What went wrong with capitalism

In bestselling author Ruchir Sharma’s new book, which he will discuss at this talk, he rewrites the standard histories, which trace today’s popular anger to the anti-government rebellion that began under Margaret Thatcher and Ronald Reagan.

The now widely accepted narrative is that four decades of downsizing government – cutting taxes, spending, and regulations – left the financial markets free to run wild, fuelling inequality, slowing growth – and alienating much of the population. Sharma exposes the story of shrinking government as a myth. With historical and global sweep, he shows that government has expanded steadily as a regulator, borrower, spender, and micro manager of the business cycle for a century. Working with central banks, particularly in the last two decades, governments created a culture of easy money and bailouts that is making the rich richer, and big companies bigger. Sharma says progressive youth are part right that capitalism has morphed into “socialism for the very rich.” The broader issue, however, is socialized risk for the poor, the middle class and the rich; government is trying to guarantee that no one ever suffers economic pain by borrowing heavily to prevent recessions, extend recoveries, and generate endless growth. The result is rapidly rising debt and declining competition—exactly the environment in which oligopolies and billionaires do best.

Meet our speaker and chair

Ruchir Sharma is Chairman of Rockefeller International and Founder and Chief Investment Officer of Breakout Capital, an investment firm focused on emerging markets. He moved to Rockefeller in 2022 after a 25 year career at Morgan Stanley Investment Management, where he was Head of Emerging Markets and Chief Global Strategist. His commentary has appeared in The Wall Street Journal, The Financial Times, The Washington Post, Foreign Affairs, Foreign Policy, Bloomberg and The Guardian, among others. He was a contributing opinion writer at the New York Times from 2016 to 2021 and is currently a contributing editor and columnist at the Financial Times.

Sharma is the author of four books. His last, The 10 Rules of Successful Nations. It is an updated and abridged adaptation of The Rise and Fall of Nations: Forces of Change in the Post-Crisis World, which became a New York Times best seller. In 2012, his first book, Breakout Nations: In Pursuit of the Next Economic Miracles, debuted as the number one bestseller in India, and earned Sharma the Tata Literature Live! First Book Award for 2012. Breakout Nations also made the Wall Street Journal hardcover business bestseller list, and was chosen by Foreign Policy as one of its “21 Books to Read in 2012”.

Francesco Caselli is Norman Sosnow Professor of Economics and Head of the Department of Economics at LSE.

Hashtag for this event: #LSECapitalism

Podcast

A podcast of this event is available to download from What went wrong with capitalism.

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