleague Elizabeth Pott-Berman has written a widely criticized book about economic theory. But in fact, what she says, I think it's really important, is that a lot of sort of pop economics or sort of Econ 101 stuff, it's not very sophisticated, got picked up by public policy wonks in both political parties and they ran with it, right? Understanding the complexities or getting any significant training in the broader range of normative concerns that, you know, we should be worried about.
Angus Deaton: I agree with that, but you want to be a bit careful. A lot of the people she's writing about, they believed in markets. I think it's a great, great book, but they also believed in redistribution and so on. So the Chicago view, which was redistribution was a complete waste of time, really bad, that the government couldn't do anything about antitrust because they were captured, the regulators would be captured, or because it didn't need it because the market would take care of it in the end. And what Amy said, which I think is incredibly important, was this percolation of these ideas funded by right-wing right-wing foundations into law schools. And it's the law schools that's training the politicians. I think this has been this sort of disaster, but you can't blame mainstream economics for that because that's not what we thought.
Amy Kapczynski: Although one thing to just jump in there, I think that the forms of redistribution that were sanctioned by mainstream economics, which are largely tax and transfer, I think were not sophisticated about how the political economy functions. And I think that's dead right. And I think part of what that book, which I think is helping us think about sort of how those ideas get into the mainstream. And I think now one of the real struggles ahead of us is in fact how to think about redistribution, redistribution, the role of things like labor unions and other institutional forms that were disparaged by many of the even sort of mainstream because of a sort of efficiency efficiency-driven, perfectionist kind of conception about what redistribution had to look like. And that was deeply embraced by Democrats and Republicans alike, and I think deeply, deeply problematic.
Elizabeth Anderson: Yeah, I agree with that. But I also want to point out that this is a place where I think the classical economists are really right. And that is they were much more focused on what we now call pre-distribution. That is, you don't want to have a system where the property arrangements and the way you govern firms are set up to enable one class of people to, like, extract wealth from everybody else and then think, oh, now we got to redistribute. No, you don't want to even allow those kinds of business models to get going in the first place. So instead of— and then the idea was was that if you set up the pre-distributive institutions, and what they were mainly thinking about were property arrangements, inheritance, and this kind of stuff, if you set it up right, then markets can actually do the work for you, or a lot of the work at any rate. And that opens up a lot more possibilities than if you think, no, well, you know, will let the lobbyists structure the property and contract relations the way they like, right, in the capital interests, and then after the fact will try to redistribute, which ends up being a huge uphill because once people get money in their pockets, they think it's theirs and they fight it to the hilt, right?
Debra Satz: Yeah, and there is an argument that the degree of inequality that we have in the United States and actually in some of the other developed countries is undermining democracy. It's just making all of our institutions not work as they were meant to in a democratic society, which is for everyone. They're really been captured by a minority of interests and warped. And it's unclear how you un-warp them. Conscious of the time, and I— so there is a big audience question, uh, which I'll, uh— and, and there, for those who have asked questions and we haven't gotten to them, uh, we'll all— all the panelists will see the questions, um, and, uh, be able to think about them, uh, and so, uh, I want to just assure you of that. But, um, one of the questions is, look, given all of what you're saying, um, how should public policy change? How should we try to get public policy to change? Should this be top-down, bottom-up? What, you know, what are the levers that academics have to influence and move policy? And the floor is open for that larger question.
Samuel Bowles: I want to start exactly where Angus was when in his opening statement that the problem of democracy and elections is really central. And I, that's what, that's where I would focus. The goodwill of enlightened elites is not going to save us if They can't get elected and can't get legislation passed. But in so doing, Angus, I'd like to come back because I really wouldn't— I don't think that— Sure, some Chicago economists have played a very, I think, unfortunate negative role in all of this. But I think if we're going to devise an economics that makes sense for the future, we have to rely also on some big economists whose names are associated with Chicago. I would particularly mention Coase, who had a very important theory of the exercise of power in the firm, and Hayek, who emphasized that information is local and scarce. And those two insights are really essential. I'd add another conservative, Schumpeter, who emphasized the fact that we should see capitalism from a dynamic standpoint. I think it's really important also not even to dismiss Buchanan and Becker because remember, they developed the idea of capture of the state. They saw the state as a special interest group. That's the problem we now have. We can't just assume that the state is going to be the instrument for carrying out good policies. So I wouldn't I don't disagree with anything you said about setting aside distribution in a very self-interested way, but I think the thinkers that I mentioned are worth taking very seriously. And in the case of Coase and Hayek, I would make them quite prominent in how we would recast our thinking about economics. But about what should be done in the world, I think democratizing democracy would be a good place to start.
Debra Satz: That's another bumper sticker, Sam, democratizing democracy. Amy.
Amy Kapczynski: Yes, I think, I mean, we've been having a largely American conversation and clearly part of that American conversation is about the failure of our majoritarian institutions to in fact be majoritarian. That's a critically important issue in the United States today. If we're talking about sort of more democratic control over the economy, more widely shared and to less concentrated control. I think though fundamentally we also need to take a page from abolitionist organizing. Here I'm thinking of prison abolitionists who talk about non-reformist reforms. It's in fact an idea that comes from Gors, an old Marxist, the idea that we need to think about reforms that build power so that you can in fact enact more informed reforms in the future. And Gors was particularly thinking about the power of the working class and abolitionists are of course thinking about the power into racially dispossessed groups. I think fundamentally, and this is not something academics are particularly good at, but I just helped run the Law and Organizing Summer Academy, which is working with organizers who are very good at thinking about this, is thinking about and prioritizing institutions that build power for ordinary people and trying to find reforms that not just do the right thing, and sort of move the needle in one direction, but that in fact increase the power of ordinary people to have a stake and have a say in the next political conversation. Those institutions are very weak in American life. The institutions that are strong are ones that in fact are deeply inegalitarian. The Ivy League institutions in which I sit are one of those, right? So we need to fundamentally think about that and prioritize forms of bottom-up organizing that can help bring accountability and power in fact that we need to change to bring the kinds of very significant changes we're talking about.
Debra Satz: Yeah, the uptick in the labor market in unionization is actually something that's encouraging as a counter to corporate power. Liz, I'm going to give you the last word and then I'll close out the session.
Elizabeth Anderson: Okay, well, I want to pick up on what Sam and Amy I have said, my own work on egalitarian political theory is really trying to articulate a theory that's drawn from, informed by, but hoping to inform democratic social movements. Democracy is at the core of everything, right? Because ordinary people right now are not being served by our current economic arrangements. But they— we need to help them organize, self-organize, you know, into movements, because that's the only way they can be heard. And academics need to learn from that and also inform ordinary people you know, given the knowledge that we have and the normative resources that can help articulate some of their aspirations. But it all comes back to democratic organizing. And most of the problems that we see today, they're institutional, but at roots it's due to a democratic deficit.
Debra Satz: All right. Well, first of all, thank you. This has been a fantastic discussion. We could go on for a very long time. So it's been really wonderful. I want to thank the panelists. I want to thank the audience. I'm sorry we didn't get to more of your questions. And a heads up, in your chat is information about the series, Social Science For a World in Crisis, how to look at previous episodes and look forward to new episodes. So thank you for joining us and have a good rest of your day.
Narrator: That was Elizabeth Anderson, Sam Bowles, Sir Angus Deaton, Amy Kapsinski, and Debra Sets discussing creating a new political economy framework. For more on the participants and their work, we've got links in the episode notes. If you enjoyed this episode and crave more intellectual conversations, be sure to follow us online or in your podcast app of choice. We've got a growing catalog of interviews and discussions exploring a wide spectrum of social science topics. And if you're interested in learning more about the people, projects, and rich history of the center, you can visit our website at casbs.stanford.edu. And you can also find us on Twitter. We're @CASBSStanford. Until next time, from everyone at CASBS and the human-centered team, thanks for listening.