What's the matter with capitalism?

 

 

This Picture shows my grandfather's goat and myself at a family Easter gathering over seventy years ago

 Today Calogero Mistretta would not have been given a visa to live in the United States  He was uneducated and had rudimentary skills  However he raised a family of seven, three boys and four girls  Two of the boys became dentist, two girls managed grocery stores  One even hit the lottery, she was always lucky  The family business supported them all while contributing to the community and feeding everyone

 

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 Meanwhile, the people that we did not listen to are angry and frustrated. I do not believe that they wish to dismantle capitalism, even though it is not treating them well. But they would surely prefer a democratic capitalism in which their views counted for something. They believe, possibly incorrectly, that they are being harmed by globalization-related job loss through by levels of legal and illegal immigration that are holding down their wages. My guess is that they are more correct than economists and policymakers have usually asserted and, even if they are wrong, it is not a requirement of democracy that voters’ beliefs are “evidence based,” to use a currently favorite term among the technocratic elite. Economists are doing democracy a disservice when they argue that
more globalization and more trade deals are in the national interest. They should know that the compensation that would be needed to make it so will not be forthcoming, and they should know that the (imaginary) monetary compensation that they have in mind would not actually make people whole. One of the most robust findings of the happiness literature is that job loss hurts people by multiples of the earnings that they lose.
Many working-class people have lost trust, not only in us, but in science and in expertise. Pandemics become harder to control, as does climate change. Voters have turned to the populists who promise to do better, and who might well do so for them, though at a terrible cost, the undermining of democracy, and perhaps even the loss of the planet.

 

What’s the matter with capitalism?
Angus Deaton
Nexus Lecture, Amsterdam, December 17, 20221

"I am grateful to the Nexus Institute, whose support made this lecture possible. I am grateful to Bill Easterly for helpful suggestions. Anne Case read and commented on earlier drafts of this lecture. More importantly, much of the discussion
here is drawn from the work that she and I have done over the past eight years, and her influence and ideas run through the lecture."